Labor laws and property rights at the Supreme Court

On Nov. 13, the U.S. Supreme Court issued an order granting certiorari in Cedar Point Nursery v. Hassid, 20-107, a case dealing with the intersection of labor union organizing laws and property rights. While the case is principally about the latter, its reach is broad and it cuts both directions politically. The Supreme Court's decision thus stands to be momentous for property owners and labor unions and potentially government regulators.

The underlying case -- Cedar Point Nursery v. Shiroma, 923 F.3d 524 (2019) -- is a 2-1 9th U.S. Circuit Court of Appeals panel opinion holding that California's Agricultural Labor Relations Act, allowing union organizers access to agricultural employees on employers' private property, is governed by regulatory takings standards and is not a per se categorical taking. The access regulation declares that the rights of agricultural employees include "the right of access by union organizers to the premises of an agricultural employer for the purpose of meeting and talking with employees and soliciting their support."

Although the access right is not unlimited, as the regulation imposes several restrictions relating to time, place, number of organizers, purpose, and conduct, the California law allows union organizers to enter the private property of agricultural growers 120 days per year for up to three hours at a time. In the district court litigation, the plaintiff landowners alleged that the United Farm Workers union disrupted work by moving through their trim sheds with bullhorns, distracting and intimidating workers, and violated the access regulation by failing to provide the required written notice before taking access.

The 9th Circuit denied a petition for rehearing en banc, but eight judges dissented from the denial in what reads as a clear attempt to capture the Supreme Court's attention. 956 F.3d 1162 (9th Cir. 2020). The question presented in the successful cert petition is "whether the uncompensated appropriation of an easement that is limited in time effects a per se physical taking under the Fifth Amendment."

The Fifth Amendment's takings clause provides that "nor shall private property be taken for public use, without just compensation." The Supreme Court has long recognized that government regulation of private property may, in some instances, be so onerous that its effect is tantamount to a direct appropriation or ouster -- and that such "regulatory takings" may be compensable under the Fifth Amendment. In former Justice Oliver Wendell Holmes' storied but murky formulation, "while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking." The rub has been -- and remains -- discerning how far is "too far." The various Supreme Court takings tests all focus directly upon the severity of the burden the government imposes upon private property rights.

In suing for declaratory and injunctive relief under 42 U.S.C. Section 1983, the Cedar Point Nursery plaintiffs alleged that the access regulation creates a permanent easement that allows union organizers to enter their property "without consent or compensation" in violation of the Fifth Amendment. The plaintiffs based their argument entirely on the theory that the access regulation, as applied to them, constitutes a permanent physical invasion of their property -- with no contemplated end-date -- and is thus a per se taking under Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982), which held that a state law requiring landlords to permit cable companies to install cable facilities in apartment buildings effected a taking. "Where governmental action results in a permanent physical occupation" of the property, by the government itself or by others, our cases uniformly have found a taking to the extent of the occupation, without regard to whether the action achieves an important public benefit or has only minimal economic impact on the owner."

The 9th Circuit panel majority agreed with the district court and determined that both PruneYard Shopping Center v. Robins, 447 U.S. 74 (1980), and Nollan v. California Coastal Commission, 483 U.S. 825 (1987), contradicted the plaintiffs' argument that the access regulation is a permanent physical occupation. PruneYard is most famously a free speech case dealing with a privately owned shopping center open to the public. But the case also addressed a takings claim about which the Supreme Court concluded that requiring the shopping center to permit exercise of state-protected free expression rights and to petition on shopping center property does not amount to an unconstitutional infringement of property rights under the takings clause.

The 9th Circuit determined that the Cedar Point Nursery plaintiffs did not suffer a permanent physical invasion that would constitute a per se taking because "the sole property right affected" by the regulation is the right to exclude, which in the panel majority's crabbed view is just one of the essential "sticks" in the "bundle of property rights." Relying on a narrow reading of Loretto, the majority reasoned that in a permanent physical invasion the government does not simply take a single strand from the bundle of property rights: "it chops through the bundle, taking a slice of every strand."

The majority also rejected the plaintiffs' argument under Nollan, which held that an easement for public access across private property, "where individuals are given a permanent and continuous right to pass to and fro, so that the real property may continuously be traversed, even though no particular individual is permitted to station himself permanently upon the premises," constituted a permanent physical taking. Giving limited effect to Nollan, the 9th Circuit reasoned that although the union access regulation does not have a contemplated end-date, it does not meet the definition of a permanent physical occupation because it does not grant union organizers a permanent and continuous right of access.

The 9th Circuit's decision essentially allows the government to eliminate a landowner's right to exclude, without compensation, so long as the regulation at issue does not require the grant of permanent and constant access. But a permanent right to an easement to enter or occupy an owner's land -- whether the right is held by labor organizers or government regulators -- severely infringes private property rights even if it applies only to certain hours of the day and even if the intrusion is not continuous. Moreover, the right to exclude unwanted persons cannot be diminished if property rights are to enjoy the same status as every other constitutional right.

Cedar Point Nursery is an important case to watch for an additional reason. The case will be the first major property rights case involving newly confirmed Justice Amy Coney Barrett, and she will have the opportunity to unambiguously convey where she stands. 