OPINION AND ORDER
Plaintiffs are raisin growers in California who claim that the United States, in its implementation of the Agricultural Marketing Agreement Act of 1937 (“Agricultural Marketing Act”), Pub.L. No. 75-137, 50 Stat. 246 (codified as amended at 7 U.S.C. §§ 601-74), by promulgating the currently effective raisin marketing order under the statute, has taken their property without just compensation in contravention of the Fifth Amendment of the United States Constitution. The Agricultural Marketing Act authorizes the Secretary of Agriculture (the “Secretary”) to issue marketing orders for various agricultural products, including raisins, in an effort to limit the supply of such products on the open market and thus to stabilize prices. The raisin marketing order does not explicitly regulate raisin producers (is., growers), but it imposes draconian regulations on handlers—those who stem, sort, clean, seed, package, or process raisins—by requiring them to transfer to the government’s Raisin Administrative Committee (“RAC”) an annually specified portion of the raisins they buy from producers. Specifically, handlers must physically separate these “reserve tonnage” raisins for the government from the remaining “free tonnage” raisins, which handlers may sell on the open market. The marketing order in effect causes handlers to purchase from producers only the “free tonnage” raisins, with producers receiving an equity interest in the “reserve tonnage” raisins in the
Plaintiffs filed their complaint on June 1, 2006, alleging that the Agricultural Marketing Act and regulations promulgated under that Act, including the currently effective raisin marketing order, result in an uncompensated taking of the “reserve tonnage” portion of the raisins they transfer to handlers. Compl. 1ÍH 46-47, 2, 27. In further support of their claim, plaintiffs assert that their equity return on the net proceeds from the sale of these “reserve tonnage” raisins has been worthless or nearly so in recent years. Id. 1145. Plaintiffs seek certification as a class, a declaration that the statutory and regulatory bases for the marketing order violate the Fifth Amendment, an injunction to prevent the United States Department of Agriculture (“USDA”) from enforcing the raisin marketing order, and damages. Id. 111115-20, 51.
The government has filed a motion to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6) of the Rules of the Court of Federal Claims (“RCFC”), contending that plaintiffs have not presented a cognizable takings claim. Def.’s Mot. to Dismiss at 4. Plaintiffs have responded by arguing that the government has mis-charaeterized them claim as a regulatory taking, rather than a per se physical taking, and that the federal government’s authority under the Commerce Clause to regulate interstate commerce does not trump the Takings Clause of the Fifth Amendment. Pl.’s Brief Opposing Def.’s Mot. to Dismiss 11111, 14, 29. The Pacific Legal Foundation has filed a brief as amicus curiae in support of plaintiffs, averring that the raisin marketing order confers no benefit on plaintiffs and imposes an involuntary transfer of a portion of plaintiff’s raisins to the government. Briefing has been completed and the court has held a hearing on the pending motions. For the reasons set out below, the government’s motion to dismiss is granted.
BACKGROUND
In the midst of the Great Depression, Congress passed the Agricultural Marketing Act, which sought to address “the disruption of the orderly exchange of commodities in interstate commerce [that] impairfed] the purchasing power of farmers and destroyed] the value of agricultural assets.” Agricultural Marketing Act,
Under the Agricultural Marketing Act, the Secretary may delegate to industry committees the power to administer marketing orders, and these committees may recommend to the Secretary changes to existing orders. 7 U.S.C. § 608c(7)(C); see 7 C.F.R. § 989.35 (2006).
By February 15 of each crop year,
Using a reserve pool mechanism, the raisin marketing order requires handlers
The Agricultural Marketing Act explicitly excludes raisin producers from regulation, 7 U.S.C. § 608c(13)(B), but the expansive regu
The raisin marketing order shares many of the characteristics of marketing orders for other agricultural products. Compare 7 C.F.R. Part 989 (Raisin Marketing Order), with 7 C.F.R Parts 930 (Tart Cherry Marketing Order), 981 (Almond Marketing Order), 984 (Walnut Marketing Order), 985 (Spearmint Oil Marketing Order), 993 (Prune Marketing Order).
Marketing orders for agricultural products have been controversial, and considerable litigation has recently arisen about them. Recently, the raisin marketing orders have been a focal point for such litigation. In 2005, the Federal Circuit decided Lion Raisins III,
STANDARD FOR DECISION
“Dismissal of a complaint under RCFC 12(b)(6) is appropriate when the plaintiff can prove no set of facts that would warrant the requested relief, when drawing all well-pleaded factual inferences in favor of the complainant.” Levine v. United States,
ANALYSIS
A. The Federal Government’s Power to Regulate Interstate Commerce
Plaintiffs’ takings claims are intertwined with the question of what power the federal government possesses to regulate the raisin industry. Pis.’ Sur-Reply Br. Opposing Def.’s Mot. to Dismiss If 5. Plaintiffs claim that they have only three options for disposing of their raisins: (1) preparing the raisins for sale to the public, thereby subjecting themselves to the marketing order as handlers; (2) selling the raisins to handlers, again subjecting themselves to the marketing order; or (3) consuming all of the raisins on their farms. Id. For all practical purposes, plaintiffs claim, they cannot sell raisins without the government gaining title to and control over a fixed portion as “reserve tonnage” raisins. See id.; Compl. 111146-47.
Under the Commerce Clause of the Constitution, Congress may regulate the channels of interstate commerce, the instrumen-talities of interstate commerce, and persons or things in interstate commerce, including
Illustrative of Congress’s power to regulate intrastate activity—and in particular intrastate agricultural activity—is the Depression-era decision in Wickard v. Filbum,
But even if [Fillbum’s] activity be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstatе commerce and this irrespective of whether such effect is what might at some earlier time have been defined as ‘direct’ or ‘indirect.’
Id. at 125,
Filbum had been partially foreshadowed by the Supreme Court’s decision in United States v. Rock Royal Co-Op., Inc.,
Congress’s power to regulate the raisin industry in the manner prescribed by the Agricultural Marketing Act is gоverned by Filbum. Nonetheless, Congress’s power to act under the Commerce Clause does not immunize the federal government from a takings claim under the Fifth Amendment. The Commerce Clause, just as the War Power, may well provide the underpinnings for a taking, but the Supreme Court has explicitly stated that there is no “blanket exception to the Takings Clause whenever Congress exercises its Commerce Clause authority.” Kaiser Aetna v. United States,
B. The Scope of the Raisin Marketing Order and Other Such Orders
The scope of the raisin marketing order is remarkable, but in many ways is typical of other marketing orders. Marketing orders for other agricultural products also employ a variation of the reserve pool mechanism used in the raisin marketing order. See, e.g., 7 C.F.R §§ 930.55-57 (tart cherries), 981.50-.58 (almonds), 984.54-.56 (walnuts), 985.57 (spearmint oil), 993.56-.65 (prunes). Some marketing orders simply require the handler to hold the reserve portion in his or her possession, see, e.g., 7 C.F.R. § 984.54(b) (requiring a walnut handler to hold reserve walnuts “in his possessiоn or under his control”), while one requires an industry committee, under certain circumstances, to hold the reserves on behalf of individual producers. 7 C.F.R. § 985.57(a) (“The Committee shall store reserve [spearmint] oil for the account of the producer.”). Most marketing orders give the industry committee that is acting as the government’s agent a plenary power to sell or dispose of the reserves, see 7 C.F.R. §§ 981.66(a) (almonds), 984.56(a) (walnuts), 989.67(a) (raisins), 993.65(a) (prunes), but such orders also give either handlers or producers a proportional interest in the net proeeeds from any reserve sales. 7 C.F.R. §§ 981.66(e) (almonds), 984.56(e) (walnuts), 989.66(h) (raisins), 993.65(e) (prunes).
In addition to the raisin marketing order, two other marketing orders as a practical matter effect a shift in beneficial ownership somewhat аkin to the direct transfer of title of which plaintiffs in this case complain. An almond handler must “at all times, hold in his possession or under his control, in proper storage for the account of the Board, the quantity of almonds necessary to meet his reserve obligation.” 7 C.F.R. § 981.52 (emphasis added). Nonetheless, handlers do have the option of selling their reserve almonds in non-competitive markets, subject to conditions set by the Board. 7 C.F.R. § 981.67; see also Cal-Almond, Inc. v. United States, 30 Fed.Cl. 244, 245 (1994), aff'd,
Under the marketing order for prunes, handlers are required “at all times, [to] hold, in [their] possession or under [their] control, in propеr storage for the account of the committee, free and clear of all liens, the quantity of prunes necessary to meet [their] reserve obligation.” 7 C.F.R. § 993.57 (emphasis added). Nonetheless, prune handlers are not required to effect a physical separation of reserve prunes from “salable” prunes. 7 C.F.R. §§ 993.57, 993.54; see Prune Bargaining Assoc. v. Butz,
C. Plaintiffs’ Takings Claim
1. Fifth Amendment takings principles.
Thе Takings Clause of the Fifth Amendment provides that “private property [shall not] be taken for public use, without just compensation.” The Takings Clause “was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States,
Physical takings are compensable, see Loretto v. Teleprompter Manhattan CATV Corp.,
2. Plaintiffs’ property interest in their raisins.
Plaintiffs contend that this is a physical, not a regulatory, takings case, primarily because the raisin producers must give up title to the reserve raisins to the RAC in connection with the producers’ sale of free-tonnage raisins to handlers. See Pis. Opp. to Def.’s Mot. to Dismiss (“Pis.’ Opp.”) at 5-8. The government resists any finding of a taking of a property interest, contending that plaintiffs’ participation in the raisin production business is purely voluntary, as is their marketing of raisins. Def.’s Reply at 2. As the government would have it, “the reserve pool mechanism [established by the raisin marketing order] is the price of entering that market.” Id.
Plaintiffs claim that the raisin marketing order leaves raisin growers in an untenable position—they must subjeсt themselves to an involuntary transfer of a portion of the raisins they grow, let their raisins rot in their fields, or eat all of their raisins. Compl. Pis.’ Sur-Reply Br. Opposing Def.’s Mot. to Dismiss U 5. Plaintiffs also complain that their equity interest in the net proceeds from the “reserve tonnage” raisins has become worthless for practical purposes. Compl. K 45.
Here, under California law, plaintiffs unquestionably had title to their raisins grown in their fields. See Cal. Rev. & Tax Code § 6016 (“ ‘Tangible personal property’ means personal property which may be seen, weighed, measured, felt, or touched, or which is in any other manner perceptible to the senses.”).
Plaintiffs argue that the transfer of reserve-tonnage raisins in connection with the sale of free-tonnage raisins to the handlers was involuntary—that once plaintiffs decided to grow raisins, there was no escape from the raisin marketing order, plaintiffs had no ability to opt out, and the result was a per se taking. See Pis.’ Sur-Reply Br. Opposing Def.’s Mot. to Dismiss f 5. This contention is unavailing. Although the RAC gains title to some of the raisins that plaintiffs grow, the transfer does not have the same consequences as, for example, entry by governmental officials upon their land for purposes of confiscating their raisins would have. There is no physical invasion of property, see Loretto,
In the circumstances at hand, if plaintiffs have a takings claim, it would relate to their property interest, equitable in nature, in the net proceeds from the disposition of the “reserve tonnage” raisins. 7 U.S.C. § 608e(6)(E); 7 C.F.R. § 989.66(h). In this case, however, plaintiffs have put forward no explicit claim as to this property interest, and the court will not consider that such a claim has been made by implication from plaintiffs’ contention that their equitable interest has in recent years proven to be worthless or nearly so. Among other things, such a claim would have to be limned with particularity, and there appear to be at least four conceptually possible avenues for plaintiffs to pursue vindication of their property rights in the equity pool.
First, plaintiffs could make a regulatory takings claim, arguing that the RAC, by returning only meager pool proceeds to plaintiffs, effected a taking. See Cienega Gardens v. United States,
Second, plaintiffs might petition the Secretary of Agriculture for an administrative remedy. As producers, plaintiffs are specifically excluded from the Agricultural Marketing Act’s scope, 7 U.S.C. § 608c(13)(B), and administrative remedies are limited to handlers. 7 U.S.C. § 608c(15). Plaintiffs claim, Hr’g Tr. 64: 7-14 (Nov. 21, 2006), and the government concedes, Def.’s Resp. to Pis.’ Post-argument Submissions of Additional Authoritiеs at the Court’s Request at 1, that producers have no remedy under the Agricultural Marketing Act. In administrative proceedings, the Secretary has adhered to this interpretation of the statute. See, e.g., In re Kent Cheese Co.,
Third, plaintiffs could file suit in federal district court, alleging that the Secretary or the RAC has violated the Agricultural Marketing Act, the raisin marketing order, or the associated regulations. As producers, plaintiffs might qualify for the narrow exception to the general rule that handlers must exhaust their administrativе remedies under the Agricultural Marketing Act. See Stark v. Wickard,
When ... definite personal rights are created by federal statute, ... the silence of Congress as to judicial review is, at any rate in the absence of an administrative remedy, not to be construed as a denial of authority to the aggrieved person to seek appropriate relief in the federal courts in the exercise of their general jurisdiction.
Stark
Fourth, plaintiffs might claim they were subject to an illegal exaction. The species of claim known as an illegal exaction has several variations. A plaintiff may sue for a sum “improperly exacted or retained” in violation of the Constitution, a statute, or a regulation. United States v. Testan,
Any of these reserve-pool claims would reach well beyond the scope of the сhallenged complaint. In short, the producer plaintiffs have made no claims as to the one affected property interest that results from their growing and marketing activities—then-equity interest in the reserve pool. Accordingly, they have not stated a claim upon which relief can be granted under RCFC 12(b)(6).
CONCLUSION
For the reasons set forth, the government’s motion to dismiss under RCFC 12(b)(6) is GRANTED. The Clerk shall enter judgment accordingly. No costs.
It is so ORDERED.
Notes
. The recitations that follow do not constitute findings of fact by the court. Rather, the recited factual elements are taken from the parties' pleadings and other filings and are either undisputed or are alleged and assumed to be true for purposes of the pending motion.
. Section 8c of the Agricultural Marketing Act, 7 U.S.C. § 608c, the key statutory provision dealing with the marketing orders, originated in a 1935 amendment to the Agricultural Adjustment Act of 1933, Pub.L. No. 73-10, 48 Stat. 31. See Act of Aug. 24, 1935, Pub.L. No. 74-320, § 5, 49 Stat. 750, 753-61. The Agricultural Marketing Act reenacted much of the Agricultural Adjustment Act, including Section 8c. See Agricultural Marketing Act, § 1(e),
. References to the raisin marketing order and to other USDA regulations are to those revised as of January 1, 2006, unless otherwise noted.
. The raisin crop year runs from August 1 of a given year until July 31 of the next year. See 7 C.F.R. § 989.21.
. A producer is "any person engaged in a proprietary capacity in the production of grapes which are sun-dried or dehydrated by artificial means until they become raisins.” 7 C.F.R. § 989.11.
. A handler is "(a) [a]ny processor or packer; (b) any person who places, ships, or continues natural condition raisins in the current of commerce from within thе area to any point outside thereof; (c) any person who delivers off-grade raisins, other failing raisins or raisin residual material to other than a packer or other than into any eligible non-normal outlet; or (d) any person who blends raisins [subject to certain exceptions].” 7 C.F.R. § 989.15. A processor is any person who receives raisins and uses them in California to make a product other than raisins for marketing or distribution. 7 C.F.R. § 989.13. A packer is "any person who, [in California], stems, sorts, cleans, or seeds raisins, grades stemmed raisins, or packages raisins for market as raisins,” but does not include a producer who sorts and cleans unstemmed raisins. 7 C.F.R. § 989.14.
. The RAC may dispose of "reserve tonnage” raisins in non-competitive markets by sale to handlers serving specified оutlets or for resale to exporters for sales abroad, by direct sale to the United States or foreign governments, by gift, or by any other means consistent with 7 U.S.C. § 608c. 7 C.F.R. § 989.67(b). Plaintiffs allege that proceeds from "reserve tonnage” raisins are used to subsidize raisin packers’ exports and school lunch programs, as well as to fund more than half of the RAC’s budget. Compl. VV 37, 44.
. The price handlers pay producers for "free tonnage” raisins is negotiated privately by handlers’ and packers’ bargaining associations. See Lion Raisins III,
. Pursuant to 7 C.F.R. § 993.90(a), the handling requirements for the marketing order for prunes were suspended indefinitely by the Secretary in August 2005. See Dried Prunes Produced in California; Suspension of Handling and Reporting Requirements, 70 Fed.Reg. 50,153 (Aug. 26, 2005); see also Dried Prunes Produced in California; Suspension of Handling and Reporting Requirements, 70 Fed.Reg. 30,610 (May 27, 2005).
. To the same effect, the D.C. Circuit recently ruled in Edaleen Dairy, LLC v. Johanns,
. Under the Tucker Act, 28 U.S.C. § 1491(a), this court possesses subject matter jurisdiction of a takings claim against the United States. See Preseault v. Interstate Commerce Comm’n,
. In Rock Royal, the оperation of the Agricultural Marketing Act was upheld in the context of a milk marketing order, in the face of Fifth Amendment due process and takings contentions advanced as defenses to an enforcement action. See Rock Royal,
. Based solely on the regulatory language, the marketing orders for almonds, walnuts, and prunes explicitly include within the definition of a handler intrastate attempts by producers to market their crops. See 7 C.F.R. §§ 981.11, 981.13, 981.16 (handler includes any person who "put[s] almonds ... into any channel of trade for human consumption ... within [California]”); 7 C. F.R. §§ 984.4, 984.13, 984.14 (handler includes any person who "put[s] walnuts ... in the current of commerce within [California]"); 7 C.F.R. §§ 993.4, 993.13, 993.14 (handler in-eludes any person who "place[s] prunes in the current of the commerce within [California]"). The definition of a raisin handler, at least on its face, covers interstate efforts by producers to market their crops. 7 C.F.R. §§ 989.4, 989.15 (handler includes "any person who places ... raisins in the current of commerce from within [California] to any point outside thereof”) (emphasis added). Plaintiffs' complaint avers that the raisin marketing order, in practice, regulates even purely intrastate activity. See Compl.
. In this respect, the government overstates the holding in Wallace. In Wallace, the majority opinion for a panel that divided 2 to 1, stated that "even if the [walnut packer] were able to show (which it has not done) that the only alternative to making delivery to the Control Board of surplus [i.e., reserve] walnuts ... would be to go out of business,” case law would support upholding the walnut marketing order. Wallace,
. This definition of "tangible personal property” applies for tax purposes, not for California law generally, see Filmservice Labs., Inc. v. Harvey Bernhard Enters., Inc.,
. However harsh the consequences of the raisin marketing order, the consequences attendant to marketing raisins were known in advance. Although the transfer of title to the reserve raisins to the RAC cannot be considered as “voluntary” in the sense that it was a desired outcome of intended action, neither was it an unexpected result of such action. See Carruth,
. Because the "free” and "reserve” percentages vary from crop year to crop year, see Compl. H 34, and in some years there may be no reserve at all, plaintiffs would have difficulty posing generic, facial claims about their equitable interest in the reserve pool. See, e.g., id. 1134.6 (no reserve for crop year 2004-05).
. Although ''[t]he Court of Federal Claims ordinarily lacks jurisdiction over due process claims under the Tucker Act, 28 U.S.C. § 1491, ... [it] has been held to have jurisdiction over illegal exaction claims 'when the exaction is based upon an asserted statutory power.’ ” Norman,