Cedar Point Part II: Common Sense (Keep Out) And Common Law (The Right To Exclude)

In this post -- the second in a series of deeper dives that we're posting about last week's U.S. Supreme Court opinion in Cedar Point Nursery v. Hassid, No. 20-107 (June 23, 2021) -- we'll be covering more on the "right to exclude," how the Court treated our old frenemy Pruneyard, and how the majority dealt with that case's holding that the California Supreme Court's rule that shopping center owners must allow use of their properties as forums for public speech was not a judicial taking.

Here are all of the posts in our Cedar Point series:

• Part I: SCOTUS's Strawberry Letter 23 To Property Rights
• Part II: Common Sense (Keep Out) And Common Law (The Right To Exclude)
• Part III: No, Chicken Little, The Sky Isn't Falling
• Part IV: The Other Opinions
  
• Part V: Help Us Help You
• Part VI: What Others Are Saying

And in case you missed the live webcast on Friday, July 16, 2021 that featured expert analysis of the case, please don't miss listening to the recording of ALI-CLE's "Takings and Eminent Domain After Cedar Point: What Practitioners Need to Know."

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Last we left it, the Cedar Point majority (Roberts, CJ, joined by Justices Thomas, Alito, Gorsuch, Kavanaugh, and Barrett) had distinguished regulations that require or result in physical invasions of private property from regulations that otherwise "restrict an owner's ability to use his own property." Slip op. at 6. A majority of the latter cases are analyzed under Penn Central (or, in cases where the regulation results in a significant diminution of beneficial use or value, under Lucas), while the former, the majority concluded, result in a categorical obligation to compensate without balancing the Penn Central factors:

The regulation grants union organizers a right to physically enter and occupy the growers’ land for three hours per day, 120 days per year. Rather than restraining the growers’ use of their own property, the regulation appropriates for the enjoyment of third parties the owners’ right to exclude.

Slip op. at 7.

In the core of the opinion, the Court rejected the argument (based on language in Loretto) that categorical treatment is only appropriate for "permanent" invasions, and anything less than a 24/7/365 intrusion is simply a regulation on use, meaning the invasion is merely one of the Penn Central factors to consider. Not so, held the Court, infringing on the right to exclude inflicts a special form of constitutional wrong, and a “different standard applies” to analysis of any regulation that allows a physical invasion, than to other regulations that merely regulate use.

Leaning heavily on Kaiser Aetna's view of the right to exclude as the stick in the property rights bundle "universally held the be a fundamental element of the property right" and "one of the most essential sticks,” the Court held that physical invasions at the invitation of the government undermine the "central importance” of property's exclusive use. See slip op. at 7-8 (citing Thomas W. Merrill, Property and the Right to Exclude, 77 Neb. L. Rev. 730 (1998) (noting the right to exclude is the “sine qua non” of property)). [Barista's note: although not cited in the opinion, you may also want to read Professor Merrill's follow up, "Property and the Right to Exclude II."] The Court called this an "intuitive approach" based as much on "common sense" as precedent. Slip op. at 10. In short, if you don't have the ability to control who can come on your property -- and the law backing you up -- you don't really possess what most folks would think is "property," do you?

The Court addressed the "permanent" language in Loretto and clarified that when it used the phrase there, it was being more descriptive than normative, because the occupation by the cable TV box in that case was indeed "permanent" (even though in reality, very little is really permanent, as our cert stage amicus brief points out). But permanent occupations didn't close out the field of per se takings, the Cedar Point majority clarified, it merely set the ceiling. Intrusions of a lesser duration are also categorical takings. If you took us at our word in Loretto that "permanent" was a hard-and-fast requirement for categorical treatment, you apparently missed Nollan where were told you that wasn't really the rule:

To be sure, Loretto emphasized the heightened concerns associated with “[t]he permanence and absolute exclusivity of a physical occupation” in contrast to “temporary limitations on the right to exclude,” and stated that “[n]ot every physical invasion is a taking.” 458 U. S., at 435, n. 12; see also id., at 432–435. The latter point is well taken, as we will explain. But Nollan clarified that appropriation of a right to physically invade property may constitute a taking “even though no particular individual is permitted to station himself permanently upon the premises.” 483 U. S., at 832.

Slip op. at 11.

Did anyone accurately predict that the Court would have
to burn the Loretto opinion in order to save the Loretto rule?

So "permanence," vel non, is not where the line is. Nor are the purpose or scope of the the access regulation particularly relevant. See slip op. at 12 (rejecting the Board's argument that California's regulations are more limited than the easement in Nollan because they are designed only to allow a limited class of union organizers and not the general public to access property). That does not change the essential character of the regulation from one requiring access to one regulating use. The Cedar Point opinion reemphasized the nature of the imposition: 3 hours per day, up to 120 days per year, with the union organizers in the event that triggered the lawsuit showing up unannounced at 5am.

Nor is the label put on the access terribly important. The Court rejected the argument that California's regulation does not impose an actual easement because it is neither labeled an easement nor has all of the usual attributes of an easement (a burden on a specific parcel, is not recordable, for example). Slip op. at 12-13. Yes, state law is the source of most of the sticks in property, but (a) California law otherwise would recognize Cedar Point's right to control who comes onto its property, and (2) most importantly, state law has never been the be-all-end-all of what counts as "property" under the U.S. Constitution.

In that regard, the Court has traditionally been most protective of the right to exclude (and a few other sticks), and it is one of the areas in which the Court has exhibited some “anti-federalism” leanings—by concluding that there are certain "fundamental" or "core" notions of private property in which state law may not intrude, even if state law for the most part defines and shapes property law.

Justice Thurgood Marshall said it best in Pruneyard Shopping Center v. Robins, 447 U.S. 74 (1980). where the Court considered whether a shopping center open to the public was a forum for public speech. The California Supreme Court had expressly changed its prior view of the California Constitution’s free speech provision, overruled an earlier decision holding that it did not protect speech on shopping center property, and held that shopping centers therefore were fora for public speech. The shopping center owner appealed (yes, appealed) to the U.S. Supreme Court, asserting what later became known as a judicial taking: the owner argued that when the California Supreme Court changed its speech jurisprudence to allow a physical invasion of its property by handbillers the owner wished to exclude, a taking resulted.

The U.S. Supreme Court held that the California Supreme Court’s decision was not a taking, even though the California court acknowledged it had changed California law. The change in law did not interfere with the shopping center owner’s right to exclude because it had voluntarily opened its property to the public for shopping for the owner’s commercial gain, it thus possessed only a limited right to exclude; the shopping center failed to demonstrate that allowing both handbillers and shoppers would interfere with whatever right to exclude remained. Having invited the public in to shop, the owner could not be heard to complain that others entered as well. In short, the shopping center owner “failed to demonstrate that the ‘right to exclude others’ is so essential to the use or economic value of their property that the state-authorized limitation of it amounted to a ‘taking.’” Pruneyard, 447 U.S. at 84. Despite that holding, however, the Justices did not seem at all bothered by the notion that the takings doctrine might require them to make qualitative judgments about state property law.

Justice Marshall concurred in a separate opinion setting forth his view that property has a “normative dimension” which the U.S. Constitution protects from state court redefinition:

I do not understand the Court to suggest that rights of property are to be defined solely by state law, or that there is no federal constitutional barrier to the abrogation of common law rights by Congress or a state government. The constitutional terms “life, liberty, and property” do not derive their meaning solely from the provisions of positive law. They have a normative dimension as well, establishing a sphere of private autonomy which government is bound to respect.

Id. at 93 (Marshall, J., concurring). Justice Marshall continued:

Quite serious constitutional questions might be raised if a legislature attempted to abolish certain categories of common-law rights in some general way. Indeed, our cases demonstrate that there are limits on governmental authority to abolish “core” common-law rights, including rights against trespass, at least without a compelling showing of necessity or a provision for a reasonable alternative remedy.

Id. at 93–94 (Marshall, J., concurring). Justice Marshall noted that in Ingraham v. Wright, 430 U.S. 651 (1977), the Court determined the Due Process Clause prohibits abolishment of “those privileges long recognized at common law as essential to the orderly pursuit of happiness by free men.” Id. at 94 n.3 (Marshall J., concurring) (quoting Ingraham, 430 U.S. at 672–73).

In Stop the Beach Renourishment, for example, six Justices agreed that “private property” is not a completely malleable concept that may be redefined at will by state courts. The plurality noted that in Lucas, the Court had reserved for itself the determination whether the restriction in the regulation that was claimed to work a taking was inherent in title and a preexisting limitation on land ownership.

The “core” common law property rights referenced by Justice Marshall include aspects of property such as interest following principal. Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 162 (1980) (legislature may not simply declare that interest on principal is state-owned property); Phillips v. Wash. Legal Found., 524 U.S. 156, 172 (1998) (interest on lawyers’ trust accounts is “property”). Obtaining ownership of accretion. Cnty. of St. Clair v. Lovingston, 90 U.S. 46, 68–69 (1874) (right to future accretions is a vested right and “rests in the law of nature”). The  the ability to transfer property. Hodel v. Irving, 481 U.S. 704, 716 (1987) (passing property by inheritance is a fundamental attribute of property). Importantly, making reasonable use and development of land. Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1019 (1992). And, of course, the right to exclude others.

When these core rights are threatened, the Justices now in the majority have had little difficulty finding them to be fundamental property rights that transcend a state’s ability to redefine them by regulating them out of existence without just compensation, and without detailed reliance on state law. See Lucas, 505 U.S. at 1014 (“[T]he government’s power to redefine the range of interests included in the ownership of property was necessarily constrained by constitutional limits.”) (citation omitted).

But what about Murr, you ask? In that case the tables were turned, with the Chief Justice dissent arguing that Wisconsin law should define (or at least be the presumptive controlling law) for the "larger parcel" issue. There's no direct mention of Murr in the Cedar Point majority opinion, but we're guessing that the Chief reconciled what might be viewed as his contrary dissent that state law should define the parcel, but not the property right

I think the answer is far more straightforward: State laws define the boundaries of distinct units of land, and those boundaries should, in all but the most exceptional circumstances, determine the parcel at issue.

Murr v. Wisconsin, 137 S. Ct. 1933, 1953 (2017) (Roberts, CJ, dissenting) (emphasis added). We'll see if that distinction is challenged.

In what's been a long time coming (in our opinion), the Court definitively clarified Pruneyard. That case merely stands for the proposition that by opening its property to the public for some purpose, the owner can't really say it has some absolute right to keep the public out:

Limitations on how a business is 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.

Slip op. at 14-15. There's some nuance in Pruneyard, naturally. Opening up your property to A, doesn't necessarily mean you think its okay for B to come on and shout political slogans at you, A, and others who might just want to shop or work in peace, and there may be limitations on how deeply the government may dictate what members of the public do once they are on the property. But that doesn't really seem like a categorical takings problem.

In sum, the Cedar Point majority accepted the notion that by inviting the agricultural workers on its property, the property owners did not also open up the property to others who might be, let's say, "appurtenant" to those workers. Absent some Pruneyard-like facts, the choice remains with the property owner.

To wrap up this post, here's the short story about what will not automatically get a regulation requiring access to property off the takings hook after Cedar Point:

• permanence
• the number or classification of people or things doing the invading
• whether the regulation or state law describes the access as an "easement"

That, as we concluded in our first post is a strong affirmation of property rights generally, and for common understandings of what it means to own something more specifically.

What does this portend for regulations that impose a "lesser" level of invasion? And are there exceptions to the general rule that all invasions -- whether straight-up government incursions, or regulations that throw open otherwise closed doors to third parties -- are presumed to be takings?

Stay tuned for Part III, where we'll take a look at that.

Cedar Point Nursery v. Hassid, No. 20-107 (U.S. June 23, 2021)