Eminent Domain Report

On June 23rd, the United States Supreme Court held that a California regulation allowing labor organizations to intermittently access agricultural employers’ property was an unconstitutional taking. The Court reversed the decision from the Ninth Circuit Court of Appeals, an outcome we predicted in our post last year about this issue. The decision is a major victory for property owners, and raises questions going forward about a public agency’s ability to regulate private property rights—particularly as it pertains to allowing temporary access. 

Background

In Cedar Point Nursery v. Sheroma, a group of employers filed a lawsuit claiming that the California Agricultural Labor Relations Board’s regulation permitting union organizers to use an employer’s private property for up to three hours per day, 120 days per year, resulted in a taking of their property without the payment of just compensation. The trial court and Ninth Circuit Court of Appeals found no taking, reasoning that the regulation limits organizers’ access to the property and that temporarily infringing on the “right to exclude” is not a permanent physical invasion triggering the taking of private property.  

The U.S. Supreme Court disagreed, finding that the regulation resulted in a per se physical taking of property, entitling the property owners to just compensation. 

The Court’s Reasoning

The Supreme Court first explained that when the government physically acquires private property for a public use, the Takings Clause imposes a clear and categorical obligation to provide the owner with just compensation. A taking can arise through the government’s (i) formal exercise of eminent domain, (ii) taking physical possession of property without taking title (i.e., inverse condemnation), or (iii) actions effecting an occupation of property. The Court then stated that a regulation restricting an owner’s use of property is analyzed under a different standard (i.e., whether it qualifies as a regulatory taking). 

The Court determined the California regulation to be a per se physical taking, as it allowed others to invade the landowners’ property and violated the right to exclude—“one of the most treasured rights of property ownership.”

With respect to the regulation in question, the Court explained that it effected a physical occupation of property triggering a taking: calling something a “regulation” does not mean it cannot be deemed a taking; no matter the name, a per se taking occurs if the government’s actions lead to a physical appropriation of property. The Court determined the California regulation to be a per se physical taking, as it allowed others to invade the landowners’ property and violated the right to exclude—“one of the most treasured rights of property ownership.”

The fact that the “invasion” of the California regulation was temporary (limited to 120 days a year and a maximum of three hours per day) did not make it constitutional. The Court stated that a physical appropriation is a taking whether it is permanent or temporary, intermittent or continuous. The Court cited other intermittent governmental actions which were deemed to be takings, such as when military aircraft frequently flew low over an owner’s farm, grazing treetops and terrorizing poultry, or when the government fired coastal defense guns across private property. The Court also stated that the degree of economic loss did not affect its decision that the regulation was a per se taking. Its prior decisions had found it unconstitutional to require landlords to allow small cable boxes with thin cable to be installed on their roofs, or to require California property owners to grant easements across their property to allow the public to get to the beach. The Court summarized these cases: “Government authorized invasions of property—whether by plane, boat, cable, or beachcomber—are physical takings requiring just compensation.”

Limits of the Decision

The Majority Opinion addressed the arguments of the three Justices who dissented, as well as the reasoning of the Ninth Circuit Court of Appeals decision. The Supreme Court differentiated its 1980 ruling that forcing a privately owned shopping center to allow leafletting was not a taking, stating that the shopping center in that case was open to the public, unlike the agricultural properties in the case at hand. According to the Court: “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.”

The Court also addressed three slippery slope arguments. First, it said it would still distinguish between takings and trespass, the latter being isolated physical invasions without a granted right of access. Second, it stated that many government-authorized physical invasions that are consistent with longstanding restrictions on property will not amount to takings. For example, requiring a landowner to abate a nuisance on its property is not a taking, because there was never a right to engage in the nuisance in the first place. And traditional privileges to access private property, such as to make an arrest, are not takings. Third, the Court noted that the government may require property owners to yield a right of access in order to receive certain benefits. Thus, government health and safety inspection requirements generally will not constitute takings.

Application of the Decision to Other Cases

Although the regulation the Supreme Court found unconstitutional applies only to owners of agricultural property in California who employ workers, the Court’s decision may be applied more broadly in other contexts. The Takings Clause is just that—a clause—stating only, “[N]or shall private property be taken for public use, without just compensation.” Its very brevity makes every Supreme Court interpretation of it impactful. The Court’s ruling that government-authorized invasions of property are takings even if they are temporary and intermittent and cause trivial economic loss, may affect other cases. Perhaps the Court’s declaration that the right to exclude is “one of the most treasured rights of property ownership” may be used to argue that eviction moratoriums, which the CDC recently extended to July 31st, are unconstitutional takings. In any event, the Court’s expansive view of what constitutes a per se taking is a victory for property owners.