The Supreme Court ruled on Monday that a federal program designed to regulate raisin supply and prices is unconstitutional.
The court sided with Fresno, Ca., raisin farmer Marvin Horne who challenged the 1949 marketing order that allowed the United States Department of Agriculture (USDA) to seize raisins from producers to ensure high prices. Justice John Roberts delivered the 8-1 decision of the court, joined by Antonin Scalia, Anthony Kennedy, Clarence Thomas, and Samuel Alito in full, and in part by Ginsburg, Breyer, and Kagan.
"The reserve requirement imposed by the Raisin Committee is a clear physical taking," Chief Justice Roberts wrote. "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 decision struck a blow against one of the New Deal era's most enduring principles—that the government can confiscate or destroy crops to preserve prices and reserves.
The Obama administration defended the USDA order as a "win-win proposition," claiming that prices remain high for farmers allowing them to donate excess supply.
In his concurring opinion, Justice Thomas said the Takings Clause of the Fifth Amendment prohibits the Raisin Administrative Committee from seizing the raisin and, among other things, gives them away or sells them to exporters and foreign governments.
"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 said.
The government argued that it had a vested interest in regulating output, citing Horne’s voluntary entry of their raisins into the stream of commerce. Recalling a 1929 case Leonard & Leonard v. Earle, Justice Sonia Sotomayor spoke during oral arguments, positing that the USDA "could [seize the goods] because this is a good in commerce."
"As long as it could meet the Penn Central test, that there is some nexus between the government’s goal and the regulation, then it’s okay," Sotomayor said.
Sotomayor refused to label the government seizure under the marketing order as a form of "taking" in her dissent.
She cited a 1982 decision from Loretto v. Teleprompter Manhattan CATV Corp. stating that claims of unlawful seizure "require that each and every property right be destroyed by governmental action before that action can be said to have effected a per se taking. Because the Order does not deprive the Hornes of all of their property rights, it does not effect a per se taking."
The Court ruled to limit the verdict to only raisins, leaving other foods vulnerable to common regulatory legislation imposed by the USDA. The Hornes are not required to pay the $695,000 fine for refusing to comply with the program since 2002.