"Raisin" Hell at the Supreme Court
Subscribe today for Free Enterprise Updates
- Latest business trends and best practices
- News about legislation and regulation impacting business
- Business how-to articles from industry experts
- Commentary and interviews with newsmakers in business and politics
Tis the season to give thanks. And for the last 80 years, the federal government has required raisin producers to “give thanks” for the privilege of selling their raisins nationally by requiring them to fork over up to half of their raisins – for free. A lawsuit raising a constitutional challenge to the program has now made its way to the U.S. Supreme Court. The case is Horne v. Department of Agriculture.
The program, operated by the U.S. Department of Agriculture, has a rather Orwellian-sounding name – the “Raisin Marketing Order.” In a nutshell, under this program, every year, as a condition for “letting” farmers sell their raisin crops in interstate commerce, the federal government has taken up to 47% of the farmers’ raisins – often for no payment at all, or below the cost of producing the raisins. The program has its origins in Great Depression efforts to fix the prices of agricultural crops. Don’t care much for raisins? Similar programs cover a variety of other agricultural products, such as walnuts, almonds, prunes, tart cherries – and cranberries! That’s something to chew on as you sit down to your Thanksgiving meal tomorrow.
Think the raisin program comes straight from the That-Must-Be-Unconstitutional Department? So did Marvin and Laura Horne, California raisin farmers and small business owners who, in 2004, found themselves facing a federal government “enforcement action” against them for failing to fork over nearly half their raisins after they began to sell their raisins directly rather than through a middle-man that packages the raisins. In addition to a bevy of fines, the government said it was willing to take the cash value of the Horne’s raisins in lieu of the raisins themselves (the assessments and penalties totaled nearly $700,000 – that’s enough to buy about 3.7 million mini cartons of Sun-Maid raisins, in case you were wondering…). The Hornes fought back, claiming that the program violates the U.S. Constitution’s “Takings Clause,” which provides that if the federal government takes private property, it must justly compensate the private property owners for it.
A district court judge ruled that the Constitution’s prohibition against unjust takings of private property didn’t apply to the Hornes, essentially agreeing with the government that the raisins rightly belonged to the government because the farmers “voluntarily chose to send their raisins into the stream of interstate commerce.” Sheesh; sounds like the federal government follows the old adage, “what’s mine is mine, and what’s yours is mine, too.”
When the Hornes appealed their case and it finally reached the full Ninth Circuit, the court told the Hornes that they couldn’t even raise their Takings Clause defense in that court. The Ninth Circuit told the farmers they had to pay the penalties, and if they wanted their money back, then travel to Washingon, DC to bring a claim in the Court of Federal Claims to get their raisins (or rather, the cash value of them) back. Call the Ninth Circuit’s decision “jurisdictional gymnastics.” This term, the U.S. Supreme Court will decide whether property owners have to hop across the country to defend their Constitutional rights.
The Supreme Court’s agreement to hear the Hornes case follows closely on the heels of another property rights case the U.S. Supreme Court unanimously decided earlier this year, Sackett v. EPA. Just as in the Hornes case, the federal government in Sackett case ran roughshod over the property rights of two homeowners, Mike and Chantell Sackett, and then played “jurisdictional gymnastics” to keep the Sacketts from getting their day in court. The Chamber’s public policy law firm, the National Chamber Litigation Center, filed an amicus brief supporting the Sacketts. In a ruling vindicating the Sackett’s legal rights, Supreme Court Justice Samuel Alito filed his own concurring opinion describing the federal government’s conduct in the Sackett case as “unthinkable” for “a nation that values due process, not to mention private property.”
Here’s hoping the Supreme Court sees the “Raisin Marketing Order” and the Ninth Circuit’s “jurisdictional gymnastics” as equally “unthinkable.” Next time you purchase a package of raisins, remember that the federal government could get the same package for free, and perhaps raise a glass of grape juice in a toast to folks like the Hornes and the Sacketts who are fighting for the property rights of individuals and small business owners.