576 U.S. 350 (2015)
The Agricultural Marketing Agreement Act of 1937 authorizes the Secretary of Agriculture to promulgate marketing orders to help maintain stable markets for particular agricultural products.1 Under the resulting California Raisin Marketing Order, growers must give a percentage of their crop to the Government free of charge in years when the Committee sets a reserve requirement.2 The Raisin Administrative Committee determined the allocation at 47 percent in 2002-2003 and 30 percent in 2003-2004.3
Growers generally ship their raisins to a handler.4 The handler physically separates the reserve raisins due the Government, pays the growers only for the free-tonnage raisins, and packs and sells the free-tonnage raisins.5 The Raisin Committee acquires title to the reserve raisins that have been set aside and decides how to dispose of them in its discretion.6 Proceeds from Committee sales are principally used to subsidize handlers who sell raisins for export.7 Raisin growers retain an interest in any net proceeds after deductions for export subsidies and the Committee's expenses.8
The Hornes are both raisin growers and handlers.9 They handled their own raisins and raisins produced by other growers, paying those growers in full for all of their raisins, not just the free-tonnage portion.10 In 2002 the Hornes refused to set aside any raisins for the Government.11 The Government assessed a fine equal to the market value of the missing raisins—about $480,000—and an additional civil penalty of just over $200,000 for disobeying the order.12
When the Government sought to collect the fine, the Hornes sued, arguing that the reserve requirement was an unconstitutional taking under the Fifth Amendment.13 This Court previously held that the Hornes could present their constitutional defense and remanded for consideration on the merits.14 On remand, the Ninth Circuit viewed the reserve requirement as a use restriction rather than a per se taking.15 The Supreme Court granted certiorari.16
Whether the government's categorical duty under the Fifth Amendment to pay just compensation when it physically takes possession of an interest in property applies only to real property and not to personal property?17
Yes. The reserve requirement physically appropriates the Hornes' raisins, which constitute personal property.20 The marketing order requires growers to turn over a percentage of their crop to the Raisin Administrative Committee. The Committee acquires title and disposes of the raisins at its discretion.21
The Hornes refused to set aside any raisins in 2002.22 This led to a fine based on market value.23 The marketing order applies the same physical transfer mechanism to all growers.24 This direct appropriation triggers the categorical duty to pay just compensation under the Fifth Amendment.25
The clause contains no textual distinction between real and personal property.26 Historical practice treated both forms equally.27
The categorical duty to pay just compensation applies to personal property.28
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Justice Thomas joined the Court's opinion in full and added an observation about the public-use requirement of the Takings Clause.29 The Clause prohibits taking private property except for public use even when the Government offers just compensation.30 The historical understanding imposes a meaningful constraint requiring that the Government actually use or give the public a legal right to use the property.31
The Raisin Administrative Committee takes raisins and in some instances gives them away or sells them to exporters, foreign importers, and foreign governments.32 To the extent the Committee's actions are not for public use, calculating just compensation on remand would be a potentially fruitless exercise.33
Whether the Government may avoid the categorical duty to pay just compensation for a physical taking by reserving to the property owner a contingent interest in a portion of the property's value set at the government's discretion?34
No. The Hornes retain an interest in net proceeds from the Committee's disposition of reserve raisins after export subsidies and expenses.38 That interest is contingent on the Committee's discretionary decisions.39 It proved worthless in one of the years at issue while falling below production costs in the other.40 The marketing order transfers title to specific raisins to the Committee.41
The Committee then sells or allocates them.42 The retained interest does not prevent the physical appropriation from qualifying as a taking.43 Once the Government physically takes the raisins, questions of value or retained interests bear only on compensation calculations.44
The Government may not avoid the duty to pay just compensation by reserving a contingent interest in proceeds.45
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Justice Breyer agreed with Parts I and II of the Court's opinion but disagreed with Part III rejecting the Government's request for remand to determine whether the marketing order afforded just compensation.46 He argued the Takings Clause proscribes taking without just compensation but does not prohibit taking if just compensation is provided.47 Precedent beginning with Bauman v. Ross allows offsetting benefits conferred upon the owner's remaining property when calculating compensation for a partial taking.48
The value of benefits conferred on the remaining free-tonnage raisins by the reserve requirement may be set off against the value of the reserve raisins taken.49 If the benefit equals or exceeds the value of the taken raisins, there is no net taking without just compensation.50 Because the question of compensation had not been fully presented or developed in the record, he would remand for briefing and factfinding on the compensation question rather than entering judgment for petitioners.51
Whether a governmental mandate to relinquish specific, identifiable property as a condition on permission to engage in commerce effects a per se taking?52
A governmental requirement that growers relinquish specific, identifiable property as a condition of selling produce in interstate commerce effects a per se physical taking.53 The ability to sell in commerce is not a government benefit that may be conditioned on waiver of Fifth Amendment protections.54
Yes. The Hornes function as both growers and handlers.55 They paid other growers in full for all raisins.56 They were therefore required to set aside 47 percent of their raisins in 2002-2003 and 30 percent in 2003-2004 to sell the remainder in interstate commerce.57
Their refusal triggered the assessed fine and penalty.58 The marketing order mandates physical transfer of title to the reserve raisins rather than merely restricting their use.59 The Hornes cannot avoid the demand by choosing not to participate because the condition directly appropriates identifiable property.60 This constitutes a per se taking under the Fifth Amendment.61
The mandate effects a per se taking.62
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Justice Sotomayor dissented.63 She argued the Court's application of Loretto was incorrect because Loretto's per se physical-occupation rule requires that governmental action destroy each and every property right in the affected property.64 If the owner retains any meaningful property right, the action does not qualify as a Loretto per se taking and instead must be analyzed under the more nuanced Penn Central framework.65
The Hornes retained at least one meaningful interest—the right to any net proceeds from disposition of reserve raisins—so the reserve requirement did not destroy each of their property rights.66 She would affirm the Ninth Circuit's judgment and uphold the reserve requirement against a per se takings challenge.67
Whether the Hornes may raise a takings defense to the fine without first paying it and suing for compensation in the Court of Federal Claims under the Tucker Act?68
Yes. The Hornes function as both growers and handlers. They paid other growers in full for all raisins. They therefore possess the complete economic interest in the raisins the Government claims should have been set aside.71
This allows them to assert the constitutional defense directly in the enforcement proceeding.72 Prior Supreme Court precedent already established that the Hornes need not pay the fine first and then sue in the Court of Federal Claims.73 The Government calculated the fine using the fair market value of the raisins.74 No remand is required to determine compensation because that amount already quantifies the taking.75
The Hornes may raise the takings defense without first paying the fine and suing under the Tucker Act.76