HORNE ET AL. v. DEPARTMENT OF AGRICULTURE
No. 12-123
SUPREME COURT OF THE UNITED STATES
June 10, 2013
569 U.S. ___ (2013)
THOMAS, J.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT; Argued March 20, 2013
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
Syllabus
HORNE ET AL. v. DEPARTMENT OF AGRICULTURE
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
No. 12-123. Argued March 20, 2013—Decided June 10, 2013
The Agricultural Marketing Agreement Act of 1937 (AMAA), which was enacted to stabilize prices for agricultural commodities, regulates only “handlers,” i.e., “processors, associations of producers, and others engaged in the handling” of covered agricultural commodities,
Petitioners, California raisin growers, started a business that processed more than 3 million pounds of raisins from their farm and 60 other farms during the two crop years. When they refused to surrender the requisite portions of raisins to the reserve, the United States Department of Agriculture (USDA) began administrative proceedings, alleging that petitioners were handlers who were required to retain raisins in reserve and pay assessments. Petitioners countered that as producers, they were not subject to the Order. They also raised an affirmative defense that the Order violated the Fifth Amendment‘s prohibition against taking property without just compensation. An Administrative Law Judge found that petitioners were handlers, found that they had violated the AMAA and the Marketing Order, and rejected their takings defense. On appeal, a judicial officer agreed that petitioners were handlers who had violated the
Held: The Ninth Circuit has jurisdiction to decide petitioners’ takings claim. Pp. 9–15.
(a) That court incorrectly determined that petitioners brought their takings claim as producers rather than handlers. Petitioners argued that they were producers—and thus not subject to the AMAA or the Marketing Order—but both the USDA and the District Court concluded that they were handlers. And the fines and civil penalties for failure to reserve raisins were levied on them in that capacity. Because the Marketing Order imposes duties on petitioners only in their capacity as handlers, their takings claim raised as a defense against those duties is necessarily raised in that same capacity. In finding otherwise, the Ninth Circuit confused petitioners’ statutory argument that they were producers with their constitutional argument that, assuming they were handlers, their fine violated the Fifth Amendment. The relevant question is whether a federal court has jurisdiction to adjudicate a takings defense raised by a handler seeking review of a final agency order. Pp. 9–10.
(b) The Government‘s claim that petitioners’ takings-based defense was rightly dismissed on ripeness grounds is unpersuasive, and its reliance on Williamson County Regional Planning Comm‘n v. Hamilton Bank of Johnson City, 473 U. S. 172, is misplaced. There, a plaintiff‘s claim that a zoning decision effected a taking without just compensation was not ripe. But the claim failed because the plaintiff could not show that it had been injured by the Government‘s action when there had been no final decision. Here, petitioners were subject to a final agency order imposing concrete fines and penalties. The takings claim in Williamson County was also not yet ripe because the plaintiff had not sought “compensation through the procedures [provided by] the State.” Id., at 194. The Government argues that petitioners’ takings claim is premature because the Tucker Act affords a remedy, but, in fact, the AMAA provides a comprehensive remedial
(c) A takings-based defense may be raised by a handler in the context of an enforcement proceeding initiated by the USDA under
673 F. 3d 1071, reversed and remanded.
THOMAS, J., delivered the opinion for a unanimous Court.
NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
No. 12-123
MARVIN D. HORNE, ET AL., PETITIONERS v. DEPARTMENT OF AGRICULTURE
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
[June 10, 2013]
JUSTICE THOMAS delivered the opinion of the Court.
Under the Agricultural Marketing Agreement Act of 1937 (AMAA) and the California Raisin Marketing Order (Marketing Order or Order) promulgated by the Secretary of Agriculture, raisin growers are frequently required to turn over a percentage of their crop to the Federal Government. The AMAA and the Marketing Order were adopted to stabilize prices by limiting the supply of raisins on the market. Petitioners are California raisin growers who believe that this regulatory scheme violates the Fifth Amendment. After petitioners refused to surrender the requisite portion of their raisins, the United States Department of Agriculture (USDA) began administrative proceedings against petitioners that led to the imposition of more than $650,000 in fines and civil penalties. Petitioners sought judicial review, claiming that the monetary sanctions were an unconstitutional taking of private property without just compensation. The Ninth Circuit held that petitioners were required to bring their takings claim in the Court of Federal Claims and that it therefore lacked jurisdiction to review petitioners’ claim. We disagree.
I
A
Congress enacted the AMAA during the Great Depression in an effort to insulate farmers from competitive market forces that it believed caused “unreasonable fluctuations in supplies and prices.” Ch. 296, 50 Stat. 246, as amended,
The AMAA does not directly regulate the “producer[s]” who grow agricultural commodities,
The Secretary promulgated a marketing order for Cali-
The Marketing Order also established the Raisin Administrative Committee (RAC), which consists of 47 members, with 35 representing producers, ten representing handlers, one representing the cooperative bargaining associations, and one member of the public. See §989.26. The Marketing Order authorizes the RAC to recommend setting up annual reserve pools of raisins that are not to be sold on the open domestic market. See
Under the Marketing Order‘s reserve requirements, a producer is only paid for the free-tonnage raisins. §989.65. The reserve-tonnage raisins, on the other hand, must be held by the handler in segregated bins “for the account” of the RAC. §989.66(f). The RAC may then sell the reserve-tonnage raisins to handlers for resale in overseas markets, or may alternatively direct that they be sold or given at no cost to secondary, noncompetitive domestic markets, such as school lunch programs. §989.67(b). The reserve pool sales proceeds are used to finance the RAC‘s administrative costs. §989.53(a). In the event that there are any remaining funds, the producers receive a pro rata share.
Handlers have other duties beyond managing the RAC‘s reserve pool. The Marketing Order requires them to file certain reports with the RAC, such as reports concerning the quantity of raisins that they hold or acquire. §989.73. They are also required to allow the RAC access to their premises, raisins, and business records to verify the accuracy of the handlers’ reports, §989.77, to obtain inspections of raisins acquired, §989.58(d), and to pay certain assessments, §989.80, which help cover the RAC‘s administrative costs. A handler who violates any provision of
B
Petitioners Marvin and Laura Horne have been producing raisins in two California counties (Fresno and Madera) since 1969. The Hornes do business as Raisin Valley Farms, a general partnership. For more than 30 years, the Hornes operated only as raisin producers. But, after becoming disillusioned with the AMAA regulatory scheme, they began looking for ways to avoid the mandatory reserve program.3 Since the AMAA applies only to handlers, the Hornes devised a plan to bring their raisins to market without going through a traditional handler. To this end, the Hornes entered into a partnership with Mrs. Horne‘s parents called Lassen Vineyards. In addition to its grape-growing activities, Lassen Vineyards purchased equipment to clean, stem, sort, and package the raisins from Raisin Valley Farms and Lassen Vineyards. It also contracted with more than 60 other raisin growers to clean, stem, sort, and, in some cases, box and stack their raisins for a fee. The Hornes’ facilities processed more
Although the USDA informed the Hornes in 2001 that their proposed operations made them “handlers” under the AMAA, the Hornes paid no assessments to the RAC during the 2002–2003 and 2003–2004 crop years. Nor did they set aside reserve-tonnage raisins from those produced and owned by the more than 60 other farmers who contracted with Lassen Vineyards for packing services. They also declined to arrange for RAC inspection of the raisins they received for processing, denied the RAC access to their records, and held none of their own raisins in reserve.
On April 1, 2004, the Administrator of the Agriculture Marketing Service (Administrator) initiated an enforcement action against the Hornes, Raisin Valley Farms, and Lassen Vineyards (petitioners). The complaint alleged that petitioners were “handlers” of California raisins during the 2002–2003 and 2003–2004 crop years. It also alleged that petitioners violated the AMAA and the Marketing Order by submitting inaccurate forms to the RAC and failing to hold inspections of incoming raisins, retain raisins in reserve, pay assessments, and allow access to their records. Petitioners denied the allegations, countering that they were not “handlers” and asserting that they did not acquire physical possession of the other producers’ raisins within the meaning of the regulations. Petitioners also raised several affirmative defenses, including a claim that the Marketing Order violated the Fifth Amendment‘s prohibition against taking property without just compensation.
An Administrative Law Judge (ALJ) concluded in 2006 that petitioners were handlers of raisins and thus subject to the Marketing Order. The ALJ also concluded that
Petitioners appealed to a judicial officer who, like the ALJ, also found that petitioners were handlers and that they had violated the Marketing Order. The judicial officer imposed $202,600 in civil penalties under
Petitioners filed a complaint in Federal District Court seeking judicial review of the USDA‘s decision. See
The Ninth Circuit affirmed. The court agreed that petitioners were “handlers” subject to the Marketing Order‘s provisions, and rejected petitioners’ argument that they were producers, and, thus exempt from regulation. 673 F. 3d 1071, 1078 (2012). The court did not resolve petitioners’ takings claim, however, because it concluded that that it lacked jurisdiction to do so. The court explained that “a takings claim against the federal government must be brought [in the Court of Federal Claims] in the first instance, ‘unless Congress has withdrawn the Tucker Act grant of jurisdiction in the relevant statute.‘” Id., at 1079 (quoting Eastern Enterprises v. Apfel, 524 U. S. 498, 520 (1998) (plurality opinion)). The court recognized that
We granted certiorari to determine whether the Ninth Circuit has jurisdiction to review petitioners’ takings claim. 568 U. S. ___ (2012).
II
A
The Ninth Circuit‘s jurisdictional ruling flowed from its determination that petitioners brought their takings claim as producers rather than handlers. This determination is not correct. Although petitioners argued that they were producers—and thus not subject to the AMAA or Marketing Order at all—both the USDA and the District Court concluded that petitioners were “handlers.” Accordingly, the civil penalty, assessment, and reimbursement for failure to reserve raisins were all levied on petitioners in their capacity as “handlers.” If petitioners’ argument that they were producers had prevailed, they would not have been subject to any of the monetary sanctions imposed on them. See
It is undisputed that the Marketing Order imposes duties on petitioners only in their capacity as handlers. As a result, any defense raised against those duties is necessarily raised in that same capacity. Petitioners argue that it would be unconstitutional for the Government to come on their land and confiscate raisins, or to confiscate the proceeds of raisin sales, without paying just compensation; and, that it is therefore unconstitutional to fine petitioners for not complying with the unconstitutional requirement.4 See Brief for Petitioners 54. Given that
The relevant question, then, is whether a federal court has jurisdiction to adjudicate a takings defense raised by a handler seeking review of a final agency order.
B
The Government argues that petitioners’ takings-based defense was rightly dismissed on ripeness grounds. Brief for Respondent 21–22. According to the Government, because a takings claim can be pursued later in the Court of Federal Claims, the Ninth Circuit correctly refused to adjudicate petitioners’ takings defense. In support of its position, the Government relies largely on Williamson County Regional Planning Comm‘n v. Hamilton Bank of
When the agency brought its enforcement action against petitioners, however, it did not seek to recover reserve-tonnage raisins from the 2002–2003 and 2003–2004 crop years. Rather, it sought monetary penalties and reimbursement. Petitioners could not argue in the face of such agency action that the Secretary was attempting to take raisins that had already been harvested and sold. Instead, petitioners argued that they could not be compelled to pay fines for refusing to accede to an unconstitutional taking.
First, we explained that the plaintiff‘s takings claim in Williamson County failed because the plaintiff could not show that it had been injured by the Government‘s action. Specifically, the plaintiff “ha[d] not yet obtained a final decision regarding the application of the zoning ordinance and subdivision regulations to its property.” Id., at 186. Here, by contrast, petitioners were subject to a final agency order imposing concrete fines and penalties at the time they sought judicial review under
Second, the Williamson County plaintiff‘s takings claim was not yet ripe because the plaintiff had not sought “compensation through the procedures the State ha[d] provided for doing so.” Id., at 194. We explained that “[i]f the government has provided an adequate process for obtaining compensation, and if resort to that process yields just compensation, then the property owner has no claim against the Government for a taking.” Id., at 194–195 (internal quotation marks and alteration omitted). Stated differently, a Fifth Amendment claim is premature until it is clear that the Government has both taken property and denied just compensation. Although we often refer to this consideration as “prudential ‘ripeness,‘” Lucas v. South Carolina Coastal Council, 505 U. S. 1003, 1013
Here, the Government argues that petitioners’ takings claim is premature because the Tucker Act affords “the requisite reasonable, certain, and adequate provision for obtaining just compensation that a property owner must pursue.” Brief for Respondent 22. In the Government‘s view, “[p]etitioners should have complied with the order, and, after a portion of their raisins were placed in reserve to be disposed of as directed by the RAC, . . . sought compensation as producers in the Court of Federal Claims for the alleged taking.” Id., at 24–25. We disagree with the Government‘s argument, however, because the AMAA provides a comprehensive remedial scheme that withdraws Tucker Act jurisdiction over a handler‘s takings claim. As a result, there is no alternative “reasonable, certain, and adequate” remedial scheme through which petitioners (as handlers) must proceed before obtaining review of their claim under the AMAA.7
The Court of Federal Claims has jurisdiction over Tucker Act claims “founded either upon the Constitution, or any Act of Congress or any regulation of an executive department.”
Under the AMAA‘s comprehensive remedial scheme, handlers may challenge the content, applicability, and enforcement of marketing orders. Pursuant to
C
Although petitioners’ claim was not “premature” for Tucker Act purposes, the question remains whether a takings-based defense may be raised by a handler in the context of an enforcement proceeding initiated by the USDA under
In the case of an administrative enforcement proceeding, when a party raises a constitutional defense to an assessed fine, it would make little sense to require the party to pay the fine in one proceeding and then turn around and sue for recovery of that same money in another proceeding. See Eastern Enterprises, supra, at 520. We see no indication that Congress intended this result for handlers subject to enforcement proceedings under the AMAA. Petitioners were therefore free to raise their takings-based defense before the USDA. And, because
III
The Ninth Circuit has jurisdiction to decide whether the USDA‘s imposition of fines and civil penalties on petitioners, in their capacity as handlers, violated the Fifth Amendment. The judgment of the Ninth Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.