Over the past several years, I have learned far more about the strange federal laws regulating raisins than I had ever expected to. Two years ago, the Supreme Court decided a federal jurisdiction case called Horne v. Department of Agriculture, where it unanimously held that people who are fined for violating the raisin price regulations are allowed to challenge those fines and regulations in a regular federal district and appellate courts.
Since then, the Ninth Circuit has now ruled on the merits of the case, and upheld the regulations, and I confess that I’m rather troubled by its logic. (A new cert. petition is pending.) The raisin regulations require raisin producers to reserve a portion of their crop to be sold by the government; the government determines both the portion and the price, which it sometimes sets to be basically zero. The Hornes argued that these regulations are a taking of the raisins, and that they are therefore entitled to a determination about whether the government’s chosen compensation is “just compensation” within the meaning of the Takings Clause.
Normally, when the government takes your property away from you, as opposed to regulating it, that’s a taking. I take it that if the government told me to set aside part of my land and forced me to get rid of it for a government-determined price, that would be a taking. But the Ninth Circuit concluded that wasn’t true of the raisins for two reasons — first, because they were personal property rather than real property, and second because they did not lost all of their rights in the raisins, since they “retain the right to the proceeds of their sale.” (The kind of taking I’m talking about here is called in the cases a “per se taking,” as opposed to a regulatory taking, which sometimes, but rarely, arises when property is subject to burdensome regulations.)
As for the first, modern doctrine generally recognizes personal property as subject to the full protection of the takings clause. As I noted in my entry on the Takings Clause:
The Fifth Amendment’s protections are triggered only when the property at issue is “taken,” and when it is “property” as defined by applicable state or federal law. For purposes of the clause, property need not just be land (real property), but can be personal property, such as bank accounts, Webb’s Fabulous Pharmacies v. Beckwith (1980), or intangible property, such as trade secrets. Ruckelshaus v. Monsanto Co. (1984).
There’s also an amicus brief by several law professors, including my co-blogger Ilya Somin, arguing that the protection of personal property goes all the way back to the Founding. And reassuringly, the government doesn’t even really defend that argument in its opposition to certiorari.
The government does kind of defend a variation of the second argument — that there is no taking because the raisin farmers get some proceeds from the raisins they’re forced to set aside. But I’m not really sure how that can be right either. If property is taken, the government has to provide just compensation. If the government can render property “not-taken” simply by providing 50% (or 10% or 1%?) compensation, then the government can redefine the just compensation requirement at will.
I could imagine there being hard questions about how to determine just compensation in the context of raisin regulation, but I don’t see how either of the propositions in the Ninth Circuit’s opinion can be consistent with the basic premises of modern takings doctrine. If they aren’t reversed in this case, I hope that they are duly ignored in the future.
Of course there are lots more filings and issues in the case, and for those interested, SCOTUSBlog has them here.
[In the spirit of full disclosure I should note that Michael McConnell represents the raisin farmers, and he was once my boss, and remains a friend. But I also think he’s right about the raisins.]