An Urban's Rural View

When it comes to commanding media attention, raisins just can't compete with same-sex marriage and Obamacare. So it's no surprise the Supreme Court's decision in those more momentous legal battles elicited a gusher of ink, while the raisin case got hardly a trickle.

Yet despite being overshadowed, the court's raisin decision (http://tiny.cc/…) was noteworthy. While seemingly limited to a narrow category of farm price-support programs, Horne v. Department of Agriculture may actually be remembered as an important precedent.

Depending on your point of view, the victors in the case -- California raisin farmers Marvin and Laura Horne -- are either scrappy battlers for property rights or free riders. Thirteen years ago they defied a USDA marketing order to set aside raisins, calling it an unconstitutional "taking" of their property. Defiance led to fines, which led to litigation. On June 22 the Supreme Court ended the Hornes tortuous journey through the legal system.

Eight of the court's nine justices agreed that the constitution's protection against governmental takings applies as much to personal property -- raisins -- as to real property -- land. If the government takes physical possession of your personal property, you're entitled to compensation.

If your reaction is to wonder how anyone could disagree, consider the argument of the dissenting justice, Sonia Sotomayor. In her eyes, the requirement to set aside raisins was simply a condition on participation in a government-regulated market, with the regulation aimed at raising the price of their crop. Farmers retained an interest in the reserved raisins -- they'd get paid something, at least, if and when the raisins were eventually sold. Those who didn't like the condition could grow other crops or use their grapes for wine instead of raisins.

"Insofar as the Hornes wish to sell some raisins in a market regulated by the government and at a price supported by governmental intervention," she wrote "the order requires that they give up the right to sell a portion of those raisins at that price and instead accept disposal of them at a lower price."

Eight justices rejected that argument. They conceded the government may impose a quota on how many tons the Hornes produce for sale without paying compensation. But, taking physical possession of raisins is different. Once the government does that, compensation is required.

The eight also rejected the argument that the Hornes weren't forced to participate in the raisin price-support program. Writing for the court, Chief Justice Roberts quipped: "'Let them sell wine' is probably not much more comforting to the raisin growers than similar retorts have been to others throughout history."

One of the eight justices -- Clarence Thomas -- wrote a separate supporting opinion offering another challenge to the set-aside requirement. The constitution, the justice noted, allows takings, even with compensation, only for "public use." He questioned whether USDA's raisin reserve was really for public use.

The eight justices did part ways at a critical point in the decision. Three felt the case should be sent back to a lower court to consider the appropriate level of compensation -- in particular whether the benefits the Hornes received from the price-support program partially or wholly compensated them for the raisins. Five ruled that the Hornes should simply be relieved of the $680,000 in fines and civil penalties the government had assessed.

Five being a majority of the nine-member court, that's how it ends for the Hornes. Case closed. Meanwhile, USDA is studying what to do now about the raisin program, and presumably also the similar programs for almonds, dates, dried prunes, spearmint oil and tart cherries.

At first glance, farm price-support programs without set-asides would appear to be unaffected. But the key takeaways from the case -- that the government can't take personal property without compensation and can't demand physical property as a condition of engaging in regulated commerce -- will almost certainly have reverberations. You can bet lawyers for property owners will be citing them for years to come.

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