Supreme Court Gets Another Chance to Kill Crazy Raisin Regulations

The implications reach far beyond just raisins.

Last week the Supreme Court announced it would revisit the important case of Horne v. USDA. The case, which I first wrote about here in 2013 after attending the Court's first hearing on it, centers on a USDA program that forces those who traffic in raisins ("handlers," in USDA raisin parlance) to turn over cash or a significant part of their crop—sometimes almost fifty percent—to the USDA without compensation.

In Horne, the eponymous family, which markets raisins, sued the USDA to force the agency to compensate them if the USDA forced them (along with raisin handlers around the country) to turn over cash or almost half their raisin crop to the agency in return for the purported privilege of handling raisins.

The Hornes effectively sued to stop the government from stealing their raisins, arguing that the USDA program amounts to an unconstitutional taking under the Fifth Amendment.

The Fifth Amendment's Takings Clause is perhaps the most important protection of private property written into the U.S. Constitution. The clause requires that any government taking—or seizure, effectively—of private property must be a) for public use and b) accompanied by "just compensation."

As the Ninth Circuit puts it, the Hornes argue the USDA "works a constitutional taking by depriving raisin producers of their personal property, the diverted raisins, without just compensation."

That's exactly what the USDA's raisin marketing program does. Unfortunately, the Ninth Circuit didn't see it that way.

In May, the court ruled against the Hornes—for a second time, no less.

The court determined that "the Hornes' impatience with a regulatory program they view to be out-dated and perhaps disadvantageous to smaller agricultural firms is understandable," but concluded that "the courts are not well-positioned to effect the change the Hornes seek, which is, at base, a restructuring of the way government regulates raisin production."

While the Horne case concerns the USDA's raisin programs, the case outcome could have widespread impact for farmers around the country—and could put an end to a host of superfluous, wasteful USDA programs. Why? Because the USDA's raisin marketing order program is just one of dozens of similar programs.

Similar USDA marketing order programs are in place for almonds, apricots, avocados, cherries (both sweet and tart), Florida and Texas citrus, cranberries, dates, grapes, hazelnuts, kiwifruit, olives, many onions and pears, pistachios, California plums and prunes, many potatoes, raisins, spearmint oil, tomatoes, and walnuts.

These programs are responsible for pervasive regulation of the respective industries.

The spearmint oil marketing order, for example, governs all spearmint oil sold in the country. It "authorizes volume control measures to regulate the marketing of spearmint oil through annual sales allotments," according to the USDA. "Spearmint oil produced in excess of a grower's allotment is placed into a reserve pool and used later to fill production deficiencies and unexpected demand."

Note the government's use of passive voice, which I italicized. The words "is placed… and used" sound a whole lot more constitutional than the more accurate "we take… and use."

There's reason to be optimistic about the case's return to the Supreme Court. Justices of all stripes are skeptical of the USDA program. During the 2013 hearing, Justice Elena Kagan suggested—correctly, as it turned out—that the Court might remand the case, which she said appeared to be either an unconstitutional taking or "just the world's most outdated law."

The program amounts to a choice between "[y]our raisins or your life," Justice Antonin Scalia joked during the same hearing.

While I believe the case is a slam dunk from a legal perspective, I'll quell my optimism this time around.

"I suspect the Court will vacate and remand Horne back to the U.S. Court of Appeals for the 9th Circuit," I wrote after the 2013 hearing, "which will ultimately rule in favor of the Hornes."

The former happened, but the latter didn't. Still, I'm excited to see the Supreme Court have another shot at killing an outdated law that flies in the face of both the Constitution and food freedom.