Cedar Point Nursery v. Hassid Quietly Rewrote Four Decades of Takings Clause Doctrine

Penn Central Transportation Co. v. New York City (1978) is the Supreme Court's seminal Takings Clause case. Penn Central identified three factors to determine whether a land use regulation was a taking. First, the court assesses the "economic impact of the regulation." Second, the courts measure the "extent to which the regulation has interfered with distinct investment-backed expectations." In other words, has the government regulated a specific land use that the property owner has invested money in?  Third, the court analyzes the "character of the governmental action."

Loretto v. Teleprompter Manhattan CATV Corp. (1982) followed Penn Central. In this case, New York required landlords to install cable television hookups on their buildings. Loretto would turn entirely on the third Penn Central factor. The Court identified two different "characters" of land use regulations: (1) temporary physical invasions and (2) permanent physical occupations. When the government temporarily invades a property, the Court will consider all three Penn Central factors. These temporary physical invasions are "subject to a balancing process." The Court observed that a "taking" is less likely to be found "when interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good." However, if a land use regulation causes a permanent physical occupation, a "taking may more readily be found." With this second category, it was irrelevant "whether the action achieves an important public benefit or has only minimal economic impact on the owner." Rather, when "[t]he physical intrusion reaches the extreme form of a permanent physical occupation," there is a taking. And, there is no need for the Courts to balance the other two Penn Central factors. This sort of land use regulation is known as a categorical, or per se regulatory taking. And a categorical regulatory taking requires a permanent physical occupation.

This summary is taken from my in-progress book, An Introduction to Property Law: The Cases Everyone Should Know. As of Wednesday morning, I think I provided an accurate statement of the law. This standard had been settled for four decades. But on Wednesday, the Court decided Cedar Point Nursery v. Hassid. For the first time this term, the Court split along 6-3 ideological lines. Chief Justice Roberts wrote the majority opinion. The six Republican-appointed Justices were in the majority, and the three Democratic-appointed Justices were in the dissent. Critically, Cedar Point quietly rewrote Takings Clause doctrine.

A hallmark of Chief Justice Roberts's jurisprudence is faux-minimalism. He professes to decide cases in narrow ways, and hesitates to actually overrule precedent. But in reality, he subtly modifies old doctrine. Cedar Point is the latest example of this approach. In a perfect world, the Court would overrule Penn Central. It was a disastrous decision for property rights. Alas, the Court lacks the commitment to take those steps. Instead, the majority misreads old precedents, and alters wide swaths of the law.

First, the Court eliminated the requirement that a categorical taking must involve a "permanent physical occupation." Consider a few statements from the Chief's majority opinion:

Whenever a regulation results in a physical appropriation of property, a per se taking has occurred, and Penn Central has no place.

The upshot of this line of precedent is that government-authorized invasions of property—whether by plane, boat, cable, or beachcomber—are physical takings requiring just compensation.

The duration of an appropriation—just like the size of an appropriation, see Loretto, 458 U. S., at 436–437—bears only on the amount of compensation.

To begin with, we have held that a physical appropriation is a taking whether it is permanent or temporary.

The Court seems to suggest that any appropriation of property is a per se taking.

Of course, the million dollar question is what is an appropriation? Loretto drew a line between "permanent physical occupations" and "temporary physical invasions." Cedar Point Nursery eliminated that line, and did not replace it with anything. The duration of the appropriation has historically been the cornerstone of the Loretto framework.

Justice Breyer wrote the dissent. He responded in his usual staid fashion with an accurate statement of the law:

At the same time, our prior cases make clear that the regulation before us allows only a temporary invasion of a landowner's property and that this kind of temporary invasion amounts to a taking only if it goes "too far." See, e.g., Loretto v. Teleprompter Manhattan CATV Corp., 458 U. S. 419, 434 (1982).

How does the Chief get around this rule? He cites page 322 of Tahoe Sierra .

Our cases establish that "compensation is mandated when a leasehold is taken and the government occupies property for its own purposes, even though that use is temporary." Tahoe-Sierra, 535 U. S., at 322. 

But this section of Justice Stevens's opinion concerned actual appropriations of land, and not mere regulations of property. Here is the full passage, with the portion Roberts quoted in red:

When the government physically takes possession of an interest in property for some public purpose, it has a categorical duty to compensate the former owner, United States v. Pewee Coal Co., 341 U.S. 114, 115, 71 S.Ct. 670, 95 L.Ed. 809 (1951), regardless of whether the interest that is taken constitutes an entire parcel or merely a part thereof. Thus, compensation is mandated when a leasehold is taken and the government occupies the property for its own purposes, even though that use is temporary.

In this excerpt, the word "taken" means physically taken; not merely regulated. Justice Stevens explains the distinction in the next paragraph:

This longstanding distinction between acquisitions of property for public use, on the one hand, and regulations prohibiting private uses, on the other, makes it inappropriate to treat cases involving physical takings as controlling precedents for the evaluation of a claim that there has been a "regulatory taking," and vice versa.

The Chief disregards this distinction. I am still struggling to grasp how sweeping this change will be for Takings Clause jurisprudence.

Second, the Court conflates regulatory takings and exactions. The leading exactions case is Nollan v. California Coastal Commission. In that case, a property owner requested a building permit. The government would only grant that permit if the property owner gave the state an easement. That easement would allow members of the public to walk from the street to the beach. Nollan held that this exaction was a violation of the Takings Clause. Traditionally, the doctrine for exactions has differed from the doctrine for regulatory takings. Cedar Points, however, conflates these two doctrines. The Court discuses Loretto and Nollan in the same context. Immediately after discussing Loretto, the Court pivots to Nollan.

We reiterated that the appropriation of an easement constitutes a physical taking in Nollan v. California Coastal Commission. . . . As a starting point to our analysis, we explained that,had the Commission simply required the Nollans to grant the public an easement across their property, "we have no doubt there would have been a taking." Id., at 831.

Once again, this citation is misleading. On page 831, the Nollan Court–per Justice Scalia–explains that there would be a taking in this hypothetical because there was a "permanent physical occupation" under Loretto.

We think a "permanent physical occupation" has occurred, for purposes of that rule, where individuals are given a permanent and continuous right to pass to and fro, so that the real property may continuously be traversed, even though no particular individual is permitted to station himself permanently upon the premises.

An easement is a quintessential permanent physical occupation. And Nollan expressly relied on the "permanent physical occupation" test from Loretto. Nollan went on to discuss the specific dynamics of the exactions inquiry, which differs from the hypothetical offered at the outset.

Third, the Court misstates the analysis in PruneYard Shopping Center v. Robins (1980). The Chief wrote:

The Board and the dissent argue that PruneYard shows that limited rights of access to private property should be evaluated as regulatory rather than per se takings. See post, at 8–9. We disagree. Unlike the growers' properties, the PruneYard was open to the public, welcoming some 25,000 patrons a day. 447 U. S., at 77–78. Limitations 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.

Huh? PruneYard was a Penn Central case. Justice Rehnquist's majority opinion expressly adopted the three factors from Penn Central:

This examination entails inquiry into such factors as the character of the governmental action, its economic impact, and its interference with reasonable investment-backed expectations. Kaiser Aetna v. United States, supra, at 175, 100 S.Ct., at 390. When "regulation goes too far it will be recognized as a taking." Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415, 43 S.Ct. 158, 160, 67 L.Ed. 322 (1922). Here the requirement that appellants permit appellees to exercise state-protected rights of free expression and petition on shopping center property clearly does not amount to an unconstitutional infringement of appellants' property rights under the Taking Clause. There is nothing to suggest that preventing appellants from prohibiting this sort of activity will unreasonably impair the value or use of their property as a shopping center.

The fact that there was no permanent physical occupation in that case supported the application of the three factors. (PruneYard was decided the term before Roberts clerked).

Justice Breyer pithily responds to the Chief's misstatement:

On the other hand, as the majority notes, the shopping center in PruneYard was open to the public generally. See ante, at 14–15. All these factors, how ever, are the stuff of which regulatory-balancing, not absolute per se, rules are made.

Though I do fault Justice Breyer for one small faux-pas. He referenced the "fee tail."

It does not, for example, take from the employers, or provide to the organizers, any freehold estate (e.g., a fee simple, fee tail, or life estate); any concurrent estate (e.g., a joint tenancy, tenancy in common, or tenancy by the entirety); or any leasehold estate (e.g., a term of years, periodic tenancy, or tenancy at will). See J. Dukeminier, J. Krier, G. Alexander, M. Schill, & L. Strahilevitz, Property 215–216, 222–224, 226, 343–345, 443–445 (8th ed. 2014). 

This interest was largely abolished around the time of the American Revolution. It exists, in theory at least, in a handful of states. Fortunately, any extant fee tail can be converted to a fee simple with a simple deed. This type of interest is thankfully moribund. I'm not even sure how a fee tail could be created in the blood-line of multiple union organizers.

Finally, the Chief applies this novel standard to the California regime:

As in those cases, the government here has appropriated a right of access to the growers' property, allowing union organizers to traverse it at will for three hours a day, 120 days a year. The regulation appropriates a right to physically invade the growers' property—to literally "take access," as the regulation provides. Cal. Code Regs.,tit. 8, §20900(e)(1)(C). It is therefore a per se physical taking under our precedents. Accordingly, the growers' complaint states a claim for an uncompensated taking in violation of the Fifth and Fourteenth Amendments.

This statement is inconsistent with how Loretto has been understood. A "regulation [that] appropriates a right to physically invade the growers' property" is not a categorical taking. In the span of a few pages, the Court upset four decades of Takings Clause jurisprudence.

Here, my criticism of Roberts is somewhat against self-interest. The Court's modern Takings Clause jurisprudence borders on incoherent. I appreciate any effort to clarify and standardize the doctrine. And I am especially fond of cases that strengthen the judicial protection of property rights. But these changes to precedent should be made candidly.

Going forward, I have no idea how to teach the Takings unit. Cedar Point Nursery substantially disrupted the corpus of laws. I am grateful that I'm not teaching Property II this year. This unit will be a mess.