Raisin Takings Case: Good News from the Grapevine

Filed in Legal by on June 26, 2015 0 Comments

On June 22, the United States Supreme Court decided an important case in favor of private property rights. In the case of Horne v. Department of Agriculture, the court decided that a physical taking of personal property receives the same Fifth Amendment protection as a physical taking of real property. In short, “[t]he Government has a categorical duty to pay just compensation when it takes your car, just as when it takes your house.”

The case stems from a New Deal-era U.S. Department of Agriculture marketing order, which required growers of raisins to physically set aside a percentage of crop in order to maintain stable markets for raisins.

For example, in 2002-2003, the government ordered raisin growers to turn over 47% of their crop. The government then sold these raisins in noncompetitive markets. Due to the high administrative costs of the program, raisin growers would often receive nothing in return.

In this case, the Hornes refused to set aside any of the raisins. The government then assessed a $680,000 fine on the Hornes.

In an overwhelming 8-1 decision, the Supreme Court held that “the reserve requirement imposed by the [Government] is a clear physical taking.” The court deemed that the government could not avoid its categorical duty to pay just compensation. Importantly, the court held that “just compensation normally is to be measured by the market value of the property at the time of the taking.”

Finally, the court stipulated that it is a taking when “a governmental mandate to relinquish specific, identifiable property as a condition on permission to engage in commerce.” The court held that selling raisins 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.”

It remains to be seen as to whether this sort of language would apply in a situation like mandatory inclusionary zoning.

Even though this case does not deal with home building and real property, it is an important property rights case. It confirms what private property advocates have claimed for years – that when the government physically takes your property, whether it’s a personal possession or real estate, it is a taking under the Fifth Amendment.

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