The title of this post may have you wondering, especially the part about how a regulation that invites others to physically enter private property, is determined by a court to not be a physical taking. (The court also hints at looking at a physical taking under Penn Central, and not by applying per se rules.)
At issue in the Ninth Circuit's 2-1 opinion in Cedar Point Nursery v. Shiroma, No. 16-16321 (May 8, 2019) was a regulation adopted by California's Agricultural Labor Relations Board which requires agricultural employees to open their land to labor union organizers. The regulation is framed as protecting the rights of ag employees to "access by union organizers to the premises of an agricultural employer for the purpose of meeting and talking with employees and soliciting their support."
The regulation, as the Ninth Circuit majority pointed out, "is not unlimited," and regulates the "time, place, number of organizers, purpose, and conduct" of the union organizers. Slip op. at 7-8. The union is required to submit a "notice of intent to take access" (protip: if you don't want your regulation to be challenged as a taking, maybe start by not calling the entry which the regulation requires a "take').
Two separate agricultural employers filed a § 1983 complaint against the Board in federal court for declaratory and injunctive relief, alleging the regulation was a taking under the Fifth Amendment, and an unlawful seizure under the Fourth Amendment. The district court granted the Board's motion to dismiss for failure to state a claim (12(b)(6)).
Two of three judges on the Ninth Circuit panel agreed, and the court affirmed, concluding the allegations of the complaint do not state a plausible takings claim under Twombly/Iqbal. The employers alleged a physical Loretto taking. Slip op. at 14-15 ("Here, the Growers alleged that the access regulation, as applied to them, effects a Fifth Amendment taking by creating an easement that allows union organizers to enter their property 'without just compensation.' The Growers base their Fifth Amendment argument entirely on the theory that the access regulation constitutes a permanent physical invasion of their property and therefore is a per se taking").
The panel majority rejected the argument that the invasions were permanent. The owners argued they were permanent even though the union organizers cannot remain on the property permanently (obviously), but because they were open-ended, with no end date. The majority instead relied on PruneYard Shopping Center v. Robins, 447 U.S. 74 (1980), in which the Supreme Court concluded that the California Supreme Court had not effected a taking when it held that the California Constitution required shopping centers to be forums for public speech. The Ninth Circuit panel read PruneYard as rejecting the "end-date" requirement:
Thus, in PruneYard there was no “contemplated end-date” to the California Supreme Court’s decision holding that the California Constitution protects reasonably exercised speech and petitioning in privately owned shopping centers. Yet, contrary to the Growers’ argument, the Court did not conclude that the California Supreme Court’s decision resulted in a permanent physical invasion. Id. at 83–84.
Slip op. at 16.
Wait a sec. We have always viewed the result in PruneYard as stemming not from any end-date in the entry allowance, but rather as standing for the proposition that under California property law, the owner of a shopping center than is open to the public for commercial purposes can't be closed off to others who enter for non-commercial purposes.
The panel majority also rejected the argument that union easement in this case was like the beach access easement in Nollan. As you remember, there the Court held there was a taking. (Or, more accurately, that the California Coastal Commission could not condition the Nollans' development permit on them surrendering their right to be compensated for dedicating a public access easement.) The panel majority concluded that the Nollan easement was permanent because the public had a right to enter at any time (unlike the union easement, which can only be effected with advanced notice and at limited times):
Although the access regulation does not have a “contemplated end-date,” it does not meet Nollan’s definition of a permanent physical occupation. As structured, the regulation does not grant union organizers a “permanent and continuous right to pass to and fro” such that the Growers’ property “may continuously be traversed.” Id. at 832. The regulation significantly limits organizers’ access to the Growers’ property. Unlike in Nollan, it does not allow random members of the public to unpredictably traverse their property 24 hours a day, 365 days a year.
Slip op. at 17.
Besides, the panel majority concluded, the right to exclude is only one of the sticks, not the whole shebang. See pages 17-18 of the opinion for all the sticks/bundle analogies you can handle. Again, we thought that there was something doubleplusgood about the right to exclude that made it stand apart from other sticks like the right to develop, for example. But not to the panel majority.
Interestingly, the panel majority did not analyze the regulation under Penn Central, noting the property owners only alleged a permanent physical invasion, and not a regulatory taking. "Therefore, we take no position regarding whether the access regulation falls under the category of takings governed by the standards set forth in Penn Central." Slip op. at 20. But the majority made it pretty clear that it thought Penn Central was the right test, by asserting that both Loretto and Kaiser Aetna, were held to be takings by applying the then-recent Penn Central decision.
True enough, but that does overlook, in our opinion, the fact that the "character of the government action" as a physical invasion in the Court's mind sure did seem to overwhelm the other two Penn Central factors in importance in both Loretto and Kaiser Aetna, so much so that it has become a canard of takings law that a physical invasion is a per se taking without regard to the economic impact or an owner's expectations. Nor does it take into account that since Loretto and Kaiser Aetna, the contours of per se vs ad hoc takings has become more defined.
The majority also rejected the Fourth Amendment seizure claim, concluding that the access regulation was not a "meaningful interference" with the owners' possessory interests in their property. Read pages 22-24 of the opinion for the details.
One judge dissented, concluding that "have found no Supreme Court case holding that non-employee labor organizers may enter an employer’s nonpublic, private property for substantial periods of time, when none of the employees live on the employer’s premises." Slip op. at 25. Judge Leavy disagreed with the majority's view of PruneYard, concluding that the case was mostly about the free speech rights of the invaders, and therefore not very helpful here.
Instead, Judge Leavy concluded that "the Access Regulation allowing ongoing access to Growers’ private properties, multiple times a day for 120 days a year (four 30-day periods per year) is a physical, not regulatory, occupation because the 'right to exclude' is 'one of the most fundamental sticks' in the bundle of property rights." Slip op.at 27. Here, the employees the unions needed to reach did not live on the employers' properties, so there were other ways to get in touch with the employees.
So, what do you think? Might we see more on this case?
Cedar Point Nursery v. Shiroma, No. 16-16321 (9th Cir. May 8, 2019)
