The Supreme Court Further Expands The Definition Of A Physical – Mondaq News Alerts

At the end of its recent term, the U.S. Supreme Court handeddown a new decision on the law of takings. The case, CedarPoint Nursery v. Hassid, was a labor relations disputedisguised as a takings case, but its resolution has importantimplications for the terms on which New York developers can getaccess to adjoining property in aid of their construction projects.In Cedar Point Nursery, a divided Court ruled, by a 6-3vote, that a state regulation authorizing very limited temporaryentry by union organizers onto private agricultural propertyamounted to a physical "taking" of property that violatedthe Fifth and Fourteenth Amendments to the Constitution.1 Thedecision expands the concept of what is a physical taking andraises questions about the further expansions of takings law thatmay follow.

The last clause of the Fifth Amendment to the U.S. Constitution,part of the Bill of Rights adopted in 1791, provides: "norshall private property be taken for public use, without justcompensation." Although originally applicable only to thefederal government, the Fourteenth Amendment, adopted after theCivil War, makes the principle equally applicable to the states andtheir political subdivisions.2

The most obvious example of a taking is when the government or a private party authorized by law to do so (such as autility) exercises the power of eminent domain to acquireactual ownership of private property, or at least a permanentinterest in property. In that situation, a public purpose and justcompensation are required by the Constitution.3 Other situations are notso obvious and have spawned a large body of court decisionsaddressing countless permutations.

Supreme Court precedent distinguishes between"physical" takings and "regulatory" takings.Physical takings are unconstitutional per se (i.e., automatically)in the absence of a public purpose and compensation. By contrast,an owner's claim that it has been subjected to a regulatorytaking in effect, a claim that although there has been nophysical invasion of its property, a law, regulation or othergovernmental action has intruded so far into its property rights asto amount to a taking must be analyzed and evaluated on afact-specific, case-by-case basis.

What rises to the level of a physical taking, however, isn'talways clear either, and the concept has expanded over the years.In 1946, the Supreme Court held that repeated low-altitudeoverflights by military aircraft approaching and leaving a nearbyairport, the effect of which was to destroy the owners' abilityto operate their chicken farm, constituted a taking.4 In 1979,the Court held that the government's claim of a navigationalservitude over private property, the effect of which was to allowthe public to access the property on a continuous basis,effectuated a taking.5 And in 1982, the Court held that even ade minimis permanent physical occupation of property is a taking;more specifically, the Court struck down as unconstitutional a NewYork statute requiring owners of apartment buildings to allow cableTV companies to attach their cables to the owners'buildings.6 Which brings us to the Cedar PointNursery case.

A regulation under California's Agricultural Labor RelationsAct gave labor organizations a limited right of access to privateagricultural property. Access was allowed in no more than four30-day periods in any one calendar year, and only during threehours during any one day one hour before work, one hourduring the lunch break and one hour after work. Access was limitedto two organizers per work crew, plus one additional organizer forevery 15 workers over 30 workers in a crew. The property owner wasentitled to prior notice. Disruptive conduct was prohibited, butthe union organizers were otherwise free to meet with employees todiscuss labor or union issues.

Cedar Point Nursery is a large California strawberry grower. Itclaims that, one morning in 2015, United Farm Workers organizersentered its property and disturbed its operations, causing someworkers to join a protest and others to leave the worksite. Alongwith a second grower, it sued in federal court, arguing thatCalifornia's regulation effected an unconstitutional physicaltaking of its property. The trial court dismissed the lawsuit, anda divided U.S. Court of Appeals for the Ninth Circuit affirmed thatdecision. The Supreme Court agreed to hear the case.

The Court reversed the Ninth Circuit's decision and ruled infavor of the nursery. Perhaps not surprisingly, given thecase's origin in a dispute about union activity, the Courtsplit along partisan lines, with the six Republican-appointedjustices forming the majority and the three Democrat-appointedjustices dissenting.

Chief Justice John Roberts wrote for the majority that "theaccess regulation appropriates a right to invade the growers'property and therefore constitutes a per se physical taking."The opinion emphasized that the short duration of time during whichthe regulation allowed entry onto property was irrelevant, and thelength of the appropriation "bears only on the amount ofcompensation." The opinion affirmed that physical invasionsare takings even if they are intermittent instead of permanent,citing United States v. Causby, the 1946 decision in whichthe Court held that occasional low-altitude military overflightshad effected a taking (although in Causby the overflightshad destroyed the owners' business).

To reconcile this absolutist definition of a taking withcommonly recognized circumstances in which limited entry ontoprivate property has long been allowed, the majority opinionarticulated a series of exceptions to this per se rule. First,"isolated physical invasions, not undertaken pursuant to agranted right of access, are properly assessed as individual tortsrather than appropriations of a property right." Second,access that is "consistent with longstanding backgroundrestrictions on property rights," including "traditionalcommon law privileges to access private property," is anotherexception. And third, "the government may require propertyowners to cede a right of access as a condition of receivingcertain benefits, without causing a taking."

The dissenting opinion was written by Justice Stephen Breyer. Itargued that the California regulation did not effect a per setaking because it did not appropriate anything, but only regulatedemployers' right to exclude others from their property.

The Cedar Point Nursery majority and dissentersdisagreed about how to distinguish between the appropriation ofproperty and regulation of the right to exclude. Because the Courtheld that the California regulation allowing limited access byunion organizers to agricultural properties was in fact anappropriation, the decision raises questions about how much furtherthe Court might go and how far property rights advocateswill push the Supreme Court and lower courts in expandingthe concept of a taking.

To begin with, any law or regulation requiring that unionrepresentatives be given access to a workplace or job site is now to say the least constitutionally suspect.

In future cases, moreover, courts are likely to be asked toclarify the exception to the per se rule that Cedar PointNursery recognized for access that is "consistent withlongstanding background restrictions on property rights." Theopinion provided no further definition of this exception beyond areference to "traditional common law privileges." Priorcase law from around the country has recognized multiple situationsin which entry onto another's land without the owner'spermission is allowable, including, for example, to bypass animpassible section of a public road, to retrieve personal property,to abate a private or public nuisance, to stop a crime or to make alawful arrest.7Are all of these examples still good law after Cedar PointNursery?

Even if these cases remain good law, is only court-made lawstill valid? One possible implication of the absolutistinterpretation of a taking in Cedar Point Nursery is that,while court-made exceptions to the per se rule remain valid, stateand local governments are powerless to enact statutes thatrecognize limited rights of entry in defined circumstances.

In 1980, for example, a unanimous Supreme Court agreed thatCalifornia's Supreme Court could properly interpret its stateconstitution as protecting the right of peaceful protestors to setup a card table in a shopping mall's central courtyard,distribute pamphlets and collect signatures over the objection ofthe mall's owner, which maintained a blanket policy againstexpressive activity on its premises.8 In reaching this result,the Court's opinion, written by Justice (later Chief Justice)William Rehnquist, explained that, while "property does not'lose its private character merely because the public isgenerally invited to use it for designated purposes,'"that principle "does not ... limit the authority of the Stateto exercise its police power or its sovereign right to adopt in itsown Constitution individual liberties more expansive than thoseconferred by the Federal Constitution."9 In response to the mallowner's contention that "a right to exclude othersunderlies the Fifth Amendment guarantee against the taking ofproperty without just compensation," the Supreme Court'sopinion explained that "it is well established that 'notevery destruction or injury to property by governmental action hasbeen held to be a "taking" in the constitutionalsense,'" and "the determination whether a state lawunlawfully infringes a landowner's property in violation of theTakings Clause requires an examination" of multiplefactors.10

The only way to reconcile this case-by-case approach with theper se rule of Cedar Point Nursery is to rely on the factthat the shopping mall was open to the public, although not for thepurpose that the visitors in that case sought to use it, while inCedar Point Nursery the owners did not open their land tothe general public. But the Court specifically said in the shoppingmall case (and in prior cases) that private property does not"lose its private character" even if it is open to thegeneral public a point that is inconsistent with adistinction based on private property's status as open to thegeneral public.

Closer to home, New York has a statute, Section 881 of the RealProperty Actions and Proceedings Law, that empowers courts to grantlicenses allowing property owners to gain temporary access toneighboring property for the purpose of effectuating repairs orimprovements to their own property "upon such terms as justicerequires." The statute often has been used by developers andtheir contractors to compel recalcitrant neighbors to allow them toenter onto adjoining property to perform surveys and installprotective measures. The statute does not require compensation,although it is not unusual for courts, in the exercise of theirdiscretion, to require the payment of a fee if the entry is formore than a de minimis length of time for example, if thepurpose of the entry is to install and maintain temporaryprotective scaffolding. Is this statute unconstitutional due to itsfailure to expressly require the payment of "justcompensation" in accordance with the Fifth Amendment? Orperhaps due to its creation of a right of access in the service ofa private purpose rather than a public one? It seems inevitablethat these issues and others of a similar nature will be litigated in a future case. The risk of the issue beingraised should motivate developers to avoid litigation if possibleand to be prepared, if necessary, to augment the usual protectionsprovided in access agreements (such as indemnification andinsurance) with some amount of compensation for the temporaryintrusion onto a neighbor's property.

Footnotes

1 CedarPoint Nursery v. Hassid, 594 U.S. ___ (No. 20-107, June 23,2021).

2Chicago, Burlington & Quincy Railroad Co. v. City ofChicago, 166 U.S. 226 (1897).

3Id.

4United States v. Causby, 328 U.S. 256 (1946).

5Kaiser Aetna v. United States, 444 U.S. 164(1979).

6Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419(1982).

7See, generally, Restatement(Second) of Torts 195-211.

8PruneYard Shopping Center v. Robins,447 U.S. 74 (1980). Members of the Court issued multiple separateopinions explaining their reasoning, but all of the justices agreedwith the result.

9 Theinternal quotation in PruneYard is from the Court'sprior opinion in Lloyd Corp. v. Tanner, 407 U.S. 551(1972), where the Court upheld the right of a shopping mall ownerto prohibit public expression on its premises.

10 Theinternal quotation in this excerpt from PruneYard is fromArmstrong v. United States, 364 U.S. 40(1960).

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The Supreme Court Further Expands The Definition Of A Physical - Mondaq News Alerts