Supreme Court routs raisin racket

By David B. Rivkin, Jr., and Andrew M. Grossman — 22 June 2015 in USA Today

Constitutional law isn’t all conflict. It may seem that way as the Supreme Court barrels along to the conclusion of another term, with contentious cases concerning same-sex marriage, Obamacare, and seemingly every other issue plucked from the headlines. But the high-profile controversies obscure that, as much as the Supreme Court may be divided, the justices are able to come together on a great many important issues.

For example, raisins. Yes, those tiny wrinkled morsels. The tiny snacks are also the subject of a major challenge to government power — one that has revealed surprising agreement on the Court.

Marvin and Laura Horne have been growing raisins for 40 years on their family’s California farmland. After they decided to dry the raisins for themselves, rather than sell their grapes to a processor, they found themselves in the cross hairs of the federal government, facing fines of nearly a million dollars.

Their crime? Refusing to allow the government to seize over a million pounds​ of the raisins they had grown and processed themselves.

It is the dirty little secret of American agriculture that raisins and other crops, despite being produced by private parties, are actually under the control of the federal government, which colludes with major producers to fix prices and control the market.

These so-called “marketing programs” are a relic of the New Deal, a time when the U.S. response to the threat of Soviet five-year plans was to adopt our own, but better. The rest of the economy that was once subject to central planning has since embraced the free market. Farming is among the last holdouts.

Many of these programs empower producers to use the power of the government to cap supply. In the raisin program, for example, a board made up raisin processors sets a “reserve percentage” of the annual crop that must be set aside for the government to use as it pleases. Some of those raisins are used in government programs, while others are sold, with the proceeds used to subsidize exports. Producers, however, have no guarantee that they’ll receive a single dollar for the tons of produce they’re forced to turn over to the government.

The Hornes challenged this scheme as an unconstitutional taking of private property. And just this week, the Supreme Court agreed, in an 8-1 decision.

The government argued that raisin producers actually benefit, because restricting the supply of raisins drives up the prices paid to producers — at the expense of consumers, of course. The Court held, however, that any hypothetical benefit simply doesn’t matter: the government simply can’t take your property, without any compensation, and then tell you that it’s for your own good.

Whether or not the Hornes in particular would have benefited from having their crops seized is a matter of disagreement— they say the price increase doesn’t come close to covering their losses. But what’s beyond debate is that the raisin program deprived the Hornes of any real interestin their own property.

That result, and the broad support for it on the Court, wasn’t inevitable. While the Court’s conservatives have long been wary of governmental overreaching, its liberals regularly vote to uphold broad and often intrusive regulatory authority.

What brought the justices together in this case may be a shared wariness of government cronyism. While many programs can at least be defended as advancing the public interest, the raisin marketing program only benefits private parties like major producers and exporters at the expense of other private parties like smaller farms and consumers. A small group of winners profits, while everyone else loses. That’s enough to make even justices who see few limits on federal power to intervene in markets think twice.

There’s a lesson in this for the rest of us. As Republicans and Democrats bicker over the budget, the economy, health care, and just about everything else, they should be able to come together on a non-partisan reform agenda taking aim at government cronyism and corporate welfare. The political parties may have different visions of the public interest, but we should all be able to agree that government has no business serving private interest.

David B. Rivkin, Jr., and Andrew M. Grossman practice constitutional law at the law firm Baker & Hostetler.​


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