SCOTUS REVITALIZES TAKINGS JURISPRUDENCE: PHYSICAL TAKINGS, ANYWAY.

California growers sued the Agricultural Labor Relations Board for a reg that requires them to admit union organizers onto their property for 3 hours/day for 4 months a year. Is the reg equivalent to physical taking of property? SCOTUS says yes (6-3).   When the government physically acquires private property for public use, the owner receives just compensation. Mandating union organizers to enter on the premises is an actionable physical intrusion.

California argued it was merely regulating use—no different from requiring businesses to submit to health and safety inspections.  In property rights circles, a blockade against takings law is the Penn Central case (1978) holding that government may regulate for the “common good.” Penn Central is addressed in virtually every rent control case in federal courts.

But here the court discovers a fissure in the impenetrable perfect sphere of Penn Central. Justice Roberts holds that: “The right to exclude is ‘a fundamental element of the property right.” Even if temporary.

The essential question is whether the government has physically taken property for itself or someone else—by whatever means—or has instead restricted a property owner’s ability to use his own property.” In this case, the state effectively seized farmers’ property and handed it to union organizers.

The state and many municipalities have relied on parks for affordable housing to justify a wide variety of public functions: rent controls, housing element mandates, uncompensated subsidies, infinite tenancy, and to prevent closures. The legislature has even tried to pass a bill to bar owners from their own common facilities!  It is sadly ‘government by faction,’ Madison’s feared result of ‘majoritarian rules’ government. Generally, ever-emboldened government invades private property with cavalier disregard for public policy.

The Court’s conservative majority has repudiated one formidable obstacle used by government (Penn Central) and vindicated important rights against forced intrusions on property rights.

DOES IT AFFECT MOBILEHOME PARKS.

A great victory. But the result should seem so obvious and natural. Are we surprised?  The surprise should be that defense of natural rights required intervention by SCOTUS.  That is startling. Good to see a bright line held up to the light, amid the caliginous darkness of our state capital’s mores and deceitful practices to stop park owners.

Of course, our mobilehome park industry has learned this lesson decades ago. Evidence? Has anyone ventured to build new mobilehome parks in the last 30 years? Res Ipsa Loquitur. But during this same time, how many dozens of parks have closed and disappeared? The California mobilehome population continues to diminish.

But there is a big difference between intruders establishing a foothold which is adverse to the owner’s enterprise–a labor union–and, the natural consequence of invited relationships, which begin to look like the possessory rights of tenancy–a consensual grant in perpetuity/indefinitely (Civil Code §798.55 (b), 798.56a, 798.73, 798.78). The term of mobilehome tenancy is statutory, out of the hands of the parties (despite purposeless lip service to 1-12 month rental agreement offers per Civil Code § 798.18). The Chief Justice makes reference to the expectant visits from public health and safety inspectors, intrusions grounded in protection of the public:

“The government may require property owners to cede a right of access as a condition of receiving certain benefits,” such as a license to operate a business . . . Or, for that matter, conditions for a permit to operate a mobilehome park.

This whole takings argument started back before Jean Hall in Santa Barbara. My firm was working with another in Westlake Village on rent control issues there. I was tasked with developing arguments against a proposed ordinance. So I diagramed the flow of money on a sale and developed the claim that vacancy control is a taking. The argument was brought to Jean Hall’s lawyer in Santa Barbara. The argument prevailed in District Court until, until reversed subsequently. I wrote a brief in the Oceanside rent control case where the appellate court also rejected the argument in 1982-1983.

Judge Bea of the Ninth Circuit says that “rent control” with vacancy control is not rent control, but a “wealth transfer” and not rent control at all, save for the few incumbents in possession at passage. Still, his opinion remains in the minority at this time. Yet, premiums are so clearly “key money” punishable by law in many jurisdictions. In New York, lofts cannot be sold at a profit–a felony. In some cities, accounting to excess price is required. So clear is it, that denial of the premium taking is more an act of political defiance than reasoned judicial temperament.

So this case may warm the embers. But there remains a wide distance between nonconsensual entry to organize workers (a taking), and marketing like crazy to fill spaces where we enthusiastically invite people in to create leasing relationships. It all comes back to the regulatory taking issue and whether more jurists like Judge Bea will bring clear thinking to the 9th circuit.

TERRY  R. DOWDALL