Supreme Court to hear California raisin growers’ case

WASHINGTON — The Supreme Court agreed Tuesday to hear an appeal from Fresno raisin growers Marvin and Laura Horne, who contend that the federal marketing program that can take nearly half of their crop is unconstitutional.

Their case poses a significant challenge to the New Deal-era farm program that seeks to prop up prices by keeping part of the crop off the market.

It also raises questions about the limits of the government’s power to regulate commerce, an issue that sharply divided the justices in the major healthcare overhaul case decided in June.

California produces 99.5% of the nation’s raisins and about 40% of the world’s supply, but the U.S. Department of Agriculture has a say on how some of the crop can be used.

Under the federal program, the USDA’s raisin board seeks to maintain stable prices by setting aside some portion of the crop and keeping it off the market. Those raisins can be used in the federal school lunch program, but the growers are paid little or nothing for them.

Believing the scheme to be outdated and unfair, the Hornes joined with several other growers to evade the system and sell their raisins independently. They were hit with an order to pay a $483,843 civil fine.

They sued, but lost in the U.S. 9^th Circuit Court of Appeals. The judges said the Hornes should have filed a claim in a special claims court.

Over the objections of the Department of Agriculture, the high court said it would hear the growers’ arguments that they were denied “just compensation” as required by the Constitution, making the program an illegal “taking” of private property.

California raisins were last before the court in the late 1990s in a dispute over marketing campaigns. Then, dissident growers were challenging the mandatory fees for generic ads, such as those depicting dancing raisins and a rendition of the song “I Heard It Through the Grapevine.”

The new case arises from independent farmers who admitted that they spoke for only a “small part of the large raisin industry” in California.

The federal marketing order for raisins “extracts a hefty portion of a farmer’s annual raisin crop as a condition” for selling the rest of it on the market, said the growers’ appellate lawyer, Michael McConnell, a Stanford University law professor and former federal appeals court judge.

In 2003, when the case began, raisin handlers were required to set aside 47% of the crop, he said. The next year, the percentage dropped to 30%.

In those two years, the raisin board “determined that the compensation for the reserve-tonnage raisins should be set at precisely zero dollars,” he said. The Hornes “received no compensation for the USDA’s appropriation of almost one-third of their crop,” he said.

In defense of the USDA, Solicitor Gen. Donald Verrilli Jr. had urged the court to steer clear of the case. The marketing orders apply to “handlers” of raisins, not to producers, he said.

The Hornes tried to play both roles by producing raisins and then marketing them, he said. They “cannot flout the raisin marketing order and then challenge the resulting monetary assessment on the ground that compensation might hypothetically be owed if they had complied,” he said.

The case of Horne vs. USDA will come up for argument in March. While it could yield a narrow procedural ruling, it also could lead to a broader decision that will affect the many other agricultural marketing orders.

david.savage@latimes.com