Supreme Court Decides Horne v. Department of Agriculture
On June 10, 2013, the Supreme Court decided Horne v. Department of Agriculture, No. 12-123, holding that the Agricultural Marketing Agreement Act of 1937 (AMAA) withdraws the grant of Tucker Act jurisdiction over takings claims arising under the AMAA and thus permits "handlers" under the AMAA to raise such claims in a Department of Agriculture enforcement proceeding under 28 U.S.C. § 608c(14)(B).
Under the AMAA, the Secretary of Agriculture may issue marketing orders to regulate "handlers," which the AMAA defines as "processors, associations of producers, and others engaged in the handling" of covered agricultural commodities. Handlers who violate the Secretary's marketing orders are subject to civil and criminal penalties.
The Secretary promulgated a Marketing Order for California raisins requiring handlers to reserve a portion of their year's production in raisins and give them to a Raisin Administrative Committee (RAC) instead of selling them on the open market. The Marketing Order also requires handlers to allow the RAC access to their premises, raisins, and business records for inspection and requires handlers to pay assessments to cover the RAC's administrative costs.
Marvin and Laura Horne are raisin producers who devised a plan to bring their raisins to market without going through a traditional handler so they would not be subject to the AMAA regulatory scheme. However, the USDA informed the Hornes in 2001 that their proposed operations made them "handlers" under the AMAA. Nonetheless, the Hornes did not set aside reserve-tonnage raisins, refused to pay assessments to the RAC for two crop years, and declined to arrange for several RAC inspections.
The Administrator of the Agriculture Marketing Service initiated an enforcement action against the Hornes. The Hornes claimed that they were only "producers," not "handlers," and thus not subject to the AMAA or the Marketing Order. The Hornes also raised an affirmative defense that the Marketing Order's reserve-tonnage requirement violated the Fifth Amendment's prohibition against taking property without just compensation. An administrative law judge (ALJ) concluded that the Hornes were "handlers" of raisins and had violated the AMAA and the Marketing Order, and rejected the Hornes' takings defense. The ALJ's decision was affirmed by a judicial officer, who assessed civil penalties against the Hornes but concluded that he lacked authority to adjudicate the Hornes' takings claim. The Hornes filed a complaint in Federal District Court seeking judicial review of the USDA's decision, and the district court granted summary judgment in favor of the USDA determining that the Petitioners were "handlers" subject to the Marketing Order. The District Court also found that, although the RAC takes title to a significant portion of a California raisin producer's crop through the reserve requirement, this transfer of title does not constitute a physical taking under the Fifth Amendment.
On appeal, the Ninth Circuit affirmed the district court's summary judgment but declined to resolve the Hornes' takings claim because it concluded that it lacked jurisdiction to do so. The Ninth Circuit held that "a takings claim against the federal government must be brought [in the Court of Federal Claims] in the first instance, 'unless Congress has withdrawn the Tucker Act grant of jurisdiction in the relevant statute." Thus, the Ninth Circuit concluded, the Petitioners could bring their takings claim only in the Court of Federal Claims, which has jurisdiction over claims that are "founded either upon the Constitution, or any Act of Congress or any regulation of an executive department." 28 U.S.C. § 1491(a)(1).
The Supreme Court reversed, holding that the AMAA provides a comprehensive remedial scheme that allows handlers to challenge the content, applicability, and enforcement of marketing orders and thus withdraws Tucker Act jurisdiction over petitioners' takings claim. The Hornes could raise their takings-based defense in the context of an enforcement proceeding initiated by the USDA under section 608c(14) of the AMAA. The AMAA provides that handlers may not be subjected to an adverse order until they have given "notice and opportunity for an agency hearing on the record." §608c(14)(B). Because the AMAA specifically allows judicial review of adverse orders, the district court and the Ninth Circuit were not precluded from reviewing the Hornes' constitutional challenge.
Justice Thomas delivered the opinion for a unanimous Court.
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