Horne v. Department of Agriculture, No. 12-123; U.S. Supreme Court; opinion by Thomas, J.; decided June 10, 2013. On certiorari to the U.S. Court of Appeals for the Ninth Circuit.
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, See 7 U.S.C. § 608c(1). Any handler that violates the secretary of the Department of Agriculture’s marketing orders may be subject to civil and criminal penalties. See §§ 608a(5), 608a(6), and 608c(14). One such order, the California Raisin Marketing Order, established a Raisin Administrative Committee (RAC), which recommends setting up annual reserve pools of raisins that are not to be sold on the open domestic market, and which recommends what portion of a particular year’s production should be included in the pool. The order also requires handlers to pay assessments to help cover the RAC’s administrative costs.
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 U.S. 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 marketing order, imposed fines and civil penalties, and declined to address the takings claim.
Petitioners sought review in the federal district court. Granting summary judgment to the USDA, it found that substantial evidence supported the agency’s determination that petitioners were handlers rather than producers, and it rejected petitioners’ takings claim. The Ninth Circuit affirmed. It agreed that petitioners were handlers subject to the marketing order, but concluded that it lacked jurisdiction to resolve the takings claim, which they should have raised in the Court of Federal Claims. It recognized that when a handler raises a takings defense, Court of Federal Claims Tucker Act jurisdiction gives way to the AMAA’s comprehensive remedial scheme, see 7 U.S.C. § 608c(15), but found that petitioners had brought the takings claim in their capacity as producers.
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 scheme that withdraws Tucker Act jurisdiction over a handler’s takings claim. As a result, there is no alternative remedy. Pp. 10-14.
(c) A takings-based defense may be raised by a handler in the context of an enforcement proceeding initiated by the USDA under § 608c(14). The provision’s text does not bar handlers from raising constitutional defenses to the USDA’s enforcement action. Allowing handlers to do so would not diminish the incentive to file direct challenges to marketing orders under § 608c(15)(A), for a handler who refuses to comply with a marketing order and waits for an enforcement action will be liable for significant monetary penalties if the constitutional challenge fails. It would also make little sense to force a party to pay an assessed fine in one proceeding and then turn around and sue for recovery of that same money in another proceeding. See Eastern Enterprises v. Apfel, 524 U.S. 498, 520. Pp. 14-15.
673 F.3d 1071, reversed and remanded.