Horne v. Department of Agriculture (II)

Case Updates

The Supreme Court held that a federal program requiring raisin farmers to turn over nearly half of their crop to the government for little or no compensation violates the Takings Clause of the Fifth Amendment of the U.S. Constitution.

In its decision, the Court announced three legal holdings that strengthen property rights for business and individuals. First, the Court ruled that the full protections of the Takings Clause apply to “personal property,” not just “real property.” Second, the Court clarified that the Takings Clause applies to situations where the government requires an individual or business to pass legal title of property to the government, even if the property itself has not yet been transferred to the government. Third, the Court ruled that the ability to participate in interstate commerce is not a “benefit” that the government may withhold unless an individual or business agrees to give up other constitutional rights.

The U.S. Chamber filed a brief urging the U.S. Supreme Court to clarify that the “per se” Takings Clause doctrine applies to personal physical property and that regulators may not “condition” a business’s participation in interstate commerce on ceding property rights. The case arises out of a long-running dispute between California raisin farmers and the U.S. Department of Agriculture, which relied on a Great Depression-era price control statute to compel the farmers to give the government up to half of their raisin crops, for little to no compensation. The Ninth Circuit ruled that the “Raisin Marketing Order” at issue did not constitute a “per se” physical taking because the “per se” doctrine applies only to real property, not personal property. The Ninth Circuit also ruled that the government had lawfully conditioned the sale of raisins in interstate commerce on participation in the forfeiture program and that, therefore, the raisin farmers need only abandon raisin farming to avoid the “use restriction.” The Chamber warned that the Ninth Circuit’s decision diluting the “per se” physical takings doctrine will have serious negative effects on property rights nationwide and that the court’s “use restriction” theory guts protections for personal property.

The Chamber asked the Supreme Court to review a Ninth Circuit decision and clarify whether the Raisin Marketing Orders violate the Takings Clause. The amicus brief states that in this matter, on remand from its prior reversal in the Supreme Court, the Ninth Circuit again sharply departed from the Court’s longstanding takings jurisprudence, adopting a dangerous new test that slashes property rights protections which should ensure that property owners retain an adequate, efficient, and prompt remedy against government takings of real and personal property. The brief argues that the Ninth Circuit's decision threatens private property rights in a broad range of contexts, and creates dangerous incentives for the government to disguise traditional takings. Personal property is no less at risk of government interference—and thus no less deserving of the certainty and predictability provided by a per se rule or physical takings—than real property. Finally, the Chamber points out that the Court’s review is urgently warranted in order to reaffirm that a taking occurs whenever the government physically occupies or appropriates private property, and to avert dire effects on business interests and private property rights nationwide by inviting governments to reframe appropriations as mere “use restrictions.”

John P. Elwood and Jeremy C. Marwell of Vinson & Elkins LLP represented the U.S. Chamber of Commerce as co-counsel to the U.S. Chamber Litigation Center.