Horne v. Department of Agriculture

Brief Fact Summary.

Horne family members, raisin growers, refused to set aside any raisins for the government and refused its entry to the raisin storage. The government invoked the Department of Agriculture’s California Raisin Marketing Order, which requires a percentage of a grower’s crop to be physically set aside in certain years for the account of the government, free of charge, and imposed a fine equal to the market value of the missing raisins and a civil penalty for disobeying the order. The Hornes argued that the requirement constitutes an unconstitutional taking of their property under the Fifth Amendment.

Synopsis of Rule of Law.

The Government has a duty to pay just compensation when it physically takes possession of an interest in property under the Fifth Amendment.

Facts.

The United States Department of Agriculture’s California Raisin Marketing Order requires a percentage of a grower’s crop to be physically set aside in certain years for the account of the government, free of charge. The government then sells, allocates, or otherwise dispose of the raisins to help maintain stable markets for raisins. Horne family members, raisin growers, refused to set aside any raisins for the government and refused its entry to the raisin storage, believing they were not legally bound to do so. The government imposed a fine equal to the market value of the missing raisins and a civil penalty for disobeying the order. The Hornes turned to the court and argued that the requirement constitutes an unconstitutional taking of their property under the Fifth Amendment.

Issue.

Does the government’s duty under the Fifth Amendment to pay just compensation when it physically takes possession of property apply only to real property and not personal property?

Held.

No. A taking is one in which the government directly appropriates private property for its own use. Such an appropriation is a per se taking that requires just compensation under the Fifth Amendment. The government’s formal demand that growers turn over a percentage of their raisin crop free of charge, for the government’s control and use, constitutes a taking without regard to other factors that a court might ordinarily consider.

Discussion.

The reserve requirement imposed by the government is a clear physical taking. Actual raisins are transferred from the growers to the government. Any reserve raisins that are left on the premises of growers are held for the account of the government. Raisin growers subject to the reserve requirement thus lose the entire “bundle” of property rights in the appropriate raisins – the right to possess, use, and dispose of” them. The government’s “actual taking of possession and control” of the reserve raisins gives rise to a taking “as if the government held full title and ownership.”