Supreme Court Limits Ability to Compel Access to Private Property Without Compensation

On June 23, 2021, the United States Supreme Court ruled that a California law granting union organizers the “right to access” an employer’s private property violated the United States Constitution because it took the employer’s property for public use without providing compensation. In the decision Cedar Point Nursery v. Hassid, the Supreme Court ruled that a law allowing third parties to access a private employer’s premises, even for purposes of union organizing activity on a temporary basis (three hours per day, 120 days of the year) amounted to a physical taking of the employers’ property without just compensation. In its decision to invalidate the California law, the Supreme Court was careful to note that no employee resided on the employer’s premises. In ruling for the employer and finding that the California labor regulation violated the United States Constitution, the Court distinguished between laws such as California’s that would allow a physical occupation of private land by a third-party and laws that are permissible regulations of the owner’s use of private property.

The Court ruled a taking occurs when “the government has physically taken property for itself or someone else – by whatever means – or has instead restricted a property owner’s ability to use his own property.” Cedar Point, Slip op. p. 7. In an effort to distinguish the California labor regulation at issue in the Hassid case from civil rights and other laws that govern the conduct of businesses open to the public, the Court noted that “[l]imitations on how a business 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.”  Cedar Point, Slip op., pp. 14-15.

Defining what can oftentimes be a nebulous standard of when a law constitutes an unconstitutional taking rather than a lawful regulation of use, the Supreme Court emphasized that a hallmark of a government taking is when the government takes away an owner’s right to exclude others from its property, “one of the most treasured rights of property ownership.” Cedar Point, Slip op., p. 7. As in all takings, the United States Constitution mandates the remedy for the property owner is compensation as opposed to a return of the property.

The attorneys in Lewis Rice's Federal Takings Practice Group focus on both proving the taking has occurred as well as establishing the value of the property that was taken. If you have questions around navigating when, how, and under what circumstances laws and regulations can constitute a taking, contact an author listed above.