Horne v. Department of Agriculture

PETITIONER:Marvin D. Horne, et al.
RESPONDENT:Department of Agriculture
LOCATION: Raisin Valley Farms

DOCKET NO.: 12-123
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 569 US (2013)
GRANTED: Nov 20, 2012
ARGUED: Mar 20, 2013
DECIDED: Jun 10, 2013

Joseph R. Palmore – Assistant to the Solicitor General, Department of Justice, for the respondent
Michael W. McConnell – for the petitioners

Facts of the case

The Agricultural Marketing Agreement Act of 1937 (AMAA) was enacted to protect farmers from radical fluctuations in the market. The AMAA allows the Secretary of Agriculture to impose production quotas or supply limitations on products as needed. Refusal to comply with these orders can result in civil and criminal penalties. The orders only applied to “handlers,” those who process and package the products for distribution. The Raisin Marketing Order of 1949 created reserve-tonnage, a percentage of raisins that must be turned over the government each year.

Marvin and Laura Horne were raisin producers living in California who implemented a system to bring their raisins to market without handlers to avoid the AMAA. The Administrator of the Agricultural Marketing Service initiated an enforcement action against the Hornes for failure to comply with the orders. The Administrative Law Judge held that the Hornes should be subject to the Order under the auspices of the AMAA. The Judicial Officer affirmed the decision and held the Hornes liable. The Hornes filed for judicial review in district court, and the court granted summary judgment for the Department of Agriculture.

The United States Court of Appeals for the Ninth Circuit affirmed and held that it did not have jurisdiction to rule on the Hornes’ claim that the Order violated their Fifth Amendment rights under the Takings Clause. The Court held that the Hornes must bring that claim before the Court of Federal Claims, as required by the Tucker Act.


Can the Takings Clause be used as a defense in actions regarding a government-mandated transfer of funds?

If so, does the Unites States Court of Appeals for the Ninth Circuit have jurisdiction over the case?

Media for Horne v. Department of Agriculture

Audio Transcription for Oral Argument – March 20, 2013 in Horne v. Department of Agriculture

Audio Transcription for Opinion Announcement – June 10, 2013 in Horne v. Department of Agriculture

John G. Roberts, Jr.:

Thomas has our opinion this morning in case 12-123, Horne versus Department of Agriculture.

Clarence Thomas:

This case comes to us on a writ of certiorari to the United States Court of Appeals for the Ninth Circuit.

During the great depression, Congress enacted the Agricultural Marketing Agreement Act of 1937, I will refer just as the Marketing Agreement Act.

This Act stabilized — was act — was inducted to — enacted to stabilize agricultural commodity prices.

California raisins are one of the many commodities regulated by the Act.

Pursuant to the Marketing Agreement Act, the Secretary of Agriculture issued regulations creating the Raisin Administrative Committee.

Each year the Raisin Administrative Committee recommends whether to place a percentage of the raisin crop in a so-called reserve pool that is not sold on the open market.

If a reserve pool is established, raisin handlers are required to set aside a portion of the raisins they receive from procedures and hold them in the pool.

Procedures receive no upfront compensation for these raisins.

The Raisin Administrative Committee then decides whether to give the raisins away or sell them in foreign markets.

Petitioners are California raisin growers who became frustrated with this regulatory scheme.

Since the regulations apply only to raisin handlers, petitioners decided to process and sell their own raisins without using a third-party handler in an effort to avoid the requirement that they contribute raisins to the reserve pool.

They also agreed to process raisins from 60 other farms.

The Department of Agriculture determined that petitioners were raisin handlers and demanded that they turn over the requisite percentage of raisins.

After petitioners refused the Department of Agriculture initiated administrative proceedings, seeking civil penalties and reimbursement for the raisins that petitioner refused to surrender.

Petitioners argued that they were producers not handlers and therefore did not have to give up the raisins.

They also argue that the raisin regulations violated the Fifth Amendment prohibition against taking property without just compensation.

An Administrative Law Judge found that petitioners were handlers and that they had violated the raisin regulations.

He imposed fines and rejected petitioner’s takings defense.

On appeal, a judicial officer agreed, petitioners then sought review in Federal District Court which concluded that petitioners were handlers rather than producers and rejected petitioner’s takings claims on the merits.

The Ninth Circuit affirmed.

It agreed that petitioners were handlers but concluded that it lacks jurisdiction to adjudicate the takings claims because it was not right.

According to the Ninth Circuit, petitioners raised their takings claims as producers, not handlers, and thus were required to pay the fines and then file suit in the Court of Federal Claims.

In an opinion filed with the clerk today, we reverse.

Although, petitioners argued before the agency that they were producers and thus not subject to the raisin regulations, both the agency and the District Court concluded that they were handlers.

Because the raisin regulations imposed duties on petitioners only in their capacity as handlers, petitioner’s takings claims, to raise as a defense against fines imposed for violating those duties is necessarily raised in that same capacity.

In finding otherwise, the Ninth Circuit confused petitioner’s statutory argument that they were producers with their constitutional argument that even assuming they were handlers defines violated the Fifth Amendment.

As a result, the relevant question is whether a federal court has jurisdiction to adjudicate a takings defense raised by a handler.

Petitioners were subject to final agency order imposing fines and thus suffered an injury sufficient for Article III jurisdiction.

The Government argues that petitioners’ claim is unripe because the Tucker Act affords them a remedy.

Clarence Thomas:

The Tucker Act normally requires people who want or individuals who want to sue the United States for damages to bring their suits in the Court of Federal Claims.

However, when a statute contains its own self-executing remedial scheme, Tucker Act jurisdiction is replaced by that scheme.

In this case we conclude that the Marketing Agreement Act provides such a comprehensive remedial scheme and that nothing in the Marketing Agreement Act bars handlers from raising constitutional defenses to the Department of Agriculture’s — Department of Agriculture’s enforcement action.

Accordingly, petitioners are free to raise their takings claims in these proceedings.

Indeed it would make little sense to force a party to pay an assessed fine in one proceeding and then turn around and sue for recovery of that same money in another.

We, therefore, reverse the judgment of the Ninth Circuit.

The opinion of the Court is unanimous.