Horne v. Department of Agriculture

(1) Whether the Takings Clause of the Fifth Amendment applies only to real property and not personal property; (2) whether government may avoid paying just compensation for a physical taking of property by reserving a contingent interest in a portion of the value of the property to the property owner; and (3) whether the California raisin marketing order is a per se taking that requires just compensation.

Under the Agricultural Marketing Agreement Act of 1937, the Department of Agriculture has the authority to ensure orderly market conditions through various marketing orders. One such marketing order requires California raisin farmers to divert a certain percentage of their crop to a reserve run by the Raisin Administrative Committee—a branch of the Department of Agriculture. The Raisin Administrative Committee then chooses whether to sell the reserve raisin crop overseas, to federal agencies, or back to the California raisin farmers for sale to export markets. Failure to comply with the order results in fines and penalties.

Petitioners are various California raisin farmers who argued that the marketing order was an unconstitutional taking that has deprived them of their personal property—the raisins—without just compensation. Petitioners rely on the Takings Clause of the Fifth Amendment, which limits the government's power of eminent domain—the power to take private property for public use—by requiring that just compensation be paid if private property is taken for public use.

The Ninth Circuit held that the marketing order was not an unconstitutional taking in that Petitioners voluntarily chose to send their raisin crop into interstate commerce. Petitioners sought a rehearing and the Ninth Circuit held that the court lacked jurisdiction to hear Petitioners' takings claim. The Ninth Circuit further stated that Petitioners needed to bring their claim in a separate court—the Court of Federal Claims—in order to sue on Fifth Amendment grounds. The United States Supreme Court granted certiorari and held that Petitioners could raise their claim in federal court, directing the lower courts to hear the claim on its merits. On remand, the Ninth Circuit again held that the marketing order was not an unconstitutional taking, distinguishing between Petitioners' personal property and and the Fifth Amendment's focus on real property.

The United States again granted certiorari to hear Petitioners' claim on the merits. In particular, the Court will determine (1) whether the Fifth Amendment applies only to real property, and (2) if the marketing order is a constitutional taking that requires just compensation.