Under a federal marketing program for California raisins, the government seeks to stabilize prices by taking some of the annual crop off the market. A federal committee each year recommends to the Agriculture Department the part of the crop that it believes should be held off the market. A packer or processor may buy raisins from the growers for the part of an annual yield that can be marketed, but the part ordered to be withheld must be kept in reserve. These so-called “reserve tonnage” amounts, though, can be sold in markets where competition does not exist, such as school-lunch programs. The proceeds from selling those raisins are used to pay the costs of running that part of the program.
A group of grape vineyard operators in California were accused by the Department of setting up a program to evade the reserve pool requirement by processing their own grapes into raisins, then selling them. They countered that they were only producers, not processors, and so were not covered by the marketing order and its reserve set-aside. The Department sought to compel them to obey the marketing order, and the vineyards ultimately were ordered to pay $483,844 in civil penalties.
The vineyards went to court, contending that the reserve set-aside requirement amounted to a “taking” of their private property without just compensation, as required by the Fifth Amendment. A federal district court judge ruled for the Department, finding that the vineyard operators were, in fact, functioning as processors or packers. Transfer of title to the reserve raisins was not a “taking,” the judge concluded.
The Ninth Circuit Court ultimately ruled that it lacked jurisdiction to hear the “takings” claim, and that the vineyards should take that plea to the Court of Federal Claims under the so-called ”Tucker Act,” which allows lawsuits against the government seeking monetary compensation for taking private property for public use. The vineyards then took the issue of where they may sue to the Supreme Court, resulting in Tuesday’s grant of review.My fellow bloggers are already noting that this situation sounds a lot like an exaction. This case has an interesting parallel with Koontz v. St Johns River Water Management District, No. 11-1447 (cert. granted Oct. 5, 2012). In both cases, the courts below held that the property owner needed to give in to the government's demand for their property before challenging the demand. With any luck, the Court will make clear two cases arising out of very different contexts that unlawful government demands for property may be challenged in court without giving in first. In that sense, the Court's ruling in either of these cases could end up seeming a bit like Sackett v. EPA, where the Court gave landowners the right to take EPA to court to challenge environmental compliance orders.
You can follow the case's progress over at SCOTUSblog. More background is available from the LA Times. The briefs from the petition for certiorari stage are below.