Supremes Hand Victory to CA Raisin Growers

WASHINGTON (CN) - Reversing the Ninth Circuit for the second time in this case, the Supreme Court sided Monday with California raisin growers challenging a federal reserve pool.

As in a 1938 dispute involving walnuts, the case at hand involves 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.

Laura and Marvin Horne, 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.

With the committee also rejecting their Fifth Amendment claims, the Hornes filed suit in Fresno, Calif., joined by the Raisin Valley Marketing Association, a coalition of 61 raisin growers in Fresno and Madera Counties.

Though the 9th Circuit affirmed for the government in July 2012, the Supreme Court reversed unanimously a year later.

On remand last year, the 9th Circuit affirmed for the government again.

The decision prompted a divided reversal Monday from the high court, citing violation of the Fifth Amendment's takings clause.

"The reserve requirement imposed by the Raisin Committee is a clear physical taking," Chief Justice John Roberts wrote for the court. "Actual raisins are transferred from the growers to the government. Title to the raisins passes to the raisin committee. The committee's raisins must be physically segregated from free-tonnage raisins. Reserve raisins are sometimes left on the premises of handlers, but they are held 'for the account' of the government. The committee disposes of what become its raisins as it wishes, to promote the purposes of the raisin marketing order."

Joined by all but Justice Sonia Sotomayor, the majority rejected the government's Marie Antoinette impersonation - that the raisin growers chose to participate in the raisin market, and must therefore accept the government's conditions.

"According to the government, if raisin growers don't like it, they can 'plant different crops,' or 'sell their raisin-variety grapes as table grapes or for use in juice or wine,'" Roberts wrote.

"'Let them sell wine' is probably not much more comforting to the raisin growers than similar retorts have been to others throughout history. In any event, the government is wrong as a matter of law."

Noting that the Hornes had to turn over 47 of their raisin crop one year and 30 percent the next, Roberts scoffed at calling the scheme a "voluntary exchange," akin to precedent concerning pesticide manufacturer Monsanto.

"Selling produce in interstate commerce, although certainly subject to reasonable government regulation, is similarly not a special governmental benefit that the government may hold hostage, to be ransomed by the waiver of constitutional protection," the decision states. "Raisins are not dangerous pesticides; they are a healthy snack. A case about conditioning the sale of hazardous substances on disclosure of health, safety, and environmental information related to those hazards is hardly on point."

Precedent concerning state permits for oyster harvesters does not apply either, the court found.

"Raisins are not like oysters: they are private property - the fruit of the growers' labor - not 'public things subject to the absolute control of the state,'" Roberts wrote. "Any physical taking of them for public use must be accompanied by just compensation."

Justices Ruth Bader Ginsburg and Elena Kagan joined a partial dissent by Justice Stephen Breyer that faults the majority for not remanding the case for consideration "of whether any compensation would have been due if the Hornes had complied with the California Raisin Marketing Order's reserve requirement."

In rejecting the need for this, Roberts had noted that government "already calculated the amount of just compensation in this case, when it fined the Hornes the fair market value of the raisins: $483,843.53."

"The government cannot now disavow that valuation, and does not suggest that the marketing order affords the Hornes compensation in that amount," the chief justice added. "There is accordingly no need for a remand; the Hornes should simply be relieved of the obligation to pay the fine and associated civil penalty they were assessed when they resisted the government's effort to take their raisins. This case, in litigation for more than a decade, has gone on long enough."

Justice Clarence Thomas spoke about the remand disagreement among the majority in a concurring opinion.

"To the extent that the committee is not taking the raisins 'for public use,' having the Court of Appeals calculate 'just compensation' in this case would be a fruitless exercise," Thomas wrote.

Sotomayor's dissent meanwhile says that the Raisin Marketing Order does not deprive the Hornes of their property rights and thus does not amount to a taking.

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