Long-time California raisin farmers Marvin and Laura Horne have been forced to experience firsthand the costs that America’s regulatory state imposes on entrepreneurs, especially innovative members of the agriculture industry.
No longer do farmers enjoy the ancient right to sell their produce and enjoy the fruits of their labor. Indeed, Horne v. U.S. Dept. of Agriculture exemplifies the extent to which all property and business owners are made to suffer a needless, Rube Goldberg-style litigation process to vindicate their constitutional rights.
In this case, the USDA imposed on the Hornes a “marketing order” demanding that they turn over 47% of their crop without compensation. The order—a much-criticized New Deal relic—forces raisin “handlers” to reserve a certain percentage of their crop “for the account” of the government-backed Raisin Administrative Committee, enabling the government to control the supply and price of raisins on the market. The RAC then either sells the raisins or simply gives them away to noncompetitive markets—such as federal agencies, charities, and foreign governments—with the proceeds going toward the RAC’s administration costs.
Believing that they, as raisin “producers,” were exempt, the Hornes failed to set aside the requisite tribute during the 2002-2003 and 2003-2004 growing seasons. The USDA disagreed with the Hornes’ interpretation of the Agricultural Marketing Agreement Act of 1937 and brought an enforcement action, seeking $438,843.53 (the approximate market value of the raisins that the Hornes allegedly owe), $202,600 in civil penalties, and $8,783.39 in unpaid assessments. After losing in that administrative review, the Hornes brought their case to federal court, arguing that the marketing order and associated fines violated the Fifth Amendment’s Takings Clause.
After litigating the matter in both district and appellate court, the government—for the first time—alleged that the Hornes’ takings claim would not be ripe for judicial review until after the Hornes terminated the present dispute, paid the money owed, and then filed a separate suit in the Court of Federal Claims. The U.S. Court of Appeals for the Ninth Circuit proved receptive to the government’s reversal. Relying on Williamson County v. Hamilton Bank (1985)—the Supreme Court case that first imposed ripeness conditions on takings claims—the court ruled in a revised opinion that the Tucker Act (which relates to federal waivers of sovereign immunity) divested federal courts of jurisdiction over all takings claims until the property owner unsuccessfully sought compensation in the Court of Federal Claims. In conflict with five other circuit courts and a Supreme Court plurality, the Ninth Circuit also concluded that the Tucker Act offered no exception for those claims challenging a taking of money, nor for those claims raised as a defense to a government-initiated action.
The ruling defies both law and common sense. It stretches the Supreme Court’s ripeness rule beyond its moorings and it forces property owners to engage in utterly pointless, inefficient, and burdensome activities just to recover what should never have been taken in the first place. Having filed an amicus brief that supported the Hornes’ successful petition for Supreme Court review, Cato has again joined the National Federation of Independent Business, Center for Constitutional Jurisprudence, and Reason Foundation on a new brief that urges the Court to affirm its plurality decision in Eastern Enterprises v. Apfel (1998), which held that an unjustified monetary order is inherently a taking without just compensation. Any ruling to the contrary imposes a pointless burden on property owners, particularly when the government initiated the original proceeding.
We argue that the Ninth Circuit’s overbroad reading of Williamson County stretches the ripeness doctrine beyond any sensible reading; it allows the government to initiate a claim and then block an important constitutional defense on the fallacious notion that it has been brought prematurely. We advocate a rule that is more compatible with the history and text of the Fifth Amendment—that the most natural reading of the Takings Clause demands that compensation be offered as a prerequisite to government action. Indeed, from the time of Magna Carta, just compensation has been required before property was seized.
Moreover, just as the Court wouldn’t permit the government to seize property without some prior “due process of law,” it shouldn’t permit the government to seize property without prior “just compensation.” The Court has no reason to treat takings claims with less deference than rights anchored in other constitutional provisions.
Horne will be argued at the Supreme Court on March 20.