Supreme Court Upholds Private Property Rights

On June 23, 2021, the Supreme Court by a vote of 6-3 ruled unconstitutional a California regulation allowing union organizers to enter farmland for the purpose of uniting workers. The case, brought by two private farm businesses, challenged the regulation as a violation of the Fifth Amendment, which bars the taking of private property by the government without compensation (Cedar Point Nursery et al. v. Hassid et al., Case No. 20-107, U.S. slip op., June 23, 2021.) The Court held that the government appropriation of a right of access to private property – to literally “take access” – is a per se physical taking.

In this case, a California strawberry grower and a fruit distributer filed this lawsuit challenging a California regulation that permitted union organizers to enter the grounds of agricultural businesses for up to three hours per day, 120 days per year. The plaintiffs claimed that such access constituted an “easement” without consent or compensation, in violation of the Fifth Amendment. 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 Supreme Court held that the CA access regulation was a taking without just compensation because it gave union organizers a right to physically enter and occupy the growers’ land, which takes away the owners’ right to exclude others from the property – “a fundamental element of the property right.”

Notably, the Court reasoned that even though the access was not permanent or constant, the regulation was still a per se physical taking because without such permissible access, the union organizers could have been excluded from the property. Supreme Court precedent has held that the duration of the access, similar to the size of the access, bears only on the amount of compensation due and that intermittent access, as opposed to continuous access, does not make it any less a physical taking.

The Court clarified that the CA access regulation appropriates a right to invade the growers’ property, takes away their right to exclude, and thus is a per se physical taking, rather than simply “regulating access.” A comparison was made to government requirements of property owners ceding a right of access to health and safety inspectors. The Court held that in those instances, having access is a condition of receiving certain benefits (i.e. permits, registrations, and licenses) and does not constitute a taking because the access is germane to the benefit provided and for protection against public risk.

This case has been deemed a victory for the future defense of property rights and may have broader implications for similar government measures, such as the CDC’s eviction moratorium, where takings arguments have also been raised, including in the litigation filed by the Alabama and Georgia Associations of REALTORS®. NAR will continue to analyze this case and the potential impact on other laws and regulations impacting property owners.