The Supreme Court’s Incomplete Raisin Decision

 

shutterstock_155693495Many opponents of the government’s persistent meddling in agricultural markets hailed the recent Supreme Court decision in Horne v. Department of Agriculture — which found that a government scheme in which raisins are confiscated from growers in order to prop up crop prices constituted a taking that required just compensation — as a victory for limited government. As I note in my new column for Defining Ideas, however, the Court’s approach to this topic was woefully incomplete:

The most amazing part of this saga is not that the Hornes won, but that no one involved in the litigation used the word “cartel.” The Hornes had to avoid the term, which would undermine their claim. A cartel arrangement is not just a naked taking. Its offset turns out to be the higher prices that the Hornes and other cartel members can fetch for their remaining stock of raisins in the open market, which should count as a form of in-kind compensation under the Takings Clause. Under traditional antitrust lingo, they are cheaters who work under the cartel umbrella. All power to them!

Nonetheless, the government did not wish to make an open admission that the Marketing Act fortifies cartels, lest they undermine the stabilization myth that helps shield these cartels from public disapproval. And the Supreme Court, which has already blessed these grotesque arrangements, could ill-afford to undermine the legitimacy of its own earlier rulings, including Wickard, which props up the modern welfare state, including Obamacare.

Right off the bat, Chief Justice Roberts’ entire takings discussion has a surreal quality because it ignores the real victims of this program, the public at large. The Court instead focuses only on the Hornes’ claim that the government seized their raisins, which is of course a paradigmatic taking that under current law is unconstitutional.

In its opening salvo, the government claimed that personal property, such as raisins, receive less constitutional protection than real estate. The Chief Justice rightly slapped that claim down, noting that the comprehensive phrase ”private property” includes all forms of wealth in private hands, even patents. The constitutional text offers no warrant for dividing the field into first and second-class forms of property. Once raisins received full protection, the government could not justify its marketing program by saying that the residual cash that came back at the end of each annual cycle removed any constitutional taint from the program. That residual cash from the program cannot possibly meet the standard of full and fair market value (that is, the measure of just compensation), and the Chief Justice rightly rejected Justice Sotomayor’s odd dissent that there is no taking at the front end because some compensation is offered at the end of the day.

From that point on, Justice Roberts entered choppy waters. He is no judicial revolutionary, and thus throughout his opinion he tries to make peace with the tattered constitutional jurisprudence that has long embraced a distinction between physical and regulatory takings. The latter restricts the ability of a property owner to use or sell his property, but leaves him undisturbed in the possession of his land…

My conclusion:

In the end, Horne counts as a partial victory over the government. But its long-term value is undercut by the confused tangle of legal doctrine that the Roberts decision left in place. To be sure, the Chief Justice conveniently ignored the offsetting benefits from the marketing, and struck down the fines and penalties in the individual case. It now remains to be seen whether every raisin grower is free to defy the government mandate, or whether the government can switch to acreage restrictions or other devices to achieve the same end.

The public always pays a high price for muddled law. It leads to uncertain outcomes in future cases. And worse, it results in the perpetuation of indefensible constitutional doctrines. The line between physical and regulatory takings is essential to propping up the most destructive government initiatives, both state and federal. And the use of exactions and other unconstitutional conditions leads to massive abuses by government regulators. Chief Justice Roberts had the chance to go beyond incrementalism in the face of massive doctrinal disarray. We are all the poorer that he shunted off to one side the larger issues about New Deal programs that Horneshould have brought front and center.

You can read the argument in full here.

Published in Law
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There are 3 comments.

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  1. Instugator Thatcher
    Instugator
    @Instugator

    I just find it incomprehensible that civil forfeiture does not run afoul of the very same ‘takings clause’.

    • #1
  2. civil westman Inactive
    civil westman
    @user_646399

    Which is all a clear and erudite explanation of why and how the government will continue to do as it d*mn well pleases to the governed whose forbearers once consented. We live under a tangle of rules which lawyers, often derisively, refer to as “legal fictions.” One might say we live under the rule of legal fictions rather than the rule of law. BTW, in law, consent may always be withdrawn; it is never perpetual. Why is it that we are unable to withdraw our consent from even a single element of the statist program, either established or in the process of being enacted?

    • #2
  3. Ross C Member
    Ross C
    @RossC

    When they came for my raisins there was no one left.

    The professor dances around the whole concept of why the government must regulate raisin production at all (i.e. what is the raison for raisin?).  It sounds like a new deal program that maybe does no good but we think should continue because there might be some harm if we do not.

    • #3
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