The Government Raisin Ring

Possibly one of the biggest property-rights case since Kelo has recently been argued before the Supreme Court. The property in question this time is not land, but raisins. A couple, the Hornes, who were raisin farmers in California were fined for declining to participate in a government sponsored raisin regulatory group. The raisin growers sued the government under the 5th Amendment with regard to their raisin property, asking “whether the government’s chosen compensation is “just compensation” within the meaning of the Takings Clause”. They also sued as well under the 8th Amendment with regard to excessive fines. Hopefully, SCOTUS will rule this case in favor of the raisin growers and gain back some ground for property rights that was lost with Kelo.

A little background:

“Like much government mischief, Horne v. USDA has its roots in the Great Depression and federal programs to prop up the price of goods by controlling supply. To create raisin scarcity, the government established a Raisin Administrative Committee that manages the supply of raisins through annual marketing orders. Raisin handlers must set aside a portion of their annual crop, which the feds may then give away, sell on the open market, or send overseas.

Among the targets were Fresno, California raisin farmers Marvin and Laura Horne, who have been in the business for decades. In 2003-2004 the family farm was required to give some 30% of its raisin crop to the government—some 306 tons—without compensation. The previous year they had to hand over 47%, and they were paid less than the raisins cost to produce.

The Hornes refused to participate, and in a letter to the Agriculture Department they called the program “a tool for grower bankruptcy, poverty, and involuntary servitude.” The raisin police were not amused. The Raisin Administrative Committee sent a truck to seize raisins off their farm and, when that failed, it demanded that the family pay the government the dollar value of the raisins instead.”

The question at hand is really one of liberty and property — whether or not the government can seize a business product in order to regulate prices of that product in the market.

One of the more disturbing aspects of this case is the fact that the case was already once argued before the Supreme Court, and returned to the Ninth Circuit Court for clarification; SCOTUS “remanded for a determination of the merits of the takings claim”. Instead, the Ninth Circuit essentially doubled down on their ruling and suggested that their property — raisins that they farmed — was not considered personal property enough to merit the 5th amendment invocation because “the Takings Clause affords less protection to personal property than to real property, and that the Hornes’ did not lose all economically valuable use of their property.”

This logic is ridiculous. The Ninth Circuit had the audacity to suggest that the raisin growers actually benefited from the attempted seizure and subsequent fines — in the form of higher prices in the market for the raisins the growers had left to sell — and could therefore potentially recoup the cost of the fines incurred.

Here then we have a case of American business owners who fail to participate in a government sponsored, price-controlling committee, who then face suffering loss of property or fines because the government prefers the business owners to participate in the regulatory group in order to keep the market prices stabilized.
As the Heritage Foundation notes, “the egregiousness of this conduct is amplified when the government penalizes a business for refusing to transfer some of its property to a third party (here, the Raisin Administrative Committee), without assurance of being compensated. Whether the business chooses to incur the penalty or instead accedes to the transfer, basic logic demonstrates that its property is being taken.”

The Supreme Court has the ability to bring clarity with this case that the Takings Clause protects personal property on the same level as with real property. As Kelo was 10 years ago, it’s about time that property rights were affirmed strongly once again.