Friday, March 1, 2013

Is it a Regulatory Taking if the Government Forces You to Hand Over Your Crops in Exchange for the Privilege of Entering the Marketplace?

Now that all the responsive briefs are have been submitted in Horne v. U.S. Department of Agriculture, No. 12-236 (cert. granted Nov. 20, 2012), I've had a chance to take a look. Recall that this is the third property rights case that the U.S. Supreme Court will hear this term. Recall that this is the raisins case, Horne v. U.S. Department of Agriculture, No. 12-236 (cert. granted Nov. 20, 2012), that has been compared to guerrilla warefare, and which is to consider whether a New Deal agricultural statute takes property of raisin growers without compensation. As I've written before, the issues is this: if the government takes you to court because you failed to pay something it required, can you defend against the government by arguing it is attempting to take your property without compensation?

In its response brief, the Department of Agriculture begins by continuing a recent theme in takings cases by naming the Takings Clause the Just Compensation Clause. Robert Thomas believes this move was to imply that the Hornes are seeking compensation, when in fact they are simply defending against government enforcement. The Department makes two main points:
  1. The Hornes can attack the raisin confiscation through a claim for compensation through the federal Tucker Act, which authorizes the Court of Federal Claims to award compensation when it finds a taking has occured.
  2. The Hornes engaged in a procedural "shell-game" in defending against government enforcement using the takings clause. The Department argues that the Hornes are defending in their statutory capacity as a "producer" of raisins rather than as a "handler."
As for the second point, the amicus brief of the Sun-Maid Growers of California makes the same argument. I ask: should the government really be able to shield itself when it takes property by erecting arbitrary statutory categories of property owners?

In the amicus brief of the International Municipal Lawyers Association, Prof. John Echeverria of Vermont Law School, who always resolves takings claims in favor of the government, argues:
Petitioners have needlessly complicated the vindication of their asserted rights under the Takings Clause of the Fifth Amendment by failing to file a straight forward claim for just compensation in the U.S.Court of Federal Claims. Petitioners have long participated in the raisin industry marketing program which they now believe results in a taking. Thus, they could easily have filed a claim for just compensation in the U.S. Court of Federal Claims based on this asserted taking. Instead, petitioners decided to disregard federal law requiring that they participate in the program and now seek to invoke the Takings Clause to defend against the sanctions imposed as a result of their illegal action.This effort should fail for three independent reasons. First, because the purpose of the Takings Clause is to provide compensation for takings, rather to stop takings from occurring, it would contradict the purpose and function of the Takings Clause to allow a party who has defied federal law and thereby blocked implementation of a federal program to defend his or her action by invoking the Takings Clause. Second, government seizures of private property for law enforcement purposes, such as forfeitures, are outside the scope of the Takings Clause. Third, government-imposed mandates to pay money in general, including but not limited to the kinds of monetary sanctions at issue in this case, are outside the scope of the Takings Clause.While it is unlikely the Court will reach the merits of the takings issue in this case, amici submit that the takings argument is meritless. The raisin marketing program is best viewed as involving a regulatory restriction on property rather than an appropriation of property, and therefore the Penn Central analysis should govern this claim. Given the modest (if any) net economic burden imposed by the raisin marketing program, and the modest (if any) interference with petitioners’ reasonable investment-backed expectations, the Penn Central claim should fail. Even if the alleged taking were analyzed under a per se test,the claim should fail because petitioners could not carry the burden of demonstrating that the program has imposed any net compensable injury on them.
Let's hope the U.S. Supreme Court doesn't have as much disdain for private property rights as Prof. Echeverria does! This case is scheduled for oral argument on March 20, 2013.