Will the Supreme Court abandon federalism to defeat pro-labor regulation?

In March, the U.S. Supreme Court heard arguments for Cedar Point Nursery v. Hassid, in which the Pacific Legal Foundation (PLF) asserted that a California law allowing union organizers entry onto agricultural private property for up to 120 days a year constitutes a “taking” under the U.S. Constitution. For deregulation advocates like PLF, the case presents a new opportunity for the justices to empower the Takings Clause to be a more central constitutional doctrine buffering private property from what it views as overreaching state authority. But it also asks the court, implicitly, if it remains committed to the principle, celebrated by conservative Justices William Rehnquist and Antonin Scalia, of “federalism,” that is, devolving power from the federal government to the states. Efforts to empower property rights in the federal courts usurp the states’ rights to determine their own property laws.

In cases where plaintiffs seek compensation for the government’s taking of their property, courts must point to a property interest that is being taken. Since the founding era, states have had ultimate authority to define these interests. States need latitude not only to define property rights, but to redefine them from time to time. In the 19th century, to meet the growing economy’s insatiable demand for lumber, most states expanded their definitions of a river’s navigability, or public use, to “commercial usage” or “floatable usage” — allowing timber companies to float logs through private property. With the advent of air travel, courts redefined underlying property interests and the law of trespass to allow airplane overflights. Drone use and data harvesting are two of many areas where adjustments in property rights are being debated today.

In an increasingly polarized society, there are powerful reasons not to have the federal government proscribe uniform rules throughout the country on all property matters. Why should a landlord’s property rights regarding evicting tenants in Alabama and California have to be identical? Having states adopt a variety of laws serves as an important incubator for growth of the economy and for promoting public welfare. States, for example, take different approaches as to what is categorized as “marital property,” and that legal diversity allows for real-world tests of the different approaches. Moreover, a one-size-fits-all approach to property law ignores the physical differences among the States. California, facing fire, drought and beach erosion, needs a different law of property than landlocked Iowa.

In the 1980 case of Pruneyard Shopping Center v. Robins, the central precedent for the current Cedar Point Nursery case, California shopping mall owners argued that it was a taking to require them to allow petitioning on their private property. Justice Rehnquist authored an opinion upholding federalism. Rehnquist held that California’s constitution allowed it to define property rights – including how the “right to exclude” is defined – differently than Oregon had done in a similar case. To Rehnquist, the federal government was not possessed of the “residual authority that enables it to define ‘property’ in the first instance.” That authority lay in state constitutions, state laws and state courts.

But the Supreme Court of the same period started empowering takings by defining “per se” takings rules that applied uniformly across the country. When the Supreme Court defines a “per se” rule of takings, it means that no other balancing or factual inquiry is required, overriding states’ ability to define property. An expansion in the scope of per se takings is thus, in effect, a reduction in the power of states to define property rights under their own law. Importantly, however, the per se rules the Supreme Court has adopted to date are so narrow and limited in scope that they do not fundamentally affect states’ ability to define property rights.

As their lawyer stated in the oral arguments, PLF wants nothing less than a new per se rule of takings that would override state law on many issues. PLF requests a new per se rule that no matter the extent of the interference, any law allowing entry on private property is a taking, even if the entry were limited to one hour per year. This would go far beyond the current per se rule of the 1982 case, Loretto v. Teleprompter Manhattan CATV Corp., which holds that only “permanent physical occupations” of property are per se takings. Under the PLF’s approach, it would be immaterial whether a state had determined that property ownership does not include the right to deny reasonable access to the property for a public purpose.

The justices’ own questions at oral argument – as well as public commentary to date – have largely ignored the federalism dimension of the Cedar Point case. That is a mistake. The initial question in Cedar Point, long before the case ever reached the Supreme Court, should have been one about California law: Does a commercial enterprise’s property rights include the right to deny labor organizers reasonable access to employees whom the employer brought to the site, and who may benefit from the organizers’ counsel in order to prevent their exploitation? The Supreme Court should remand Cedar Point to the lower court to consider that question. By so doing, it would recognize and ratify the central role of state law in defining property rights.

If states are not allowed to define substantive property law, it will be shaped by the preferences and ideology of the justices who happen to serve on the United States Supreme Court. Should Cedar Point mark a step toward the justices arrogating that tremendous power to themselves, that will be a troubling development. If federalism is no longer a priority to the conservative legal movement, we will move to a new era of the triumph of empowered takings where the federal courts usurp the role of the states in determining property laws, limiting the power of states to adapt to disparate conditions and experiment with solutions that might well benefit the country as a whole.

David Dana is the Kirkland & Ellis Professor of Law at Northwestern University Pritzker School of Law, where he teaches property and environmental law and directs the Program on Sustainability and Food and Animal Law. Claire Priest is the Simeon E. Baldwin Professor at Yale Law School. She is the author of “Credit Nation: Property Laws and Institutions in Early America” (2021).