Additional Issues in Cedar Point v. Hassid

In this post, I consider some additional issues that came up in the recent Supreme Court oral argument in an important takings case.

Yesterday, I posted on the Supreme Court oral argument in oral argument in Cedar Point Nursery v. Hassid, a major takings case. In this post, I cover a few additional issues raised by the case, which I did not have time or space for earlier. I summarized the facts of the case and the major constitutional issues involved in yesterday's post, and also here and here.

First, as Josh Blackman points out, there was considerable discussion among the lawyers and justices about whether the access rights the California regulation gives to union organizers qualify as an easement or not. I think it is pretty obvious that the right is indeed an easement, in the sense that it gives the organizers a recurring right to enter the property for specified purposes, albeit for a limited amount of time. Specifically, it is an easement in gross (a right that attaches to a specific person or group, as opposed to the owner of a specific nearby property, which would be an easement appurtenant).

But I also think this issue is irrelevant to the question before the Court: whether the California law creates a per se taking. What matters is that the right given to the union organizers is a recurring physical invasion of property. The Supreme Court has long held that a permanent, government-mandated physical occupation or invasion of property qualifies as a taking—even if it imposes only modest burdens on the property owner. And it doesn't matter whether the occupation is an easement or some other right formally defined by the common law. If the state creates some novel type of permanent physical invasion that doesn't fit any previously known legal category, it still would be a taking. The key question at issue in Cedar Point is whether a recurring (3 hours per day, 120 days per years), but not literally continuous physical invasion qualifies as "permanent." I think the answer is clearly "yes." But whether it does or not shouldn't depend on whether the government has created an easement.

In my earlier post, I addressed the issue of whether a victory for Cedar Point would require courts to conclude that government health and safety inspections qualify as takings (the answer is no). Law professor Aaron Tang claims that it would lead to similar problems for antidiscrimination laws prevent businesses from refusing to serve customers based on characteristics such as race or sex.

This is a slightly more complicated issue than health and safety inspections. But the answer is still "no." Unlike California's union-organizer regulation (which requires giving access to organizers, regardless of the reason why the owner may want to exclude them), antidiscrimination laws don't actually require businesses to allow entry by any particular person. They just bar some specific reasons for exclusion. Thus, business owners remain free to exclude as many people as they want, and indeed to exclude all customers who don't fit very stringent criteria unrelated to the forbidden classifications. Perhaps an extremely broad anti-discrimination law that barred all or nearly all possible reasons for exclusion would qualify as a taking. But few if any existing laws come even close to doing so.

If antidiscrimination laws did somehow qualify as takings, the practical effect would be very minor. If a regulation qualifies as a taking, it doesn't mean that the government cannot enact it at all. It just means they must pay compensation (usually defined as the "fair market value" of the property right the government has seized).

The fair market value of excluding customers based on race, sex, or sexual orientation will, in most cases, actually be zero or negative. Having a wider range of customers actually increases profitability for most businesses. One can imagine situations where having customers of one group (e.g.—African-Americans) reduces business from others (e.g.—white racists) to such an extent that the business suffers a net loss of profit. But such cases are likely to be rare under modern conditions, and difficult to prove in court. By contrast, allowing extensive access to union organizers onto a property where the owner generally excludes non-employees often does create real costs (though exactly how much will vary from case to case).

Finally, during the oral argument, Justice Brett Kavanaugh repeatedly suggested that the issue in Cedar Point can easily be resolved by applying the Supreme Court's 1956 ruling in NLRB v. Babcock & Wilcox Co. In Babcock, the Court ruled that the National Labor Relations Act (NLRA), "an employer may validly post his property against nonemployee distribution of union literature if reasonable efforts by the union through other available channels of communication will enable it to reach the employees with its message and if the employer's notice or order does not discriminate against the union by allowing other distribution." Babcock was a purely statutory case interpreting the NLRA. It says nothing about the Takings Clause or any other constitutional issue. Thus, I am skeptical that the standard it creates somehow controls the Cedar Point case.

Justice Kavanaugh suggests that the Babcock Court ruled as it did in order to avoid constitutional problems, because Takings Clause issues were raised in the briefs of the parties. Perhaps that really was part of the justices' motivation back in 1956. But, if so, there is no evidence of it in the Court's opinion.

None of the other justices showed much interest in Kavanaugh's Babcock theory; Justice Sotomayor briefly mentioned it only to indicate she doesn't think it applies. So I would be surprised if the Court ended up ruling on this basis.

I would add this is not the first time Kavanaugh has flirted with a screwy theory during the oral argument in a major property rights case. During the 2019 reargument in Knick v. Township of Scott, Kavanaugh was the only justice to show much interest in the Trump administration's strange "Klingon forehead" theory of how the case should be decided. But, ultimately, the Court dismissed that argument in a footnote, and Kavanaugh joined Chief Justice Roberts' majority opinion (see my analysis in this article, pp. 158-59). Whether Kavanaugh  similarly returns to the fold in this case or, instead, sticks to his guns, remains to be seen.

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.