Supreme Court

Today at SCOTUS: Property Rights vs. USDA Crop Seizures

The federal government seeks to confiscate raisins without paying just compensation to raisin farmers.

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According to the Fifth Amendment to the U.S. Constitution, the government must pay just compensation when it takes private property for a public use. Three years ago, in the case of Arkansas Game & Fish Commission v. United States, the U.S. Supreme Court reaffirmed that command, declaring that the government has a "categorical duty" to pay just compensation when it "physically takes possession of an interest in property."

Yet according to the Obama administration, the Fifth Amendment places no substantive check on the federal government's power to seize tens of thousands of tons of raisins without paying just compensation to raisin farmers. In oral argument this morning, the Supreme Court will consider the legality of that federal claim.

At issue today in Horne v. United States Department of Agriculture is a federal regulatory scheme which dates back to the Agricultural Marketing Agreement Act of 1937, a New Deal law designed to raise agricultural prices by tightly controlling the amount of agricultural products that went to market. For raisin "handlers" such as family farmers Marvin and Laura Horne of California, what this means in practice is that each year they are required to turn over a certain percentage of their crop to the federal government, or else pay the government the dollar equivalent of that crop, plus certain fines. The federal government then enjoys exclusive control over those raisins, and may opt to sell them for export, or put them to other use, such as in school lunch programs. To put that in perspective, in 2002-2003, the Hornes and other farmers were told to hand over 30 percent of their raisin crop, which amounted to 89,000 tons. In return, the federal government paid nothing.

"Simply put," the Hornes argue in their main brief, "the Marketing Order physically deprives raisin producers of a large portion of their raisin crop and compels transfer of those raisins to the [Raisin Administrative Committee], the agent of the USDA, without just compensation." Those government actions violate the Fifth Amendment to the Constitution, the Hornes say, and must be stopped.

In response, the Obama administration claims that the Fifth Amendment should really have nothing to do with it. The Hornes "are subject to the reserve requirement due to their voluntary choice to market raisins in commerce," the federal government argues in its brief. Because the raisin confiscation "is rationally related to the legitimate government interest in ensuring orderly market conditions and fair prices for producers," the Obama administration maintains, "the government may condition participation in that market on compliance with the reserve requirement."

Notice the terms "rationally related" and "legitimate government interest." That language is taken directly from a legal concept known as the rational-basis test, which is, in the words of Black's Law Dictionary, "the most deferential of the standards of review" used by the courts when judging the constitutionality of government action. In other words, rather than viewing this case through the lens of the Fifth Amendment, which, like the rest of the Bill of Rights, places strict limits on what the government is permitted to do, the Obama administration wants the Supreme Court to adopt "the most deferential" approach possible when reviewing the USDA's actions.

Let's hope the Supreme Court declines this unsavory federal invitation. Whether the Obama administration cares to admit it or not, the USDA is clearly seeking to take physical possession of private property (crops or their cash equivalent) for an ostensible public use, and the USDA is just as clearly refusing to pay just compensation for the taking of that property. This situation is a textbook example of an unconstitutional taking under both the language of the Fifth Amendment and the Court's precedents. 

Related: Reason TV on "Feds vs. Raisins: Small Farmers Stand Up to the USDA."