Supreme Court

Now Pending Before SCOTUS: Regulatory Scheme That Lets Government Seize Raisin Crops Without Paying Just Compensation

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Credit: Library of Congress

The justices of the U.S. Supreme Court met today in private conference to consider the latest batch of petitions from parties seeking review of their cases. Among those petitions was Horne v. Department of Agriculture, an important Fifth Amendment case challenging the federal government's authority to take a portion of a farmer's raisin crop without paying compensation for that taken property.

If Horne sounds familiar, that's because the Supreme Court has already ruled on a previous incarnation of the case. In June 2013 the Court voted unanimously in favor of California raisin farmers Marvin and Laura Horne, arguing that they possessed the requisite legal standing to bring a Takings Clause challenge against the Agricultural Marketing Agreement Act of 1937, a New Deal law designed to raise agricultural prices by controlling supplies. In the situation at issue here, raisin prices are supposed to be artificially inflated when the government forces raisin farmers like the Hornes to set aside a portion of their crop, which is held in reserve and forbidden from being sold on the open U.S. market. As the Hornes rightfully see it, the government has taken their property for a public use but refused to compensate them for the loss, a plain violation of the Fifth Amendment, which states, "private property [shall not] be taken for public use without just compensation."

Unfortunately, the Hornes lost on the merits in May 2014 at the U.S. Court of Appeals for the 9th Circuit, which held that 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," no Takings Clause violation had occurred. According to the 9th Circuit, because the Hornes "voluntarily choose to send their raisins into the stream of interstate commerce," the Hornes must follow the rules set by the federal government.

But that misses the salient fact that the federal government has carried out a physical confiscation of private property, which has long been a hallmark test in Takings Clause jurisprudence. As University of Chicago law professor William Baude retorts, "If this isn't a taking, what is?"

Indeed. The Supreme Court has every reason to hear this case—and every reason to overrule the 9th Circuit.

For previous Reason coverage of Horne v. Department of Agriculture, go here.

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  1. but rather imposed a condition on the Hornes’ use of their crops by regulating their sale,” no Takings Clause violation had occurred. According to the 9th Circuit, because the Hornes “voluntarily choose to send their raisins into the stream of interstate commerce,” the Hornes must follow the rules set by the federal government.

    Right, so the government telling you you can’t do anything with your own property, i.e. rendering it completely static and worthless is NOT a taking.

    We need a hunting season on lawyers.

    1. No, you need a time machine to go back and make sure FDR dies of polio. He’s the one who threatened to stack the Supreme Court with his yes men if they didn’t stop cockblocking his programs.

  2. For a magazine called Raisin…

  3. Is the 9th a sort of holding cell for retarded judges? Their decisions keep coming up and they keep being retarded.

    1. I thought this line from a follow-up post by Baude on VC was funny:

      But Horne does have three other qualities that I observed in summary reversal cases ? first, it is a Ninth Circuit decision; second, it is a Ninth Circuit decision where Judge Reinhardt was on the panel;

  4. Instead of having the Commerce Clause why didn’t the Constitution just have a clause saying the Federal Government can steal anything. It would be simpler.

  5. The government takes a big chunk of my paycheck every week – where’s my compensation?

    I’m afraid this case is doomed – any erstwhile raisin farmer (or tobacco, peanut, tomato or almond farmer, doctor, lawyer, taxi driver, hair braider, carpet cleaner or dog walker) knows the rules on licensing and permitting. And the government does not believe in ‘shall issue’ for the permit to engage in trade.

    Saying you have to set aside a portion of your crop as determined by a marketing board in the interest of maintaining stable supply and demand (even though we all know they really exist to restrain supply and thereby keep prices and profits high) is no different than the allotments other growers are given that restrict production altogether or the Certificate of Need demanded by other types of businesses or all the various taxes and fees and licenses and permits that dampen any entrepreneurial spirit at all. It’s ‘regulating’ commerce in the worst possible way, like a guillotine will regulate your blood pressure, but it is regulation.

    About the only good that may come out of this may be a few people learn that there’s such a thing as a raisin marketing board that centrally plans the production of raisins, get a little curious and discover that there’s lots of marketing boards that have been centrally planning the production of food for years, find out that the whole goddamn agricultural sector has been a bunch of dirty communists since about 1915.

  6. But Tony keeps telling me that shit like this never happens.

  7. Isn’t this just another form of income tax, proportionate to their raisin production? Presumably this form of price support makes more sense than paying them not to produce but I fail to see the point unless the artificial price jumps for than the amount of lost product. Reminds me of smashing windows.

  8. More regulatory taking cases, how exciting.

    It definitely sounds like a “total taking,” reducing the raisins’ value to near-$0 (use as livestock feed, fertilizer, feeding the farmer/employees), but I guess that’s just my optimism speaking. The Court has a way of squelching that bad habit of mine.

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