29 Jun Raisin Takings Case: What’s in it for Local Governments?
Same-sex marriage, Affordable Care Act, raisins. What do these three have in common? The Supreme Court has recently issued a ruling regarding each of them.
In Horne v. Department of Agriculture the Supreme Court held 8-1 that the federal government violated the Fifth Amendment Takings Clause by physically setting aside a percentage of a grower’s raisin crop each year without pay. At least six other agriculture set aside programs are in trouble as a result of this case. But what about its impact on state and local government?
Horne is a complicated case with four issues. The holding most relevant to state and local government is that taking an interest in personal property (here raisins) rather than land is a per se taking rather than a “more flexible and forgiving” regulatory taking. As the International Municipal Lawyers Association amicus brief points out an argument can now be made that towing illegal parked cars, removing abused and neglected pets, confiscating drugs or pirated copyrighted materials, and confiscating guns from felons might amount to takings requiring just compensation.
Per the Agricultural Marketing Act raisin growers are required in certain years to give a percentage of their crops to the federal government free of charge to maintain a stable market for raisins. Raisin grower sometimes receive proceeds from the sale of set-aside raisins. The Horne’s refused to set aside raisins for the federal government and were fined the fair market value of the raisins and for failing to comply with the order. The Horne’s sued claiming the set aside requirement was an unconstitutional taking.
The Court first held that the appropriation of personal property is a per se taking just like the appropriation of land stating that the text, history, and precedents interpreting the Takings Clause don’t suggest a different rule. The Court next concluded the government could not avoid paying just compensation because the growers in this case had a contingent interest in the value of the set aside raisins. “The fact that the growers retain a contingent interest of indeterminate value does not mean there has been no physical taking, particularly since the value of the interest depends on the discretion of the taker, and may be worthless, as it was for one of the two years at issue here.” To the question of whether the government’s mandate to turn over raisins as a condition of participating in commerce is a per se taking the Court said yes in this case. It is not enough that the growers voluntarily chose to sell raisins rather than wine.
Only five Justices agreed that the Horne’s just compensation should be the fair market value of the set aside raisins (and the fine for disobeying the order should be dropped). Three Justices would have sent the case back to the lower court to determine whether, through the price supports for the raisins the Horne’s did not have to set aside, they received just compensation.
Only time will tell whether people will try to bring takings claims against state and local governments citing Horne for government seizures of personal property more common than raisins—and whether those claims will be successful.