Oral Arguments in Horne v. USDA

A few weeks ago, I wrote about an interesting takings case the Supreme Court was set to hear this term, Horne v. USDA. The Court heard oral arguments in this case on April 22, so this is the promised update now that I’ve had time to go through the transcript.

The short version of the story is: things don’t look good for the government.

Orals got underway with arguments from Michael McConnell, a renowned constitutional law scholar, who represented the Hornes. McConnell laid out the basics of the Hornes’ position – which is, essentially, that taking raisins from farmers is still a taking as far as the Constitution is concerned, even though raisins are personal, as opposed to real, property.

Several justices questioned McConnell’s claim that this case should be considered a per se taking as opposed to a regulatory taking. Justice Kagan asked several pointed questions about the limits of the Hornes’ claim: that is, what other sorts of government requirements might a ruling in their favor affect? Kagan asks “So how about just programs where the government says, give us – produce records for us. I’m sure that there are a lot of programs like that in the world. And there is something intuitive about your saying, well, the government is asking us to turn over stuff. …How would that fare under your argument?”

McConnell responded by drawing attention to an important distinction: in records (Kagan’s example), the value is not in the documents themselves, but in the information they contain – and in most cases, the individual forced to turn those records over does not herself lose that value (i.e. she does not lose the information). Thus McConnell implicitly argues that it is not the deprivation of a possessory interest that makes a taking, but rather the deprivation of the value of that possessory interest. These sorts of arguments are common – and often quite strong – in the world of regulatory takings, but are less common in physical takings cases, like this one.

Deputy Solicitor General Edwin Kneedler argued for the government. Kneedler didn’t even get through his opening remarks before Justice Scalia interjected “These plaintiffs are ingrates, right? You’re – you’re – you’re really helping them?” And Kneedler barely defended the claim that raisin farmers benefit from the program. This seems a strange move, as Kneedler emphasized that there is no taking in this case because the premise of the program is to benefit those farmers. That is, he argued no taking occurred because the program was intended to benefit raisin farmers – but he did not argue that the program actually benefits those farmers. Several of the justices appeared to be quite skeptical of these claims.

The justices pointed out that even if the property owners do in fact benefit from the program, that does not change the reality that a taking has occurred in the first place. Justice Alito, for example, argued that the government’s logic suggests that no taking when government takes personal property for any purpose which might potentially benefit the owner in some (conceivable) way: Alito asked “Could the government say to a manufacturer of cellphones, you can sell cellphones; however, every fifth one you have to give to us? Or a manufacturer of cars, you can sell cars in the United States, but every third car you have to give to the ­­ to the United States.”

A few minutes later, Justice Sotomayor weighed in, stating that she wondered, “like Justice Alito, about his every fifth telephone or whatever. Every fifth car or every fifth telephone you have to give to the government. You – I don’t know you’ve answered that question. Is that a taking or isn’t it?” Kneedler continued to evade the direct question, and continued to irk the justices in so doing.

Parts of Kneedler’s arguments were – to me at least – almost comical. He repeatedly stated the government’s position that this was not a taking though he did “concede that the government gets legal title.” At another point, he argued this was not taking, but just part of a comprehensive regulatory scheme. He then argued that the regulatory scheme was not a historical anomaly (as Chief Justice Roberts and Justice Kagan suggested), but in the next breath acknowledged that no other programs actively “reserve” (i.e. take) commodities. [I’m not the only one who found some of Kneedler’s problems amusing — laughter at some of the government’s claims are noted in the transcript, and has been discussed by other Court watchers.]

Perhaps the oddest argument Kneedler made in defending the Raisin Administrative Committee, was that “this is not a taking to begin with because the – the grower voluntarily submits the total amount of raisins to the handler” and the handler then hands over the required portion to the government [emphasis mine]. But recall from my earlier post on this case – the Act requires growers to turn over their crop – there is nothing voluntary about the program.

All told, Justices Breyer, Kagan, and Sotomayor, along with the Court’s five more conservative members, expressed considerable concern with government’s arguments. (If I had to bet, I would say that the final vote on the case will be 8-1 in favor of the Hornes with Justice Ginsburg dissenting—though I admit a 9-0 decision would not surprise me). The Court would most likely hold that this was indeed a taking, and then remand the case to a lower court to determine how much compensation would be owed.

If I’m right, the case on remand would be interesting in its own right, as the government argued repeatedly that the (alleged) benefits of the program to farmers amount to in-kind compensation, which might reduce any eventual cash compensation found to be due.

For those interested, you can read the full transcript of the oral arguments here.

Takings in the Early 20th Century

This week we return to our series on the development of the law of physical takings. After our discussions on the 14th Amendment and Chicago, Burlington & Quincy Railroad Corp. v. City of Chicago, we are fairly caught up to the beginning of the modern era of Supreme Court doctrine on physical takings.

Recall that after CB&Q RR v. Chicago, the Takings Clause of the Fifth Amendment was held to bind state and local governments (it was “incorporated” against the states via the 14th Amendment). In that case, the Court decided that “due process” required substantively just outcomes, not just observance of legalistic procedures. Since then, the main stream of the Court’s physical taking doctrine has concerned another question.

At this point, another reminder is due: The Fifth Amendment states, “nor shall private property be taken for public use, without just compensation.” That is, it states that no property can be taken by the government, except for public use (that is, it cannot take property for private use). Further, it states that when government must take property for public use, it must compensate the owner for the taken property. Thus, after CB&Q RR v. Chicago these precepts bind the states (and by extension, local governments) as well as the federal government.

The text of the Fifth Amendment is fairly straightforward (unless you ask a lawyer, of course). As a result, there has been relatively little litigation on the Fifth Amendment, compared to the sexier amendments – especially the First (people seem to get much more excited about free speech and religion than government confiscation of property – at least until someone threatens their property!). The mainstream of the Supreme Court’s Takings doctrine since 1897 has concerned the meaning of “public use” – yes, lawyers consider that contestable. That is, the Court has sought to define what sorts of things count as “public uses” for which property can be taken from individuals.

For much of American history, public use was understood to mean actual use by the public. Land could be taken for things such as public roads, bridges, schools – that is, things that the public actually uses. Eminent domain was later used to gain lands and easements for railroads, which were private but heavily regulated by government due to their being “affected with public interest.” Over time, governments pushed at the limits of what “public use” might mean. This development continues today, but we’ll start with the beginning of modern public use doctrine.

Rindge Company et al. v. County of Los Angeles

In this case the County of Los Angeles used eminent domain to acquire property from a number of individuals and corporations in order to build a highway. Several of these property owners sued the county, alleging that the taking unlawfully deprived them of their property in violation of the 14th Amendment (recall that because of the way incorporation works, alleged rights violations by state or local governments fall under the 14th Amendment).

Justice Sanford, writing for the Court, argued that “The nature of a use, whether public or private, is ultimately a judicial question. However, the determination of this question is influenced by local conditions.” Still the Supreme Court held that “a taking of property for a highway is a taking for public use has been universally recognized, from time immemorial” so consideration of local conditions in this case is not terribly pressing. The owners in fact concede that taking for a genuine highway is a public use. Their argument is that the highway in question is not an actual highway, but rather a segment that does not constitute a road of necessity or convenience for the general public (that is, they are arguing that the road doesn’t really connect two places in the conventional sense). Importantly though, the Court held that “It is not essential that the entire community, nor even any considerable portion, should directly enjoy or participate in any improvement in order to constitute a public use.” That is, the Court held that entire public does not have to use the road (or any other public work) to satisfy the public use requirement, and implies that the work has only to be open to the public for their use. And further, since roads are frequently built in pieces, the seemingly incomplete nature of the road to be built does not render the taking invalid.

Very importantly, the Court also discusses the necessity of any given taking. Sutherland writes “The necessity for appropriating private property for public use is not a judicial question. This power resides in the legislature, and may either be exercised by the legislature or delegated by it to public officers.” That is, the Court will not second guess a legislatures’ decision to use eminent domain as opposed to some other theoretical method of obtaining property. [Put differently, the Court will not hear cases in which individuals allege that it is inappropriate to use eminent domain because some other less injurious method was available to the government.]

In summary, the Supreme Court here held that the determination of Public Use is a judicial question, but that Public Necessity is a legislative question. Thus, future challenges to uses of eminent domain will center on the uses to which legislatures want to put expropriated property. The case of Rindge Co. v. Los Angeles is important because it establishes in very clear language that the Public Use does not require that the entire public actually use that property to satisfy the Constitution. This holding will be very important in the future development of the Court’s Takings Doctrine.