On May 8, 2019, in Cedar Point Nursery v. Shiroma, __ F.3d __ (Case No. 16-16321) (2019), a 2-1 Ninth Circuit panel majority held that a California regulation allowing union organizers access to agricultural employees on employers’ private property, to communicate about union organization under certain limited circumstances, is not a Fifth Amendment taking.
The access regulation, authorized by California’s Agricultural Labor Relations Act, declared that the rights of agricultural employees under the ALRA include “the right of access by union organizers to the premises of an agricultural employer for the purpose of meeting and talking with employees and soliciting their support.” But the access right is not unlimited, however, as the regulation imposes several restrictions relating to time, place, number of organizers, purpose, and conduct.
The plaintiffs alleged that the United Farm Workers union disrupted work by moving through their trim sheds with bullhorns, distracting and intimidating workers, and violated the access regulation by failing to provide the required written notice before taking access. In suing for declaratory and injunctive relief under 42 U.S.C. section 1983, the plaintiffs alleged that the access regulation creates an easement that allows union organizers to enter their property “without consent or compensation” in violation of the Takings Clause of the Fifth Amendment. They based their takings argument entirely on the theory that the access regulation, as applied to them, constitutes a permanent physical invasion of their property, having no contemplated end-date, and is thus a per se taking under Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982).
The district court rejected the plaintiffs’ argument that the regulation constitutes a per se physical taking but granted the plaintiffs leave to amend. Although the plaintiffs could have taken that cue to plead a non-physical regulatory taking under the three-factor analysis established in Penn Central Transportation Co. v. New York City, 438 U.S. 104, 124 (1978), they declined to do so.
The Ninth Circuit panel majority agreed with the district court and determined that the plaintiffs’ argument that the access regulation is a permanent physical occupation, as opposed to a temporary invasion, is contradicted by both PruneYard Shopping Center v. Robins, 447 U.S. 74 (1980) and Nollan v. California Coastal Commission, 483 U.S. 825 (1987).
PruneYard is most famously a free speech case dealing with the PruneYard, a privately-owned shopping center open to the public for purposes of patronizing its tenants and with a policy forbidding visitors and tenants from engaging in public expressive activity unrelated to commercial purposes. But the case also addressed a takings claim about which the Supreme Court concluded that requiring the PruneYard to “permit appellees [i.e., high school students seeking support for their opposition to a United Nations resolution against Zionism] to exercise state-protected rights of free expression and petition on shopping center property clearly does not amount to an unconstitutional infringement of [the PruneYard’s] property rights under the Taking Clause.”
The Ninth Circuit majority acknowledged that the PruneYard was open to the public, but reasoned that fact was merely one of the Supreme Court’s considerations and was not dispositive. Moreover, the Ninth Circuit reasoned that the Supreme Court’s use of Penn Central’s regulatory takings factors, in PruneYard, weighs against the plaintiff’s contention that the access regulation is a permanent physical taking. Finally, the Ninth Circuit noted that the plaintiffs only alleged that the access regulation was a physical invasion under Loretto and never argued that it was a non-physical taking under Penn Central.
The Ninth Circuit rejected the plaintiffs’ argument under Nollan, in which the Supreme Court considered whether the California Coastal Commission could condition the grant of a permit to rebuild a beachfront house on a transfer to the public of an access easement. The Ninth Circuit reasoned that although the union access regulation does not have a “contemplated end-date,” it does not meet Nollan’s definition of a “permanent physical occupation” because it does not grant union organizers a “permanent and continuous right to pass to and fro” such that the plaintiffs’ property “may continuously be traversed.” According to the panel majority, the regulation significantly limits organizers’ access to the plaintiffs’ property and, unlike in Nollan, it does not allow the public to unpredictably traverse their property at any time.
The Ninth Circuit also determined that the plaintiffs have not suffered a permanent physical invasion that would constitute a per se taking because the sole property right affected by the regulation is the right to exclude, which in the panel majority’s view is just one of the essential “sticks” in the “bundle of property rights.” Relying on Loretto, the majority reasoned that in a permanent physical invasion the government does not simply take a single strand from the bundle of property rights: “it chops through the bundle, taking a slice of every strand.”
The dissent was persuaded that the plaintiffs had successfully alleged the access regulation was an unconstitutional taking, reasoning that allowing ongoing access to the employers’ “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” and that the plaintiffs need not allege that the regulation “affects more property right ‘sticks’ beyond this single, fundamental property right.” The dissent also persuasively distinguished PruneYard as principally a free speech case involving a private party regulating the expressive conduct of other private parties entering its property, where the public is invited, whereas Cedar Point Nursery involved a state agency universally regulating the access of nonemployee organizers on private property not open to the public. And the dissent agreed that the plaintiffs had shown that union organizers could access the employees at nearby, off-site premises through alternative means of communication.
Cedar Point Nursery is a fascinating takings case addressing the intersection between statutorily- and regulatorily-authorized labor organizing and constitutionally-protected private property rights. Should the aggrieved plaintiffs in the case file a petition for writ of certiorari, the Supreme Court would have a unique opportunity to finally make clear that private property rights are not the second class rights the case law often reveals them to be.
Questions? Please contact Bryan W. Wenter, AICP of Miller Starr Regalia.
For more than 50 years, Miller Starr Regalia has served as one of California’s leading real estate law firms. Miller Starr Regalia has expertise in all types of real property matters, including full-service litigation and dispute resolution, transactions, acquisitions, dispositions, leasing, financing, common interest development, construction, management, eminent domain and inverse condemnation, exactions, title insurance, environmental law, and land use. Miller Starr Regalia attorneys also write Miller & Starr, California Real Estate 4th, a 12-volume treatise on California real estate law. “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state. For more information, visit www.msrlegal.com.