Horne v. Department of Agriculture (2015)
Horne v. Department of Agriculture (2015)
576 U.S. 351
The Agricultural Marketing Agreement Act of 1937 authorizes the Secretary of Agriculture to promulgate “marketing orders” to help maintain stable markets for particular agricultural products. The marketing order for raisins established a Raisin Administrative Committee that imposes a reserve requirement—a requirement that growers set aside a certain percentage of their crop for the Government, free of charge. The Government then sells those raisins in noncompetitive markets, donates them, or otherwise disposes of them in a manner consistent with the purposes of the program. If any profits remain after subtracting the Government’s expenses from administering the program, the net proceeds are distributed back to the raisin growers. In 2002–2003, raisin growers were required to set aside 47 percent of their raisin crop under the reserve requirement. In 2003–2004, 30 percent. The Horne family, raisin growers in California, refused to set aside any raisins for the Government on the ground that the reserve requirement was an unconstitutional taking of their property for public use without just compensation. The Government fined the Hornes the fair market value of the raisins as well as additional civil penalties for their failure to obey the raisin marketing order.
The Hornes sought relief in federal court, arguing that the reserve requirement was an unconstitutional taking of their property under the Fifth Amendment. The Ninth Circuit rejected their argument that the reserve requirement was a Fifth Amendment taking; it determined that the requirement was not a per se taking because personal property is afforded less protection under the Takings Clause than real property and because the Hornes, who retained an interest in any net proceeds, were not completely divested of their property. The Ninth Circuit held that, as in cases allowing the government to set conditions on land use and development, the Government imposed a condition (the reserve requirement) in exchange for a Government benefit (an orderly raisin market). It also held that the Hornes could avoid relinquishing large percentages of their crop by “planting different crops.” The Supreme Court granted certiorari.
Opinion of the Court: Roberts, Scalia, Kennedy, Thomas, Alito, Ginsburg (as to Parts I and II), Breyer (as to Parts I and II), Kagan (as to Parts I and II).
Concurring opinion: Thomas.
Concurring in part and dissenting in part: Breyer, Ginsburg, Kagan.
Dissenting opinion: Sotomayor.
CHIEF JUSTICE ROBERTS delivered the opinion of the Court.
Under the United States Department of Agriculture’s California Raisin Marketing Order, a percentage of a grower’s crop must be physically set aside in certain years for the account of the Government, free of charge. The Government then sells, allocates, or otherwise disposes of the raisins in ways it determines are best suited to maintaining an orderly market. The question is whether the Takings Clause of the Fifth Amendment bars the Government from imposing such a demand on the growers without just compensation.
I
The Agricultural Marketing Agreement Act of 1937 authorizes the Secretary of Agriculture to promulgate “marketing orders” to help maintain stable markets for particular agricultural products. The marketing order for raisins requires growers in certain years to give a percentage of their crop to the Government, free of charge. The required allocation is determined by the Raisin Administrative Committee, a Government entity composed largely of growers and others in the raisin business appointed by the Secretary of Agriculture. In 2002–2003, this Committee ordered raisin growers to turn over 47 percent of their crop. In 2003–2004, 30 percent.
Growers generally ship their raisins to a raisin “handler,” who physically separates the raisins due the Government (called “reserve raisins”), pays the growers only for the remainder (“free-tonnage raisins”), and packs and sells the free-tonnage raisins. The Raisin Committee acquires title to the reserve raisins that have been set aside, and decides how to dispose of them in its discretion. It sells them in noncompetitive markets, for example to exporters, federal agencies, or foreign governments; donates them to charitable causes; releases them to growers who agree to reduce their raisin production; or disposes of them by “any other means” consistent with the purposes of the raisin program. Proceeds from Committee sales are principally used to subsidize handlers who sell raisins for export (not including the Hornes, who are not raisin exporters). Raisin growers retain an interest in any net proceeds from sales the Raisin Committee makes, after deductions for the export subsidies and the Committee’s administrative expenses. In the years at issue in this case, those proceeds were less than the cost of producing the crop one year, and nothing at all the next.
. . . In 2002, the Hornes refused to set aside any raisins for the Government, believing they were not legally bound to do so. The Government sent trucks to the Hornes’ facility at eight o’clock one morning to pick up the raisins, but the Hornes refused entry. The Government then assessed against the Hornes a fine equal to the market value of the missing raisins—some $480,000—as well as an additional civil penalty of just over $200,000 for disobeying the order to turn them over.
When the Government sought to collect the fine, the Hornes turned to the courts, arguing that the reserve requirement was an unconstitutional taking of their property under the Fifth Amendment. Their case eventually made it to this Court when . . . the Ninth Circuit . . . rejected the Hornes’ argument that the reserve requirement was a per se taking, reasoning that “the Takings Clause affords less protection to personal than to real property,” and concluding that the Hornes “are not completely divested of their property rights,” because growers retain an interest in the proceeds from any sale of reserve raisins by the Raisin Committee. [It] . . . instead viewed the reserve requirement as a use restriction, similar to a government condition on the grant of a land use permit. See Dolan v. City of Tigard, (1994); Nollan v. California Coastal Commission (1987). As in such permit cases, the Court of Appeals explained, the Government here imposed a condition (the reserve requirement) in exchange for a Government benefit (an orderly raisin market). And just as a landowner was free to avoid the government condition by forgoing a permit, so too the Hornes could avoid the reserve requirement by “planting different crops.” Under that analysis, the court found that the reserve requirement was a proportional response to the Government’s interest in ensuring an orderly raisin market, and not a taking under the Fifth Amendment. We granted certiorari.
II
The petition for certiorari poses three questions, which we answer in turn.
A
The first question presented asks “Whether the government’s ‘categorical duty’ under the Fifth Amendment to pay just compensation when it ‘physically takes possession of an interest in property’ applies only to real property and not to personal property.” The answer is no.
There is no dispute that the “classic taking [is one] in which the government directly appropriates private property for its own use.” Nor is there any dispute that, in the case of real property, such an appropriation is a per se taking that requires just compensation. 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. The Government has a categorical duty to pay just compensation when it takes your car, just as when it takes your home.
The Takings Clause . . . protects “private property” without any distinction between different types. The principle reflected in the Clause goes back at least 800 years to Magna Carta, which specifically protected agricultural crops from uncompensated takings. Clause 28 of that charter forbade any “constable or other bailiff” from taking “corn or other provisions from any one without immediately tendering money therefor, unless he can have postponement thereof by permission of the seller.”
The colonists brought the principles of Magna Carta with them to the New World, including that charter’s protection against uncompensated takings of personal property. In 1641, for example, Massachusetts adopted its Body of Liberties, prohibiting “mans Cattel or goods of what kinde soever” from being “pressed or taken for any publique use or service, unlesse it be by warrant grounded upon some act of the generall Court, nor without such reasonable prices and hire as the ordinarie rates of the Countrie do afford.” Virginia allowed the seizure of surplus “live stock, or beef, pork, or bacon” for the military, but only upon “paying or tendering to the owner the price so estimated by the appraisers.” And South Carolina authorized the seizure of “necessaries” for public use, but provided that “said articles so seized shall be paid for agreeable to the prices such and the like articles sold for on the ninth day of October last.”
. . . Nothing in this history suggests that personal property was any less protected against physical appropriation than real property. . . .
The reserve requirement imposed by the Raisin Committee is a clear physical taking. Actual raisins are transferred from the growers to the Government. . . . The Committee disposes of what become its raisins as it wishes, to promote the purposes of the raisin marketing order.
Raisin growers subject to the reserve requirement thus lose the entire “bundle” of property rights in the appropriated raisins . . . with the exception of the speculative hope that some residual proceeds may be left when the Government is done with the raisins and has deducted the expenses of implementing all aspects of the marketing order. The Government’s “actual taking of possession and control” of the reserve raisins gives rise to a taking as clearly “as if the Government held full title and ownership,” as it essentially does. . . .
B
The second question presented asks “Whether the government may avoid the categorical duty to pay just compensation for a physical taking of property by reserving to the property owner a contingent interest in a portion of the value of the property, set at the government’s discretion.” The answer is no.
The Government and dissent argue that raisins are fungible goods whose only value is in the revenue from their sale. According to the Government, the raisin marketing order leaves that interest with the raisin growers: After selling reserve raisins and deducting expenses and subsidies for exporters, the Raisin Committee returns any net proceeds to the growers. The Government contends that because growers are entitled to these net proceeds, they retain the most important property interest in the reserve raisins, so there is no taking in the first place. The dissent agrees, arguing that this possible future revenue means there has been no taking . . . That is not an issue here: The Hornes did not receive any net proceeds from Raisin Committee sales for the years at issue, because they had not set aside any reserve raisins in those years (and, in any event, there were no net proceeds in one of them).
C
The third question presented asks “Whether a governmental mandate to relinquish specific, identifiable property as a ‘condition’ on permission to engage in commerce effects a per se taking.” The answer, at least in this case, is yes.
The Government contends that the reserve requirement is not a taking because raisin growers voluntarily choose to participate in the raisin market. According to the Government, if raisin growers don’t like it, they can “plant different crops,” or “sell their raisin-variety grapes as table grapes or for use in juice or wine.”
“Let them sell wine” is probably not much more comforting to the raisin growers than similar retorts have been to others throughout history. . . . [P]roperty rights “cannot be so easily manipulated.” . . . The Government and dissent rely heavily on Ruckelshaus v. Monsanto Co. (1984). There we held that the Environmental Protection Agency could require companies manufacturing pesticides, fungicides, and rodenticides to disclose health, safety, and environmental information about their products as a condition to receiving a permit to sell those products. While such information included trade secrets in which pesticide manufacturers had a property interest, those manufacturers were not subjected to a taking because they received a “valuable Government benefit” in exchange—a license to sell dangerous chemicals.
The taking here cannot reasonably be characterized as part of a similar voluntary exchange. In one of the years at issue here, the Government insisted that the Hornes turn over 47 percent of their raisin crop, in exchange for the “benefit” of being allowed to sell the remaining 53 percent. The next year, the toll was 30 percent. We have already rejected the idea that Monsanto may be extended by regarding basic and familiar uses of property as a “Government benefit” on the same order as a permit to sell hazardous chemicals. Selling produce in interstate commerce, although certainly subject to reasonable government regulation, is similarly not a special governmental benefit that the Government may hold hostage, to be ransomed by the waiver of constitutional protection. Raisins are not dangerous pesticides; they are a healthy snack. A case about conditioning the sale of hazardous substances on disclosure of health, safety, and environmental information related to those hazards is hardly on point.
III
[T]he Government briefly argues that if we conclude that the reserve requirement effects a taking, we should remand for the Court of Appeals to calculate “what compensation would have been due if petitioners had complied with the reserve requirement.” The Government contends that the calculation must consider what the value of the reserve raisins would have been without the price support program, as well as “other benefits . . . from the regulatory program, such as higher consumer demand for raisins spurred by enforcement of quality standards and promotional activities.” Indeed, according to the Government, the Hornes would “likely” have a net gain under this theory.
The best defense may be a good offense, but the Government cites no support for its hypothetical-based approach, or its notion that general regulatory activity such as enforcement of quality standards can constitute just compensation for a specific physical taking. Instead, our cases have set forth a clear and administrable rule for just compensation: “The Court has repeatedly held that just compensation normally is to be measured by ‘the market value of the property at the time of the taking.’” The Government has already calculated the amount of just compensation in this case, when it fined the Hornes the fair market value of the raisins: $483,843.53. The Government cannot now disavow that valuation and does not suggest that the marketing order affords the Hornes compensation in that amount. There is accordingly no need for a remand; the Hornes should simply be relieved of the obligation to pay the fine and associated civil penalty they were assessed when they resisted the Government’s effort to take their raisins. This case, in litigation for more than a decade, has gone on long enough.
The judgment of the United States Court of Appeals for the Ninth Circuit is reversed.
JUSTICE BREYER, with whom JUSTICE GINSBURG and JUSTICE KAGAN join, concurring in part and dissenting in part.
I agree with Parts I and II of the Court’s opinion. However, I cannot agree with the Court’s rejection, in Part III, of the Government’s final argument. The Government contends that we should remand the case for a determination of whether any compensation would have been due if the Hornes had complied with the California Raisin Marketing Order’s reserve requirement. In my view, a remand for such a determination is necessary.
The question of just compensation was not presented in the Hornes’ petition for certiorari. It was barely touched on in the briefs. And the courts below did not decide it. . . . In my view, . . . the Takings Clause requires compensation in an amount equal to the value of the reserve raisins adjusted to account for the benefits received. And the Government does, indeed, suggest that the marketing order affords just compensation. Further, the Hornes have not demonstrated the contrary. Before granting judgment in favor of the Hornes, a court should address the issue in light of all of the relevant facts and law.
Given the precedents, the parties should provide full briefing on this question. I would remand the case, permitting the lower courts to consider argument on the question of just compensation.
JUSTICE SOTOMAYOR, dissenting.
. . . Because the Order does not deprive the Hornes of all of their property rights, it does not effect a per se taking. I respectfully dissent from the Court’s contrary holding.
. . . In my view, [w]here some property right is retained by the owner, no per se taking . . . has occurred. . . .
The Hornes . . . retain at least one meaningful property interest in the reserve raisins: the right to receive some money for their disposition. The Order explicitly provides that raisin producers retain the right to “[t]he net proceeds from the disposition of reserve tonnage raisins” and ensures that reserve raisins will be sold “at prices and in a manner intended to maxim[ize] producer returns,” According to the Government, of the 49 crop years for which a reserve pool was operative, producers received equitable distributions of net proceeds from the disposition of reserve raisins in 42.
Granted, this equitable distribution may represent less income than what some or all of the reserve raisins could fetch if sold in an unregulated market. In some years, it may even turn out (and has turned out) to represent no net income. But whether and when that occurs turns on market forces for which the Government cannot be blamed and to which all commodities—indeed, all property—are subject. In any event, we have emphasized that “a reduction in the value of property is not necessarily equated with a taking,” that even “a significant restriction . . . imposed on one means of disposing” of property is not necessarily a taking, and that not every “‘injury to property by governmental action’” amounts to a taking. . . . I take us at our word: [An] action can[not] be called a per se taking . . . if there remains a property interest that is at most merely damaged. That is the case here; accordingly, no per se taking has occurred.