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Property Rights

Supreme Court Hears Oral Argument in Major Takings Case—Property Owners Seem Likely to Prevail

The Court seems likely to rule in favor of property rights in Cedar Point Nursery v. Hassid.

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Earlier today, the Supreme Court heard oral argument in Cedar Point Nursery v. Hassid, an important takings case. I discussed the issues at stake in the case here and here:

In Cedar Point, the US Court of Appeals for the Ninth Circuit ruled that a California law requiring agricultural growers to give union organizers access to their property for three hours per day, 120 days per year, did not create a per se taking requiring compensation under the Takings Clause of the Fifth Amendment. The state mandated union-organizer access so that the organizers could try to persuade the growers' farmworkers to join their unions….

Longstanding Supreme Court precedent holds that a taking occurs anytime the government has imposed a "permanent physical occupation of property…."

The issue here comes down to whether a "permanent physical occupation" occurs only when it is literally continuous, or when the right to occupy continues indefinitely, but does not apply to all hours of the day, all the time….

For reasons discussed in my earlier posts linked above, the case has implications that go far beyond the union-organizer context. If California prevails, states would have broad power to authorize extensive uncompensated physical invasions of private property—a power that conservative red states could easily abuse, no less than blue states can.

Fortunately, it looks like a majority of the justices are likely to vote against the state in this case. During the oral argument, several justices pointed out that, under the approach advocated by the lower court decision and by the state of California, any access requirement that lasts less than 365 days per year or does not cover all daylight hours would not be a per se taking. And that's true regardless of the purpose of the government policy, and regardless of the amount of disruption caused. As a general rule, whether a regulation qualifies as a per se taking doesn't depend on the importance of the government interest at stake, and the amount of harm caused to the owner is relevant mainly for determining how much compensation she is owned if there was a taking, not the question of whether there was a taking in the first place.

Justice Clarence Thomas pointed out that California's position would allow the state to mandate regular access to private property for police or National Guard units that wanted to use it to hold training exercises. Justice Amy Coney Barrett asked the following insightful question:

Let's imagine that [my house is] situated 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's so highly visible to the traffic that's passing by.

But exactly like this one, you know, it says you can do it 120 days a year and three hours at a time just during rush hour. I take it, under your theory, that's not a per se taking, that would be subject to Penn Central.

In response, California Solicitor General Michael Mongan admitted that it would not be a per se taking, and that the complicated Penn Central balancing test would apply instead. He claimed it would be a "powerful" Penn Central case. But, as Justice Barrett pointed out, "Penn Central is deliberately designed to be very permissive towards regulations, given the pervasiveness of regulations on property use in modern life. And so it's stacked in favor of regulations."

Historically, property owners rarely win under Penn Central, and the complex balancing test developed under that case is also notoriously vague and uncertain.

Even the three liberal justices—who are generally less sympathetic to property rights claims than the conservatives—were highly critical of Mongan for failing to provide a clear standard for when recurring, but not literally continuous, physical invasions of property qualify as takings. Sonia Sotomayor, the justice least supportive of takings claims, emphasized that "we need something that gives clear guidance," and was reluctant to relegate the case to the Penn Central test, because that test "fails to capture the significant interests in the right to exclude at stake in physical invasion cases." She suggested the case might be better analyzed under the approach the Supreme Court adopted in Arkansas Game and Fish Commission v. United States, where the Court ruled that recurring, but not continuous, flooding of property by the government qualifies as a taking. If recurrent physical invasion by union organizers is analogous to recurring flooding, California probably loses this case. At the very least, it's notable that Sotomayor rejects¬† California's position that Penn Central applies. If it does not, it's hard to avoid the conclusion that there is a per se taking here.

I am far from certain that Sotomayor and the other liberals will ultimately vote for the property owners in this case. I think they could still go either way. But if you have a takings case where Justice Sotomayor's vote is in play, and there is a real chance she might vote for the property owners, that's very bad news for the government.

While the property owners overall did better during the oral argument,  their counsel, Joshua Thompson of the Pacific Legal Foundation, did face some tough questions of his own. The biggest problem for him, raised by a number of justices, was the possibility that, if Cedar Point wins, recurring government health and safety inspections of businesses would also qualify as takings.

Thompson tried to address this issue by arguing that, under the common law, property owners have no right to exclude "reasonable" government inspections and searches. This is not entirely clear, and it's also not clear exactly what qualifies as a reasonable search in this context (it might not be the same thing as a reasonable search under the Fourth Amendment). A better answer is that inspections meant to protect health and safety fall within the police power, and such uses of the police power are not generally considered takings under the original meaning of the Takings Clause, and subsequent precedent. By contrast, a general right of union organizers to enter property does not come within the police power exception. And the same goes for other types of recurring government-mandated intrusions that are not health and safety measures, such as Justice Thomas' example of mandated access for police and National Guard training.

A number of other interesting issues came up in the oral argument. I may write about them later, if time allows. But, for the moment, the key takeaway from this oral argument is that the property owners are likely to win. What is less clear is exactly what rule the Court will adopt for these types of cases, particularly on the question of how to differentiate the California union-access law from health and safety inspections. There are a number of different ways to do that. I noted two above, and there may well be others.

NOTE: The property owners in this case are represented by the Pacific Legal Foundation. My wife Alison Somin works for PLF. But she has no involvement in this case.

UPDATE: I address some additional issues raised in the oral argument here.