Federal Court Upholds 'Out-Dated' New Deal Scheme That Hurts Small Farmers

In June 2013 the U.S. Supreme Court ruled unanimously in favor of California raisin farmers Marvin and Laura Horne. At issue in Horne v. Department of Agriculture was the Agricultural Marketing Agreement Act of 1937, a New Deal law designed to raise certain agricultural prices by controlling supplies. For the Hornes, this meant handing over a portion of their raisin crop each year to the federal government, thereby contributing to the artificial scarcity that is supposed to benefit the industry at large. (Never mind if those higher prices benefit consumers. New Deal lawmakers were not worried about that.)

As the Hornes see it, this government-mandated surrender of a portion of their crop violates the Takings Clause of the 5th Amendment, which requires the government to pay just compensation when it takes private property for a public use. But the U.S. Court of Appeals for the 9th Circuit ruled against the Hornes in 2011, holding that it lacked jurisdiction to even hear their Takings Clause arguments. On appeal last year, the U.S. Supreme Court overruled that decision and granted the Hornes their day in federal court.

That day has now come and gone. And once again, the 9th Circuit ruled against the Hornes. In a decision issued last Friday, the 9th Circuit found the Takings Clause to be undisturbed because the USDA "did not authorize a forced seizure of the Hornes' crops, but rather imposed a condition on the Hornes' use of their crops by regulating their sale." In effect, so long as the farmers "voluntarily choose to send their raisins into the stream of interstate commerce," they must bend to the regulatory rules set by the USDA. Don't like it? Try "planting different crops," the court suggested. Or perhaps the Hornes might consider "selling their grapes without drying them into raisins."

At this point, you may be wondering where the USDA gets the authority to impose these sorts of controls on the raisin supply in the first place. We're not talking about health or safety regulations, after all, we're talking about a federal agency raising prices by artificially limiting supplies. What makes that pass muster?

Here's how the 9th Circuit addressed those concerns:

While the Hornes' impatience with a regulatory program they view to be out-dated and perhaps disadvantageous to smaller agricultural firms is understandable, 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. The Constitution endows Congress, not the courts, with the authority to regulate the national economy.

Translation: This court defers to the judgment of Congress on economic matters and there's nothing you small farmers can do about it.

The Hornes next move is to either ask for a rehearing of their case by a full panel of the 9th Circuit, or else seek review (once again) at the U.S. Supreme Court.

Related: Reason TV profiled the Hornes last year.

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  • Fluffy||

    Boooooooooooooooooooooooooooo

  • UnCivilServant||

    It's just the 9th circut, they're the most overturned circut in the nation.

  • Swiss Servator, CH yeah!||

    Another scoop of coal on the eternal fire that FDR is roasting in, plz.

  • The Late P Brooks||

    I remember looking at the photos and newsreel footage, as s kid, of people dumping milk in the street and asking myself, "WTF?"

    Why do people look back at the New Deal as anything but a fucking disaster?

  • Redmanfms||

    Why do people look back at the New Deal as anything but a fucking disaster?

    Because there has now been 5 successive generations of people who went through schools telling them that the New Deal saved America and the the only reason America "recovered" for the Great Depression was because of the hero FDR.

    I too saw the old newsreels of the various NRA/AAA price fixing bullshit schemes that involved pouring milk out on the ground and destroying millions of hogs in the midst of an economic depression and thought, "How the holy fuck is that going to benefit people struggling to put food on the table?" I asked my teacher how destroying product and mandating price fixing (at elevated prices) could possibly benefit the one-fifth to one-quarter of the population who were out of work. She just stared at me with an expression of muted horror and confusion.

  • Robert||

    Usually the answer in defense of this & other anti-competitive schemes is that if prices of goods or services are allowed to drop too low, then "nobody" will go into or continue in those lines of biz, and then everybody will have nothing.

  • Tim||

    This is not links.

  • BardMetal||

    FDR really fucked up this country, I'll never understand why the so-called "greatest generation" revere that man so much.

    I wonder if we would look at him the same way if you took WW2 out of the picture.

  • tarran||

    My great grandmother was widowed in her 50's. Her husband hadn't made adequate preps financially.

    She would not hear a word against FDR. He may have betrayed her by supporting the repeal of prohibition, but he also was sending her a check, every month, for the rest of her life.

  • antisocial-ist||

    Probably, because he had "charisma" . Recent history has proven it doesn't matter how miserable people are as long as the pres seems really cool and says he cares.

  • sarcasmic||

    People love a strong leader.

  • Redmanfms||

    FDR really fucked up this country, I'll never understand why the so-called "greatest generation" revere that man so much.

    My grandmother hated FDR passionately. He killed the Maine potato industry and left her family destitute. Her father worked several full-time jobs, including much as a merchant seaman. She remained convinced that the 10-15 year period where he was working 100+ hours a week contributed to his death at 60 (he came from famously long-lived stock).

    But FDR had a propaganda machine even more devoted and sycophantic than Obama's press, without competing news outlets or the internet. People believed the outright lies they were told because they read them in the paper, and "the paper doesn't lie!"

  • Robert||

    He was elected POTUS X 4, so he must've had something going for him. It also helped his rep that he was succeeded by the very unpopular Truman, who still managed to get elected POTUS 1ce.

  • Rev Match||

    I wonder if we would look at him the same way if you took WW2 out of the picture.

    I wonder what would have happened if he had not been term limited by mortality. "King" Roosevelt?

  • The Late P Brooks||

    The Constitution endows Congress, not the courts, with the authority to regulate the national economy.

    SRSLY?

  • db||

    They've gone full commietard. You never go full commietard.

  • Voros McCracken||

    Yeah I'm sure it's in there somewhere.

  • The Late P Brooks||

    I'm surprised the court didn't offer up the helpful suggestion of selling out to Cargill or ADM.

  • db||

    Look, Americans, you'll all be much happier when you grow out of this whole "entrepreneurship" thing and just be good employees of favored corporations and state-owned enterprises.

  • Robert||

    There was a time when that could be said w a straight face, but job security these days has gone to hell.

  • mr simple||

    At this point, you may be wondering where the USDA gets the authority to impose these sorts of controls on the raisin supply in the first place.

    Actually I'm wondering why the USDA even exists. Well, not really. It's because CONTROL.

  • tarran||

    That notorious laissez faire guy Herbert Hoover thought that he knew how to farm better than farmers did.

  • Robert||

    Have I mentioned lately that I flew with Hoover?

    Anyway, it's not like the US is alone in this regard. Agriculture worldwide is among the most heavily intervened-in sectors. NZ is the only country I can think of that broke that mold. Everywhere else, gov't is simultaneously trying to raise prices for farmers and cut them for consumers; good luck with that.

  • Mainer2||

    Land of the free

  • sarcasmic||

    Price is an indicator of quality, is it not?

    The more expensive something is, the better it is. Right?

    So when the government causes the price of something to go up, it increases quality since more expensive means better!

  • Redmanfms||

    So when the government causes the price of something to go up, it increases quality since more expensive means better!

    That wasn't the reason used to justify the AAA. It was used by FDR to drive up food prices because he was attempting to counter deflation, which on a gold standard wasn't as simple as just printing money.

    I'm sure the justices who upheld this thought nothing more than, "Well, it's always been done this way and reversing this will 'deregulate' the industry so we obviously have to uphold." Anything approaching rational analysis was most likely avoided. These people are lawyers after all, you know, morons.

  • Juice||

    I'm always struck by how the court will bend the meaning of words in the constitution exclusively in favor of the government. You little serfs get the strictest possible reading while the government gets very broad definitions of words. "Regulate interstate commerce" means regulate anything that may possibly affect commerce (or not) anywhere at any time. "Nor shall private property be taken for public use, without just compensation" doesn't imply that ALL takings require just compensation because they're not actually takings, you see?

  • Gilbert Martin||

    "The Constitution endows Congress, not the courts, with the authority to regulate the national economy"

    Yeah?

    Show me the article in the Constitution where it explicitly states that.

    Otherwise, there is NO authority to regulate the national economy.

  • Sky Captain||

    And what does the citizen do when Congress screws him over? He goes to the courts for relief, doesn't he? And now the court has no backbone. At least, not to defend the citizen against the facist state.

    They should refuse to give the state their unfair share. Then the state will sue them, hopefully, and they can defend themselves. However, the way things are now, SWAT forces will swoop in a confiscate their total harvest...

    The revolution will come... I hope the facists give up quickly and without bloodshed.

  • Bubba Jones||

    This seems like bad policy but not unconstitutional. It's a tax levied in kind on raisin distribution. It's uniform across the nation.

    "The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;"

  • kbolino||

    The "tax" is not uniform, it is at the discretion of the Secretary of Agriculture.

  • R C Dean||

    so long as the farmers "voluntarily choose to send their raisins into the stream of interstate commerce",

    I seem to remember a case where a farmer grew wheat and used it all on his own land. This was deemed to be interstate commerce. There is no "choice" to participate in interstate commerce, as any economic decision is deemed to be interstate commerce.

    What a blatant, fatuous lie this court just told.

    It's a tax levied in kind on raisin distribution.

    I wasn't aware that we collected taxes in kind.

  • NewYorkCentral||

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