Wednesday, June 12, 2013

A Property Rights Win at the Supreme Court

Ilya Somin argues that the Supreme Courts recent unanimous opinion in Horne v. Department of Agriculture is a modest but potentially important victory for proponents of strong private property rights:

The Hornes are California raisin farmers seeking to challenge the constitutionality of a provision of the Agricultural Marketing Agreement Act of 1937 that requires them to turn over a portion of their raisin crop to the federal government in order to create an artificial scarcity in the market and prop up the price of raisins. They claim that this requirement violates the Takings Clause of the Fifth Amendment, which requires the government to pay “just compensation” whenever private property is “taken for public use” (the Hornes and other growers are not compensated for the expropriated raisins). The Supreme Court today did not rule on the issue of whether the Takings Clause was violated here. But it did unanimously overrule the Ninth Circuit’s decision that federal courts lacked jurisdiction to hear the Takings Clause case in the first place, because the Hornes were required to first pay the massive $483,000 fine imposed by the Agriculture Department, and then pursue various administrative remedies before getting their day in court. As Justice Thomas explains in his opinion for the Court, there were no meaningful alternative remedies available to the Hornes, because all such were closed off by federal statutes. In addition, “when a party raises a constitutional defense to an assessed fine, it would make little sense to require the party to pay the fine in one proceeding and then turn around and sue for recovery of that same money in another proceeding.” He might have added that imposing such a requirement would be a heavy burden on property owners who cannot afford to wait for years of administrative and judicial proceedings to get their money back. Damon Root and Lyle Denniston have more details on the case and its potential significance.

Somin notes, rightly, that the case may herald some broader changes in the Court's thinking as well:

But there is at least a small chance that the ruling will have a broader effect. One of the arguments rejected in today’s opinion was the claim that federal courts lacked jurisdiction to hear the case under the Court’s 1985 decision in Williamson County Regional Planning Commission v. Hamilton Bank, which holds that property owners claiming that they have been the victims of an uncompensated taking cannot bring a case in federal court until they have first been denied compensation in any potentially available state regulatory or judicial proceedings. Until that happens, the claims are not considered “ripe.” As I discuss in this article (pp. 23-26), Williamson County makes it impossible to bring many takings claims in federal court at all; once state courts have rejected the takings claim, federal courts are often precluded from reviewing it by the Court’s later decision in San Remo Hotel v. San Francisco (2005). No other category of constitutional rights claim is systematically denied access to federal court in the same way.

Horne certainly does not overrule Williamson County. But in footnote 6, the Court notes that Williamson County’s “ripeness” requirement is not a bar to federal court jurisdiction because “[a] “Case” or “Controversy” [as required for federal jurisdiction by Article III of the Constitution] exists once the government has taken private property without paying for it. Accordingly, whether an alternative remedy exists does not affect the jurisdiction of the federal court.” [emphasis added]. Normally, ripeness is a constraint on federal court jurisdiction. If the Williamson County regime can’t be justified on jurisdictional grounds, it is not clear what – if anything – justifies it at all. If it really is true that a Takings Clause case arises “once the government has taken private property without paying for it,” then it should not matter whether that violation of the Constitution might be remedied by a state proceeding instead of a federal one. There is still a federal constitutional case that can be brought in federal court.

Steve Clowney

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