The takings clause of the
Fifth Amendment does not only apply to the government’s use of eminent domain
to take real estate. This was emphasized
by the United States Supreme Court in last week’s opinion entitled Horne v. Department of Agriculture, 569
U.S. ___ (2013).
Horne is about a
California raisin grower based in the counties of Fresno and Madera, who
challenged a federal regulatory scheme which has been applied to California
raisin growers since 1949. The
regulations, “adopted to stabilize prices by limiting the supply of raisins on
the market”, require raisin growers to frequently turn over a percentage of
their crop to the Federal Government.
The government took action against the grower for failing to
participate in and comply with the regulatory scheme. The government assessed significant fines and
civil penalties against the grower. As a
defense, the raisin grower argued that the statutory scheme, known as the
Agricultural Marketing Agreement Act of 1937 and the California Raisin
Marketing Order, violated the Fifth Amendment as an unconstitutional taking of
their private property without just compensation. The grower’s argument was that “it would be
unconstitutional for the Government to come on their land and confiscate raisins,
or to confiscate the proceeds of raisin sales, without paying just
compensation.”
The grower first went through an administrative hearing
process where the first administrative law judge rejected the takings defense,
and the appellate administrative officer declined to deal with that
constitutional defense. The raisin
grower then filed a lawsuit in Federal District Court, where they lost a motion
for summary judgment filed by the government.
The District Court held that there was no physical taking of the
crop. The Ninth Circuit Court of Appeals
affirmed, but held that it lacked jurisdiction to hear the grower’s Fifth
Amendment takings defense. The Supreme Court of the United States agreed to hear
the case in order to decide the jurisdiction issue.
The government argued that the raisin grower’s claim was
premature, because it should have first pursued its takings claim in the Court
of Federal Claims, under the Tucker Act.
The Supreme Court disagreed, explaining that under the statutory scheme
at issue, Tucker Act jurisdiction was withdrawn. In fact, the regulatory scheme specifically
gives the Federal District Court jurisdiction to review administrative
rulings. Therefore, the raisin grower’s
Federal District Court claim was not premature. The Supreme Court further held that a “takings-based defense” can be
raised by the raisin grower in connection with the government’s action to
enforce the regulatory scheme.
The Supreme Court unanimously ruled that the
raisin grower “raised a cognizable takings defense”, and that the Ninth Circuit
Court of Appeals made a mistake when it declined to resolve that defense. The ruling of the Ninth
Circuit was reversed, and the case was remanded back to the Court of Appeals
for further proceedings, where a determination will have to be made as to
whether the government’s imposition of fines and penalties on the raisin grower
violated the Fifth Amendment to the Constitution.
It will be interesting to see what the Ninth
Circuit Court of Appeals does with this case on remand. Will the Court of Appeals put a stop to the
confiscation of the crops or proceeds of the crops of California raisin farmers
that has been happening since 1949? Will this case eventually wind up back with
the Supreme Court?
