Yesterday, the United States Supreme Court ruled in Horne v. USDA that the federal government cannot seize raisins from raisin producers without paying just compensation. On the face of it, this sounds so logical that one wonders how the issue got all the way to the Supreme Court.
In the late 1930s, as the Great Depression wore on, the U.S. government imposed a series of market orders in an attempt to keep prices for agricultural commodities high enough to support the farmers. One result was the Raisin Administrative Committee, which determined each year what percentage of raisins growers must turn over to the government, free of charge. The Committee would then dispose of the raisins in any number of ways, none of which commanded market prices for the raisins. The raisin producers retained an interest in the net proceeds from those sales.
The market order was never repealed, and the 2002-2003 Raisin Administrative Committee ordered growers to hand over 47 percent of the crop. Here, a family of raisin handlers refused to hand over any raisins to the Raisin Administrative Committee, which committee then levied a fine for the value of the missing raisins plus a financial penalty for disobedience.
The Government had argued that “if raisin growers don’t like it, they can ‘plant different crops,’ or ‘sell their raisin-variety grapes as table grapes or for use in juice or wine.’ Op. at 12. The Government relied on a case that permitted the Environmental Protection Agency to require pesticide, fungicide, and rodenticide manufacturers to disclose health, safety, and environmental information about their products as a condition to receiving a permit to sell, even if those disclosures included trade secrets. The Supreme Court had held there that the requirement was not a taking because the manufacturers received a lucrative license to sell dangerous chemicals it would otherwise not be permitted to sell, in other words, a “valuable Government benefit.” Op. at 13.
This Court said that “[r]aisins are not dangerous pesticides; they are a healthy snack,” and that the right to engage in the interstate sale of produce cannot be “held hostage,” redeemable only by “waiver of constitutional protection.” Op. at 13.
The Court also distinguished a case involving the “privilege fee” that Maryland watermen pay the State for the right to harvest oysters. That fee is not a taking because oyster farmers are fishing a state resource – in other words, appropriating State property for their own use, instead of the other way around. Op. at 14.
Justice Breyer’s Dissent. Justice Breyer argued that whether the market value of the remaining, non-reserved raisins benefitted from the fact of the reserve – the purpose of the market order in the first place – had not been addressed in the lower courts. The question, he believes, warrants a remand because if the facts were to show that the market price of raisins benefitted from the reserve requirements, that benefit itself might constitute “just compensation.”
Justice Sotomayor’s Dissent. Justice Sotomayor dissented on the grounds that the Takings Clause applies only when all property rights are destroyed. Because the raisin handlers retain rights in their non-reserved raisins as well as some interest in the net proceeds of the sales of the reserved raisins, their property rights are not completely destroyed and thus, the order is not a per se taking.