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SCOTUS Kills Agency’s Raisin d’Être
Raisin farmer Marvin Horne won his 11-year-long suit against the federal government.
Hidden in the tottering mountain range of federal regulations is the sinister-sounding Marketing Order 989. This rule empowers the Marketing Order and Agreement Division of the Fruit and Vegetable Program of the Agricultural Marketing Service of the U.S. Department of Agriculture to manage a National Raisin Reserve.
That’s right, America: We’re $18 trillion in debt but our government pays for a National Raisin Reserve.
The sub-sub-sub-division of the USDA even created a 35-person Raisin Administrative Committee to oversee our strategic supply of dried grapes. In this Truman-era scheme, the federal government seizes a large percentage of every farmer’s crop in order to prop up prices.
Surely, Obama’s various “Smarter Government” initiatives must have laughed at the ridiculous raisin cartel and ordered it dismantled, right?
Believe it or not, President MENSA thought it was just swell and spent untold piles of Chinese cash defending it in court, even hiring private investigators to harass Dangerous Enemies of the Raisin Cartel.
California farmer Marvin Horne is America’s leading raisin dissident. For years, the 70-year-old allowed the government to seize a percentage of his harvest. Those stolen raisins were placed into the reserve and he had to eat the cost, so to speak. All farmers just considered this theft the price of doing business until 2002 when Horne said no.
“I believe in America. And I believe in our Constitution. And I believe that eventually we will be proved right,” Horne said. “They took our raisins and didn’t pay us for them.”
“The hell with the whole mess,” he said, “it’s like being a serf.”
Shocked at the serf’s insolence, the U.S. government demanded Horne pay $650,000 in fines and surrender 1.2 million pounds of raisins. That equals four years of harvests.
The farmer lost every court case until he reached the Supreme Court. Justices from the left and right were amazed that the program even existed.
Justice Antonin Scalia called it “a crazy statute.” Justices Breyer and Sotomayor insisted that Horne have the ability to “challenge this scheme.” Even Justice Kagan wondered “whether this marketing order is a taking or it’s just the world’s most outdated law.” They kicked it back to the Ninth Circuit to make a decision, but the USDA had the power to end it any time they wanted.
When the Ninth Circuit again blessed the silly scheme, SCOTUS voted 5-4 to declare the raisin regulation unconstitutional and said that Horne and other farmers had to be paid for their seized product.
“The reserve requirement imposed by the Raisin Committee is a clear physical taking,” Chief Justice Roberts wrote. “The Hornes should simply be relieved of the obligation to pay the fine and associated civil penalty they were assessed when they resisted the government’s effort to take their raisins.”
After an 11-year battle with the USDA, the raisin dissident was jubilant. “I’m elated,” Horne said. “The monkey is off my back. I think it’s a great ruling for everybody; if you want my raisins, pay for them.”
Published in Law
Tell me, how exactly would you calculate that? Using only facts, not assumptions. And do we really think the government would know the “right” amount to confiscate to properly balance market prices with demand? Would all farmers act as the mythical rational man and precisely adjust their supply production correctly? Whenever government thinks they know better than the market, unintended consequences always follow. Frequently far more severe than the original problem. Just look at rents in any city where Rent Control exists.
The Hornes and other growers may have been receiving benefit because of the artificially created scarcity of raisins. So in that sense your argument has merit. However, if you want to look at it that way, as a consumer of raisins, I was getting screwed. It was a taking from me without just compensation.
The government should stay out of price manipulation business. It is not why government exists.
You are conflating a discussion of the merits (or lack thereof) of the program with the damages/compensation calculation.
Regarding the latter, economists often look at elasticities. In civil damages cases between private parties, similar factors often arise such as in assertions of “price erosion”.
This is like a static tax revenue analysis. It presumes that the program was efficient, and that the profits of raisin growers would have been lower absent the government seizure.
Without the program, raisin growers might have banded together to market more extensively and raise the demand for raisins. Some might have plowed under their vines and planted different crops in which consumers were more interested. They might have invested in automation to reduce dependence on manual (and often illegal) labor. The industry might have consolidated to improve efficiency. Whatever the details, we can be fairly certain that the capital deployed in growing the seized crop would have found a better use.
Illegal government takings to prop up an outmoded cartel: Medieval economic reasoning for a modern age.
The government actually helped in the damages calculation by fining Mr. Horne the fair market value of the raisins he refused to surrender – the very definition of “just compensation”.
Actually, a goodly number of Medievals, e.g. Venice, Italy, had a vastly superior grasp of economics to FDR’s 1930s “brain trust.”
Gödel’s Ghost
I guess I’ve found my “conservative litmus test:” if you accept the government taking anyone’s private property, for any reason whatsoever, you aren’t a conservative.
Then I suppose you consider our Conservative forebears, those 18th Century Liberals who wrote the Takings Clause and their fellow Americans who ratified it as a part of the Bill of Rights, to not actually be our Conservative forebears.
Eric Hines
But that’s the whole point. The asserted FMV was the value in the cartellized market. That value was created by the program being challenged.
Instead, it could have been called an unjust enrichment value.
As usual, you’re all missing the real issue.
Which is this: “raison d’etre” is one of those phrases that I read, and know exactly what it means…
… but then forget that I don’t actually know how to pronounce it until halfway through an attempt in front of several witnesses.
It never ends well.
My position is that conservative is as conservative does. Sticking the word “Conservative” on it don’t make it so.
Now, as a practical matter, of course, it’s all relative. But it’s not as if the value of private property weren’t well established as a matter of Classical Liberal philosophy by the time our forefathers founded the US. So I find them lacking for excuses.
Agreed. Furthermore, did the program really raise the price or did it just get the government free raisins? The government didn’t confiscate, then destroy the raisins, which would have change the supply/demand balance. It fed them to schoolkids or exported them. So in the absence of the program, those raisins still might have been legally bought to go to the same end users.
But again, that assumes that no other actions would have been taken by raisin growers and consumers to effect supply and demand. The government tainted the market by taking raisins from other growers, then used this tainted number to determine a fair market value. A complete contradiction in terms if you ask me, since how can there be any fair market value when the government is openly and intentionally manipulating the markets.
The taint here has a known direction: upward.
Consider the alternative, which highlights the relationship between regulatory and physical takings. What if the taint were downward? Would you limit the plaintiff to the downwardly tainted market value?
The Fifth Amendment doesn’t say that private property may only be taken by the gov’t for certain public uses. It just requires just compensation when property is taken. That’s the purpose: not to define what uses it can or must be put to, but to make sure that the owner of the property isn’t robbed in the process.
That’s the purpose: not to define what uses it can or must be put to, but to make sure that the owner of the property isn’t robbed in the process.
Most folks prior to Berman would likely disagree with you. Most States post-Kelo also disagree with you.
And I disagree with your claim. This is the Takings Clause of the 5th:
nor shall private property be taken for public use
That’s a pretty clear specification of the uses to which government-confiscated private property can be put in order to be a legitimate taking.
Eric Hines
“For public use” simply means “for use by the public” (i.e. “for use by the government”).
If you read it otherwise, (e.g. to mean “for uses that are public “) the problem is that you’re then in an even worse situation: in that case, it would say that compensation is required when the taking is for public uses…but what about when they’re not for public uses? It would leave that scenario uncovered.
Not to mention, how to define a “public use” ? Would it mean that the real estate couldn’t be sold to developer? For how long? Not within five years of the taking? What about 50 years from now?
All these problems are avoided by reading it “Nor shall private property be taken by the government without just compensation”.
National Raisin Reserve?! ..
Free the Raisins!
The only good raisin is a dead raisin.
A raisin is a terrible grape to waste.
(I got a bunch of them)
If the goal is to avoid problems of definition, the best way is to grant unlimited powers to the government.
That is, in fact, what the Supremes created a government right to do, first with Midkiff and then extended with Kelo. After Berman changed the text of the Clause to “public purpose.”
No, here. The government is not synonymous with the public–that’s Rousseau-ian stance that the Founders rejected, and that the text of our Constitution continues to reject. The government is, rather, subordinate to the public–to We the People. “Public use” refers (referred prior to the judicial bench amendments) to things like roads and bridges and other infrastructure–things We the People use in common.
A real estate developer’s development is everywhere and always a private use thing, for all that he may be developing it for a collection of folks to use. And to own as private property. That’s the sort of thing “allowed” by Berman‘s creation of “public purpose,” which allowed the razing of a neighborhood because government (not the residents holding out) decided it didn’t like the “public” esthetics, the sort of thing that let Kelo throw an old woman out of her home so a real estate developer could build a shopping mall in the neighborhood.
Eric Hines
I pronounce it ‘reason for existence” myself. The translation is close enough and I know how to say those words.
The problem is, there’s no way to read the words to mean that property may only be taken for public uses… It just doesn’t say that…. It doesn’t say that even if you interpret “for public use” to mean “for uses whereby the public can use it.” In that case, all it does is to restrict the requirement for compensation to those cases where the use is a public one… And I don’t believe that was the intent of the framers. That would be a ridiculous intent.
It would need to say “Private property may only be taken for public uses, and just compensation must be paid.” But it doesn’t.
Asmittedly, I’m not extremely familiar with the jurisprudence. But I can read.
That is the meaning of the clause. Also, it can’t be read in isolation: it needs to be read with Art I, Sect 8, and it needs to be read with the 9th and 10th Amendments.
And jurisprudence prior to Berman held the same.
Eric Hines
It may be that the framers intended that meaning… Who knows? And that some courts did the same. But the plain meaning of the words do not mean that… And there’s no way to make them mean that without appealing to “spirit over letter” and such….which I don’t particularly like. The text says that when property is taken for public use, it must be compensated. It doesn’t say what happens when it’s taken for other purposes. Since I don’t believe such a lapse in meaning was intentional, there is only one other logical way to read it: to read “for public use” to mean ” by the government. ” That removes the lapse in meaning. That’s the key to originalism. The plain meaning of the words have to be followed, because it’s not only the intent of the framers that mattered, but the intent of every state legislator who voted to ratify it.