Court rules against Calif. raisin farmer’s complaint with USDA

McClatchy Washington BureauMay 15, 2014 

— A dissident Fresno-area raisin farmer who took his complaints all the way to the U.S. Supreme Court has lost his challenge to a crucial part of the system that governs his industry.

In a unanimous decision, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit rejected farmer Marvin D. Horne’s argument that a “set-aside” requirement amounted to an unconstitutional taking of his property. Under the decades-old program, raisin handlers can be required to give a portion of their crop to an industry reserve.

“While the Hornes’ impatience with a regulatory program they view to be out-dated and perhaps disadvantageous to smaller agricultural firms is understandable, the courts are not well-positioned to effect the change the Hornes seek,” Judge Michael Daly Hawkins wrote.

Hawkins, nominated to the bench by President Bill Clinton, added that Horne’s putative goal of a “restructuring of the way government regulates raisin production” can only be accomplished by Congress, not the courts.

The 29-page ruling, quietly issued last Friday, diminished what had been a notable, if technical, Supreme Court victory by Horne and his allies last year.

The Supreme Court, in its unanimous decision authored by conservative Justice Clarence Thomas, had allowed Horne to make the takings argument in the first place. That, however, was only a procedural green light. In the latest decision, the lower appellate court considered the takings argument and then rejected it.

“The Hornes can avoid the reserve requirement of the marketing order by...planting different crops, including other types of raisins, not subject to this marketing order or selling their grapes without drying them into raisins,” Hawkins reasoned.

Barry Kriebel, president of Sun-Maid Growers, which supports the marketing order, said in an interview Thursday that “we’re pleased” with the court’s ruling. At the same time, Kriebel added that the reserve requirement to which Horne objected hasn’t been used in the last four years.

“The industry has changed a lot of its practices,” Kriebel said. “We’ve moved closer to the 21st century.”

A federal marketing order has governed the raisin industry since 1949. Concentrated in California’s sunny San Joaquin Valley, raisin production spanned more than 200,000 acres and reached a value of over $725 million in 2012.

The marketing order regulates handlers, who pack and process the raisins. Among other provisions, the order requires that handlers may have to withhold some of their crop for a “reserve tonnage” managed by the Fresno-based Raisin Administrative Committee. The set-aside raisins may be sold for purposes such as the National School Lunch program

Raisin handlers set aside 47 percent of their crop during the 2002-03 season and 30 percent for 2003-04, but they were paid for only part of what they surrendered.

Horne, in protest, had helped organize about 60 other growers into the Raisin Valley Farms Marketing Association, which took care of the packing. By identifying themselves as producers rather than handlers, the group’s members reasoned, they were exempt from the set-aside requirement.

The Obama administration termed this a “scheme” and the Agriculture Department subsequently ordered Horne and his coalition to pay more than $650,000 in fees and penalties. USDA further insisted that Horne raise his Fifth Amendment takings argument in the specialized U.S. Court of Federal Claims, after first paying a fine or turning over the required portion of his crop.

Horne’s 2013 Supreme Court victory enabled him to make his taking challenge in a conventional civil lawsuit. The Fifth Amendment prohibits the taking of private property for public use without just compensation.

“The (Agriculture) Secretary did not authorize a forced seizure of the Hornes’ crops, but rather imposed a condition on the Hornes’ use of their crops by regulating their sale,” Hawkins wrote.

Email: mdoyle@mcclatchydc.com; Twitter: @MichaelDoyle10.

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