August 2021
SCOTUS Continues to Protect Property Rights from Regulatory Takings

By Peter H. Webster, Dickinson Wright, PLLC and Jason C. Long, Steinhardt Pesick & Cohen, PC.

In Cedar Point Nursery v. Hassid, __US__; __ S Ct __ (2021), the Supreme Court held that a California regulation that required property owners to allow union organizers onto their property for three hours per day, 120 days per year, was a per se physical taking because it appropriated, without just compensation, an easement to enter private property.

The key issue was whether the regulation was a per se physical taking. If so, then, “[t]he government must pay for what it takes.” If a restriction only limits an owner’s use of its property, however, the Court generally determines whether the restriction effects a taking using the approach in Penn Central Transportation Co v. New York City, 438 US 104 (1978) that considers factors including the regulation’s economic impact, its interference with reasonable investment-backed expectations, and the character of the government action. But when the government physically appropriates property, Penn Central is not applicable.

SCOTUS held that the regulation was a per se physical taking, reasoning that:

  1. The regulation did not merely limit the owners’ use of their property, but appropriated their “right to exclude.” The right to exclude is “a fundamental element of the property right.” Kaiser Aetna v. US, 444 US 164 (1979).
  2. Because the regulation appropriated a right to physically invade the property — to literally “take access” — it constitutes a per se physical taking.
  3. A physical appropriation is a taking whether it is permanent or temporary; the duration bears only on the compensation due. US v. Dow, 357 US 17 (1958).
  4. The Court acknowledged its statement in Loretto v. Teleprompter Manhattan CATV Corp, 458 US 419 (1982), that “[n]ot every physical invasion is a taking.” But the regulation in Cedar Point Nursery was not changed from a physical taking into a use restriction just because the access was restricted to a discrete group (union organizers), for a narrow purpose, and for a limited time.
  5. The Court distinguished PruneYard Shopping Center v. Robins, 447 US 74 (1980) which applied the Penn Central factors to a claim that the right to engage in leafleting at a privately-owned shopping center resulted in a taking. PruneYard did not establish that limited rights of access should be evaluated under Penn Central rather than as per se takings. Restrictions on how a business generally open to the public may treat individuals are distinguishable from regulations granting a right to invade property closed to the public.
  6. The Court rejected concerns about government entry onto private property.

    a. Precedent makes clear that isolated, unauthorized physical invasions are properly assessed as individual torts rather than takings.
    b. Many government-authorized physical invasions will not amount to takings because they are consistent with longstanding limits on property rights, including common law limits. Lucas v. South Carolina Coastal Council, 505 US 1003 (1992).  
    c. Government may require property owners to grant access in exchange for certain benefits, without causing a taking. Likewise, government health and safety inspection rules will generally not constitute takings.

Cedar Point Nursery furthers the Court’s recent trend of protecting property rights from the overreach of government regulation without paying just compensation. It builds on Knick v. Township of Scott, 588 US__; 139 S Ct 2162 (2019), which overruled Williamson County Regional Planning Commission v. Hamilton Bank, 473 US 172 (1985), to allow property owners alleging violations of the federal Takings Clause to file actions directly in federal court, rather than first filing in state court.

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