Supreme Court Thwarts Federal Government's Brazen Raisin Robbery

06/22/2015 05:03 pm ET | Updated Jun 22, 2016

It was an outrageous abuse of government power, facilitated by what Justice Elena Kagan has called "the world's most outdated law." Today, in a dazzling display of judicial engagement, the Court struck a blow in favor of property rights, holding that the Constitution does not allow the government to take thousands of dollars' worth of raisins from hardworking farmers without paying for them.

The facts of the case: Pursuant to a New-Deal-era scheme designed to raise agricultural prices by tightly controlling the amount of agricultural products that went to market, family farmers like Marvin and Laura Horne of California are required to turn over a certain percentage of their raisin crop to the federal Raisin Administrative Committee in order to maintain an "orderly raisin market." If they do not, they must pay the government the dollar equivalent of that allotment, plus additional fines.

In 2002-2003, the Hornes and other farmers were told to hand over 30 percent of their raisin crop (89,000 tons in total). The Hornes refused, arguing that they were not legally bound to do so. The government then assessed the Hornes a $480,000 dollar fine equal to the market value of the missing raisins, as well as an additional civil penalty of over $200,000 for disobeying the order. The Hornes sued, arguing that the reserve requirement was forbidden by the Takings Clause of the Fifth Amendment, which provides that "private property" may not be "taken for public use, without just compensation."

Amazingly, the Ninth Circuit Court of Appeals held that the Hornes had not been unlawfully deprived of their property. It reasoned that the Takings Clause affords more protection to real property (land) than it does to personal property (in this case, raisins). In addition, it characterized the reserve requirement as a "condition" imposed in exchange for a government benefit (that is, the privilege of engaging in commercial activity), rather than a taking, adding that the Hornes could always avoid the requirement by "planting different crops."

The Supreme Court began by roundly (and rightly) rejecting the Ninth Circuit's distinction between personal and real property. The language of the Takings Clause is broad and categorical and reflects the Framers' appreciation of the centrality of all private property to a free and thriving civil society. It requires "just compensation" whenever the government appropriates "private property" for a "public use," full stop. Thus, as Chief Justice Roberts put it, "The Government has a categorical duty to pay just compensation when it takes your car, just as when it takes your home." The raisins were private property, forcibly transferred from the growers to the government, and nothing should enable the government to escape its duty to compensate the growers.

The Court then eviscerated the government's efforts to avoid its duty to pay just compensation by claiming that the growers retained a "contingent interest" in the value of the property because Raisin Committee, after selling reserve raisins (and deducting expenses and subsidies for exporters) returns net proceeds to growers. The Court instead found that the Raisin Committee's deprivation of the growers' rights in their property was total--they lost the rights to possess, use, and dispose of their raisins. That the growers retained a hypothetical future interest of "indeterminate value" does not change that fact, particularly when, as Chief Justice Roberts pointed out, "the value of the interest depends on the discretion of the taker." Once there is a taking, the Court held, there is a duty to pay just compensation that the government may not evade.

Finally, in response to the argument that the Hornes could always avoid the reserve requirement by planting other crops, the Court affirmed an essential principle: engaging in commerce is not a "special governmental benefit that the Government may hold hostage, to be ransomed by the waiver of constitutional protection." Although commercial activity can be subject to "reasonable regulation" grounded in reliable evidence that such regulation furthers a legitimate end of government, such as public safety, Chief Justice Roberts reasoned, "Raisins are not dangerous pesticides; they are a healthy snack."

In supporting the Court's pro-liberty decision, Chief Justice Roberts referred to the Magna Carta, which, as he points out, "specifically protected agricultural crops from compensated takings." The Framers of our Constitution understood the Magna Carta to be an affirmation that there is a higher law to which even the government is subject--that, in the words of founding father James Otis, the government "cannot make two and two, five." Simply put, the government cannot act arbitrarily, but must instead act pursuant to a rational principle, consistent with individual rights that precede government, including property rights. Allowing the Raisin Committee to deprive people of the fruits of their labor by administrative fiat would be to acquiesce to a view of government power that the Constitution rejects. The Hornes' decade-long resistance to the petty tyranny of the Raisin Committee has been nothing less than heroic, and the Court fulfilled its duty in vindicating their claims.