(UPDATED 5:30 p.m.) In an 8-1 decision, the U.S. Supreme Court declared the federal raisin marketing order unconstitutional, ruling that the government cannot take private personal property without fairly compensating the owner.
The case stems from a dispute about the 47% crop reserve the Raisin Administrative Committee mandated for the 2002-03 season. Marvin Horne, operator of an association of growers doing business as Raisin Valley Farms in Kerman, Calif., refused to give the government what amounted to almost half the crop.
The U.S. Department of Agriculture assessed Raisin Valley Farms $480,000 for the value of the raisins and levied a penalty of $200,000. The raisin growers refused to pay and the case worked its way through the federal court system to the Supreme Court.
"This opinion is a complete vindication of the Hornes," said John O"Quinn, the Washington, D.C., attorney who represented Marvin Horne and his wife.
"It"s important because it makes it clear that private personal property is protected as well as private real property."
The case also clarifies the difference between regulatory taking and "per se taking," O"Quinn said. Some of the other 31 federal commodity marketing orders authorize regulatory taking, which O"Quinn said is a better means to the end the government seeks.
"This (raisin marketing order) was very unique. It set up the situation for the government to actually take a crop, unlike other orders that allow regulatory holds on reserves," O"Quinn said.
THE OPINION AND DISSENT
Chief Justice John Roberts wrote the opinion for the high court, saying the marketing order from 1937 violated the Constitution"s Fifth Amendment sometimes referred to as eminent domain or the "takings clause" by forcing raisin growers to give the government part of their crop without compensating them.
" ‘Let them sell wine" is probably not much more comforting to the raisin growers than similar retorts have been to others throughout history." Chief Justice John Roberts
The clause requires the government to pay just compensation when it takes property. The chief justice said the concept dates back at least 800 years to provisions in the Magna Carta that specifically protected agricultural crops from uncompensated takings.
"The reserve requirement imposed by the raisin committee is a clear physical taking. Actual raisins are transferred from the growers to the government," the chief justice wrote.
Justice Sonia Sotomayor dissented.
"This intervention hardly strikes me as worth the cost," Sotomayor wrote, "but what makes the court"s twisting of the doctrine even more baffling is that it ultimately instructs the government that it can permissibly achieve its market control goals by imposing a quota without offering raisin producers a way of reaping any return whatsoever on the raisins they cannot sell."
Chief Justice Roberts and the majority of the court characterize it differently. Roberts wrote in the majority opinion that the government doesn"t have the right to force business owners to give up part of their property for the right to participate in commerce.
"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, citing the USDA"s argument.
" ‘Let them sell wine" is probably not much more comforting to the raisin growers than similar retorts have been to others throughout history."
Through the court battle, Horne maintained that the raisin reserve requirements were designed to benefit large corporate growers who primarily export their raisins, according to court documents.
Barry Kriebel, president of Sun Maid Growers of California, told the Wall Street Journal that Horne got a "free ride" while other growers "paid their dues." The newspaper also reported he said most growers now agree that "reserve pools have had their day."
Kriebel, who is one of 47 members of the Raisin Administrative Committee, was not available for comment June 23. There are 10 Sun Maid representatives on the committee, according to committee website.
The committee referred questions about the case to the USDA.
Sun Maid growers petitioned the USDA in November 2014 to discontinue the reserves. The petition was denied. The committee hasn"t ordered growers to reserve part of their raisins since the 2009-10 season.
Whether the raisin opinion will have a ripple effect on other USDA marketing orders was unknown as of June 23.
"The U. S. Department of Agriculture is reviewing the Supreme Court"s ruling in the Marvin Horne, et.al. v. USDA case," a department spokesman said. "We will provide guidance based on the decision in the near future."
Other USDA commodity marketing orders currently in place are:
- Cherries: sweet and tart
- Citrus: Florida and Texas
- Onions: Idaho-E. Oregon, South Texas, Vidalia and Walla Walla
- Pears: Oregon-Washington
- Plums/Prunes: California
- Potatoes: Idaho-E. Oregon, Washington, Oregon-California, Colorado and Virginia-North Carolina
- Spearmint oil