Raisin Farmers Get New Shot at Supreme Court

WASHINGTON (CN) - The Supreme Court agreed Friday to consider whether California raisin growers can stop putting some crops in a federal reserve pool.

A June 2013 reversal for these farmers apparently did not do the trick, and the 9th Circuit affirmed summary judgment for the government on remand in 2014.

Nearly mirroring a 1938 dispute involving walnuts, the raisin case pits the U.S. government against growers Marvin and Laura Horne and the Raisin Valley Marketing Association, a coalition of 61 raisin growers in Fresno and Madera Counties.

Both cases involve dissatisfaction with federal marketing rules that direct a share of every grower's annual harvest to a crop-specific committee, which then sells the reserves for export or donates them to school-lunch programs or foreign governments. The Department of Agriculture began the program in the late 1930s under the Agricultural Marketing Agreement Act (AMAA), hoping it would stabilize commodity prices, market disequilibrium and the nation's floundering credit system.

The Hornes, who have grown raisins in California since 1969, tried to circumvent the law in 2001 by cutting out the middle man: buying packaging equipment and contracting with 60 local farms to stem, clean and sort their raisins. Claiming that they were now "producers," not "handlers," and that reserve requirements applied only to handlers, they said they should no longer have to contribute. The federal Raisin Administrative Committee did not agree and imposed nearly $700,000 in fines.

The committee also rejected the Hornes' claim that the reserve rule violated the Fifth Amendment's takings clause, which prohibits the federal government from seizing personal property without compensation.

The Hornes filed their complaint against the Department of Agriculture in Fresno, Calif.

Per its custom the U.S. Supreme Court did not issue any comment in taking up the case Friday.

In its 2014 reversal, the San Francisco-based panel evaluated the restrictions under two Supreme Court cases: Nollan v. California Coastal Commission, from 1987, and Dolan v. City of Tigard, from 1994.

The 29-page opinion emphasizes that there is no basis for individualized review since "the use restriction is imposed evenly across the industry; all producers must contribute an equal percentage of their overall crop to the reserve pool."

It concludes with a note on agency deference.

"While the Hornes' impatience with a regulatory program they view to be out-dated and perhaps disadvantageous to smaller agricultural firms is understandable, the courts are not well-positioned to effect the change the Hornes seek, which is, at base, a restructuring of the way government regulates raisin production," the ruling states. "The Constitution endows Congress, not the courts, with the authority to regulate the national economy. Accordingly, it is to Congress and the Department of Agriculture to which the Hornes must address their complaints. The courts are not institutionally equipped to modify wholesale complex regulatory regimes such as this one.

"Instead, our role is to answer the narrower question of whether the Marketing Order and its penalties work a physical per se taking. We hold they do not. There is a sufficient nexus between the means and ends of the Marketing Order. The structure of the reserve requirement is at least roughly proportional (and likely actually proportional) to Congress's stated goal of ensuring an orderly domestic raisin market. We reach these conclusions informed by the Supreme Court's acknowledgment that governmental regulation of personal property is more foreseeable, and thus less intrusive, than is the taking of real property. This, coupled with our observation that the secretary has endeavored to preserve as much of the Hornes' ownership of the raisins as possible, leads us to conclude the Marketing Order's reserve requirements - and the provisions permitting the Secretary to penalize the Hornes for failing to comply with those requirements - do not constitute a taking under the Fifth Amendment."

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