Supreme Court’s Latest Labor Decision Affirms Farming Companies’ Property Rights

On June 23, the United States Supreme Court ruled in favor of farming operations when it held that a California regulation that gave union organizers access to farm companies’ property to recruit agricultural workers constituted an “unconstitutional taking” of private land.  Specifically, by a 6-3 vote, the Court found the California regulation akin to the government taking private property for public use without just compensation, in violation of the U.S. Constitution’s Fifth Amendment.

The Decision

The case, Cedar Point Nursery v. Hassid, involved a California regulation, issued in 1975 and unique in the nation, that allowed union organizers to meet with agricultural workers at work sites in the hour before and after work and during lunch breaks for as many as 120 days per year.  Under the regulation, union organizers did not need to obtain the employer’s consent before entering their property.

After union organizing efforts in 2015, Fowler Packing Company, a shipper of grapes and citrus, and Cedar Point Nursey, a grower of strawberry plants, challenged the law, arguing that it amounted to a government taking of private property without compensation.  The Takings Clause of the Fifth Amendment, applicable to the States through the Fourteenth Amendment, provides: “[N]or shall private property be taken for public use, without just compensation.”

The Ninth Circuit Court of Appeals ruled that the regulation did not impose a burden so heavy that it amounted to an unconstitutional taking because the right of union organizers to access employers’ property was temporary and intermittent.  The Supreme Court disagreed.  Chief Justice John Roberts, writing for the majority, explained that the Ninth Circuit’s “position is insupportable as a matter of precedent and common sense.  There is no reason the law should analyze an abrogation of the right to exclude in one manner if it extends for 365 days, but in an entirely different manner if it lasts for 364.”

In the majority’s view, “the access regulation grants labor organizations a right to invade the growers’ property” and is, therefore, a “per se” unconstitutional taking.  A per se taking occurs when the government physically acquires private property for a public use.  Per se physical takings can occur even when the taking is minimal.  For instance, in a prior decision, the Supreme Court ruled that requiring landlords to allow cable television companies to install their equipment on their buildings was a per se taking of property that required compensation, even though the equipment occupied just 1.5 cubic feet of space on the exterior of each building.  In such situations, the government must pay for what it takes.  In this case, the Court explained, “[r]ather than restraining the growers’ use of their own property, the regulation appropriates for the enjoyment of third parties the owners’ right to exclude.”

Justice Breyer wrote a dissent responding to the majority’s position, stating that “this regulation does not ‘appropriate’ anything; it regulates the employers’ right to exclude others.”  Justice Breyer expressed concern that the “majority’s conclusion threatens to make many ordinary forms of regulation unusually complex or impractical,” such as regulations that permit temporary entry onto a property owner’s land for purposes of examining food products or performing inspections for compliance with preschool licensing requirements.

The majority opinion dismissed Justice Breyer’s concerns, stating that “[g]overnment health and safety inspection regimes will generally not constitute takings” because the government may make such inspections a condition of granting licenses and permits.

In addition, the majority explained that its decision did not invalidate its prior decision in PruneYard Shopping Center v. Robins, where the Court held that allowing high school students to gather petitions at a private shopping mall did not amount to a taking of the mall’s property.  Chief Justice Roberts wrote, “[u]nlike the growers’ properties, the PruneYard was open to the public, welcoming some 25,000 patrons a day.  Limitations on how a business generally open to the public may treat individuals on the premises are readily distinguishable from regulations granting a right to invade property closed to the public.”

The Supreme Court’s decision reversed the judgment of the Ninth Circuit and remanded the case for further proceedings.

Bottom Line

The Supreme Court’s decision is a victory for property rights.  However, the future of California’s regulation is not yet determined, as Chief Justice Roberts did not say what should follow from the Court’s holding that the regulation was a taking.  While the farming companies sought an injunction barring union organizers from accessing their property, the typical remedy for a government taking of private property is just compensation.  California may elect to avoid injunctive relief by providing compensation to farming operations to allow union organizers to continue accessing employers’ property.

Regardless, the decision affirms the notion that a private property owner may generally exclude others, subject to PruneYard’s holding involving “already publicly accessible” businesses. We will continue to monitor this case for further developments.