California Raisin Case Decides the Obvious: When the Government Takes Your Property, it Has to Pay You For it

08/18/2015 / Gary A. Van Cleve

The California Raisins made a comeback at the end of June in the form of a United States Supreme Court decision making clear that the Fifth Amendment Takings Clause of the U.S. Constitution (you know the one: “nor shall private property be taken for public use, without just compensation”) applies not only to real estate, but also and with equal force, to personal property. As the Court said recently in Horne v. U.S. Dept. of Agriculture, “Nothing in the text or history of the Takings Clause, or our precedents, suggests that the rule is any different when it comes to appropriation of personal property.” Not to put too fine a point on it, the Court said, “The Government has a categorical duty to pay just compensation when it takes your car, just as when it takes your home.” Apparently, the Court thought that its point would be driven home more strongly by using the car analogy than by reference to the personal property of concern in the actual case ‎–‎ raisins.

It seems that since some point during the Great Depression (1937 to be exact) a federal program has existed that requires raisin growers to give up a percentage of their annual crop ‎–‎ free of charge ‎–‎ on the order of the U.S. Secretary of Agriculture, to help maintain price stability in the raisin market. The raisin-growing Hornes refused to give up 47 percent of their 2002 raisin crop as ordered by the Secretary that year. They were fined by the USDA the value of the raisins ($480,000) plus a $200,000 civil penalty. The USDA prosecuted the Hornes, who defended themselves based upon the Fifth Amendment. Years later, the case having yo-yoed up and down and back up again to the U.S. Supreme Court, it is now clear to all that it matters not what the form of private property is ‎–‎ be it 100 acres of land, a Lincoln Continental, or 100 tons of raisins ‎–‎ if the government takes it, it must pay the owner “just compensation.”

While this seems obvious, takings law can be anything but, and the raisin case seems to have gotten bogged down in the somewhat esoteric debate over whether the raisin confiscation was a permitted regulatory “forfeiture,” if you will, or whether it was a taking for which the Hornes were entitled to be compensated. In a decision that garnered only one dissent from the nine justices, the Court made it clear that this was not a permissible government regulatory provision, but an outright physical appropriation by the government of somebody’s private property. The Court said that the Takings Clause “protects ‘private property’ without any distinction between different types.” While this may seem obvious, sometimes the Court needs to make it clear for those out there who don’t quite get it.

Editor's Note: For more information about takings law, please read Bryan Huntington's article, Takings Law: The Fundamentals.