July 2021

In 1975, labor effort directed by Cesar Chavez led to the passage of the California Agriculture Labor Relations Act of 1975 (the “Act”). One of the Act’s provisions required agricultural employers to allow union organizers access to their property for up to three hours per day, 120 days per year for organizing efforts. The Act limited the times that union organizers could be present to avoid interfere with the workday, and required organizers to provide notice to the employer prior to coming onto the property.  

In 2015, two agricultural companies (the “Growers”) blocked union organizers from accessing their property. The Growers subsequently filed lawsuits in federal court challenging the Act, arguing that the Act constituted a physical taking of their property in violation of the Fifth and Fourteenth Amendments of the Constitution. The District Court denied the Grower’s motion for a preliminary injunction against the union organizers and granted the organizers’ motion to dismiss. On appeal, a divided panel of the Court of Appeals for the Ninth Circuit affirmed the District Court’s ruling. 

The Supreme Court took up the matter and issued its opinion in Cedar Point Nursery v. Hassid on June 23, 2021. In the 6-3 decision, Chief Justice Roberts, writing for the majority, reversed and remanded the lower courts’ judgment. The Court started with the basic premise that the Constitution does not allow the taking of private property by the state without just compensation. There are clear cut cases where just compensation is required for the taking of property, such as eminent domain or where the government has acted to wholly deprive an owner of use of the property (such as where the property is located in a flood zone following construction of a dam). 

The more nuanced issue is when a government “imposes regulations that restrict an owner’s ability to use his own property.” The Supreme Court rejected the lower court’s focus on the taking being “garbed as a regulation” and held that a taking occurs if government action “restricted a property owner’s ability to use his own property.” In this case, the California law requiring a property owner to provide access to third parties of its property is a “per se physical taking.” It infringes on property owners’ rights by forcing them to allow union organizers on their property and denies them the “treasured rights” to exclude persons from their property. 

The Cedar Point Nursery decision is clearly a setback for union organizers. But the decision could also have significant impacts on government regulators. In his written descent, Justice Breyer cautioned that the majority opinion classifies “virtually every government-authorized invasion [as] an ‘appropriation.’”  Government regulators often require access to private property. Justice Breyer listed just a handful of the countless regulations requiring government access to private property, such as food inspection, preschool licensing, inspections of manufactured homes, inspections of wetlands, and inspections of assisted living facilities. Justice Breyer questioned if the Court’s decision would classify these administrative regulatory inspections as a government “taking.”  

The majority opinion attempts to distinguish its ruling from these other government invasions of private property by claiming that “the government may require private property owners to cede a right of access as a condition of receiving certain benefits, without causing a taking.” But Justice Breyer questioned how well this new system would work when the regulations do not seemingly confer a benefit on the private business. For instance, Justice Breyer questioned if there was a benefit to meat labeled as “inspected” for purposes of interstate commerce. 

The Cedar Point Nursery decision could open the door to lawsuits by private individuals and corporations seeking to limit the government’s ability to enter private property under the auspices of government regulation.  

For more information contact:

Matthew Wallin, Esq.

mwallin@gibbsgiden.com

(310) 552-3400

Matthew Wallin is a senior associate in the Los Angeles office where he practices labor and employment law.  He has extensive experience defending private business and public entities in litigation and advising clients on labor compliance issues.  

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