Lake Erie Conservative

thoughtful discussion(s) about issue(s)

… A Major Victory for Property Rights [#US Supreme Court][#Horne v Dept of Ag]…

Posted by paulfromwloh on Monday,June 29th,2015

.. what came up at the US Supreme Court recently in Horne v. Department of Agriculture …

.. The Horne family is one of raisin growers . Many of our agricultural products have been subject to what are called ” marketing orders ” since the Depression – era programs of the late 1930s . What they do is ” take ” a portion of the grower ‘ s product , and use it to ” stabilize ” the market ..

.. what has never been quite established is that these ” marketing orders ” are takings under our US Constitution under the Fifth Amendment . Yes , the Fifth Amendment , remember the second clause ..

.. [h/t — m.NationalReview.com]..
.. [link] to the blog posting ..

.. what the Supreme Court decided [and , as usual , the media butchered] is that yes , these marketing orders are a taking ..

.. Carrie Severino of National Review puts it better ..

The Court had to address three questions to decide whether this constituted a taking, and on this question, eight justices were in agreement.

First, it determined whether the Constitution’s Takings Clause, the text of which simply addresses “private property,” covers only real estate, or whether it also covers personal property (like the raisins in this case). The Court rightly held that the words “private property” are broad enough to cover property in general, so “the Government has a categorical duty to pay just compensation when it takes your car, just as when it takes your home.” This reading is particularly sensible in light of history, including Revolutionary War-era appropriations of personal property that angered the colonists and likely inspired the constitutional protections. The Chief even cited the understanding of property in the Magna Carta, which just last week celebrated its 800th birthday.

The second question for the Court was whether a contingent residual interest in the property was enough to compensate growers for the taking. In this case, after the raisins were disposed of (in various noncompetitive markets or even given away), growers were paid their share of any net proceeds – often less than the cost of producing the crop or nothing at all. The Court held that the speculative possibility of a payment at a later date was not sufficient to save the scheme. Law students will recall that even forcible installation of a cable box on a rooftop constitutes a taking due (presumably small) compensation. In light of that precedent, it’s hard to see why losing control over how one’s crop is used wouldn’t be a taking. Under the USDA’s program, the government takes title to (full legal ownership of) the raisins and has the right to dispose of them however it wants. Any residual funds paid to growers would simply be accounted to the “just compensation” due for such a taking.

It’s significant that the physical taking of the raisins was key to the Court’s result on both these questions. While many have decried the burden that purely regulatory takings place on the economy, the Court’s decision explicitly distinguishes this case from that sort of taking. So the answer may have come out differently if, for example, growers were simply limited in the ways they could use their raisins rather than having their raisins physically “appropriated” from them and title given to the government. That case will have to wait for another term.

The third question considered by the Court was whether the raisin-confiscation scheme was still a taking despite the fact that it was a “condition on permission to engage in commerce.” The government was arguing, in effect, that the raisin growers opted into this scheme voluntarily in exchange for being allowed to sell their crop at all. But Chief Justice Roberts wrote that saying “let them sell wine” (the vintner’s equivalent of “let them eat cake”) is cold comfort and anyway outside the government’s authority. While the government can require compliance with safety regulations for sellers of pesticides,

Selling produce in interstate commerce, although certainly subject to reasonable government regulation, is . . . not a special governmental benefit that the Government may hold hostage, to be ransomed by the waiver of constitutional protection.

As the Chief put it, “[r]aisins are not dangerous pesticides; they are a healthy snack.” And selling normal agricultural products shouldn’t require farmers to go to the government with hat in hand.

But even a wine cellar can’t reach the chilling effects of the government‘s asserted entitlement to control of the growers’ property. While the government had the good sense not to endorse the Ninth Circuit’s attempts to limit the Fifth Amendment to protecting real property, it showed little respect for property owners. Its arguments suggested that Americans should have to ask permission from their benevolent overlords to be allowed to enter the marketplace at all. The government argued that being allowed to “keep the change” after a third party disposed of nearly half the annual crop was equivalent to retaining full ownership of the literal fruit of one’s labors.

The 5-4 section of the opinion dealt with whether the Hornes had received just compensation for their raisins. The Chief held that the value of the grapes had already been established by the government itself when it assessed a nearly half-million dollar fine on the Hornes as the value of the grapes they refused to release to federal agents. The case was thus neatly resolved by simply canceling out the fine imposed by the government.

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