Wednesday, June 24, 2015

Informal Brief: Horne v. Dept of Argiculture

So this Monday the Supreme Court announced the Horne case. Here's a breakdown of the decision and the dissents:

The case is simple, the raisin industry is over by a Federal committee known as the Raisin Administrative Committee. This committee decides how much of each raisin crop will be seized by the government (sometimes more than half), and how much (if anything) will be paid to the growers of the crop. The government may sell the seized raisins to exporters, or give them away. The Hornes objected and won the case.

That the government actually took physical possession and ownership of the raisins was a central factor to the majority decision. This is not regulation that requires a certain percent be set aside, but rather that a percent be physically turned over to the government. At one point, the government actually drove up with trucks and demanded the raisins be turned over right then. This factor both grants the Hornes a complete win, in that all of the penalties are dismissed, and limits the reach of the case.

The Court answered three questions in the case:

The first question, whether the Takings Clause only applied to real property (land) and not personal property (everything else) was not only answered "no", it was answered "That has never been true since the concept of property rights was first conceived." This goes back eight hundred years, to the Magna Carta.

The Court addresses the concept of regulatory takings - that a government can effectively seize control of a property by regulating all of the potential uses of property (referred to as the Penn Central test) and holds that an actual physical taking is always a taking. (Because, well, duh)

And the physical seizure was a key factor in deciding this case - the government's actual possession of the raisins deprived the Hornes of their property right in the raisins. That the government could outright prohibit the sale of raisins is not material to the physical seizure.

The second question was whether the government could sidestep the responsibility of just compensation by allowing the Hornes a contingent interest of part of the value.

Again, the question comes down hard on the fact that the government actually took possession and ownership of the raisins instead of just regulating them. The physical seizure simply eliminates the question of regarding the government's allowance of an interest. Not only that, but the scheme allows the government to pay nothing if it deems that the value of the Hornes' interest.

The dissent argues that it is not a taking to ban the sale of a good, but while a prohibition on the sale of a good does eliminate the item's commercial value, that does allow the owner to make use the property in every other way. The Court repeatedly hammers the dissent for confusing the analysis for regulatory takings (Penn Central) with physical takings.

Whether the government can force someone to waive a Constitutional right to participate in the market is the final question. The answer is no, because then the government could obtain any property passing through commerce with a waiver scheme, and freely selling legal merchandise is not a government benefit.

The Court does differentiate this case from a case involving the required disclosure of safety and environmental information for various commercial poisons in exchange for a government license to sell them. The Court differentiated the cases based on the grounds that the sale would be prohibited by law without the government's authorization, and the authorization is a substantial benefit, and, well, they're poison, not "a healthy snack."

A case involving Maryland crabs is also separate, on the grounds that the required set-aside of shells (for fertilization and other state purposes) is effectively a payment for access to state property (the crabs). As the government never owned the raisins, as Maryland owned the crabs, there is no connection between the two cases.

The Court also refused to remand the question of just compensation back to the lower court. The government argued that the Hornes may have benefited from the program, and therefore may still have to pay the government for that benefit. (In my opinion, a frivolous, last-ditch attempt to get them to pay)

The Court dismissed this rationale as baseless, and found that the government had already calculated the value of the Hornes' raisins when it assessed the penalties (part of the penalties being the value of the raisins themselves). Since the Hornes never turned over the raisins, the "just compensation" is dismissal of the penalties. This issue is, incidentally, the whole of the first dissent.

Justice Thomas has a brief concurrence holding, in addition to the whole Court's opinion, that "public use" means "use by the public", as a public park, road, government building or public hospital. This is a strike against the Kelo decision, which rewrote "public use" to "any use".

Justice Sotomayor's individual dissent is startling. Relying on the regulatory analysis of Penn Central, she reaches the conclusion that, because the government seized the raisins and might, maybe, pay the farmer something for his crop after the crop was seized, it doesn't count as a taking. But Penn Central is the wrong test for a physical taking, and even if it was the correct test, it's not much of a residual property right if the government can refuse to pay anything at all.
Don't forget - you can follow me on Twitter and help support this content by contributing and sharing with your social circles.

No comments:

Post a Comment