Administrative Law

Please read this example of Administrative Law (Below)

Please comment on :

a) Did you think the USDA had the right to do what they did?

b) Should Mr. Horne have followed the law and in the long run was it worth it?

In response to an 80% drop in raisin prices during the Great Depression, Congress passed the Agricultural Marketing Agreement Act of 1937, which allowed the Department of Agriculture to issue marketing orders. In this example of administrative law in action, the U.S. Department of Agriculture ("USDA") promptly issued an order to raisin farmers requiring them to withhold a portion of their annual harvests from the market, which would result in higher prices.

The USDA gave the Raisin Administrative Committee the authority to determine amount of raisins that would be held in reserve by the government, and the amount that could be sold on the open market. The committee was composed of raisin industry members appointed by the Secretary of Agriculture. The Committee reserved more than 30% of all of the raisins grown in the U.S., selling them on non-competitive markets, for such purposes as rewarding foreign governments, or increasing U.S. exports. If there are raisins left after these sales, the Committee can give them back to growers who agree to cut back their production the following year.

Marvin Horne, a California raisin grower, did not agree with giving his raisins to the committee. In order to get around the fact that the Committee collects their raisin quota from distributors, rather than from the farmers, Horne restructured his farming operations to act as both grower and distributor. He then claimed that the reserve requirements set by law did not apply to him. The Committee sent its trucks to Horne's farm anyway, but he refused to let them onto his property. Horne was fined the value of the raisins, plus a fine, which amounted to nearly $700,000.

Horne responded by filing a federal lawsuit against the Commission, claiming that the raisin reserve violated theTakings Clause(Links to an external site.)

of the FifthAmendment(Links to an external site.)

to the U.S. Constitution, which states:

" ... nor shall private property be taken for public use, without just compensation."

The District Court judge did not agree with Horne, and granted a summary judgment in favor of the USDA. Horne appealed the decision, but the Ninth Circuit Appellate Court affirmed the lower court's decision, though it stated that the Circuit Court had no authority to hear the case as it was a question of constitutionality.

Horne took his case to the U.S. Supreme Court, which ruled that the Circuit Court did have authority to hear the case, and sent it back. The Circuit Court ruled that personal property, such as raisins, did not enjoy the same level of protection under the Fifth Amendment asreal property(Links to an external site.)

, such as the land on which the raisins were planted. Horne again appealed the decision to theSupreme Court(Links to an external site.)

.

In the Court's ruling, written by Chief Justice John Roberts, it was decided that personal property has personal property and real property have been equally protected for over 800 years. The Court ruled that the raisin reserve requirement amounted to taking, as provided by the Fifth Amendment, as the government physically seized the growers' raisins. As a result of the ruling, Horne was duejust compensationfor his raisins, which is the market value of the raisins at the time they were, or would have been, seized. In this case, the Committee had already determined the value of the raisins when it fined Horne.