The plaintiffs in the case, Marvin and Laura Horne, attempted to skirt around efforts by the Raisin Administration Committee to seize part of their raisin crop without paying full compensation. The Committee claims it seizes crops to keep prices high.
When the Committee found out about the Hornes’ efforts, they fined the farmers $695,000, a fine the Hornes are now fighting. The Committee argues it is trying to protect raisin prices, while the Hornes say the government is violating their constitutional rights by seizing their crops without providing just compensation.
So far, several of the Supreme Court justices appear to be siding with the Hornes, likening the government’s policies to Soviet-style central planning. If the Supreme Court rules in favor of the Hornes, it would reverse an earlier ruling by the 9th District Court, which in 2014 upheld the government’s right to seize raisins without providing full compensation.
U.S. Department of Agriculture has long history of regulated markets
In 1937, the U.S. Department of Agriculture was empowered through the Agricultural Marketing Agreement Act to regulate the prices of milk and various fruits and vegetables, including raisins, by limiting supply. That same year the USDA set up the Raisin Administrative Committee, and in 1949 the Committee set up the National Raisin Reserve to regulate raisin prices.
The Committee is enabled by law to confiscate portions of a farmer’s raisin crop, without providing compensation. At the Committee’s discretion, the raisins are then donated or sold to government agencies, charities, or foreign governments, or disposed of by another means.
Profits of any raisin sales are used to fund the operations of the Committee, with any excess profits given back to the farmers. In practice, farmers often receive only a small portion of the total value of their crop. The intention of these actions appear to be benign, however, with the USDA arguing that it has been trying to keep raisin prices high, and that limiting supplies is the best way to do so.
Raisin farmers charge that seizure without full compensation is unconstitutional
In 2001, Marvin and Lauren Horne decided that they had had enough of the government’s seizures of their crops. In order to skirt around collection rules, the Hornes began using their own packaging equipment, thereby cutting out the packaging companies, which the Raisin Administrative Committee relied on in order to collect their portions of the crop.
The Committee caught wind of the Hornes efforts and fined them $695,000. The Hornes argued that the collection program only applies to packagers, and as they package their own raisins, the program doesn’t apply.
The Hornes also charge that the seizure of their crops without full compensation is a violation of their Constitutional rights under the 5th amendment, which requires the government to compensate citizens for any property seized for public use.
In 2014, the 9th District Court sided with the United States government, ruling that the raisin seizure program did not violate the farmers’ rights as the farmers benefited from the program.
Now, the Supreme Court looks set to reverse that decision. Several justices have already condemned the program in court, with Chief Justice John Roberts noting “you come up with the truck and you get the shovels and you take their raisins, probably in the dark of night.” Justice Scalia had even harsher words, stating “Central planning was thought to work very well in 1937, and Russia tried it for a long time.”
Justice Stephen G. Breyer, however, suggested the seizure of raisins might not be unconstitutional if the farmers are ultimately left better off because of it. Some 1,600 raisin farmers appear to agree, having sided with the USDA, with some accusing the Hornes of “free riding.”
The court has not yet ruled on the case, but any ruling could have wide sweeping impacts on agricultural policies, and specifically efforts by the government to regulated prices by controlling supply.
