The burning question, is why? While this is not the first time the U.S. Supreme Court has ever granted a petition for review in the same case, it is certainly not common. And, it is downright uncommon for the Supreme Court to grant a second petition for review when the central issue in the case is a takings issue. So what is the Supreme Court planning to do? Are they going to revisit their 2013 decision and find that they made a mistake, and that the Hornes are actually required to first bring their takings claim in the Court of Federal Claims? Or, is the Supreme Court going to find that contrary to the conclusion of the U.S. Court of Appeals for the Ninth Circuit, the takings claim must be analyzed as a physical taking, as opposed to a regulatory taking? Or, is the Supreme Court going to address the merits, and find that the actions of the federal government resulted in a taking? Unfortunately, we all just have to wait and see.
As a quick refresher, here is a very short summary of the relevant history.
- During the Great Depression, in order to stabilize the market, Congress passed the Agricultural Marketing Agreement Act of 1937 (AMAA), and the Secretary of Agriculture promulgated the California Raisin Marketing Order. The AMAA and the Marketing Order impose a number of regulatory obligations on “raisin handlers,” including imposing reporting and reserve requirements that are enforced through the imposition of civil penalties.
- After producing raisings in California for almost 30 years, the Hornes, in an attempt to avoid the limitations and requirements imposed by the AMAA and the Marketing Order on “raisin handlers,” expanded the scope of their operations.
- In 2001, the U.S. Department of Agriculture notified the Hornes that despite the expansion of their operations, they were still acting as “raisin handlers,” and were therefore subject to all of the limitations and requirements in the AMAA and Marketing Order.
- Despite the notice, the Hornes refused to comply with the AMAA and Marketing Order, and the U.S. Department of Agriculture initiated an enforcement action.
- In 2006, an administrative law judge found that the Hornes were “raisin handlers” and that they failed to comply with the limitations and requirements in the AMAA and Marketing Order, and ordered the Hornes to pay more than $200,000 in civil penalties, $8,000 in assessments, and almost $500,000 for their failure to hold the necessary raisins in reserve.
- The Hornes challenged the decision in federal district court, but the district court affirmed the order of the administrative law judge. With respect to the reserve requirement, the district court found that the requirement merely constituted an “admission fee,” not a taking.
- On appeal, the Ninth Circuit held that the takings claim was not ripe because the Tucker Act obligated the Hornes to first file their claim in the Federal Court of Claims.
- In June 2013, the U.S. Supreme Court issued a unanimous opinion in Horne v. Department of Agriculture (2013) 133 S.Ct. 2053, holding that California raisin handlers could maintain a takings claim as an affirmative defense to an enforcement action filed by the United States, and that the Hornes were not required to first file their claim in the Federal Court of Claims.
- On remand, the Ninth Circuit concluded that because the government had neither seized any raisins nor removed any money from the Hornes’ bank account, the government’s actions had to be analyzed under “the doctrinal thicket of the Supreme Court’s regulatory takings jurisprudence.” Applying the “nexus” and “rough proportionality” standard set forth in Nollan v. California Coastal Commission (1987) 483 U.S. 825 and Dolan v. City of Tigard (1994) 512 U.S. 374, the Ninth Circuit held that the government’s actions did not rise to the level of a taking.
- In January 2015, the U.S. Supreme Court granted a second petition for review.