The Obscure Case That Could Blow Up American Civil-Rights and Consumer-Protection Laws

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On Monday, the Supreme Court heard a case that focuses on obscure and technical points of property law, but has the potential to devastate major areas of law, such as rent control and civil rights. The case, Cedar Point Nursery v. Hassid, involves a decades-old California law that allows agricultural labor organizers to enter commercial farms in order to meet with farmworkers and educate them about their rights.

That law has been on the books since 1975, and agribusiness has hated it from the beginning. It grants farmworker labor organizers access to farmers’ property, though in an effort to minimize any impact their presence would have on the owners’ operations, it sets limits on when and where organizers can enter. Commercial farmers have repeatedly challenged the law, arguing that it violates landowners’ rights under the takings clause—the part of the Fifth Amendment of the Constitution stating that private property cannot be “taken for public use without just compensation.” Previous challenges to the California law have been uniformly rejected by state and federal courts, and the plaintiffs in Cedar Point failed to persuade any of the lower courts to invalidate the law. And yet, the farmers may now have found just the audience they need in the Supreme Court’s new 6–3 conservative majority.

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If the Court does endorse the legal theory that the farmers advocate, the consequences could reshape American law for decades to come. This is because the theory rests on the dramatic claim that any government regulation allowing people not invited by the owner to enter private property is equivalent to the government installing a sidewalk or a pipeline on private land. The plaintiffs’ lawyers have claimed that the California regulation allowing labor organizers to access their land constitutes a “permanent physical occupation” of the owners’ property. The characterization seems far-fetched on its face. The right of access is not physical, except when organizers are actually present. Nor is it permanent—the organizers are there only occasionally. And even the abstract legal right of access is itself ephemeral, because it arises or disappears depending on how a farmer chooses to use a particular piece of land. If no farmworkers are present, there is no right of access.

The legal implications of the plaintiffs’ theory are hard to contain. By the farmers’ reasoning, government regulations that require owners to grant outsiders even occasional access to their commercial property, no matter how circumscribed, would amount to permanent physical occupation and would automatically violate the Constitution’s protection of private ownership against uncompensated expropriation. For example, federal civil-rights laws enacted to end Jim Crow segregation in private businesses that open their doors to the general public, such as restaurants and movie theaters, limit the power of business owners to exclude potential customers on account of their race, religion, or national origin. By the farmers’ interpretation of the Fifth Amendment, requiring an anti-Semitic hotel owner to rent a room to an orthodox-Jewish family would seem to amount to a permanent physical occupation of the hotel owner’s property by the government, because it requires the prejudiced owner to allow access to his property by people he would rather exclude for purposes other than engaging in a reasonable search. For the same reason, rent-control laws that obligate landlords to renew tenants’ leases or rent units out for lower prices than they would otherwise be able to charge might also count as “permanent physical occupations.”

That the Cedar Point case even found its way to the Supreme Court is an ominous sign. For decades, the conservative legal movement has eyed the takings clause as a potential vehicle for limiting the government’s regulatory powers. As described in a 1991 book by Charles Fried, one of Ronald Reagan’s solicitor generals, a group of conservative lawyers in the 1980s, led by then–Attorney General Edwin Meese, “had a specific, aggressive and … quite radical project in mind: to use the Takings Clause of the Fifth Amendment as a severe brake upon federal and state regulation.”

What made the project “quite radical” is that the takings clause, in a straightforward reading, simply prohibits the government from “tak[ing] private property for public use without just compensation.” This language seems to stand for the uncontroversial proposition that the government should compensate property owners when it uses its power of eminent domain to seize private property for public projects. But the conservative legal movement has aimed to expand the interpretation of the clause by treating certain limitations on owners’ freedom of action as the equivalent of a “taking,” hoping in the process to constrain the government’s power to regulate private businesses. Even though the Constitution says that the legal remedy for a “taking” is simply the payment of just compensation, litigating the taking question itself (and, if successful, what counts as just compensation) provides a pathway for well-financed landowners to gum up the works of government regulation.

The takings-clause project enjoyed some early successes. In a series of cases in the ’80s, the Supreme Court found that a regulation automatically constitutes a taking of property when it has the effect of depriving owners of all economically viable uses of their property, such as a zoning law that renders a lot totally unsuitable for development, or when it authorizes a “permanent physical occupation” of private property, such as a law requiring building owners to allow an energy company to install solar panels on their roofs. In all other cases, however, the Court has applied a test first articulated in the 1978 case of Penn Central Transportation Co. v. City of New York, which calls on courts to carefully weigh the nature and extent of the regulatory interference with private-property rights to determine whether a taking has occurred. The takings-clause project seemed to run out of steam in the early 2000s, when the Supreme Court began turning away from bright-line rules and steadily expanding the reach of Penn Central. Today, emboldened by Senate Minority Leader Mitch McConnell’s success in packing the federal courts, property-rights activists hope to harness the Supreme Court’s conservative majority to revive the project.

Much of Monday’s argument focused on the question of which test to apply—Penn Central’s highly contextual analysis or the bright-line rule that automatically deems a “permanent physical occupation” to be a taking. Property-rights advocates have long been critical of the Penn Central approach, in part because it puts the burden on landowners to demonstrate that the challenged government regulation has materially harmed them by imposing significant economic losses, singling them out for uniquely unfavorable treatment, or impinging on their ownership rights in a particularly intrusive way. Under the bright-line test, however, a landowner need only establish that the government regulation authorizes a “permanent physical occupation.” The only question that would then remain is how much compensation is due. Plaintiffs have been very creative in trying to shoehorn their claims into the “physical occupation” category. A cable-television company, for example, once tried to argue that being required to carry a particular channel constituted an “occupation” of its lines by the electronic signals flowing through them. The courts have historically rejected these sorts of efforts to expand the reach of the test, choosing to construe it narrowly and literally. After all, the consequences of letting the test get out of hand could disrupt wide swaths of regulations that most people view as both uncontroversial and important.

In an attempt to make the justices comfortable with the extreme step he was asking them to take, the plaintiffs’ attorney spent a great deal of Monday’s oral argument trying to downplay the potential implications of a Supreme Court decision in favor of the farmers. For example, one group of people the government often requires farmers to allow onto their land are food-safety inspectors. Right out of the gate, Chief Justice John Roberts asked the farmers’ lawyer whether laws requiring landowners to grant access to these inspectors would also violate the takings clause. No, the lawyer answered, because the government’s entitlement to enter private property to engage in “reasonable” searches is already an implicit limitation on owners’ rights. Of course, this response does not rule out the possibility of endless future litigation over what counts as reasonable or unreasonable when it comes to such inspections.

Two justices—from opposite sides of the political spectrum—seemed particularly keen to find a solution that would limit the potential for collateral damage. Justice Brett Kavanaugh repeatedly asked lawyers for both sides why an earlier line of Supreme Court cases that narrowly construed the rights of union organizers to access private property under federal labor law did not provide a basis for striking down the California law without establishing a dramatic new takings-clause precedent. Somewhat surprisingly, Justice Sonia Sotomayor also seemed to telegraph with her questions that she thought the plaintiffs would prevail, but she suggested that it could be done without expanding the Court’s use of bright-line rules. At one point, she asked the plaintiffs’ lawyer why the Court shouldn’t apply a 2012 case involving government-caused intermittent flooding of land, which found that such flooding might constitute a taking while reaffirming the Court’s suspicion of bright-line rules in this area of law. “Why don’t you win under that [case]?” Later, she repeated the question (“Don’t you win?”), but zeroed in on the same federal-labor-law cases as Justice Kavanaugh. Tellingly, the lawyer for the farmers argued as passionately against these alternative pathways to victory as he did in favor of his takings-clause theory. After all, the point is not so much a victory for these particular farmers as a shift in the law that will provide a powerful new tool for property-rights advocates.

The convergence of Justices Kavanaugh and Sotomayor in searching for a strategy to rule in favor of the farmers without expanding the reach of the takings clause seems to bode ill for farmworkers’ advocates. There is almost certainly no pathway to fully rejecting the plaintiffs’ claim without Justice Sotomayor’s vote. But even a compromise position seems unlikely. If both Justices Stephen Breyer and Elena Kagan were to sign on to a Kavanaugh-Sotomayor compromise, whatever that might look like, that would still be only four justices. A narrow decision would need to attract at least one more vote to avoid creating a potent new weapon for challenging government regulation. Chief Justice Roberts asked some probing questions of both sides but, characteristically, revealed very little about which way he was leaning. Whatever the Court decides to do, the grim math of this new 6–3 majority clearly means that just keeping the losses incremental will be a heavy lift.