10 June 2013

Law in Plain English: Horne v. Department of Agriculture

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

Horne v. Department of Agriculture

A federal program exists to stabilize raisin prices by requiring raisin handlers (but not growers) to set aside a certain amount of "reserve" raisins that can only be sold in non-competitive markets. The U.S. Department of Agriculture (USDA) accused a group of vineyard owners (growers) of trying to circumvent this program by processing the grapes themselves, instead of passing them on to handlers (where they would be subject to the reserve requirement). The USDA fined the growers, who filed a claim that the reserve requirement was a "taking" of their property. The District Court ruled for the USDA and a panel of the Ninth Circuit agreed. On reconsideration, the Ninth Circuit ruled that the growers should have brought their case to the Court of Federal Claims as a Tucker Act claim instead (where they would have to start all over). The questions before the Court were: (1) whether the Ninth Circuit erred in holding that a party may not raise the Takings Clause as a defense to a direct transfer of funds mandated by the Government, but instead must pay the money and then bring a separate, later claim requesting reimbursement of the money under the Tucker Act in the Court of Federal Claims; and (2) whether the Ninth Circuit erred in holding`that it lacked jurisdiction over petitioners’ takings defense, even though petitioners are required to exhaust all claims and defenses in administrative proceedings before the DoA, with exclusive jurisdiction for review in federal district court. In a unanimous decision, the Supreme Court ruled that the Ninth Circuit had jurisdiction to hear the case, and that a takings-based defense may be raised by a handler in the context of an enforcement proceeding initiated by the USDA under the raisin program. As a result, Horne's takings claim can go forward. The practical impact of this decision is to broaden the circumstances in which parties can make takings claims against the government.
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