By Derek Bradley–
In an 8-1 decision the United States Supreme Court on Monday June 22nd overturned the Ninth Circuit in Horne v. Department of Agriculture bringing an end to an unusual government practice that had existed for almost 80 years and providing a victory for property rights advocates. A pair of raisin farmers challenged the constitutionality of the Raisin Administrative Committee’s (the Committee) ability to confiscate raisin crops and not pay farmers for them in an effort to artificially inflate raisin prices. The farmers refused to relinquish their crops and were fined by the USDA. They sued in federal court saying that this was a takings under the Fifth Amendment.
The Ninth Circuit came down in favor of the Committee saying that the Fifth Amendment’s Takings Clause only applied to real estate. The US Supreme Court disagreed. Writing for the majority, Chief Justice John Roberts clarified that the Takings Clause applies to all property and not just real estate. He went on to clarify that this decision did not mean that the federal government cannot regulate raisins, or any other item that will affect interstate commerce, but that an actual seizing of the crops and a refusal to pay for them was a takings, “Selling produce in interstate commerce, although certainly subject to reasonable government regulation, is similarly not a special governmental benefit that the government may hold hostage, to be ransomed by the waiver of constitutional protection.” The Court rejected a number of arguments made by the government including that this was a similar practice to the controls on pesticides the government exercises, that this was not a complete takings as the government sometimes paid for the raisins, and that raisins were like oysters for which the government has power to limit the harvest.
The decision of the Court narrowed to 5-4 concerning the topic of compensation to the Hornes. The majority held that the farmers should be relieved of the obligation to pay any fines associated with this case and the Committee. Justice Breyer, joined by Justices Kagan and Ginsburg, wanted to remand the case to the Ninth Circuit to determine adequate compensation for the Hornes. The decision marks a reaffirmation of the importance of property rights in the United States, and particularly goods that can be sold in interstate commerce. It is a decisive victory for property rights and shows that there is little interest on the Court in allowing such heavy-handed government actions.
Please see the articles linked below for additional information on the decision and stay tuned to Schroeder Law information on future agriculture related decsions!
New York Time’s Article on the Decision
Wall Street Journal Article on the Decision
