Raisin farmers in SCOTUS case face $650K charge if they don’t give half their crop to the feds

posted at 9:46 pm on January 30, 2013 by Mary Katharine Ham

47 percent of their crop, to be precise. It’s J.J. Abrams’ world. We’re all just living in it.

Luckily, the Supreme Court decided to take the case of the Horne family, so they may end up retaining the right to freely sell the raisin crop they’ve duly produced, but how is it that they must appeal to the highest court in the land for that right? Well, it all started in 1937, as so many good things do, when the federal government began requiring raising farmers to lay aside a tribute portion of their crops in order to control supply and price.

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.

It’s been rough going for the Hornes since they had the audacity to lay claim to their own crops:

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 Hornes and others think the “marketing order” is a relic that solves a problem that doesn’t exist:

“These programs were created in a different era,” said Steffen Johnson, a lawyer who wrote a brief in support of some dissident raisin farmers, “and frankly, it was an era when farmers didn’t have access to international markets.”

On the other side of the argument are the federal government, and some other raisin growers. I’m guessing those who aren’t as good as the Hornes at growing raisins.

In a brief defending the department, Solicitor General Donald Verrilli wrote that the farmers “identify no reason why the imposition of a civil penalty and other assessments for noncompliance with a regulatory scheme constitutes a taking of property without just compensation.”

Many growers, moreover, support the marketing order as good for the raisin industry, which the 9th U.S. Circuit Court of Appeals noted last year “has long been an important one in California.”

Here to help. Oral arguments are March 20.

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