Supreme Court Grills Government Lawyer Over USDA 'Central Planning' in Raisin Confiscation Case

SCOTUS heard oral arguments on Wednesday in Horne v. USDA.

The U.S. Supreme Court heard oral arguments on Wednesday over the constitutionality of a federal program which allows the United States Department of Agriculture (USDA) to physically confiscate a large portion of each year's raison crop for the purposes of "stabilizing" the raisin market. Judging by the questions and concerns raised by the Court, that federal farm control scheme may be in serious trouble.

At issue in Horne v. USDA is whether the federal confiscation of privately owned raisins under the Agricultural Marketing Agreement Act, a federal law which dates back to the New Deal, violates the Fifth Amendment's requirement that the government pay just compensation when it takes private property for a public use.

"In this case the government literally takes possession of the raisins," declared Stanford law professor Michael McConnell, the attorney representing family farmers Marvin and Laura Horne. That's different from other forms of economic regulation, he maintained, such as when the government places a limit on the amount of raisins that farmers are permitted to grow. "Instead, they're told to set aside the raisins and give them to the government. So here there is a taking" of physical property.

Several justices seemed inclined to agree. Assume I "have some raisins in my basement," said Justice Stephen Breyer. "I'm in this program. The government comes with a shovel and some burlap sacks; it takes the raisins. I would say, well, sounds like a taking to me."

Representing the federal government was Deputy Solicitor General Edwin Kneedler. He faced the difficult task of justifying the USDA's actions in a way that did not trigger the Fifth Amendment's Takings Clause. "The government has not taken the raisins," Kneedler maintained. "This program operates only when the producer, the grower, has voluntarily submitted…the raisins to the stream of commerce."

"Is there any limit to that argument?" responded Justice Samuel Alito. "Could the government say to a manufacturer of cellphones, you can sell cellphones; however, every fifth one you have to give to us?"

A few minutes later, Justice Sonia Sotomayor returned to Alito's question. "Mr. Kneedler, I, too, am troubled, like Justice Alito, about his every fifth telephone or whatever," she said. "I don't know that you've answered that question. Is that a taking or isn't it?"

But Kneedler refused to budge. "This is a comprehensive governmental program," he stressed, "and it—it governs quality, it governs timing of sales, and it's important to recognize that's all that is going on here." Furthermore, Kneedler later added, "the premises on which Congress enacted this statute in 1937 operated then and…operate now for the benefit of [raisin] producers."

Justice Antonin Scalia, however, promptly rejected that line of argument. "Central planning was thought to work very well in 1937," Scalia retorted, "and Russia tried it for a long time."

Chief Justice John Roberts, meanwhile, raised a broader objection to the government's stance. "You say that producers who are dissatisfied with the reserve regulations may plant different crops," Roberts observed. "Normally what we say, if you don't like regulations, you can challenge them in court to see if they comply with the Constitution."

"The substantive point," Kneedler responded, "is that there is market regulation. People who are growing crops in this industry know what the regulation is…. They have the option of selling the grapes for other purposes."

But Roberts refused to buy it. Assume "we're going to say the Pledge of Allegiance in public schools," he told Kneedler, "and we're going to make everybody stand. And if you don't like it, go to a different school. I don't understand why that's not the same analysis here."

Despite the federal government's best legal efforts, it appears that the USDA will be judged under the exacting limits imposed by the Fifth Amendment.

A ruling in Horne v. United States Department of Agriculture is expected by June.