U.S. Supreme Court Says Regulation Granting Unions Access to Private Farms Led to Unconstitutional Taking

June 28, 2021 | Kitt Tovar Jensen

The case is Cedar Point Nursery v. Hassid, 2021 WL 2557070 (U.S. Sup. Ct. June 23, 2021).

On June 23, 2021, the United States Supreme Court held that a 46-year-old California regulation allowing union organizers to access agricultural employers’ property to solicit support for unionization was an uncompensated per se physical taking in violation of the the Fifth and Fourteenth Amendments of the United States Constitution. The 6-3 ruling reversed a Ninth Circuit decision finding that the regulation did not constitute a permanent physical taking.

Factual Background

A 1975 California regulation—to protect agricultural employees’ right to freedom of association—grants union organizers the “right of access” to an agricultural employer’s property. Cal. Code Regs., tit. 8, § 20900(e)(1)(C) (2020), subject to specific limitations. Union organizers can access the property for no more than four 30-day periods in a calendar year. During each of those 120 days, union organizers may enter the property for a total of three hours: one hour before work, one hour during the lunch break, and one hour after work. Additionally, union organizers must give written notice to California’s Agricultural Labor Relations Board (the Board) and the agricultural employer. Failure to grant access may result in sanctions against the employer.

The plaintiffs are two California fruit growers with many seasonal and full-time employees. No employees live on-site. In 2015, members of a farm workers union attempted to enter onto one of the plaintiff’s property, but the plaintiff blocked their entry. Three months later, members of the same union entered onto the second grower’s property, without notice, disrupting the operation and causing some employees to stop working or leave the worksite. The growers filed this lawsuit against the Board in the Eastern District of California, claiming that the regulation was an unconstitutional taking under the Fifth and Fourteenth Amendments of the U.S. Constitution.

Procedural History

The plaintiffs sought declaratory relief and a preliminary injunction, claiming that the regulation appropriated an easement for the union organizers without just compensation. The district court granted the Board’s motion to dismiss, concluding that the regulation was not a per se taking because it did not allow the union organizers permanent and continuous access to the growers’ properties. Cedar Point Nursery v. Gould, 2016 WL 1559271 (E.D. Cal. April 18, 2016). Because it found that the regulation was not a categorical taking, the district court found that it was subject to the Penn Central Transportation Co. v. New York City balancing test, which the growers did not attempt to satisfy. See 438 U.S. 104 (1978).

The growers appealed, arguing that the regulation amounted to an uncompensated per se taking in violation of their Fifth Amendment rights. Cedar Point Nursery v. Shiroma, 923 F.3d 524 (9th Cir. 2019). The Ninth Circuit disagreed, ruling that the access regulation, as applied to the growers, did not amount to a per se physical taking of their property. The court reasoned that the regulation did not allow a permanent invasion because it “did not allow random members of the public to unpredictably traverse the property 24 hours a day, 365 days a year.” After the Ninth Circuit denied a rehearing en banc, the growers petitioned for a writ of certiorari, which the U.S. Supreme Court granted.

The Fifth Amendment Takings Clause

The Takings Clause of the Fifth Amendment, made applicable to the States through the Fourteenth Amendment, prohibits the government from appropriating private property for public use without just compensation. U.S. Const. amends. V, XIV. If a government action physically appropriates private property without compensation, a per se taking has occurred and the government must provide fair compensation. Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302, 321 (2002). A taking may also occur if the government imposes a regulation which restricts a private property owner’s ability to use the property. In that case, the Court will apply the factors set forth in Penn Central.[i] 438 U.S. 104 (1978).

Per Se Physical Takings

The Court first considered whether the access regulation physically appropriated the growers’ properties or, instead, simply restricted their ability to use their property. The Court began its analysis by noting that physical takings can occur through eminent domain, when the government takes possession of a property without receiving formal title, or through inadvertent occupation of private land through government actions.[ii]

The right to exclude others is a fundamental property right. Here, the Court ruled that the access regulation granted union organizers a “right to invade,” thus appropriating the growers’ right to exclude. The Court determined that any government-authorized invasion of property, including action through a regulation, is a per se taking. The access regulation at hand did not merely restrict the growers’ ability to use their property, but rather, for the benefit of others, took the growers’ right to exclude, “one of the most treasured” rights of property ownership. As such, the Court concluded that the access regulation appropriated a right to invade the growers’ property and constituted an uncompensated per se physical taking in violation of the Fifth and Fourteenth Amendments.

Permanent and Continuous Access

The Court next rejected the argument advanced by both the Ninth Circuit and dissent that the access regulation was not a per se taking because it did not allow permanent or continuous access. The Court explained that the duration of the taking is important when considering the amount of compensation required, not in determining whether a taking has occurred. When the government commits a taking, the Court stated, it must provide compensation regardless of whether the taking is intermittent or continuous. Additionally, the Court rejected the Board’s argument that the regulation was a use restriction rather than a taking. The Court argued that to define the access regulation as such would “use words in a manner that deprives them of all their ordinary meaning.” Nollan v. California Coastal Com’n, 483 U.S. 825, 831 (1987).

The Court also noted the difference between the case at hand and PruneYard Shopping Center v. Robins. In that case, a shopping center claimed that the state constitution, protecting freedom of speech, appropriated its right to exclude by denying it the right to stop shoppers engaged in leafleting. See 447 U.S. 74, 78 (1980). In PruneYard, the Supreme Court used the Penn Central factors to determine whether a taking had occurred. The Court explained that the PruneYard facts were distinguishable because the shopping center was open to the public. Here, the growers’ property is closed to the public. The Court stated, “Limitations on how a business generally open to the public may treat individuals on the premises are readily distinguishable from regulations granting a right to invade property closed to the public.”

Public Policy Impact

Lastly, the Court addressed the dissent’s argument that finding the access regulation to be a per se taking would endanger other government activities which necessarily may involve access onto private property. The Court listed three reasons why it disagreed with this argument.

First, the Court noted the difference between the tort of trespass and an unconstitutional taking. Trespass is an isolated incident performed without the right of access. While continued trespass may become a taking, the Court stated that lower courts have been able to determine the difference. See Arkansas Game and Fish Comm'n v. United States, 736 F.3d 1364, 1372 (2013). The Court clarified that isolated physical invasions, not undertaken pursuant to a right of access, are properly assessed as individual torts, rather than property rights. The Court noted that its holding did nothing to disturb the distinction between trespass and takings.

Second, the Court stated that many government-authorized physical invasions will not amount to takings because they are consistent with longstanding background restrictions on property rights. For example, the Court explained that the government may still be able to require a landowner to abate a nuisance because the landowner never had the right to cause the nuisance. Similarly, the government would still have the traditional rights under common law to enter private property when necessary to prevent a public disaster, to prevent harm to another person, or to enforce criminal law under certain circumstances. The Court asserted that these examples of traditional common law privileges to access private property would not be considered a taking.

Third, the Court stated that the government could still require property owners to give a right of access as a condition of receiving government benefits, without causing a taking. For example, the Court explained that a government regulation requiring access to inspect private facilities to issue a required health and safety permit would not cause an impermissible taking.

In this case, the Court ruled that the access regulation granted labor organization a right to invade the growers’ property, without any corresponding benefit. As such, the Court ruled that the access regulation constitutes a per se physical taking in violation of the Fifth and Fourteenth Amendments.   

Concurrence

Justice Kavanaugh wrote separately to argue that NLRB v. Babcock & Wilcox Co., a case relied on by the Board, also supports the majority opinion. 351 U.S. 105 (1956). In Babcock, the Court considered whether the National Labor Relations Act gave union organizers the right to enter onto a private business’s property to interact with employees. Kavanaugh wrote that Babcock only granted union organizers the right to access when it was a necessity, such as when the employees were inaccessible because they lived on the company property. Here, the employees did not live on the property. Therefore, Justice Kavanagh argued that the regulation violated the rule of Babcock, in addition to constituting an impermissible taking under the reasoning stated in the majority opinion.

Dissent

Justice Breyer, joined by Justice Sotomayor and Justice Kagan, wrote a dissenting opinion. Justice Breyer argued that the access regulation was not an appropriation, but a limitation on an agricultural employer’s right to exclude others. The regulation specifically limited when a union organizer could enter the property. Therefore, he wrote “[t]he regulation regulates (but does not appropriate) the owners’ right to exclude.” Justice Breyer asserted that this temporary access to the growers’ land is not a per se taking.

The dissent also mentioned the potential remedies, which the majority opinion did not discuss. Justice Breyer pointed out that the growers did not seek compensation for the taking, but only injunctive and declaratory relief. He argued that California, on remand, should have the option to provide compensation to the employers in lieu of injunctive relief.

 

[i] The Penn Central balancing factors include economic impact, interference with reasonable investment-back expectations, and the character of the government action. Penn Centr. Trans. Co. v. New York City, 438 U.S. 104, 124 (1978).

[ii] United States v. General Motors Corp., 323 U.S. 373, 374–375 (1945); United States v. Pewee Coal Co., 341 U.S. 114, 115–117 (1951); United States v. Cress, 243 U.S. 316, 327–328, (1917).