In 2002, California raisin farmers Marvin and Lena Horne (“Horne”) substantially reorganized their raisin business in order to handle the raisins that they produced to try to avoid the requirement under the Agricultural Marketing Agreement Act of 1937 (“AMAA”) to turn over a percentage of handled raisins to the government. After Horne’s failure to comply, the USDA brought an action against Horne according to the required AMAA procedure. Although the Ninth Circuit Court of Appeals initially ruled against Horne on his takings claim, the Ninth Circuit amended its opinion and determined that Horne’s takings claim was “unripe” because Horne had to raise his takings claim in the Court of Federal Claims pursuant to the Tucker Act. Horne and the USDA disagree over whether Horne’s takings claim is ripe for adjudication; the USDA believes that the claim is unripe until Horne pursues it in the Court of Federal Claims. Specifically, the USDA believes that the AMAA does not displace the Tucker Act’s otherwise-mandatory procedures, while Horne asserts that the AMAA’s comprehensive statutory scheme displaces the Tucker Act for all related claims. Horne states that such a requirement mandates costly, duplicative litigation, while the USDA counters that such a result is the desired outcome of the statutory scheme.
1. Whether the Ninth Circuit erred in holding, contrary to the decisions of five other Circuit Courts of Appeals, that a party may not raise the Takings Clause as a defense to a "direct transfer of funds mandated by the Government," Eastern Enterprises v. Apfel, 524 U.S. 498, 521 (1998) (plurality), 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.
2. Whether the Ninth Circuit erred in holding, contrary to a decision of the Federal Circuit, that it lacked jurisdiction over petitioners' takings defense, even though petitioners, as "handlers" of raisins under the Raisin Marketing Order, are statutorily required under 7 U.S.C. § 608c(15) to exhaust all claims and defenses in administrative proceedings before the United States Department of Agriculture, with exclusive jurisdiction for review in federal district court.
May raisin farmers raise the Takings Clause as a defense to a USDA order requiring them to pay a monetary equivalent to a portion of their crop, or must they litigate non-takings defenses in the government enforcement action, pay the disputed amount to the government if liable, and then file suit in the Court of Federal Claims to recover their money?
- Federal Marketing Orders and Agreements: An Overview, The National Agricultural Law Center (background on the Agricultural Marketing Agreement Act of 1937).
- Just Compensation, Wex.
- On Raisins and Takings: Ninth Circuit Upholds USDA, Constitutional Law Prof Blog, July 27, 2011.
- David G. Savage, Supreme Court to California Raisin Growers’ Case, The Los Angeles Times.