Property Rights

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.

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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.

 

NEXT: Universities Can’t Selectively Enforce Nondiscrimination Policies Based on Student Groups’ Viewpoints

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  1. On the question of “real costs” of allowing union organizers regularly to enter growers’ property. Isn’t there a public policy in favor of organizing, and so shouldn’t the value of the taking be set at close to zero?

    1. No.

      The disruption caused by organizers is not zero-cost.

    2. No for the same reason that a public policy in favor of better transportation does not set the value of the property confiscated for a highway bypass to zero.

    3. The costs in question are the costs to the employer not the public. The idea of of the Takings Clause is there will be times the public benefits from taking private property, but if so the cost should be born by the public rather than an individual.

      So, yes, it may be considered valuable to public, but that isn’t the point, and in fact the Takings Clause is assumed to only be used in cases where it is.

    4. No; the relevant question for a taking is the cost to the property owner, not to the public. (Hopefully every government taking has a positive net value overall!)

  2. So, 3 hours a day, 120 days a year…

    12:30 AM – 3:30 AM
    Saturdays and Sunday only.

  3. “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).”

    Re-upping from prior post:

    “I would think it has the hallmarks of a license, rather than an easement.
    It does not run with the land and is not binding on successors or assigns of the property owner unless they maintain a business subject to the statute.”

    A license can also “give … a recurring right to enter the property for specified purposes, albeit for a limited amount of time”. For instance, a restaurant contracts with the owner of a nearby parking lot so patrons can park.

    Easements run withe land [bind subsequent owners] while licenses do not. Here, the union access would end if the business closes or the use changes to non-business.

    1. I’ve been thinking about this since I saw your post yesterday. I think I have to disagree. At least, partially.

      A license gives a recurring right to enter the property for specified purposes but it’s always (almost always?) a right granted only to specified representatives of the government. The union is clearly not a representative of the government. They are members of the public as much as beachgoers crossing your property to get to the shore.

      Neither model is perfect and I understand the appeal of the license model but I don’t think it’s that much better than the easement model.

  4. Antidiscrimination laws don’t require acceptance of nonpaying customers or guests.

    What do such laws have to do with the present case, where the farm is required to allow union organizers entry for free?

    1. I agree with Prof. Somin that it isn’t an issue so this is merely to explain the counter argument

      The idea is that the right to exclude is a property interest, at least that is what is bein argued in this case. The arguments goes that anti discrimination laws infringe on that right to exclude, so a robust takings clause argument that the farms are asking for would also have to apply to anti discrimination laws since they permanently infringe on the right to exclude.

      1. And so bad law makes bad law.

        “Sure, it’s an important principle we’re violating here, but we have a really good and important reason for doing this.”

        “If we can do this, then with a good reason we can also do that.”

        “If we can do this and that, why can’t we do this other thing?”

        “It’s agreed that we can constitutionally do this, that, and the other thing. So this ‘principle’ you’re appealing to can’t really be constitutional in nature.”

      2. I understood the reason the OP mentioned the topic: it has been brought up as an argument by others.

        However, in the classic antidiscrimination cases–e.g., hotel must accept guests of all races–there is no requirement that hotels must do so for free. If the hotel is paid, does anyone seriously argue there is a taking? If the hotel is not paid, does anyone seriously argue there is not a taking?

  5. Kavanaugh, QC’s Babcock notion wasn’t out of left field — the California order uses the language from the decision. It’s pretty clear that Takings provides a hard line in the neighborhood, but the difficulties with using it here are (1) the state specifically found that the conditions of Babcock were met and actually quoted it in the order (though not knowing much about the case, or this area of law, I’m not sure why NLRA preemption hasn’t been mentioned); and (2) at least at first glance, there’s daylight between a Babcock rule and a property interest. Say there’s a parking lot at issue, and the organizers want to use it to make contact with the workers, but, unlike in the Babcock facts, it’s also open to shoppers. If I can tread the herbage to buy a pound of margarine, it’s hard to argue that your being compelled to admit a non-shopping organizer has really harmed your property interests all that much.

    (Caveat, talking as a generalist with vague memories of Labor Law with an awesome Prof.)

    My difficulties with the Takings claim are (1) in California, it’s a personal interest, and the only person who can really hold it would be the state, and they couldn’t exercise it, they would just identify the relevant party that could; (2) the airplane chicken coop case was clearly an easement appurtenant, a bit like driving a mail truck over the neighbor’s flower bed, as the post office has no street access; (3) the easement would somehow follow the shop if it moved, or be extinguished by operation of a completely different area of law.

    If you have to translate the NLRA into state property and contract terms (and I’m not entirely sure that you do, given Act preemption), the best answer might be to say that public policy implies a term in any agricultural employment contract for work in California, compelling the employer to admit union representatives as a privilege against the trespass. So land-law, you’re talking consent after bargaining for value in the employment contract.

    My tuppence.

    Mr. D.

  6. In light of the bizarre Ninth Circuit opinion that would NOT allow a taking unless the access, occupation, and deprivement of property were 24/7, 365; I understand the desire to find a constitutional takings issue on appeal. SCOTUS couldn’t let the ninth circuit legal analysis stand. When Justice Soutamayour is leaning toward supporting a property owner, you know there is a problem with the restriction. Unfortunately, as a transactional real estate attorney who dealt with business, retail, development, and corporate matters, the legal dispute could have easily been resolved by drafting and entering into license agreements. Both sides were forced into an extreme position that confused the justices. The right to use/access a property for a limited without a specifically defined boundary location is a license. You purchase a license when you attend a festival or carnival. A movie theater is a license. Require for liability purposes and property right purposes a license for the union organizers to enter the property. The dollar amount associated with the license is negotiable and something rational real estate and business people can sort through.

    I engaged in real estate transactions in 25 states and 3 Canadian provinces over my 33 years as an attorney. I have closed on the purchase of 300 retail locations/properties in one transaction. I have leased hundreds of retail locations and developed retail properties. I do not understand litigation for matters that transactional attornies could resolve with routine analysis and stock/form documents. I sometimes think that there is a portion of the brain of litigation attorneys that is shunted.

  7. Bob from Ohio, I had the same take as you. From what I read in this exchange, it seemed to me like everyone was actually talking about a license.

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