John Echeverria on CPRBlog {Bio}

In Horne v. Department of Agriculture, SCOTUS to Wade into Complicated Nest of Takings Issues

Next Wednesday, the Supreme Court will hear oral argument in the case of Horne v. U.S. Department of Agriculture – a complicated and relatively little-noticed case that could have important implications for the direction of “takings” doctrine and, in turn, for how far judges wielding this doctrine may intrude upon the policy-making functions of the elected branches.  To understand the case, it is useful to analogize the issues in the case to a set of Russian nested dolls.

The issue representing the innermost doll, which the Court will only get to if it can unpack the outer dolls, is the most intriguing and arguably the most significant in terms of the future of takings doctrine.  The question is whether a federal agricultural marketing program results in a “taking” of private property within the meaning of the Takings Clause of the Fifth Amendment by requiring raisin producers to turn over a portion of their crop to a quasi-governmental entity for eventual disposal with little or no financial return to the producers.  The program was established pursuant to the federal Marketing Agreement Act, adopted during the Great Depression to stabilize the prices of certain crops by controlling the volume of production going to market.

The Act’s requirement that producers place a portion of their crop in “reserve” only goes into effect once the Department of Agriculture, in response to a petition supported by a majority of producers, issues a formal marketing order, which occurred in the case of raisins in the late 1940’s.  In some years, when production is low, no raisins are reserved under the program;  in other years, when production is high, raisin producers must place as much as a third of their crop in reserve.   The upshot is more stable – and higher – raisin prices for producers and consumers alike.

The Hornes, long-time raisin producers, concluded that the program represented bad agricultural policy and was unfair as applied to them.  In the hope of escaping the program’s requirements, they rearranged their business practices in an attempt to avoid the Act’s mandates while continuing to produce raisins, and ceased placing any portion of their raisin crop in reserve.  The USDA rejected this gambit and imposed civil penalties on the Hornes for violating the program rules.  They responded by filing suit in federal district court in California, arguing, among other things, that the reserve requirement constituted a taking.

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The Muddy Arkansas Game and Fish Commission Case

The most interesting issues to watch in Arkansas Game and Fish Commission v. United States, which the Supreme Court will hear next week on October 3, are ones the parties have not addressed.  The central issue in the case as framed by the principal briefs is whether a temporary increase in the frequency of inundation of floodplain property as a result of government action should give rise to liability under the Takings Clause.  But there are two other  -- arguably more important -- issues lurking in the background that have barely received mention:  (1) whether the claim is barred by the doctrine of sovereign immunity and (2) whether the plaintiff can claim an impairment of its rights as a riparian property owner under state law. 

This case involves the unusual situation of one governmental entity, a state agency, suing another government, the United States, for “just compensation” under the Takings Clause.  The Arkansas Game & Fish Commission claims the U.S. Army Corps of Engineer’s temporary modifications of the operation of its Clearwater Dam in Missouri over the span of half a dozen years resulted in increased flooding of commission-owned timberlands 120 miles downstream in Arkansas.  The primary mission of the commission is habitat protection, but its demand for compensation under the Takings Clause rests on an asserted “physical invasion” of its property which allegedly caused harm to commercially valuable timber.

The United States has not raised the issue, but there is a strong argument that the claim is barred by the doctrine of sovereign immunity.  Sovereign immunity is rarely an issue in a takings case against the United States because the Tucker Act constitutes a general waiver of immunity from takings claims.  But takings claims arising from flood damage present a special case because of a provision of the federal Flood Control Act which states:  “No liability of any kind shall attach to or rest upon the United States for any damage from or by floods or flood water at any time.”  This provision has been raised most frequently as a defense to tort claims, but it also has been raised in takings cases, and certainly is broad enough to bar them.  Given the general rule that the courts should resolve interpretive doubts in favor of preserving sovereign immunity, there is a solid sovereign immunity defense in this case.

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In Stop the Beach Renourishment Ruling, Conservatives Come up One Vote Short in Quest to Remake Property Rights Law

If further proof were needed that appointments to the Supreme Court matter, it was provided today by the Court’s decision in Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection. The so-called conservative wing of the Court came one vote short of issuing a decision that would have revolutionized the law of property rights in the United States.

The case involved the facially implausible claim by several coastal property owners along Florida’s panhandle that they suffered a “taking” under the Fifth Amendment to the U.S. Constitution because the state and local governments acted to protect them and their neighbors from erosion (my amicus brief in the case is here). The alleged taking resulted from an extensive effort to build up the eroded shoreline with sand pumped from the ocean bottom offshore. Because the new beach was constructed atop publicly owned submerged lands, and paid for with public dollars, the public naturally enough claimed ownership of this new land.

Despite the fact that they were at serious risk of losing their homes to the ocean, plaintiffs claimed that the project impaired their property rights because it denied them direct contact with the ocean and deprived them of their common law right to expand their landownership through future accretions to their coastal property deposited by wind and waves. Most of the affected property owners thought they were getting more than a fair deal from the project, but a half dozen owners sued seeking financial compensation on top of the erosion protection they were receiving at public expense.

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The Florida Beach Case Comes to Supreme Court: A Badly Flawed Test Case for Property Rights Advocates

On Wednesday, the U.S. Supreme Court will hear oral argument in Stop the Beach Renourishment v. Florida Department of Environmental Protection. By the time they finish hearing from both sides, the justices may wonder whether this case was worth their time and effort. (My amicus brief on the case is here).

Petitioner is a small non-profit organization whose members own coastal properties in two communities along the Florida panhandle. Petitioner’s primary argument is that its members suffered “takings” of their property interests within the meaning of the Takings Clause of the Fifth Amendment.

The case potentially raises two interesting questions, but for various reasons the Court may well find itself incapable of addressing the merits of those questions. In any event, the Court will not likely disturb the judgment of the Florida Supreme Court rejecting petitioner’s case.

The first issue is whether a Florida state agency and local governments “took” private property by authorizing and implementing a program designed to restore ocean shorelines ravaged by hurricanes. The program involves dredging large quantities of sand from the ocean bottom and depositing the sand along the water’s edge to rebuild the beach and create a buffer against future erosion losses.

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