There is no dispute that the classic taking is one in which the Government directly appropriates private property for its own use. Nor is there any dispute that, in the case of real property, such an appropriation is a per se taking that requires just compensation. Nothing in the text or history of the Takings Clause, or United States Supreme Court precedents, suggests that the rule is any different when it comes to appropriation of personal property. The government has a categorical duty to pay just compensation when it takes your car, just as when it takes your home.
In 1949 the U.S. Department of Agriculture implemented the Marketing Order Regulating the Handling of Raisins Produced from Grapes Grown in California (Marketing Order). The Marketing Order authorized the federal government to reserve a percentage of the yearly California raisin crop to stabilize the supply, and thus the price, of California raisins. Under the Marketing Order, farmers are entitled to a share of the proceeds acquired when, or if, the government sells the reserved raisins.
Marvin Horne processed his own raisins in an attempt to avoid the order. He claimed that his raisins were exempt from the reserve requirement. The Department of Agriculture claims that Horne's raisins were still subject to the order.
Horne sued and claimed that the order violated his Fifth Amendment rights against uncompensated takings. The district court found in favor of the Department of Agriculture. The appellate court held that it lacked standing. The Supreme Court held that the appellate court did have standing and remanded.
On remand, the appellate court found for the Department of Agriculture by holding that the reserve requirement did not act as a per se taking because Horne's raisins constituted personal property rather than real property. The appellate court also held that the Marketing Order did not constitute a taking because there was a sufficient nexus, and rough proportionality, between the reserve requirement and the specific interest the government seeks to protect, which in this case is the government's interest in stabilizing raisin prices.
1. Does the Takings Clause of the Fifth Amendment only apply to real property?
2. Can the government avoid the duty to pay just compensation for the physical taking of property by reserving the property owner a contingent interest in the value of the property?
3. Does a per se taking occur when the government mandates the relinquishment of specific, identifiable property as a condition of permission to engage in commerce?
1. No 2. No 3. Yes
1. The Court held that the Takings Clause of the Fifth Amendment applies equally to personal as well as real property. Because of this, the Marketing Order’s reserve requirement constituted a taking under the Fifth Amendment because it deprives the owners of their property rights to “possess, use, and dispose of” the raisins.
2. Because a physical taking had occurred, returning the net proceeds of the sale of the raisins to the owners does not exempt the government from paying just compensation for the taking itself.
3. The Court also held that making the reserve requirement a condition on legally participating in the raisin market effects a per se taking because it cannot be properly characterized as a voluntary exchange for a governmental benefit. Because of this, the government should pay a just compensation for the taking, which the government has already calculated in its attempt to fine the Hornes the fair market value of the raisins at issue, by rescinding the fine it had imposed.