Takings law is complicated enough but leave it to the frequently reversed U.S. Court of Appeals for the 9th Circuit to twist it out of shape so much as to dare the Supreme Court to reverse it not just once but twice in the same case. Guess what? The Supreme Court recently announced it’s happy to oblige by picking up the 9th Circuit’s dare in a lawsuit pitting the U.S. Agriculture Department against a couple raising raisins.
Marvin and Laura Horne are California raisin producers. Under an old New Deal law they were hit with civil penalties totaling over $695,000 for refusing to turn over to the government their “surplus” raisins under a program originally meant to prop up raisin prices during the disastrous farming days of the 1930’s. When the U.S. brought an enforcement action against the Hornes for openly thumbing their noses at the outmoded law, the couple defended themselves by asserting the U.S. was “taking” their property in violation of the Constitutional protection against takings by government “without just compensation.”
But the U.S. and the federal courts in California said “not so fast.” You can’t raise a constitutional takings defense in a “mere” enforcement action brought against you by the government. Instead, an owner must go to the separate trouble and expense of suing the U.S. in the Federal Claims Court to seek just compensation for an alleged taking of the owner’s property. Meanwhile, the enforcement action proceeds, with all its mounting risks of fines and penalties.
The Supreme Court took the Hornes’ appeal, and on June 10, 2013, unanimously reversed the 9th Circuit and held for the couple. The Court then remanded the case back to the 9th to determine, following Supreme Court takings precedents, if a taking of private property without just compensation had indeed occurred.
You can pretty much guess what happened next. The 9th, which has resisted Supreme Court takings rulings for decades, came up with not one nor two but three different reasons to hold that no taking of the Hornes’ property could possibly have occurred.
First, the 9th Circuit said a per se physical taking of “property” is limited to real, not personal, property, like the raisin crop here. Second, the court opined that no taking occurred because the governmental order being challenged allows some value (“compensation”) of the surplus raisins to possibly return to the Hornes. And third, the 9th ruled that the governmental action is not a physical acquisition of property but merely a restriction on its use (whenever a court utters “merely” the owner loses); accordingly, in applying the takings balancing test of public good versus private loss, the public good of the program trumps the Hornes’ rights.
Each of the reasons put forth by the 9th Circuit happens to be contrary to prevailing takings law precedents, starting with Supreme Court opinions. The 9th strived to distinguish away these nettlesome cases with an Orwellian pen that essentially admits no difference between a “physical taking” of property and a “regulatory taking” of the use of one’s property.
So the never-say-die Hornes knocked once again on the Supremes’ door. And the Court has now responded - “Come on in, again, Mr. and Mrs. Horne.” Want to lay odds on what the high court will do the second time around? The Justices are clearly poised to reverse the 9th Circuit in Horne II and to make crystal clear that the Fifth Amendment’s injunction – “nor shall private property be taken for public use without just compensation” – is indeed a robust right demanding protection when government goes too far.