Horne v. Dep't of Agriculture
576 US ___ (2015)

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Justia Opinion Summary

The Agricultural Marketing Agreement Act authorizes the Secretary of Agriculture to promulgate orders to maintain stable markets for agricultural products. The marketing order for raisins established a Raisin Administrative Committee, which requires that growers set aside a percentage of their crop, free of charge. The government sells the reserve raisins in noncompetitive markets, donates them, or disposes of them by any means consistent with the purposes of the program. If any profits are left over after subtracting administration expenses, the net proceeds are distributed back to the growers. In 2002–2003, growers were required to set aside 47 percent of their raisin crop; in 2003–2004, 30 percent. The Hornes refused to set aside any raisins on the ground that the reserve requirement was an unconstitutional taking of their property for public use without just compensation. The government fined them the fair market value of the raisins, with additional civil penalties. On remand from the Supreme Court, the Ninth Circuit held that the requirement was not a Fifth Amendment taking. The Supreme Court reversed. The Fifth Amendment requires that the government pay just compensation when it takes personal property, just as when it takes real property. The reserve requirement is a clear physical taking. Actual raisins are transferred. Any net proceeds the growers receive from the sale of the reserve raisins goes to the amount of compensation, but does not mean the raisins have not been taken. This taking cannot be characterized as part of a voluntary exchange for a valuable government benefit. The ability to sell produce in interstate commerce, while subject to reasonable government regulation, is not a “benefit” that the government may withhold unless growers waive constitutional protections. The Court noted that just compensation can be measured by the market value the government already calculated when it fined the Hornes.

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued.The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader.See United States v. Detroit Timber & Lumber Co., 200 U. S. 321 .

SUPREME COURT OF THE UNITED STATES

Syllabus

HORNE et al. v. DEPARTMENT OF AGRICULTURE

certiorari to the united states court of appeals for the ninth circuit

No. 14–275. Argued April 22, 2015—Decided June 22, 2015

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 account of the Government, free of charge. The Government makes use of those raisins by selling them in noncompetitive markets, donating them, or disposing of them by any means consistent with the purposes of the program. If any profits are left over 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. Marvin Horne, Laura Horne, and their family are raisin growers who 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. On remand from this Court over the issue of jurisdiction, Horne v. Department of Agriculture, 569 U. S. ___, the Ninth Circuit held that the reserve requirement was not a Fifth Amendment taking. The court 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 held that the Hornes could avoid relinquishing large percentages of their crop by “planting different crops.” 730 F. 3d 1128, 1143.

Held: The Fifth Amendment requires that the Government pay just compensation when it takes personal property, just as when it takes real property. Any net proceeds the raisin growers receive from the sale of the reserve raisins goes to the amount of compensation they have received for that taking—it does not mean the raisins have not been appropriated for Government use. Nor can the Government make raisin growers relinquish their property without just compensation as a condition of selling their raisins in interstate commerce. Pp. 4–18.

(a) The Fifth Amendment applies to personal property as well as real property. The Government has a categorical duty to pay just compensation when it takes your car, just as when it takes your home. Pp. 4–9.

(1) This principle, dating back as far as Magna Carta, was codified in the Takings Clause in part because of property appropriations by both sides during the Revolutionary War. This Court has noted that an owner of personal property may expect that new regulation of the use of property could “render his property economically worthless.” Lucas v. South Carolina Coastal Council, 505 U. S. 1003 –1028. But there is still a “longstanding distinction” between regulations concerning the use of property and government acquisition of property. Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U. S. 302 . When it comes to physical appropriations, people do not expect their property, real or personal, to be actually occupied or taken away. Pp. 4–8.

(2) 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 those raisins as it wishes, to promote the purposes of the raisin marketing order. The Government’s formal demand that the Hornes turn over a percentage of their raisin crop without charge, for the Government’s control and use, is “of such a unique character that it is a taking without regard to other factors that a court might ordinarily examine.” Loretto v. Teleprompter Manhattan CATV Corp., 458 U. S. 419 . Pp. 8–9.

(b) The fact that the growers are entitled to the net proceeds of the raisin sales does not mean that there has been no taking at all. When there has been a physical appropriation, “we do not ask . . . whether it deprives the owner of all economically valuable use” of the item taken. Tahoe-Sierra Preservation Council, 535 U. S., at 323. The fact that the growers retain a contingent interest of indeterminate value does not mean there has been no taking, particularly when that interest depends on the discretion of the taker, and may be worthless, as it was for one of the two years at issue here. Andrus v. Allard, 444 U. S. 51 , distinguished. Once there is a taking, as in the case of a physical appropriation, any payment from the Government in connection with that action goes, at most, to the question of just compensation. Pp. 9–12.

(c) The taking in this case also cannot be characterized as part of a voluntary exchange for a valuable government benefit. In one of the years at issue, the Government insisted that the Hornes part with 47 percent of their crop for the privilege of selling the rest. But the ability to sell produce in interstate commerce, although certainly subject to reasonable government regulation, is not a “benefit” that the Government may withhold unless growers waive constitutional protections. Ruckelshaus v. Monsanto Co., 467 U. S. 986 , distinguished. Leonard & Leonard v. Earle, 279 U. S. 392 , distinguished. Pp. 12–14.

(d) The Hornes are not required to first pay the fine and then seek compensation under the Tucker Act. See Horne, 569 U. S., at ___. Because they have the full economic interest in the raisins the Government alleges should have been set aside for its account—i.e., they own the raisins they grew as well as the raisins they handled, having paid the growers for all of their raisins, not just their free-tonnage raisins—they may raise a takings-based defense to the fine levied against them. There is no need for the Ninth Circuit to calculate the just compensation due on remand. The clear and administrable rule is that “just compensation normally is to be measured by ‘the market value of the property at the time of the taking.’ ” United States v. 50 Acres of Land, 469 U. S. 24 . Here, the Government already calculated that amount when it fined the Hornes the fair market value of the raisins. Pp. 14–18.

750 F. 3d 1128, reversed.

Roberts, C. J., delivered the opinion of the Court, in which Scalia, Kennedy, Thomas, and Alito, JJ., joined, and in which Ginsburg, Breyer, and Kagan, JJ., joined as to Parts I and II. Thomas, J., filed a concurring opinion. Breyer, J., filed an opinion concurring in part and dissenting in part, in which Ginsburg and Kagan, JJ., joined. Sotomayor, J., filed a dissenting opinion.

Primary Holding

The principle of just compensation under the Takings Clause in the Fifth Amendment of the U.S. Constitution applies to personal property as well as real property, and a taking may occur even if the property owner was able to retain a contingent interest of indeterminate value.

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