Facts of the Case
The Agricultural Marketing Agreement Act of 1937 (AMAA) was enacted to protect farmers from radical fluctuations in the market. The AMAA allows the Secretary of Agriculture to impose production quotas or supply limitations on products as needed. Refusal to comply with these orders can result in civil and criminal penalties. The orders only applied to "handlers," those who process and package the products for distribution. The Raisin Marketing Order of 1949 created reserve-tonnage, a percentage of raisins that must be turned over the government each year.
Marvin and Laura Horne were raisin producers living in California who implemented a system to bring their raisins to market without handlers to avoid the AMAA. The Administrator of the Agricultural Marketing Service initiated an enforcement action against the Hornes for failure to comply with the orders. The Administrative Law Judge held that the Hornes should be subject to the Order under the auspices of the AMAA. The Judicial Officer affirmed the decision and held the Hornes liable. The Hornes filed for judicial review in district court, and the court granted summary judgment for the Department of Agriculture.
The United States Court of Appeals for the Ninth Circuit affirmed and held that it did not have jurisdiction to rule on the Hornes' claim that the Order violated their Fifth Amendment rights under the Takings Clause. The Court held that the Hornes must bring that claim before the Court of Federal Claims, as required by the Tucker Act.
Questions
Can the Takings Clause be used as a defense in actions regarding a government-mandated transfer of funds?
If so, does the Unites States Court of Appeals for the Ninth Circuit have jurisdiction over the case?
Conclusions
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Yes, yes. Justice Clarence Thomas delivered the opinion for the unanimous Court. The Supreme Court held that the defendants' Takings Clause claims must be evaluated under their capacity as handlers rather than producers, because it is only in their capacity as handlers that they would be subject to the fines in question. The Court also held that, as handlers, the defendants may raise a Takings Clause challenge to AMAA marketing orders and do not need to file in the Court of Federal Claims.