The Supreme Court heard the Cedar Point Nursery v Hassid case today, an important case. I have discussed the issues at stake here and here:
At Cedar Point, the U.S. Court of Appeals for the Ninth Circuit ruled that California law requiring agricultural producers to grant union organizers access to their property for three hours a day, 120 days per year, did not provide for a per se indemnifiable provision in the fifth’s takings clause Modification. The state required access to union organizers so that the organizers could try to convince producers’ farm workers to join their unions.
The Supreme Court’s long-standing precedent is that revenue will occur whenever the government has imposed “permanent physical occupation of property …”.
The point here is whether “permanent physical employment” occurs only when it is literally uninterrupted or when the right to occupation continues indefinitely but does not apply to all hours of the day and at all times.
For reasons discussed in my earlier posts linked above, the case has ramifications well beyond the context of the union organizer. If California prevailed, states would have broad powers to authorize large-scale uncompensated physical invasions into private property – a power that conservative red states could easily abuse, no less than blue states.
Fortunately, it looks like a majority of the judges are likely to vote against the state in this case. During the hearing, several judges indicated that following the approach advocated by the lower court decision and the state of California, an access request that is less than 365 days per year or does not cover all hours of daylight does not take any per se . And that is true regardless of the purpose of government policy and regardless of the extent of the disturbance caused. As a rule, whether a regulation qualifies as such per se does not depend on the importance of the state interest concerned, and the amount of damage done to the owner is mainly relevant in determining the amount of compensation it will have if it does There was a recording, not the question of whether there was a recording at all.
Judge Clarence Thomas indicated that California’s position would allow the state to mandate regular access to private property to police or National Guard units wishing to use it for training exercises. Justice Amy Coney Barrett asked the following insightful question:
Let’s imagine that [my house is] The hotel is on the corner of two busy streets and a city decides that it would be beneficial to allow people to protest on my lawn because it is so visible to the passing traffic.
But just like this, you know, you can do it 120 days a year, three hours at a time, just during rush hour. I suppose, based on your theory, this is not an assumption per se that would be subject to Penn Central.
In response, California Attorney General Michael Mongan admitted that this would not be an intake per se and that Penn Central’s complicated balance test would apply instead. He claimed it was a “powerful” Penn Central case. But, as Justice Barrett pointed out, “Penn Central is deliberately designed to be very tolerant of regulations, as regulations governing the use of real estate are prevalent in modern life. Hence, it is stacked in favor of regulations.”
Historically, Penn Central property owners rarely win, and the complex balancing test developed in this case is also notoriously vague and uncertain.
Even the three Liberal judges, who are generally less comfortable with property claims than the Conservatives, were very critical of the Mongan because they did not set a clear standard for recurring, but not literally continuous, physical invasions of property that count as revenue. Sonia Sotomayor, the judiciary least supportive of claims about revenue, insisted “we need something that gives clear guidance” and was reluctant to relegate the case to the Penn Central test because that test “is of vital interest at the right to exclude “not captured” in cases of physical invasion. “She suggested that the case be better analyzed using the Supreme Court approach in the Arkansas Game and Fish Commission v United States case, where the court ruled that a recurrent but not continuous inundation of property by the government was considered to be ingested If a recurring physical invasion by union organizers is akin to a recurring flood, California is likely to lose that case. At least it is noteworthy that Sotomayor opposes the California position that Penn Central is adopting. If not, it is it is difficult to avoid taking one per se here.
I’m not sure if Sotomayor and the other Liberals will ultimately vote for the owners on this one. I think they could still go either way. But if you have a case where Justice Sotomayor’s vote is at stake and there is a real chance it will vote for the property’s owners, that is very bad news for the government.
While the owners fared better overall during the hearing, their attorney Joshua Thompson of the Pacific Legal Foundation faced some tough questions himself. The biggest problem for him, raised by a number of judges, was the possibility that if Cedar Point wins, recurring government health and safety inspections of companies would count as revenue as well.
Thompson tried to solve this problem by arguing that common law property owners have no right to exclude “reasonable” government inspections and searches. This is not entirely clear, nor is it exactly clear what qualifies as a reasonable search in this context (it may not be the same as a reasonable search for the fourth amendment). A better answer is that health and safety inspections are the responsibility of the police and such uses of police force are generally not considered revenue for the purposes of the original meaning of the takings clause and subsequent precedent. A general right of trade union organizers to enter property, on the other hand, does not fall under the exception of the police. The same applies to other types of recurrent intervention ordered by the government that do not constitute health and safety measures, such as the Thomas Justice example for mandatory access for police and National Guard training.
A number of other interesting questions were raised at the hearing. I can write about it later if time permits. For now, however, the main takeaway from this oral argument is that the owners are likely to win. What is less clear is exactly what rule the court will enact for these types of cases, particularly on how to distinguish California’s Union Access Act from health and safety inspections. There are several ways to do this. I mentioned two above, and there may well be others.
NOTE: The owners of the property in this case are represented by the Pacific Legal Foundation. My wife, Alison Somin, works for PLF. But she is not involved in this case.