The fundamentals of Constitutional interpretation have been changed this week (more on this in a forthcoming blog). Statutory interpretation has been subordinated by politics and the definition of a “fundamental right” has been amended to include “the mystical aphorisms of the fortune cookie,” in Justice Scalia’s interesting words. However, property rights have at least fended off two strong attacks by the government, at both the state and federal levels. In City of Los Angeles v. Patel, the Court held 8-1 that a local regulation requiring hotels to allow warrantless searches of their records was unconstitutional.
The subject of this blog, however is Horne v. Dept. of Agriculture, which addresses the Takings Clause and corrects a rather egregious example of New Deal Era commercial meddling and disregard for individual property rights. While it unfortunately reaffirms Wickard v. Fillburn (the case in which a farmer was penalized for growing his own wheat for his own consumption based on the aggregate effects on the wheat market), it does prevent the Government from actually requiring that individuals and businesses entirely forfeit rights to a percentage of its property for the benefit of “the market.”
Leaving aside the troubling absurdity that a case such as this was even legitimately contentious enough to get to the Supreme Court, the ruling in Horne v. Dep’t of Agriculture, No. 14-275 was a clear-cut victory for the protection of private property rights. By no means is the ideological conflict between private property rights and the federal government over – see King v. Burwell or Wickard v. Fillburn for startling examples – but the case was decidedly a victory, nonetheless. “Under the Department of Agriculture’s California Raisin Marketing Order, a percentage of a grower’s crop must be physically set aside in certain years for the account of the Government, free of charge. The Government then sells, allocates, or otherwise disposes of the raisins in ways it determines are best suited to maintaining an orderly market.” While those sentences would have made George III, Lord North, and George Grenville blush, this practice had been occurring for nearly 80 years.
Anyone interested in the actual mechanics of the law can read the decision for a description. This is the pertinent part:
In 2002, the Hornes refused to set aside any raisins for the Government, believing they were not legally bound to do so. The Government sent trucks to the Hornes’ facility at eight o’clock one morning to pick up the raisins, but the Hornes refused entry. The Government then assessed against the Hornes a fine equal to the market value of the missing raisins – some $480,000 – as well as an additional civil penalty of just over $200,000 for disobeying the order to turn them over.
The Government then attempted to collect the fine; the Hornes sought to use the unconstitutionality of the Marketing Order as a defense to the imposition of the fine. After some procedural and legal minutiae (important in the legal world, but less so for the meaning of the Constitution, which we are discussing here), the Ninth Circuit ultimately ruled that the Marketing Order was not a Taking, as it determined that the Constitution “affords less protection to personal than to real property.” Because the Ninth Circuit concluded that the raisin growers received some money back from the sale of the raisins they were forced to turn over, the growers were “not completely divested of their property rights.” The Ninth Circuit viewed the mandate as a regulation, much like a permit. Thus, the growers received a Government benefit by the Government regulation of the market (really) in exchange for a fee (the cost of the raisins). Thus, “the Hornes could avoid the reserve requirement by planting difference crops.”
Fortunately, the U.S. Supreme Court disagreed. First, the Court found that the Fifth Amendment applies with equal force to personal property and real property. Given the lack of differentiation in the Fifth Amendment, this makes sense. While the Supreme Court has muddied the waters a bit with past rulings on “regulatory takings,” (which apply to real property), the Court found that “people still do not expect their property, real or personal, to be actually occupied or taken away” by the Government. By actually taking the raisins from the growers to the Raisin Committee (or the title to the raisins, which is the important distinction), the raisin growers lose all rights to the property. Thus, this is a “classic” takings case.
The Court also found that the condition to “relinquish specific, identifiable property as a condition on a permission to engage in commerce” constitutes a per se taking. If the Hornes don’t like the condition, the Government’s argument went, they can sell the grapes for consumption or wine. “Let them sell wine,” Justice Roberts quipped in response, “is probably not much more comforting to the raisin growers than similar retorts have been to others throughout history. “ In short, Roberts wrote, “[s]elling produce in interstate commerce . . . is not a special governmental benefit that the Government may hold hostage, to be ransomed by the waiver of constitutional protection.”
For what it represents, the decision in Horne is a good one. At a minimum, it holds that the Government has to work to deprive an individual of his rights. Quoting Justice Holmes, the Court reiterated that “a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way.” Thus, “the means [the Government] uses to achieve its ends must be consistent with the letter and spirit of the Constitution.” So while the Court does nothing this week to limit the Government’s “broad powers,”(and expands them in other cases), the Court is at least willing to mandate that those powers be exercised in nominal compliance with the Constitutional means.