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Horne v. United States Department of Agriculture

United States Court of Appeals, Ninth Circuit

May 9, 2014

MARVIN D. HORNE and LAURA R. HORNE, DBA RAISIN VALLEY FARMS, a partnership, and DBA RAISIN VALLEY FARMS MARKETING ASSOCIATION, AKA RAISIN VALLEY MARKETING, an unincorporated association; MARVIN D. HORNE; LAURA R. HORNE; DON DURBAHN, and the ESTATE OF RENA DURBAHN, DBA LASSEN VINEYARDS, a partnership, Plaintiffs-Appellants,
v.
UNITED STATES DEPARTMENT OF AGRICULTURE, Defendant-Appellee

 Argued and Submitted, February 14, 2014, San Francisco, California

Page 1129

[Copyrighted Material Omitted]

Page 1130

[Copyrighted Material Omitted]

Page 1131

Appeal from the United States District Court for the Eastern District of California. D.C. No. 1:08-cv-01549-LJO-SMS. Lawrence J. O'Neill, District Judge, Presiding.

Michael W. McConnell (argued), John C. O'Quinn and Joseph F. Cascio, Kirkland & Ellis LLP, Washington, D.C., and Brian C. Leighton, Clovis, California, for Plaintiffs-Appellants.

Stuart F. Delery, Acting Assistant Attorney General, Joshua Waldman (argued) and Michael S. Raab, Attorneys, Appellate Staff, Civil Division, United States Department of Justice, Washington, D.C.; Benjamin B. Wagner, United States Attorney, and Benjamin E. Hall, Assistant United States Attorney, Fresno, California, for Defendant-Appellee.

Before: Stephen Reinhardt, Michael Daly Hawkins, and Ronald M. Gould, Circuit Judges. Opinion by Judge Hawkins.

OPINION

Page 1132

HAWKINS, Senior Circuit Judge

To ensure stable market conditions, the Secretary of Agriculture, administering a complex regulatory program, requires California producers of certain raisins to divert a percentage of their annual crop to a reserve. The percentage of raisins diverted to the reserve varies annually according to that year's crop output. Subject to administrative and judicial review, the Secretary can impose a penalty on producers who fail to comply with the diversion program. The program's goal is to keep raisin supply relatively constant from year to year, smoothing the raisin supply curve and thus bringing predictability to the market for producers and consumers alike. The diverted raisins are sold, oftentimes in noncompetitive markets, and raisin producers are entitled to a pro rata share of the sales proceeds less administrative costs. In some years, this " equitable distribution" is significant; in other years it is zero.

Eschewing any Commerce Clause or regulatory takings theory, Plaintiffs-Appellants Marvin and Laura Horne (" the Hornes" ) challenge this regulatory program and, in particular, the Secretary's ability to impose a penalty for non-compliance, as running afoul of the Takings Clause of the Fifth Amendment.[1] Specifically, the Hornes argue Defendant-Appellee the Department of Agriculture (" the Secretary" ), charged with overseeing the diversion program, works a constitutional taking by depriving raisin producers of their personal property, the diverted raisins, without just compensation. The Secretary defends the constitutionality of the reserve requirement. ...


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