Laura and Marvin Horne are raisin farmers. Early one morning in 2002, a truck appeared at their business and the drivers demanded a whopping 47 percent of their raisin crop. The truck was sent by the federal government and those demanding Horne’s raisin crop claimed to be operating under a “marketing order” first put in place in 1937 as part of President Franklin Roosevelt’s effort to shore up agricultural prices. Amazingly, this antiquated scheme lasted for over 65 years—well past the agricultural crisis of the Great Depression.
By 2002, the Hornes had endured enough of these raisin grabs. They refused to turn over what amounted to nearly half of their crop. The federal government assessed a fine of $480,000 for the missing raisins and another $200,000 in civil penalties against the Hornes. The Hornes fought the government through the courts and finally landed in the U.S. Supreme Court.
The Agricultural Marketing Agreement Act of 1937 allowed the secretary of agriculture to issue marketing orders to stabilize market prices for certain agricultural products, including raisins. Under this order, raisin producers could be forced to relinquish a portion of what they produced to the government without any compensation. The percentage of the crops that had to be relinquished in a given year was determined by the Raisin Administrative Committee. The plan was that the government would keep these reserve raisins off the domestic market—a reduction in supply—to help to shore up prices. This system was originally part of the New Deal aimed at aiding farmers whose agricultural products had fallen steeply in price. Unfortunately, as with most government programs, it remained in effect despite the passing of the immediate economic emergency which spawned it.
In a recent decision, Chief Justice John Roberts and the majority agreed with the Hornes. Roberts stated that the Fifth Amendment requires that property cannot be taken by the government for public use without the original owner being properly compensated. Part of the Fifth Amendment, often dubbed the “takings clause,” has been interpreted to mean that when the government takes a private citizen’s property for a public purpose—such as, for example, for the building of a road—the owner must be paid a reasonable amount for the seized property. Here, even though the property (raisins) could be regarded as having been taken for a public use—the stabilizing of agricultural prices during an economic crisis—there was virtually no compensation being paid to raisin growers like the Hornes.
In a fitting tribute to the 800th anniversary of the great document of English liberties—Magna Carta—Roberts traced the origins of the Fifth Amendment’s takings clause to that charter and concluded that “the reserve requirement imposed by the Raisin Committee is a clear physical taking. Actual raisins are transferred from the growers to the Government. Title to the raisins passes to the Raisin Committee. The Committee disposes of what become its raisins as it wishes, to promote the purposes of the raisin marketing order.”
The government unsuccessfully argued that the takings clause did not apply to personal property but the court roundly rejected that contention. Furthermore, the Department of Agriculture claimed that if the government successfully sold the seized raisins as exports, for example, growers like the Hornes might receive a residual payment which would amount to compensation. Again, the court said the mere possibility of a residual payment was not equivalent to compensation. It was simply too contingent and indeterminate.
Other U.S. citizens are still subjected to a bevy of similar antiquated, unnecessary regulations. They should make ample use of the court’s holding here to challenge these governmental restraints and reintroduce the fresh air of freedom into markets for goods and services.