Under the Agricultural Marketing Agreement Act of 1937 (AMAA), raisin farmers must turn over a substantial portion of their crop in exchange for the “privilege” of selling the remainder on the open market. The federal government requires these farmers to surrender as much as 30-47 percent of their annual crop. The farmers receive either below-market compensation or no compensation at all.
In this case California farmers refused to surrender their raisins because they believed that they were exempt from the AMAA. In response the USDA initiated legal action. The USDA convinced the Ninth Circuit Court of Appeals that the AMAA applied to the farmers, and that they should have surrendered a portion of their crop to the agency. As such, the farmers were fined for the value of the raisins that the agency would have taken.
In defense, the farmers sought to invoke the Takings Clause of the Fifth Amendment, which provides that government shall not take private property, except upon payment of just compensation. They argued that the USDA could not force them to surrender money because that would necessarily be a taking without compensation. But, the Ninth Circuit denied the farmers the right to contest these monetary fines. The Ninth Circuit held that the farmers could only raise their takings defense by initiating a separate lawsuit, in the Court of Federal Claims, after paying the fines.
The NFIB Legal Center joined with the Cato Institute in filing an amicus brief in support of the farmers in this case. Now the Supreme Court has granted review. We will continue to argue that property owners should not be forced--by a court order--to surrender their property before they may raise their Fifth Amendment rights. Not only does that place a terrible burden on property owners, but it is also nonsensical to require a separate lawsuit before property owners can have the opportunity to raise their constitutional rights.
Status: Pending - U.S. Supreme Court.