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Horne v. United States Department of Agriculture

ELR Citation: 44 ELR 20109
Nos. 10-15270, (9th Cir., 05/09/2014)

The Ninth Circuit, following a reversal and remand from the U.S. Supreme Court, held that a USDA marketing order under the Agricultural Marketing Agreement Act of 1937 requiring raisin producers to participate in a raisin reserve program does not violate the Fifth Amendment's prohibition against taking property without just compensation. Under the marketing order, California raisin producers must divert a percentage of their annual crop to a reserve. Producers who fail to comply with the diversion program are subject to penalties. California raisin producers alleged that the order amounts to a taking because it deprives them of their personal property, the diverted raisins, without just compensation. But the court disagreed, holding that the order and its penalties do not amount to a physical per se taking. There is a sufficient nexus between the means and ends of the marketing order. The structure of the reserve requirement is at least roughly proportional to Congress’ stated goal of ensuring an orderly domestic raisin market. In addition, the U.S. Supreme Court has acknowledged that governmental regulation of personal property is more foreseeable, and thus less intrusive, than is the taking of real property. And USDA has endeavored to preserve as much of the producers’ ownership of the raisins as possible. The court, therefore, held that the marketing order’s reserve requirements—and the penalty provisions—do not constitute a taking under the Fifth Amendment.