Sunday, June 28, 2015

SCOTUS Rules Against The Raisin Ripoff -- A Small Win Against The Dead Hand Of The New Deal

by George Leef

On June 22, the Supreme Court released its decision in Horne v. Department of Agriculture. When I wrote about Horne after oral arguments last fall, I called it the “raisin ripoff” case because the federal government (specifically, the Department of Agriculture’s Raisin Administrative Committee) had demanded 47 percent of the Hornes’ crop for its “price stabilization” system back in 2002.

The value of those raisins was roughly $484,000. When the Hornes refused to obey the Department’s order to turn over the raisins, they were slapped with an assessment plus a fine amounting to $695,000. They fought back, arguing that the government had violated their rights under the Fifth Amendment because it sought to take their property without paying just compensation.

Litigation dragged on for years, with the case making two appearances in the Supreme Court.
Chief Justice Roberts’ majority opinion finally puts to rest the strained, desperate arguments that the government had hoped would keep this absurd policy going.

For one, he dismissed the claim that the Fifth Amendment was only meant to protect against takings of real property and that takings of personal property (like raisins) did not have to be compensated. Roberts noted that one of the reasons why the Constitution’s drafters included the just compensation requirement was that the people had suffered from uncompensated seizures of personal property by the British and did not want any of that in their new country.

Furthermore, he easily dealt with the Ninth Circuit’s idea that the taking of the property of raisin growers was constitutionally OK because the growers might benefit from the higher prices and also might get some money returned to them – besides which, no one forces them to go into the raisin business in the first place. “Selling produce in interstate commerce, although subject to reasonable governmental regulations, is similarly not a special benefit that the Government may hold hostage, to be ransomed by the waiver of constitutional protection,” Roberts replied.

The Court’s holding that the Department of Agriculture must pay just compensation if and when it takes growers’ output is a welcome defense of property rights. While the decision does not put an end to the Department’s manipulation of raisin prices or any of its other programs – it has “marketing orders” that cover twenty fruits and vegetables including pistachios, cranberries and tomatoes – having to pay for any crops taken will crimp these programs somewhat.

...The idea that agricultural markets needed government “stabilization” was a bad one in 1937 and remains so today. Free agricultural markets would benefit consumers and spare us the waste of good food, the waste of paying bureaucrats to mess with markets, and the waste that lobbying by big agricultural interests involves.

Getting rid of all of those programs is not the Supreme Court’s job, although a strong argument can be made that they are unconstitutional under a correct understanding of the Commerce Clause. (Professor Richard Epstein has nailed that down in this Virginia Law Review article.) The job belongs to Congress, which should repeal all of the various commodity price control and subsidy programs. (Read this piece by Cato Institute’s Chris Edwards to see the scope of the problem.)...

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