Deep Dive Episode 169 – Courthouse Steps Oral Argument: Cedar Point Nursery v. Hassid

In Cedar Point Nursery v. Hassid, the Supreme Court will decide whether a California “Access Regulation” violates the Takings Clause of the Fifth Amendment. The Access Regulation allows union organizers to enter the private property of agricultural employers in the state for three hours per day, 120 days per year, for the purposes of soliciting employees to join the union.

Petitioners Cedar Point Nursery and Fowler Packing Company, Inc., are California agricultural employers subject to the Access Regulation. In 2015, union organizers came onto the property of Cedar Point Nursery, a strawberry plant harvester near the Oregon border. The same year, union organizers filed an unfair labor practices charge against Fowler Packing, a citrus and table grape grower, alleging that Fowler denied access to union organizers seeking to enter their property. Petitioners contend that the Access Regulation constitutes a per se taking by appropriating an easement for the benefit of third party union organizers. Petitioners add that, because there is no mechanism for providing just compensation to Petitioners, the Access Regulation violates the Takings Clause.

Respondents are members of the Agricultural Labor Relations Board. They argue that per se taking analysis is inappropriate because of time, place, and manner limitations contained in the Access Regulation. They urge the Court to analyze the Access Regulation under the multi-factor balancing test invoked in cases involving regulatory takings.

In 1979, a divided California Supreme Court rejected a takings claim brought by other California growers shortly after the Access Regulation went into effect. Petitioners in this case brought this case in federal court. A divided Ninth Circuit affirmed a district court’s decision rejecting Petitioners’ Fifth Amendment claim, and Petitioners’ petition for rehearing en banc was denied over the dissent of eight judges. The Supreme Court accepted the case in November 2020, and heard oral arguments on March 22, 2021.

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Transcript

Although this transcript is largely accurate, in some cases it could be incomplete or inaccurate due to inaudible passages or transcription errors.

[Music]

 

Nick Marr:  Welcome everyone to The Federalist Society’s Teleforum conference call as this afternoon, March 22nd, 2021, we’re covering oral arguments in Cedar Point Nursery v. Hassid. Oral arguments in this case were heard earlier this morning in the Court and we’re covering them now, today. I’m Nick Marr, Assistant Director of Practice Groups here at The Federalist Society.

 

      As always, please note that expressions of opinion on the call today are those of our expert.

 

      Just a brief introduction. We’re very pleased to be joined this afternoon by Mr. Wen Fa. He’s an attorney at Pacific Legal Foundation. Mr. Fa is going to give case overview, a review of the oral arguments, and then we’ll leave some time at the end for audience questions. So be thinking of those as we go along and be prepared for when we get to that portion of the call.

 

      All right, and with that, thanks very much for being with us here, Wen. I’ll give the floor to you.

 

Wen Fa:  Thank you Nick. And thank you as always to The Federalist Society for having me on. As you mentioned, I will be talking about Cedar Point Nursery v. Hassid, an important property rights case that was argued before the Supreme Court of the United States by my colleague, Joshua Thompson, this morning.

 

      I do want to give to brief caveats right off the bat. First, I am one of the attorneys representing the petitioners in this case. And second, I am here, of course, speaking only in my personal capacity. All the views expressed are my own. The arguments, I think, were made fully and adequately, I think, in our brief and at the oral argument this morning. So with that, let’s jump into the case.

 

      This case involves a taking challenge to an access regulation promulgated by California’s Agriculture and Labor Relations Board. This access regulation was promulgated in 1975. It applied to every single agricultural business in California. And it allows union organizers to come onto the land of private agricultural growers in California for three hours per day, 120 days per year. The access regulation allows union organizers to come onto the land for the purposes of soliciting employees to join the union. They can take access for an hour before lunch, an hour during lunch, and an hour after work. And they may take access for four 30-day periods throughout the year.

 

      Now right after this access regulation was promulgated in 1975, it was immediately challenged by a group of growers in state court.  And the state superior courts actually issued an injunction enjoining California from enforcing this access regulation. But the California Supreme Court, in a divided decision, ended up reversing those decisions and allowing access regulation to stay in effect [inaudible 00:03:22] in 1976.

 

      So there is a similar law under the federal NLRA, but the access under the NLRA and access that’s allowed under the California law are different in meaningful respects. So under the NLRA, union organizers were only able to access a property where the workers are otherwise inaccessible. So this is really limited to company towns where the employees live on the land of the employers. And similarly, the cases interpreting the NLRA — access under the NLRA that has found inaccessibility were cases from the ’30s, ’40s, and ’50s in which, obviously, the employees did not have anything remotely similar to cell phones, smart phones, or anything like that.

 

      The petitioners in this case are a group of agricultural growers in California that subject to the access regulation. One of the petitioners is Cedar Point Nursery. The nursery is a small grower in Dorris, California, right near the California / Oregon border. The nursery specializes in growing strawberry plants that other growers, in turn, take and plant in order to grow strawberries, not just for Californians, but for Americans across the United States.

 

      Cedar Point’s workers live — None of Cedar Point’s workers live on site.  The workers all live in hotels in nearby Klamath Falls that are actually paid for by Cedar Point Nursery.

 

      Now shortly before we filed a lawsuit in October 2015, during a busy harvest season, union organizers took access onto the property of Cedar Point. They did so at 5 a.m. during a busy harvest season, and they came in as alleged in the complaint. They came into the trim sheds with bullhorns and ended up scaring many of the employees at Cedar Point Nursery.

 

      Fowler Packing Company is a grower located in Fresno, California. It specializes in growing citrus and table grapes. If anybody has had a mandarin orange from the company, Peelz, that is grown by Fowler Packing.

 

      Now Fowler Packing, actually, does not really employ many migrant workers. It employs fulltime workers, about 2,000 fulltime workers. And the workers actually live in houses around the Fresno area.

 

      In 2015, the union filed a notice of intent to take access on the property of Fowler Packing Company. But Fowler Packing Company refused to allow the organizers onto the property. And the union ended up filing an unfair labor charge before the board that was suspiciously dismissed right on the eve of this lawsuit.

 

      So in 2016, the growers filed a challenge under the Takings Clause in federal court challenging this as a taking. Now, as relevant here, the growers allege that what the Access Regulation did was took an easement on the property of Cedar Point and Fowler. And gave that easement for the benefit of the union organizers.

 

      The growers filed both a preliminary injunction and a complaint in February 2016. The board, who were the defend — the board members were the defendants in the case, and the board subsequently filed, not just an opposition to that preliminary injunction motion, but also a motion to dismiss. The district court denied the motion for a preliminary injunction and also dismissed the case on grounds that it found that the growers did not allege a physical taking.

 

      The district court reasoned that because the access regulation did not allow for 24 / 7 / 365 access, that it could not be a physical taking because it did not amount to a permanent physical occupation. We appealed that case to the circuit court. And I argued that case before the Ninth Circuit Court of Appeals in 2017, November 2017. And in a divided 2:1 decision, the circuit court affirmed the district court’s decision. The panel majority held that because access was limited in time to three hours per day and 120 per year, because it was not around-the-clock access, then any challenge would not be permitted to go forward under the physical takings analysis but must instead proceed on a regulatory analysis under the multifactor balancing test of Penn Central.

 

      The growers did not allege the taking under the Penn Central test. The growers did not believe that was the proper test for analyzing the access regulation in this case. So the growers filed a petition for rehearing en banc. The Ninth Circuit denied that petition. But as notable here, the denial of the en banc decision was followed by a dissent by Judge Ikuta on the Ninth Circuit, joined by seven other judges on the Ninth Circuit, which argued that the Ninth Circuit should hear this case. And its failure to do so created a circuit split and was inconsistent with the Supreme Court’s precedent.

 

      Judge Ikuta’s defense from denial of rehearing en banc also reasoned that the access regulation took an easement. And any time limitations on that easement would go towards the analysis compensation that is just, rather than whether there has been a taking in the first place.

 

      After that petition for rehearing for en banc was denied, the growers filed their cert petition before the Supreme Court of the United States. And the Supreme Court granted that cert petition in November 2020. After briefing, the Court heard this case. The main arguments in this case hinges on whether the access regulation amounts to a per se physical taking, or whether it amounts to a regulatory taking, subject to the multifactor ad hoc balancing test of Penn Central.

 

      Petitioners’ argument is that this is a per se physical taking. It is analogous to an easement in that it gives the growers an access easement on the property of — it gives union organizers an access regulation on the property of the growers. And any time when its on that easement, go towards the compensation that would be just. It doesn’t really alter the analysis of whether there has been a taking in the first place.

 

      Petitioners also argued that this rule infringes on their right to exclude in a way that calls for a per se analysis, because it allows union organizers to come onto the growers private property for three hours a day, 120 days per year for the purpose of soliciting union organizers. For the purpose of soliciting union members.

 

      Respondent’s argument, on the other hand, is that this is a regulatory taking that should be analyzed under the multifactor balancing test of Penn Central. Respondents argue that there are time limits. The time limits on the scope of access that (inaudible 00:11:50) here, counsel in favor of the multifactor balancing test. And indeed, at oral argument today, the respondent’s argue that many of the examples that the justices threw at respondent’s counsel should be judged under the multifactor balancing test of Penn Central.

 

      So with that, let’s get to the argument today. I think the justices asked very interesting questions of both sides during the argument. With respect to the petitioner, there were several justices who asked about easement characterization. This is something that the Supreme Court has referenced in cases like Portsmouth Harbor and Causby and Kaiser Aetna. But the justices really wanted to know where the easement characterization came from and why the petitioners analogize this to an access easement.

 

      On the other side, there were questions sort of probing the respondents about how far their rule would go. Justice Alito, for example, asked the board whether an easement that was taken for 350 days per year would be analyzed under a per se rule, or under the regulatory taking analysis? The respondent’s attorney said that it would be analyzed under a multifactor balancing test. And I think that Justice Alito was surprised, the respondent’s attorney also claimed that an easement that was 365 days per year, that allowed access 365 days per year, would also be analyzed under the regulatory taking’s framework.

 

      Justice Kavanaugh similarly asked very interesting questions about balancing under the NLRA. So the Supreme Court in interpreting the scope of access allowed under the NLRA has said that the union organizers may take access onto private property only in cases in which the employees are not otherwise accessible. And Justice Kavanaugh asked why, well, if that’s a good enough rule under the NLRA, why isn’t that a good enough rule under the ALRA?

 

      So those were the most fascinating questions, in my opinion, that were asked today. But there were several other takeaways that I think could be drawn from today’s argument. Justice Barrett mentioned that there might be line-drawing problems on either side. Petitioners argue that petitioners deal with this problem by saying that you have to look to the common law, and you have to look at the scope of the way to exclude a common law. So you can have inspections, for example, that are reasonable searches under the common law, and reasonable searches under the Fourth Amendment. And under the common law, the Constitution allows government agents and their delegees to conduct reasonable searches. So reasonable searches would not constitute a taking under the rule that petitioners propose.

 

      Respondent has a different way of dealing with the line-drawing problem. Respondents argue that pretty much everything should be analyzed under the multifactor balancing test of Penn Central. So they argue that, regardless of whether the easement is for an hour a day, 360 days a year, 365 days a year, that would all be analyzed under a multifactor balancing test of Penn Central.

 

      So it’ll be interesting to see which way the Court will go. After the argument today, we expect that a decision will come down from the Court probably in June, near the end of the term. And obviously, all sides are eagerly awaiting the decision.

 

      With that, I will open it up for audience questions.

 

Nick Marr:  Great, thank you so much. No audience questions in the queue right now. Wen, you maybe addressed this earlier, but anything you heard in the oral arguments that struck you as unexpected? Any justices taking a route you didn’t really expect or opening up a part of the case you didn’t see coming?

 

Wen Fa:  Yeah, you know I — personally, I was surprised of the view that California took that already meant that all of these easements, no matter the scope of the access, that they should all be analyzed — their argument that they should all be analyzed under the multifactor balancing test of Penn Central.

 

      You know, as I read their brief on the merits, they said that a daylight hours easement might well qualify as a taking under the per se physical takings analysis. But it seems to me that they switched an argument a little bit in between when they filed the respondents brief and at argument. And now they’re moving everything into the ad hoc balancing test of Penn Central. And I think as Justice Barrett pointed out, that balancing test really is, one, not applicable when the property interest has been taken. And two, it’s very hostile to property owners.

 

      Property owners in Penn Central cases can lose millions of dollars in the value of their property and not receive a penny in compensation. And we really don’t think the Penn Central multifactor balancing test is appropriate here.

 

Nick Marr:  Great. Makes sense. So we’ve gotten three questions in the queue. So we’ll go to our first one.

 

Paul Beard:  Hey Wen. This is Paul Beard. I had a two-prong question on Kavanaugh’s Babcock and maybe Sotomayor’s interest in Babcock. The briefing didn’t seem to really focus on that case, and I think for obvious reasons. And I’m wondering if, one, whether PLS theory was that even if the regulation satisfies Babcock it’s still unconstitutional, and obviously, the goal was to reach the constitutional question. So I’m wondering what PLS position was, or is, with respect to Babcock and its relevance here.

 

      And the second question’s more procedural. Do you think there’s any chance of an opinion, whether majority or concurrence, based — or even dissent based on Babcock when the issue was not fully briefed? So I’m curious to know what your predictions are on that aspect of it.

 

Wen Fa:  Yeah, thank you Paul. Let me take the second question first. I always hesitate to hazard a guess on how the Supreme Court will come out in any particular case. And it’s just because my track record of it is so poor. But I will say that it did seem to me that a few of the justices, I think most especially Justice Kavanaugh, was really interested in the Babcock line of questioning.

 

      With respect to the brief, itself, it is true that we didn’t cite Babcock that often. I don’t think either party cited Babcock all that often in their briefing. And that is because Babcock, as I read it, is a case dealing with statutory interpretation. I think Justice Kavanaugh read it as constitutional avoidance. But the issue here is whether the access regulation affects a per se physical taking from the constitutional perspective. And I think that’s why we relied more heavily on cases like Nollan, on cases like Portsmouth Harbor, Causby, and Kaiser Aetna.

 

Nick Marr:  Great. We’ll go to our next questioner now.

 

Gregory Dolin:  Hi. Thank you very much. Gregory Dolin from University of Baltimore. And I guess I was wondering, how do the petitioners deal with a problem that there are a number of instances where the government requires, for example, inspections or even potentially the presence of government actors at a business to ensure certain compliance with the regulatory requirements? And those people may be present either permanently or fairly regularly. How do the petitioners sort of deal with that with the potential problem that if what is happening in California, the taking, then a number of other government regulations that protect consumer safety, for example when it comes to drug manufacturing, or meat, slaughterhouses might also then become problematic? Or at least have to be analyzed as a per se taking.

 

Wen Fa:  Professor, thank you for that question. Let me start of by saying I don’t agree with the premise that many of those other laws that are mentioned by respondent and their amici would be called into question. And I would encourage everyone to look at our reply brief. It’s actually an extended analysis of our response to those hypotheticals that were raised.

 

      We do think that the access regulation infringes on the right to exclude in a way that really contradicts a property owner’s right to exclude at common law. We do believe that at common law the Fourth Amendment is a background principle where we have the ability of the government to conduct reasonable searches as a background principle. And that background principle is encompassed, I think, in the Fourth Amendment.

 

      So we think it would not call into question the government’s ability to conduct reasonable inspections. Now I do think there are, perhaps, some inspections that might raise Fourth Amendment issues. But I think most inspections would neither raise Fourth Amendment issues nor Fifth Amendment issues.

 

      Another way of dealing with it, some of the hypotheticals you posed, is the way that the Chamber of Commerce deals with it in its amicus brief in support of the petitioners. And a way that we deal with it in our reply brief. And that’s to say that there are some constitutional conditions that the government can impose in certain industries. So for example, you might have a property owner that’s operating in a very dangerous or heavily regulated field. And the government may be able to access a constitutional condition in certain cases that complies with the requirements. And that’s laid out by the Supreme Court in cases like Nollan and Dolan.

 

      So we don’t think that the hypotheticals that were raised by respondents, or their amici were going to be called into question. We do think that the access regulation presents a special and unique sort of infringement on the right to exclude in that it takes an access easement on the private property of agricultural growers for the benefit of third-party union organizers for three hours per day, 120 days per year.

 

Gregory Dolin:  Thank you.

 

Nick Marr:  Alrighty. Next question. And this is the last one in the queue.

 

Dave Brigden (ph):  Yeah, hi. Dave Brigden from Carson City, Nevada. Just kind of following up a little bit on the last question. So the use of the property that’s at stake here is not a use for the general public, nor is it a use for an actual public official. But it’s a use for a single private third-party, like you just mentioned. And I’m curious, because of that, if it was determined that it’s an access easement that they’re actually taking on the property under your theory, if there’s — and I know it wasn’t argued at all, but if there’s any chance to revisit New London’s public use versus public purpose distinction, any chance for the Court to do that here, given that this seems to be for a public purpose, and not a public use.

 

Wen Fa:  Yeah, I think that’s a great question. As you mentioned, this is not something that was alleged in the complaint. It’s possible that that might be one route to go on remand. I think it would be an unconstitutional taking, even if it were for a public use, but in my personal view, the Kelo decision was wrongly decided, and I think the public use aspect has been really stretched outside of its proper scope. So it might be something to consider — for the district court to consider on remand.

 

      But even if this were for public use, I still think it would be a taking without just compensation.  Thank you.

 

Nick Marr:  All right. No audience questions in the queue right now. So Wen, I’ll turn the floor back to you. If there’s anything you didn’t cover in your remarks, or we didn’t get to in questions you’d like to add, go ahead and do that now. I’ll let you know if a question comes up in the queue. Otherwise, if you’d like to close out, too, any closing remarks you might have.

 

Wen Fa:  Yeah, sure. So I just want to, again, thank you, thank The Federalist Society for hosting this Teleforum. I think this is a very important case for property rights. I’m very grateful to our clients. I’m very grateful to the team, Joshua Thompson, who argued the case this morning, as well as team members Chris Kieser and Damien Schiff. I think this is a very important case for property rights.

 

      As I mentioned earlier, the Penn Central framework allows the government to impose regulations that decrease the property value of property owners by millions of dollars without paying a penny in just compensation. So I think this case is really important for the future of property rights.

 

Nick Marr:  Great. Thanks very much. And so we’ll close up a little early this afternoon. On behalf of The Federalist Society, I want to thank you, Mr. Fa, for the benefit of your valuable time and expertise this afternoon covering these oral arguments. Especially doing it so quickly, as arguments were just heard this morning. So we really appreciate that. To the audience for calling in, listening, and for your good questions.

 

      As always, we welcome your feedback by email at info@fed-soc.org. Also be checking your emails and our website for announcements about upcoming Teleforum calls and Zoom events. We’ve got a packed week this week. So be sure to check the website to see what you might want to tune into. All right, until next time, we are adjourned.  

 

[Music]

Wen Fa

Attorney

Pacific Legal Foundation


Labor & Employment

Federalist Society’s Environmental Law & Property Rights Practice Group

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