April 29, 2015

Will the Supreme Court's second Horne decision undermine Williamson County ripeness?

By Chris Kieser Attorney

One issue that has received little attention following the oral argument in Horne v. United States Department of Agriculture is the question of what the Hornes’ remedy should be if they prevail. Readers will recall that the Supreme Court last Wednesday considered a depression-era law requiring raisin farmers, like plaintiffs Marvin and Laura Horne, to turn over a significant portion of their crop to a government “raisin reserve” or face heavy fines and penalties. At issue is whether the requirement to turn over the raisins is a taking under the Fifth Amendment.

Historically, the Court allowed property owners to sue to halt a taking if law authorizing the action did not provide a mechanism for compensation, and a handful of modern cases can be read to continue this thinking. Yet, many of the Court’s recent cases say that monetary compensation is the “exclusive remedy” for a taking under the Fifth Amendment is “just compensation.” It has explained that the Constitution does not forbid takings, but only takings without just compensation. Therefore, today, courts often do not allow property owners to use the Takings Clause to stop the government from taking their property in the first place. Rather, they often have to argue that a taking occurred and they are due just compensation.

The invalidation vs. compensation distinction can make all the difference for takings plaintiffs who wish to bring their claims in federal court. In its much-maligned decision in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City (which PLF has often asked the Court to overrule), the Supreme Court said that plaintiffs who want to bring takings claims against state or local governments in federal court must first ask for just compensation in state court. The Williamson County Court reasoned that because the Constitution prohibits only takings without just compensation, plaintiffs must proceed in state court to determine whether they have been denied just compensation in order to “ripen” a takings claim. But plaintiffs seeking invalidation do not implicate Williamson County’s rationale, because that remedy is independent of whether just compensation has been provided. The same is true for plaintiffs seeking money damages distinct from just compensation under the federal civil rights statute, as I argue in a forthcoming law review article.

The Horne case may change the law on both takings remedies and ripeness. This possibility arises because the Hornes are not seeking compensation for a taking. Instead, they are defending against the Department of Agriculture’s attempt to levy fines for not turning over their raisins. At the argument, Justice Stephen Breyer asked the Hornes’ attorney (and former federal judge) Michael McConnell what should happen if the Court agrees that a taking had occurred. Justice Breyer suggested that perhaps the Supreme Court could remand (send back) the case to the lower courts and let them determine whether the raisin reserve program had actually been beneficial to the Hornes (by raising market prices, among other things). Mr. McConnell pushed back, arguing that “in cases where there’s a taking and the program does not contemplate compensation, the standard judicial remedy for that is to forbid the taking.”

The Hornes already had to defeat a similar argument the first time this case reached the Supreme Court two years ago. Relying in part on the reasoning of Williamson County, the government argued then that the Hornes could not bring a takings claim as a defense to the Department’s enforcement action. According to the government, their only remedy was to pay the fines levied and then seek just compensation – essentially a refund – in the Court of Federal Claims under the Tucker Act (which covers claims against the federal government). This would have been a strange result indeed, since the Hornes had not yet submitted to a taking. Rather, they were being fined for not doing so, and they wanted the federal courts to say that they did not have to pay the fines because the raisin reserve requirement was a taking.

In its 2013 opinion, the Supreme Court unanimously sided with the Hornes on that issue. It rejected the government’s Williamson County-like argument and held that the Hornes could raise their takings claim as a defense immediately in federal district court, because of the specific nature of the 1937 law that created the raisin reserve. Now that the merits of the takings claim are before the Court, Justice Breyer’s question presents a related argument – that this is really a claim for just compensation instead of invalidation of the fines. The Court may conclude that the appropriation of raisins is a taking, but disagree on whether the fines should be invalidated or perhaps only partially reduced by a just compensation award in the lower courts.

Invalidation should be the proper remedy for the Hornes. The alternative would be to tell the Hornes “you can give us your raisins, or you can give us some money in return for the benefit you get from giving us raisins.” But the Supreme Court has never justified a taking of property because it may provide benefits to the property owner. For example, in Loretto v. Telepromter Manhattan CATV Corp., the Court held that installation of cable television wires on private property was a physical taking that required compensation, without mentioning the benefits flowing from the wires. The government simply cannot justify an uncompensated taking on the ground that it is actually good for a property owner. Likewise, in this case, the Court should invalidate the taking instead of requiring the Hornes to show they deserve a partial refund.

Since by its own logic, Williamson County only applies when the plaintiff makes a claim for just compensation, it is plainly inapplicable to claims seeking invalidation of a law before it takes private property. If the Court agrees that the fines should be struck, it would strike a blow against Williamson County, allowing plaintiffs in some circumstances to proceed directly to federal court by asking for invalidation. That would be a positive development in the law of both remedies and ripeness.

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