Raisin d'Être: Court to Consider California Raisin Marketing - U.S. Supreme Court
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Raisin d'Être: Court to Consider California Raisin Marketing

Raisins are sometimes known as nature's candy, but they're unlikely to be called free-market fodder. The healthy snack is a "heavily regulated" agricultural commodity under the Agricultural Marketing Agreement Act (AMAA) of 1937. Not that everyone is on board with such regulation.

The Supreme Court will consider a federal foray into raisin price-stabilization this term. On Tuesday, the Court granted certiorari in Horne, et al., v. U.S. Department of Agriculture.

Under the AMAA, the federal government attempts to stabilize raisin prices by taking some of the annual crop of California raisins off the market. A packer or processor may buy raisins from the growers for the part of an annual yield that can be marketed, but the part ordered to be withheld must be kept in reserve. The "reserve tonnage" amounts can be sold in markets where competition does not exist, such as school-lunch programs, SCOTUSblog reports.

Farmers Marvin and Laura Horne challenged USDA civil penalties and assessments for non-compliance with the raisin reserve requirements during the early 2000s. The Hornes argued that they weren't bound by the reserve requirement because they were only raisin "producers," not handlers, and because the reserve requirement constituted a taking under the Fifth Amendment.

Last year, the Ninth Circuit Court of Appeals upheld the civil assessments and the constitutionality of the regulatory scheme.

Now the Supreme Court has agreed to address two issues in the case:

  1. Whether the Ninth Circuit erred in holding -- contrary to the decisions of five sister circuits -- that a party may not raise the Takings Clause as a defense to a "direct transfer of funds mandated by the Government," but instead must pay the money and then bring a separate, later claim requesting reimbursement of the money under the Tucker Act in the Court of Federal Claims; and
  2. Whether the Ninth Circuit erred in holding, contrary to a decision of the Federal Circuit, that it lacked jurisdiction over petitioners' takings defense, even though petitioners, as "handlers" of raisins under the Raisin Marketing Order, are statutorily required to exhaust all claims and defenses in administrative proceedings before the USDA, with exclusive jurisdiction for review in federal district court.

If the Court sides with the Hornes, the agricultural market would be flooded with raisins, thus driving prices down, The Associated Press reports.

Sadly, we doubt that even an incentive like lower prices could make raisins more popular.

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