{"id":2837,"date":"2015-06-22T15:22:25","date_gmt":"2015-06-22T20:22:25","guid":{"rendered":"http:\/\/agrilife.org\/texasaglaw\/?p=2837"},"modified":"2026-04-17T15:29:48","modified_gmt":"2026-04-17T20:29:48","slug":"united-states-supreme-court-finds-for-raisin-farmers-in-takings-case","status":"publish","type":"post","link":"https:\/\/agrilife.org\/texasaglaw\/2015\/06\/22\/united-states-supreme-court-finds-for-raisin-farmers-in-takings-case\/","title":{"rendered":"United States Supreme Court Finds for Raisin Farmers in Takings Case"},"content":{"rendered":"

It is not that often that an agricultural law issue is before the United States Supreme Court. \u00a0Yesterday, however, the Court sided with\u00a0raisin farmers who claimed that a government ag marketing order constituted a taking of their private property for which just compensation was owed. \u00a0[Read full opinion here<\/a>.]<\/p>\n

\"Supreme<\/a><\/p>\n

Factual Background<\/strong><\/p>\n

This case involves a claim by the Horne family against the United States Department of Agriculture. \u00a0The Hornes are raisin farmers and raisin growers in California. \u00a0<\/span>In addition to raising their own raisins, they serve as sort of a middle-man, where other farmers deliver their raisins to be packed and sold.<\/p>\n

Under the Agricultural Marketing Agreement Act, the Secretary of Agriculture is permitted to issue “marketing orders” for particular agricultural products. \u00a0The purpose of these orders is to help the government maintain stable markets for these products. \u00a0The Raisin Marketing Order requires growers to give a certain percentage of their raisin crop to the government in certain years free of charge. \u00a0The percentage that must be given is decided by the Raisin Administrative Committee (“RAC”), appointed by the Secretary of Agriculture. \u00a0The percentages vary each year. \u00a0For example, in 2002-2003, the order required growers to give up 47% of their crop, which in 2003-2004, the order required growers to give up 30%.<\/p>\n

Thus, when raisins are delivered to a handler, such as the Hornes, the handler generally separates the percentage of raisins allocated to the government (“reserve raisins”) from the remainder of the growers’ crops (“free-tonnage raisins”). \u00a0Generally, the raisin farmers are paid only on the free-tonnage raisins. \u00a0The RAC\u00a0then acquires title to the reserve raisins and sends trucks to pick up the raisins from the handlers. \u00a0From there, the RAC has discretion to do what it determines best with the raisins, such as selling them into non-competitive markets, donating them to charity, or destroying them. \u00a0The raisin farmers retain an interest in the proceeds from any sale of reserve raisins, but oftentimes once costs are deducted, there are no such proceeds to be distributed to growers.<\/p>\n

In 2002, the Hornes refused to set aside any raisins for the government. \u00a0When the government trucks arrived at the Hornes’ facility to pick up the reserve raisins, they would not allow entry to the facility. \u00a0The USDA then issued a fine to the Hornes ($480,000 market value for the reserve raisins and $200,000 penalty for disobeying a government order).<\/p>\n

In response, the Hornes filed suit claiming that the marketing order resulted in an unconstitutional taking of their property under the Fifth Amendment. \u00a0The Court of Appeals for the Ninth Circuit sided with the USDA, finding that no taking occurred. \u00a0The court reasoned this was a regulatory\u00a0Nolan\/Dolan<\/em> taking and that the government’s imposed condition was a proportional response to the governmental interest in maintaining an orderly raisin market. \u00a0Further, the court explained, the Hornes could have avoided the government condition by planting a different crop.<\/p>\n

Basic Takings Law Background<\/strong><\/p>\n

The sole legal claim at issue in this case is a takings claim under the Fifth Amendment of the Constitution, which provides that the government may not take private property for public use without just compensation. \u00a0There are essentially two categories of takings: \u00a0per se (also called categorical takings) and regulatory takings. \u00a0A per se taking occurs when there is a physical appropriation of property. \u00a0In that instance, no further analysis into the facts surrounding the case is required, a taking has occurred. \u00a0A regulatory taking, on the other hand, occurs when a regulation that restricts the use of property goes too far. \u00a0What constitutes “too far” is determined on a case-by-case, factual basis.<\/p>\n

United States Supreme Court Opinion<\/strong><\/p>\n

The Supreme Court specifically considered three issues on appeal: \u00a0(1) Does the government’s duty to pay just compensation when it physically takes possession of an interest in property apply only to real property and not to personal property?; (2) \u00a0May the government avoid the duty to pay compensation for a physical taking of property by reserving to the property owner an contingent interest in the value of the property, set at the government’s discretion?; \u00a0and (3) Does the government’s mandate to relinquish certain identifiable property as a ‘condition’ on permission to engage in commerce constitute a per se taking? \u00a0Let’s consider each in turn.<\/p>\n

(1) \u00a0Is compensation required for a taking of personal property?<\/u> \u00a0The Supreme Court answered in the affirmative. \u00a0The Court explained there is no dispute that in the case of real property, the Constitution requires just compensation. \u00a0“Nothing in the text or history of the Takings Clause, or our precedents, suggests that the rule is any different when it comes to appropriation of personal property. \u00a0The Government has a categorical duty to pay just compensation when it takes your car, just as when it takes your home.”<\/p>\n

(2) \u00a0Does allowing the grower to retain a contingent interest in a portion of the value avoid compensation owed?<\/span> \u00a0The Supreme Court said it did not. \u00a0The Court\u00a0explained that the\u00a0reserve requirement\u00a0constituted a “clear physical taking.” \u00a0The court reasoned that the raisins are physically separated from the free-tonnage raisins, title passes to the Raisin Committee, and the committee disposes of raisins as it wishes to. \u00a0This constitutes a per se, not a regulatory, taking. \u00a0Importantly, the Court drew a distinction here between per se and regulatory takings. \u00a0For a per se taking, it is unnecessary to consider the potential economic impact on the property owner–only whether or not a physical taking occurred. \u00a0If, however, this case involved a regulatory taking, then such factors such as economic impact could be considered by the Court. \u00a0However, because the court found this case to clearly be a per se taking, no such factual analysis was proper.<\/p>\n

(3) \u00a0Did the governmental mandate to relinquish specific property constitute a per se taking?<\/span> \u00a0In this case, the Supreme Court said it did. \u00a0The government argued that the Hornes voluntarily chose to participate in the raisin market and, if they did not like the reserve requirement, they could have raised a different crop or sold their grapes for juice or wine. \u00a0The Court rejected this argument.<\/p>\n

Lastly, the Court considered how compensation should be calculated. \u00a0The USDA argued that compensation should be figured based upon what the value of the raisins would have been without the price support program. \u00a0The Court rejected this argument, stating that the measure of just compensation in takings cases is the fair market value of the property at the time of the taking. \u00a0The government, itself, calculated the fair market value of the raisins when it fined the Hornes $480,000–market value at the time for the raisins.<\/p>\n

Thomas Concurring Opinion<\/strong><\/p>\n

In an interesting concurring opinion (meaning that he agreed with the result of the case, but wrote separately to address particular reasoning for the decision), Justice Thomas questioned whether the RAC’s conduct meets the “public use” requirement of takings law. \u00a0In order for the government to take private property, it must be done for a public use. \u00a0Justice Thomas states that it is “far from clear” that the RAC taking raisins from growers and giving them away or selling them to exporters, foreign importers, or foreign governments constitutes a public use.<\/p>\n

Breyer Opinion<\/strong><\/p>\n

Justice Breyer, along with Justice Ginsburg and Kagen, issued an opinion concurring in part and dissenting in part. \u00a0Justice Breyer agreed with the Court’s\u00a0answers to the three\u00a0questions presented, but opined that the case should be remanded to the lower court to determine the proper measure of just compensation owed to the Hornes. \u00a0Specifically, he explained, “The marketing order may afford just compensation for the takings of raisins that it imposes.” \u00a0He reasons that because the reserve requirement is intended to enhance the price of free-tonnage raisins that the growers are able to sell, the proper compensation may be to determine the value of the reserve raisins and deduct any enhancement caused by the taking to the free-tonnage raisins, and award the Hornes the difference. \u00a0Because this issue was not considered below or briefed by the parties, he would remand the case to determine just compensation.<\/p>\n

Sotomayor Dissenting Opinion<\/strong><\/p>\n

Sotomayor is the lone justice who would find that the marketing order did not constitute a per se taking. \u00a0She believes that in order for a per se taking occurs, the law requires “each and every property right be destroyed by governmental action before the action can be said to have effected a \u00a0per se taking.” \u00a0In her dissent, she argues that if any property right is retained by the owner, no physical taking has occurred. \u00a0Because the Hornes retained the contingent interest in the proceeds of the raisins, she would find no per se taking occurred.<\/p>\n

What Can We Learn?<\/strong><\/p>\n

First, this case provides a great distinction between the legal analysis undertaken when dealing with a per se taking versus that undertaken when dealing with a regulatory taking. \u00a0If a per se physical taking exists, there are no other factual circumstances considered by the courts. \u00a0On the other hand, if a regulatory taking occurs, numerous factual circumstances and considerations come into play to determine if the regulation “goes too far.”<\/p>\n

Second, in this case, 8 of the 9 justices (all but Sotomayor) agree that a per se taking did occur. \u00a0Thus, the argument that the marketing order, instead, constituted a regulatory taking, was not popular among the justices.<\/p>\n

Third, Justice Thomas’ concurrence raises an interesting issue of whether taking the raisins and giving or selling them to foreign countries is actually a public use. \u00a0This is at least tangentially related to an argument we saw Texas landowners make before Texas Courts with regard to the Keystone Pipeline. \u00a0Many landowners argued that allowing Keystone–a foreign corporation–to take American land to build a pipeline was improper because the benefit was to a foreign corporation. \u00a0Texas courts rejected this assertion, but would Justice Thomas have thought differently?<\/p>\n

Fourth, Justice Breyer’s opinion is also interesting. \u00a0Generally, just compensation is based upon fair market value of the property, end of story. \u00a0But Justice Breyer’s opinion and looks at the issue of whether the market value for the property taken should be off-set where the government gives something of value to the property owner in return. \u00a0Will this be something he can garner support for in future takings cases?<\/p>\n

Finally, the big question for the USDA going forward is what will happen to this type of marketing order? \u00a0Some farmers favor such marketing orders because of the stabilization and support they believe the orders provide to the market. \u00a0Others agree with the Hornes and believe such orders are not only unnecessary, but unconstitutional. \u00a0How broadly will this case be interpreted and what long-term impact will it have? \u00a0That remains to be seen. \u00a0Capital Press reports that there are 20 similar USDA marketing orders for other crops, although the exact language and requirements vary by order and crop. \u00a0[Read article here<\/a>.] \u00a0It is unclear whether the\u00a0Horne<\/em> opinion will impact these other orders as well.<\/p>\n","protected":false},"excerpt":{"rendered":"

It is not that often that an agricultural law issue is before the United States Supreme Court. \u00a0Yesterday, however, the Court sided with\u00a0raisin farmers who claimed that a government ag marketing order constituted a taking of their private property for which just compensation was owed. \u00a0[Read full opinion here.] Factual Background This case involves a claim by the Horne family against the United States Department of Agriculture. \u00a0The Hornes are raisin farmers and raisin growers in California. \u00a0In addition to raising their own raisins, they serve as sort… Read More →<\/a><\/span><\/p>\n","protected":false},"author":2443,"featured_media":1763,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[49,5],"tags":[],"class_list":["post-2837","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-takings","category-united-states-supreme-court-decisions"],"acf":[],"yoast_head":"\nUnited States Supreme Court Finds for Raisin Farmers in Takings Case - Texas Agriculture Law<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/agrilife.org\/texasaglaw\/2015\/06\/22\/united-states-supreme-court-finds-for-raisin-farmers-in-takings-case\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"United States Supreme Court Finds for Raisin Farmers in Takings Case - Texas Agriculture Law\" \/>\n<meta property=\"og:description\" content=\"It is not that often that an agricultural law issue is before the United States Supreme Court. \u00a0Yesterday, however, the Court sided with\u00a0raisin farmers who claimed that a government ag marketing order constituted a taking of their private property for which just compensation was owed. \u00a0[Read full opinion here.] Factual Background This case involves a claim by the Horne family against the United States Department of Agriculture. \u00a0The Hornes are raisin farmers and raisin growers in California. \u00a0In addition to raising their own raisins, they serve as sort... 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Texas Agriculture Law","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/agrilife.org\/texasaglaw\/2015\/06\/22\/united-states-supreme-court-finds-for-raisin-farmers-in-takings-case\/","og_locale":"en_US","og_type":"article","og_title":"United States Supreme Court Finds for Raisin Farmers in Takings Case - Texas Agriculture Law","og_description":"It is not that often that an agricultural law issue is before the United States Supreme Court. \u00a0Yesterday, however, the Court sided with\u00a0raisin farmers who claimed that a government ag marketing order constituted a taking of their private property for which just compensation was owed. \u00a0[Read full opinion here.] Factual Background This case involves a claim by the Horne family against the United States Department of Agriculture. \u00a0The Hornes are raisin farmers and raisin growers in California. \u00a0In addition to raising their own raisins, they serve as sort... 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