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Horne v. Department of Agriculture

ELR Citation: 45 ELR 20120
Nos. 14-275, (U.S., 06/22/2015)

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 violates 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. The Ninth Circuit had disagreed, holding that the order and its penalties do not amount to a physical per se taking because personal property is afforded less protection under the Takings Clause than real property and because the raisin producers, who retained an interest in any net proceeds, were not completely divested of their property. But the Supreme Court reversed. The Fifth Amendment requires that the government pay just compensation when it takes personal property just as when it takes real property. Here, the reserve requirement is a clear physical taking. The fact that the growers are entitled to the net proceeds of the raisin sales does not mean that there has been no taking at all. Any net proceeds the raisin growers receive from the sale of the reserve raisins simply goes to the amount of compensation they have received for that taking. Nor can the taking in this case be characterized as part of a voluntary exchange for a valuable government benefit. The ability to sell produce in interstate commerce, although certainly subject to reasonable government regulation, is not a "benefit" that the government may withhold unless growers waive constitutional protections. Roberts, C.J., delivered the opinion of the Court, in which Scalia, Kennedy, Thomas, and Alito, JJ., joined, and in which Ginsburg, Breyer, and Kagan, JJ., joined as to Parts I and II. Thomas, J., filed a concurring opinion. Breyer, J., filed an opinion concurring in part and dissenting in part, in which Ginsburg and Kagan, JJ., joined. Sotomayor, J., filed a dissenting opinion.