Amicus Curiae Brief — Horne v. Dep't of Agric., 135 S. Ct. 1039 (2015) (No. 14-275)

No. 14-275

MARVIN D. HORNE, ET AL., PETITIONERS

Vv.

UNITED STATES DEPARTMENT OF AGRICULTURE,

RESPONDENT

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE CATO INSTITUTE,

NATIONAL FEDERATION OF INDEPENDENT

BUSINESS, NATIONAL ASSOCIATION OF

HOME BUILDERS, REASON FOUNDATION,

AND SOUTHEASTERN LEGAL FOUNDATION

AS AMICI CURIAE IN SUPPORT

OF PETITIONERS

WILLIAM P. FERRANTI STEFFEN N. JOHNSON

Winston & Strawn LLP Counsel of Record

35 West Wacker Drive EIMERIC REIG-PLESSIS

Chicago, IL 60601 CHRISTOPHER E. MILLS

(212) 558-5600 Winston & Strawn LLP

1700 K Street, NW

Washington, DC 20006

(202) 282-5000

sjohnson@uwinston.com

Counsel for Amici Curiae

[ADDITIONAL COUNSEL LISTED ON INSIDE COVER]

ILYA SHAPTRO THOMAS J. WARD

Cato Institute DEVALA A. JANARDAN

1000 Mass. Ave., NW National Association of

Washington, DC 20001 Home Builders

(202) 842-0200 1201 15th Street, NW

tshapiro@cato.org Washington, DC 20005

(202) 266-8200

Counsel for Cato tward@nahb.org

Institute djanardan@nahb.org

KAREN R. HARNED Counsel for National

ELIZABETH MILITO Association of Home

LUKE A. WAKE Builders

NFIB Small Business

Legal Center SHANNON L. GOESSLING

1201 F St., NW, Ste. 200 Southeastern Legal

Washington, DC 20004 Foundation

(202) 406-4443 2255 Sewell Mill Rd.

elizabeth.milito@nfib.org Suite 320

Marietta, GA 30062

Counsel for National (770) 977-2131

Federation of Independ- shannon@southeasternlegal.org

ent Business

Counsel for Southeastern

MANUEL S. KLAUSNER Legal Foundation

Law Offices of Manuel

S. Klausner, P.C.

One Bunker Hill Bldg.

601 West Fifth St.

Los Angeles, CA 90071

(213) 617-0414

mkliqusner @klausnerinc.com

Counsel for Reason

Foundation

QUESTIONS PRESENTED

1. Whether the government’s “categorical duty”

under the Fifth Amendment to pay just compensa-

tion when it “physically takes possession of an inter-

est in property,” Arkansas Game & Fish Comm'n v.

United States, 133 S. Ct. 511, 518 (2012), applies only

to real property and not to personal property.

2. Whether the government may avoid the cate-

gorical duty to pay just compensation for a physical

taking of property by reserving to the property owner

a contingent interest in a portion of the value of the

property, set at the government’s discretion.

3. Whether a governmental mandate to relinquish

specific, identifiable property as a “condition” on

permission to engage in commerce effects a per se

taking.

a3

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED. .........2...........02.cccceeeeeeenees i

TABLE OF AUTHORITIES ...................22..22.c0ceeeeeeeee iv

INTEREST OF AMICI CURIAE................2.22c000200000++ 1

INTRODUCTION AND SUMMARY OF

ITT init entneiddndenianimeninatiinnenbgedmcemcennEeN 1

I cancelled marae aierinalantianiidtiitin 5

TTT Lien ocnnsinepineaeetatnbabpenenmineennmnemsiuieimeiaenadadtiin 8

I. The Ninth Circuit wrongly limited Loretto to

I iniccneniecicdennnnnanatneiamnnnneentnianentemenenseseents 8

A. This Court has explicitly recognized that

Loretto applies to both real and personal

CC 9

B. The Fifth Amendment equally protects

real and personal property. ........................-++ 12

C. There is no principled distinction

between government confiscation of real

and personal property. ...............-....---.sessss-e0+ 14

Il. The Ninth Circuit’s approach would

encourage the government to engage in

procedural gamesmanship to avoid Loretto’s

IT cninstaniinininbatinnnnsedeeeieceenimemenee 15

A. Under the government’s proposed rule, it

could manipulate the standard of review

by offering an illusory contingent

interest. 16

B. The Ninth Circuit's decision permits the

government to avoid the per se rule

merely by characterizing diffuse public

benefits as “contingent interests.”.................. 17

C. Evisceration of the per se takings rule

would undermine property ownership,

autonomy, and reliance interests. .................. 20

TALES TE LETS 24

APPENDIX: LIST OF AMICI CURIAE

lv

TABLE OF AUTHORITIES

Page(s)

CASES

Anderson v. Spear,

356 F.3d 651 (6th Cir. 2004) ....................00.2 eee 11

Armstrong v. United States,

ee Sy ST cicindricnensnnncuvsesscsecttnecnenimentt 21

Brown v. Legal Found. of Wash.,

GSB U.S. BIS CHOOS) ......cccccccccccccccscocecscccscscees 10-11

District of Columbia v. Heller,

BS TI. BG GD cccececcccccccccccccececesescscecessccssese 12

E. Enters. v. Apfel,

ee ey, IED iccnncncoconstinsteniniaiedinasanasmeassll 21

Evans v. United States,

74 Fed. Cl. 554 (2006).............. 2. cece cecec cc ceceeeeecee eens 6

Horne v. Dep't of Agric.,

BED BH. Ge, TD GPRD ccccccccccccccccccccccecececccsscesccscss 7

Koontz v. St. Johns River Water Mgmt. Dist.,

133 S. Ct. 2586 (2013) ................... cece ce ee ee eeee 20-21

Loretto v. Teleprompter Manhattan CATV

Corp..,

458 U.S. 419 (1982) .......... 2-4, 8-12, 15-16, 18-21

Lucas v. S.C. Coastal Council,

505 U.S. 1003 (1992) .................ccccceeeeeeeees 9-10, 23

Monongahela Navigation Co. v. United States,

| Eee 16

Nixon v. United States,

978 F.2d 1269 (D.C. Cir. 1992) ..................... 9,11

Pa. Coal Co. v. Mahon,

gs Eee 20

Vv

Penn Cent. Transp. Co. v. City of New York,

ER Ee: 15-16, 18, 21-24

Philip Morris, Inc. v. Reilly,

ey Se I I, Sc cncnccnsccncssoncsonesosoouses 14

Phillips v. Wash. Legal Found.,

a ae 10

Porter v. United States,

478 F.2d 1829 (Gth Cir. 1973) ........................... 11

Rose Acre Farms, Inc. v. United States,

373 F.3d 1177 (Fed. Cir. 2004).......................... 11

Tahoe-Sierra Pres. Council v. Tahoe Regi

Planning Agency,

i nese intniatiemnineennanieniiniain 10

United States v. Causby,

a en N 17

United States v. Corbin,

° BA | sie Lo Se |, eee 11

United States v. Pewee Coal Co..,

Se i arte ccuuniaaiensinespeaiannen 17

Warner /Elektra/Atl. Corp. v. Cnty. of DuPage,

991 F.2d 1280 (7th Cir. 1993) ........................... 11

Wash. Legal Found. v. Legal Found. of Wash.,

271 F.3d 835 (9th Cir. 2001) . 11-12, 14-15, 19-20

STATUTES, REGULATIONS, RULES, AND

CONSTITUTIONAL PROVISIONS

7 C.F.R.

Rn DeLee ee ae eT 6

RESALES TERA Son Reece Dre Peer MET, 6

ene I aT OES, 6

a a Na 6

Eee ee ene eer ene e mnt mE 1,6

| 8 ESE Seasons serene ene en Tae NTE 5

i TENT Ih dinniodidiihieibanininsiniinnentiiinanbanieenmniimmbeiaanenté 1

U.S. CONST. amend. V........ 2-3, 7-9, 12-13, 18, 20-21

OTHER AUTHORITIES

Tom W. Bell, “Property” in the Constitution:

The View from the Third Amendment, 20

Wm. & Mary Bill Rts. J. 1243 (2012) ............... 13

Daniel Bensing, The Promulgation and

Implementation of Federal Marketing

Orders Regulating Fruit and Vegetable

Crops Under the Agricultural Marketing

Agreement Act of 19327, 5 San Joaquin

Se Bs a irbcentencbcnesactttantoonsnseneeseseeent 6

Eric R. Claeys, The Penn Central Test and

Tensions in Liberal Property Theory, 30

Harv. Envtl L. Rev. 339 (2006) ........................ 22

Steven J. Eagle, The Four-Factor Penn Central

Regulatory Takings Test, 118 Penn St. L.

ey ee TE ccciinndinienindisinnbdcnititundndenndinibdindiecnneves 24

Richard A. Epstein, Lucas v. South Carolina

Coastal Council: A Tangled Web of

Expectations, 45 Stan. L. Rev. 1369 (1993) .22-23

Thomas M. Lenard & Michael P. Mazur,

Harvest of Waste: The Marketing Order

Program, Regulation (May/June 1985)

www.cato.org/pubs/regulation/regv9n3/v9n

vii

James Madison, Property, Nat’] Gazette, Mar.

27, 1792, reprinted in 14 The Papers of

James Madison 266 (Robert A. Rutland et

ia Ta insiiinntiicntettiicncciateiimmniniinatiednanptenmenannias 5

Eduardo Moisés Pefialver, Is Land Special?

The Unjustified Preference for

Landownership in Regulatory Takings Law,

31 Ecology L.Q. 227 (2004).....................cceeeeeees 13

Susan Rose-Ackerman, Against Ad Hocery: A

Comment on Michelman, 88 Colum. L. Rev.

TE EERE ES eee ET: 23-24

Jed Rubenfeld, Usings, 102 Yale L..J. 1077

RE A cee eee Eee 13

Antonin Scalia, The Rule of Law as a Law of

Rules, 56 U. Chi. L. Rev. 1175 (1989)............... 24

William Michael Treanor, The Original

Understanding of the Takings Clause and

the Political Process, 95 Colum. L. Rev. 782

1 Henry St. George Tucker, Blackstone’s

Commentaries app. 305 (Philadelphia,

I I nc oceerneireeieeidmannnnmieenennenttt 13

Why does America regulate the trade in

raisins?, The Economist (Apr. 14, 2013),

6 6

INTEREST OF AMICI CURIAE-

Amici are advocates for individual freedom who

regard the right to keep and control one’s own proper-

ty as among the most vital rights in any free society

and the most basic rights protected by the Constitu-

tion. See Appendix. Three of the amici participated

in this case in its previous iteration, when this Court

unanimously rebuffed the government’s attempt to

make property owners sue twice—once in federal dis-

trict court and once in the Court of Claims—to vindi-

cate their property rights.

INTRODUCTION AND

SUMMARY OF ARGUMENT

The case is here again, this time because the

Ninth Circuit has wrought a major upheaval of basic

principles of takings law. The seeds of this case were

sown in 1949, when the Department of Agriculture

established a Raisin Marketing Order, ostensibly to

smooth market fluctuations. The government's

scheme conscripts raisin “handlers” to convey title to

a quota of “producers” raisins. The Raisin Adminis-

trative Committee takes title and then has unbridled

discretion over the fate of its spoils. It can sell the

raisins for profit, ship them to another public agency,

or even give them to foreign countries.

Meanwhile, the handler must “hold in storage” the

raisins “for the account of the committee” “until he

* All parties have consented to the filing of this brief. In ac-

cordance with Rule 37.6, no counsel for a party authored this

brief in whole or in part, and no counsel or party made a mone-

tary contribution intended to fund the preparation or submis-

sion of this brief. No person other than amici curiae, their

members, or their counsel made a monetary contribution to its

preparation or submission.

2

has been relieved of such responsibility.” 7 C.F.R.

§ 989.66(a)-(b)(1). Once the Committee disposes of

the raisins, hands out subsidies to exporting proces-

sors, and covers its administrative costs, it might

have funds remaining to disburse to the farmers

whose raisins were taken and who retained a contin-

gent interest in those proceeds.

Or it might not. In 2003-2004, petitioners, the

Hornes, would have been required to turn over 306

tons of raisins—30% of their crop—to USDA. In re-

turn, they would have received nothing. Pet. App.

41a. The year before, when they would have been re-

quired to turn over nearly half of their raisins, they

would have received far less than their cost of pro-

duction. Pet. Br. 7-8. Thus, a New Deal program

whose raison d’étre was to lift prices above “the cost

of production” (Pet. App. 4a) now forces raisin farm-

ers to fork over the (dried) fruits of their labor with

no hope of even covering their expenses. Year in and

year out, the Committee takes farmers’ crops without

providing just—or sometimes any—compensation.

The Ninth Circuit nevertheless upheld the gov-

ernment’s scheme, citing two grounds for deeming

the categorical rule of just compensation inapplicable.

First, the court departed from the text and original

meaning of the Fifth Amendment—and this Court’s

precedents—by drawing an artificial distinction be-

tween real and personal property. Under the per se

rule of Loretto v. Teleprompter Manhattan CATV

Corp., 458 U.S. 419 (1982), any physical confiscation

of property has always required just compensation.

But according to the Ninth Circuit, the mere fact that

the property here is “personal,” not “real,” immunizes

the taking from Loretto’s reach.

3

The Takings Clause, however, makes no distinc-

tion between “real” and “personal” property— it states

categorically that “private property” shall not “be

taken for public use, without just compensation.”

U.S. Const. amend. V. Nor did Loretto rest on any

such distinction. It held that, where the government

“effectively destroys each” of one’s “[p]roperty rights

in a physical thing”’—“the rights ‘to possess, use and

dispose of” the property—this Court’s “cases uniform-

ly have found a taking.” 458 U.S. at 435, 434.

That Loretto applies equally to takings of personal

property is confirmed by the Takings Clause’s origi-

nal meaning. One of the chief ills targeted by the

Clause was the practice of taking citizens’ personal

property to supply the military. At the time of the

Founding, it would have been inconceivable that the

Fifth Amendment did not make citizens’ own crops

forbidden fruit.

The Ninth Circuit’s distinction not only conflicts

with this Court’s precedents and the constitutional

text, it also lacks any economic basis and favors those

with the means to become landowners over those who

lack such means. The Hornes would have lost all

right to possess, use, and dispose of their own proper-

ty. It is constitutionally irrelevant that the property

is a ton of raisins grown on their farm, rather than

the farm itself.

Second, the decision, below authorizes the gov-

ernment to flout its constitutional obligation to pro-

vide just compensation merely by providing a future,

contingent interest that may well prove worthless.

By that court’s lights, Loretto’s per se rule is inappli-

cable whenever the government preserves the theo-

retical possibility of a payout from its use of the taken

4

property—even if, as here, the payout never material-

izes or it amounts to less than the owners’ cost of

producing the property in the first place. The gov-

ernment attempts to justify this result on the ground

that the property owners share in the public benefits

supposedly produced by the taking, effectively reduc-

ing the Takings Clause to a form of rational-basis-

style “legitimate purpose” review.

By permitting the government to avoid Loretto’s

per se rule merely by offering a contingent interest

that could be utterly worthless, the Ninth Circuit

opened the door to procedural gamesmanship that

threatens to send property rights the way of the Cali-

fornia Raisins. The court found it persuasive that the

government scheme was “carefully crafted to ensure

the [owners] are not completely divested of their

property rights” in the sense that they retain the

right to an “equitable distribution,” albeit one that.

“may be zero.” Pet. App. 18a, 2la. But this mistakes

the problem for the solution. Any government action

can be joined with some trivial, contingent right.

Surely the government may not seize our cars to de-

liver the mail and avoid paying just compensation by

allowing us to use them on Sundays.

Nor, obviously, is the fact that mail would be de-

livered to our homes Monday through Saturday—our

bit of the public benefit—sufficient to avoid a per se

taking. Yet that is exactly what the government ar-

gues in suggesting that the Hornes’ enjoyment of the

supposed benefits of collectivization is a “contingent

interest” sufficient to avoid Loretto.

By devaluing property rights of all sorts, the gov-

ernment’s approach would weaken the values of au-

tonomy and reliance that undergird the Takings

5

Clause and our constitutional order. James Madison

could have been speaking directly to the court below

when he admonished: “Government is instituted to

protect property of every sort,” and “the end of gov-

ernment * * * is a just government, which impartially

secures to every man, whatever is his own.” James

Madison, Property, Nat'l Gazette, Mar. 27, 1792, re-

printed in 14 The Papers of James Madison 266

(Robert A. Rutland et al. eds., 1983) (first emphasis

added).

The Ninth Circuit's decision radically shrivels the

right to own property—in a manner that departs

from the precedents of this Court, the nation’s found-

ing ideals, and the Constitution. Its judgment should

be reversed.

STATEMENT

1. Much-criticized relics of the New Deal, agricul-

tural marketing orders administered by the United

States Department of Agriculture (USDA) continue to

control the supply of many agricultural products to-

day. In theory, these orders are designed to prevent

“unreasonable fluctuations in supplies and prices.” 7

U.S.C. § 602(4). In reality, the orders create govern-

ment-enforced cartels that give bureaucrats carte

blanche both to fine farmers who sell more than their

allotted quotas and to drive up prices for consumers.

See generally Thomas M. Lenard & Michael P. Ma-

zur, Harvest of Waste: The Marketing Order Program,

Regulation (May/June 1985).!

2. This case involves the USDA’s marketing order

for raisins, which “effects a direct transfer of title of a

producer’s ‘reserve tonnage’ raisins to the govern-

1 Available at www.cato.org/pubs/regulation/regv9n3/v9n3-4.pdf.

6

ment.” Evans v. United States, 74 Fed. Cl. 554, 558

(2006). Under that order, handlers of raisins must

reserve a certain portion of the producers’ crop, which

they may not sell on the open market. USDA annual-

ly establishes the amount to be reserved, based on

the recommendations of a committee of 46 industry

representatives and one representative of the public.

7 C.F.R. §§ 989.26, 989.29-30, 989.35-36.

The reserve-tonnage raisins must be physically

segregated from the rest of the farmer’s crop and held

“for the account” of the Committee, which takes title.

Id. §§ 989.65, 989.66(a), (b)(1), (6)(2), (@). After the

Committee disposes of the raisins and covers its ex-

penses, “[w]jhatever net income remains [if any] is

disbursed to” the farmers who grew the raisins and

were forced to turn them over. Pet. App. 6a (citing 7

C.F.R. § 989.66(h)).

The Committee’s central planning has been less

than stellar. After “allegations that members of the

Raisin Administrative Committee engaged in illegal

price-fixing and market division discussions with for-

eign producers,” the USDA amended the marketing

order to prohibit such conduct. Daniel Bensing, The

Promulgation and Implementation of Federal Market-

ing Orders Regulating Fruit and Vegetable Crops

Under the Agricultural Marketing Agreement Act of

1937, 5 San Joaquin Agric. L. Rev. 3, 20 (1995). The

Committee does consumers no favors either: its crea-

tion of “artificial raisin-scarcity * * * drives up pric-

es,” with the paradoxical result “that Californian rai-

sins are sometimes cheaper abroad than they are in

California.” Why does America regulate the trade in

raisins?, The Economist (Apr. 14, 2013).”

2 Available at http://econ.st/1C60qXK.

7

3. The Hornes are farmers in Fresno and Madera

Counties. During the relevant years, 2002-2003 and

2003-2004, the Hornes did not set aside the mandat-

ed reserve-tonnage raisins. As they explained to the

Committee, they believed they had a “right[] under

the Constitution” not to “relinquish ownership of

[their] crop” to the government. Pet. App. 129a-130a.

The government disagreed. It initiated an adminis-

trative enforcement action against the Hornes, and

the USDA ultimately found them liable for failing to

give up their raisins. Pet. App. 8a.

4. The Hornes sought relief in federal court. Pet.

App. 8a. After the district court granted summary

judgment to the USDA, the Hornes appealed to the

Ninth Circuit, which initially held that no taking had

occurred because the marketing order “applies to the

Hornes only insofar as they voluntarily choose to

send their raisins into the stream of interstate com-

merce.” Pet. App. 208a. But when the Hornes sought

rehearing, the Ninth Circuit changed its tune, aban-

doning its modern iteration of the right-privilege dis-

tinction and deciding it lacked jurisdiction over the

Hornes’ takings claim.

This Court unanimously reversed. The Court held

that the Ninth Circuit had “jurisdiction to decide

whether the USDA’s imposition of fines and civil

penalties on petitioners, in their capacity as handlers,

violated the Fifth Amendment.” Pet. App. 258a. The

Court remanded the cise so that, as Justice Kagan

put it, the Ninth Circuit could “figure out whether

this marketing order is a taking or *** just the

world’s most outdated law.” Transcript of Oral Ar-

gument at 49, Horne v. Dep't of Agric., 133 S. Ct.

2053 (2013) (No. 12-123).

8

5. On remand, the same panel again ruled that

the Committee’s seizure of the raisins is not a com-

pensable taking. The court cited two reasons—

neither of them advanced by the government—why

the per se rule requiring compensation for physical

confiscations of property does not apply.

First, without discussing the text of the Fifth

Amendment, the court announced that “the Market-

ing Order operates on personal, rather than real

property,” and that “the Takings Clause affords less

protection to personal than to real property.” Pet.

App. 18a. Second, the court reasoned that the

Hornes retain a “contingent interest” in the proceeds

from their raisins, so they “are not completely divest-

ed of their property rights.” Ibid.

The panel acknowledged that “the equitable dis-

tribution” from the Committee “may be zero,” but it

“is not zero in every year” (Pet. App. 21a)—at least,

not for those who participate year after year. Even

when it is, that is only because “it just so happens

that in those years” the Committee’s “gross proceeds

are not greater than [its] operating expenses.” Ibid.

In any event, the taken raisins “continue to work to

the Hornes’ benefit” because USDA uses them “to

stabilize market conditions.” Pet. App. 21a-22a.

ARGUMENT

I. The Ninth Circuit wrongly limited Loretto to

real property.

Where the government effects “a permanent phys-

ical occupation of property,” this Court's “cases uni-

formly have found a taking.” Loretto, 458 U.S. at 434.

Here, the government “effectively destroy[ed] each” of

the Hornes’ “[p]roperty rights in a physical thing”—

“the rights ‘to possess, use and dispose of” their rai-

9

sins. Id. at 435. Departing from this Court’s prece-

dents and the text and original understanding of the

Fifth Amendment, the Ninth Circuit held that Loretto

does not “govern controversies involving personal

property.” Pet. App. 20a. That decision must be re-

versed.

A. This Court has explicitly recognized that

Loretto applies to both real and personal

property.

1. This Court has never held that Loretto’s per se

rule is limited to real property. Loretto itself states

no such rule: As the Ninth Circuit admitted, “the

Loretto Court did not have occasion to consider the

occupation of personal property.” Pet. App. 20a. In

fact, “the actual holding of Loretto makes no mention

of a distinction between real and personal property,

nor was any rationale given in the opinion that might

justify such a distinction.” Nixon v. United States,

978 F.2d 1269, 1284 (D.C. Cir. 1992).

To support its distinction between real and per-

sonal property, the Ninth Circuit relied instead on a

“later discussion of personal property in Lucas,”

where this Court observed in dictum that, “in the

case of personal property,” the government has a

“traditionally high degree of control.” Pet. App. 18a-

20a (quoting Lucas v. S.C. Coastal Council, 505 U.S.

1003, 1027-1028 (1992)). This passage, the court rea-

soned, shows that there js “no reason to extend Loret-

to to govern controversies involving personal proper-

ty.” Pet. App. 20a. The court below was mistaken.

First, Lucas did not involve a “physical invasion”

of property (505 U.S. at 1015)—the type of taking at

issue here and in Loretto. USDA wishes to physically

take possession of the Hornes’ raisins. Lucas, by con-

10

trast, dealt with the distinct situation “where regula-

tion denies all economically beneficial or productive

use of land.” Jbid. The Marketing Order does not

merely diminish the value of the Hornes’ property, or

foreclose certain uses thereof. Rather, the govern-

ment would outright take title to that property for a

public use while refusing to pay for it.

Put simply, regulatory-taking rules are irrelevant.

The panel’s treatment of a “regulatory taking” case

such as Lucas as “controlling” in a “case[] involving

physical takings” ignored a “longstanding distinction”

between the two and was “inappropriate.” Tahoe-

Sierra Pres. Council v. Tahoe Reg’l Planning Agency,

535 U.S. 302, 323 (2002) Gnternal quotation marks

omitted); Pet. Br. 39-42.

Second, this Court has already recognized that

Loretto does apply to personal property. A decade af-

ter Lucas, the Court analyzed the government’s

forced “transfer of the interest” in lawyers’ trust ac-

counts—personal property—under the “per se ap-

proach,” finding that it was “akin to the occupation”

of property “in Loretto.” Brown v. Legal Found. of

Wash., 538 U.S. 216, 235 (2003) (citing Phillips v.

Wash. Legal Found., 524 U.S. 156, 172 (1998)).

The Ninth Circuit’s approach cannot be reconciled

with this Court’s decision in Brown. If intangible and

fungible property like earned interest on a trust fund

is subject to Loretto’s categorical rule, then surely

“physical thing{s]” like raisins—which can literally be

“possess[ed], use[d] and dispose[d] of’—fall under its

protection. Loretto, 458 U.S. at 435 (internal quota-

tion marks omitted). Indeed, such “physical appro-

priations * * * represent a greater affront to individu-

al property rights.” Tahoe-Sierra, 5635 U.S. at 324

ll

(emphasis added). Thus, it is no surprise that other

circuits to consider this issue have uniformly recog-

nized that the per se takings doctrine extends to both

real and personal property.®

2. Remarkably, not only did the Ninth Circuit ig-

nore this Court’s logic in Brown, it quoted its own

contrary reasoning from the same case: “[t]he per se

analysis has not typically been employed outside the

context of real property.” Pet. App. 20a (quoting

Wash. Legal Found. v. Legal Found. of Wash., 271

F.3d 835, 854 (9th Cir. 2001) “(WLF”) (en banc), affd

sub nom., Brown, 538 U.S. 216). The panel neglected

that, although this Court affirmed the judgment in

Brown, it rejected the Ninth Circuit’s takings analy-

sis. This Court “agree[d]” with “the dissenters,” who

“likened” the government's confiscation of earned in-

terest “to the kind of ‘per se’ taking that occurred in

Loretto.” Brown, 538 U.S. at 235 (emphasis added).

As those dissenters recognized, the “argu[ment)]

that the per se approach of Loretto and similar cases

53 See Nixon, 978 F.2d at 1284 (rejecting the “argu[ment] that the

per se takings doctrine applies only to * * * real property” as

“failfing] for want of authority or logic”); Warner/Elektra/ Atl.

Corp. v. Cnty. of DuPage, 991 F.2d 1280, 1285 (7th Cir. 1993)

(‘American governments” “have to pay just compensation” when

they “requisition personal property”); Anderson v. Spear, 356

F.3d 661, 668-669 (6th Cir. 2004) (etate’s “disgorgement” of

campaign funds “constitutes a per se taking”); Porter v. United

States, 473 F.2d 1329, 1332-(6th Cir. 1973) (per se test applied

to “commonplace items of personal property”); United States v.

Corbin, 423 F.2d 821, 826 (10th Cir. 1970) (per se test applied

where “the Government took possession of * * * fish”); see also

Rose Acre Farms, Inc. v. United States, 373 F.3d 1177, 1196 &

n.17 (Fed. Cir. 2004) (“reject[ing] the * * * contention that a ‘per

se’ takings analysis is never appliceble when personal property

is at issue”).

12

applies primarily to takings of real property * * * is

not true.” 271 F.3d at 866 (Kozinski, J., dissenting).

After all, “if the city wants to display your Renoir in

its museum, it can’t just take it and compensate you

with the joy of viewing it during visiting hours.” Jbid.

For raisin farmers in California, the deal is even

worse. If the Ninth Circuit is right, the government

can take your Renoir, send it back to France, and, af-

ter pocketing the change to cover its own budget, give

you absolutely nothing.

That dangerous reasoning is an affront to this

Court’s precedent and to the ideals of private proper-

ty on which the nation was founded. The judgment

below should be reversed.

B. The Fifth Amendment equally protects

real and personal property.

Limiting Loretto to real property would be funda-

mentally inconsistent with the text and original

meaning of the Takings Clause. When interpreting

the Constitution, this Court looks first to the

“[nJormal meaning” of the constitutional text as

“known to ordinary citizens in the founding genera-

tion.” District of Columbia v. Heller, 554 U.S. 570,

576-577 (2008). The Takings Clause refers simply to

“private property”; its text does not distinguish be-

tween real and personal property. And the available

evidence of the Clause’s original meaning points to its

application to both types of property. See Pet. Br. 36-

39.

There exists essentially only one “contemporane-

ous statement of why the clause was passed,” which

came from legal educator and jurist Henry St. George

Tucker. William Michael Treanor, The Original Un-

derstanding of the Takings Clause and the Political

13

Process, 95 Colum. L. Rev. 782, 836 (1995). As St.

George Tucker explained, the Clause “was probably

intended to restrain the arbitrary and oppressive

mode of obtaining supplies for the army, and other

public uses, by impressment, as was too frequently

practised during the revolutionary war, without any

compensation whatever.” 1 Henry St. George Tucker,

Blackstone’s Commentaries app. 305-06 (Philadelph-

ia, Birch & Small 1803). Indeed, the “widespread re-

action against military confiscation of personal prop-

erty” was a primary “motive” for the adoption of the

Clause. Treanor, supra, at 855.

Other scholars agree that the Clause, as originally

understood by the Founding generation, extends to

both real and personal property. “[T]he appropriation

of private property to supply the army during the

Revolutionary War” was a “paradigm case” of uncom-

pensated takings that the Clause was intended to

forbid. Jed Rubenfeld, Usings, 102 Yale L.J. 1077,

1122 (1993). “The Founders meant for the Takings

Clause to remedy not so much the taking of real

property as the taking of personal property by * * *

troops.” Tom W. Bell, “Property” in the Constitution:

The View from the Third Amendment, 20 Wm. &

Mary Bill Rts. J. 1243, 1260 (2012). Given this moti-

vation, it is “unlikely that the uncompensated taking

of personal property was somehow less offensive to

the Framers than the uncompensated taking of land.”

Eduardo Moisés Pefialver, Js Land Special? The Un-

justified Preference for Landownership in Regulatory

Takings Law, 31 Ecology L.Q. 227, 249 (2004).

In short, the history of the Fifth Amendment’s

Takings Clause confirms that it was understood to

mean exactly what its text says—that it protects all

types of “private property,” without qualification.

14

C. There is no principled distinction be-

tween government confiscation of real

and personal property.

Besides lacking support in this Court's precedents

and the Fifth Amendment's text and original mean-

ing, distinguishing between real and personal proper-

ty makes no sense economically. Regardless of the

property's uniqueness or “sentimental value,” only

the “market value” of taken property is compensable.

WLF, 271 F.3d at 866 (Kozinski, J., dissenting). “For

purposes of the Takings Clause,” therefore, both “real

and personal property are reduced to their cash

equivalents.” Ibid.

That value, moreover, is measured exactly the

same way for real property as it is for personal prop-

erty. “[T]en acres of undeveloped land in rural Maine

is not as valuable as ten acres of undeveloped land in

midtown Manhattan,” because “people are willing to

pay a higher price for access to Manhattan.” Philip

Morris, Inc. v. Reilly, 312 F.3d 24, 51 (Ist Cir. 2002)

(Selya, J., concurring). “If the physical thing itself

were the basis of value, these tracts of equal size and

topographical characteristics [wjould be worth the

same.” Ibid. But no one pretends that they are, or

that land is any less commercialized or fungible than

any other property. “Limiting per se takings analysis

to cases involving real property is” thus “a crude

boundary with no compelling basis” in economics or

“the law.” Ibid.

If allowed to stand, the Ninth Circuit’s unprece-

dented view of the Takings Clause “will doubtless be

greeted with a rousing cheer by government officials

who will eagerly” seize personal property—including

“bank accounts and other places where money is

15

kept”—all while easily “justifying it with some sort of

‘ad hoc’ analysis.” WLF, 271 F.3d at 866 (Kozinski,

J., dissenting). This Court should reverse.

Il. The Ninth Circuit’s approach would en-

courage the government to engage in pro-

cedural gamesmanship to avoid Loretto’s

per se takings rule.

Apart from its artificial distinction between real

and personal property, the Ninth Circuit refused to

apply Loretto because “the Hornes retain the right to

the proceeds from” the Committee’s disposition of the

raisins, so their “rights with respect to the reserved

raisins are not extinguished.” Pet. App. 2la. True,

“the equitable distribution may be zero,” but that is

only because “it just so happens that in those years”

the Committee has no net revenue. Jbid. Thus, the

Ninth Circuit held, “the Hornes did not lose all eco-

nomically valuable use of” their raisins, and Loretto

does not apply. Pet. App. 20a. Instead, because the

Hornes retained some “residual value after the regu-

lation’s application,” the court applied “the ad hoc

framework” of Penn Central Transportation Co. v.

City of New York, 438 U.S. 104 (1978). Pet. App. 22a

n.17, 16a.

Permitting the decision below to stand would have

negative consequences for all types of property rights.

The Ninth Circuit’s rationale extends to confiscations

of both personal and real property. It would allow

the government to avoid Loretto simply by giving in-

adequate—or purely theoretical—compensation to

those whose property is taken. Just as problematic,

the decision below counts the claimed benefits that

purportedly flow from the government's use of the

taken property as an adequate contingent interest.

16

That cannot be the law. If it were, it would under-

mine core property rights and lead to the vast majori-

ty of takings being analyzed only under Penn Cen-

trals highly deferential balancing test.

A. Under the government’s proposed rule, it

could manipulate the standard of review

by offering an illusory contingent inter-

est.

According to the Ninth Circuit, the government

may avoid paying just compensation simply by giving

property owners some contingent interest in their

taken property. Under this reasoning, the per se tak-

ings rule would collapse; it would apply only when a

particularly uncreative government body forgets to

provide the property owner a meaningless remainder

interest. After all, every regulation could easily be, in

the Ninth Circuit’s words, “carefully crafted to ensure

the [property owners] are not completely divested of

their property rights”—especially if it is quite alright

that “the equitable distribution” from the interest

“may be zero.” Pet. App. 18a, 21a.

The dangers of this Kafkaesque rule extend to all

types of property. The Ninth Circuit considered its

imaginary contingent interest rationale for avoiding

Loretto “independent” from its mistaken distinction

between real and personal property. Pet. App. 17a-

18a. Thus, a government seeking to build a new

highway through private property might avoid the

per se rule by leaving the property owners a contin-

4 The Ninth Circuit’s approach makes even less sense in light of

the fact that “just compensation” requires “a full and perfect

equivalent for the property taken.” Monongahela Navigation

Co. v. United States, 148 U.S. 312, 326 (1893).

17

gent interest in highway funds—just as the Post Of-

fice, desiring to seize vehicles for mail delivery, might

avoid that rule by leaving the vehicles’ owners a con-

tingent interest in mail-related revenues. And since

the government can decide the scope of the contin-

gent interest, there is every reason to expect that the

interest will, as the Ninth Circuit says, “just so hap-

pen[]” to be worthless. Pet. App. 21a.

Were the Ninth Circuit’s destructive rule correct,

this Court’s past takings cases should have come out

the other way. The seizure of coal mines in United

States v. Pewee Coal Co. would not have required the

government “to pay just compensation,” had it simply

reserved to the mine’s former owner a theoretical in-

terest in the mine’s production. 341 U.S. 114, 117

(1951) (plurality). And the disruptive flights directly

over a home and farm in United States v. Causby

could have been “balanced” into a non-compensable

taking if only the government had offered a token

portion of airport net revenues to the homeowner.

328 U.S. 256, 265 (1946). In short, the government’s

and the Ninth Circuit’s approach would, apart from

the rarest example of a government forgetting to re-

serve a parchment interest, eviscerate the per se tak-

ings rules.

B. The Ninth Circuit’s decision permits the

government to avoid the per se rule mere-

ly by characterizing diffuse public bene-

fits as “contingént interests.”

Permitting governments to manipulate the stand-

ard of review by leaving the property owner a mean-

ingless contingent interest is bad enough. But the

Ninth Circuit went further. By its lights, Loretto’s

per se rule does not apply because “even in years in

18

which producers receive no equitable distribution,”

the Hornes’ interest “funds the administration of an

industry committee” that allegedly “ensures the re-

served raisins continue to work to the Hornes’ benefit

after they are diverted to the” Committee. Pet. App.

21la-22a. The Committee would use the funds from

the Hornes’ property to “represent[] raisin producers”

and supposedly “stabilize the field price of raisins.”

Pet. App. 21la.5 In other words, because the govern-

ment knows how to use raisins better than the

Hornes do (if only they understood!), the Hornes have

a continuing contingent interest sufficient to avoid

the per se rule. Once again, this collectivist view of

property is foreign to the Fifth Amendment.

It is no exaggeration to say that, if this view be-

came law, the following scheme would be judged, not

under Loretto, but only under Penn Centrals far

weaker balancing test: The government forms a

Land Administrative Committee, which has the pow-

er to take 50 percent of all real property and direct its

use. The (former) property owners must keep the

land “for the account” of the Committee. The owners

receive no compensation. Instead, the government

puts the land to a “better” use and provides, say, low-

er taxes, or some other diffuse public benefit to the

owners (accepted as true in court on the government’s

say-so). Under the government’s and the Ninth Cir-

cuit’s view, this is not a per se taking.

That cannot be right. As the Hornes put it, farm-

ers may not lawfully be required to “relinquish own-

ership of [their] crop”—they “put forth the money and

5 All these “benefits” with “no federal funding,” says the Ninth

Circuit (Pet. App. 6a)}—as if this scheme were more constitution-

al because it runs on confiscated property rather than taxes.

19

effort to grow it, not the Raisin Administrative Com-

mittee. This is America, not a communist state.”

April 23, 2002 Letter from the Hornes to the Secre-

tary of Agriculture and the Raisin Administrative

Committee (Pet. App. 129a-130a).

Of course, one need not collectivize half the pri-

vate property in America to see the flaws of the gov-

ernment’s and the Ninth Circuit's approach. Take

Loretto itself. This Court found a per se taking there

because there was “a permanent physical occupation

of property.” Loretto, 458 U.S. at 441. But if the

Ninth Circuit were right, the government could easily

have manipulated the applicable standard, avoiding

the per se rule. All it needed to do was tell the Court

that, even if the property owners were too obtuse to

realize it, they “benefited” from the government tak-

ing their property to install cable by the improvement

of the nationwide communications system, the result-

ing increase in educational and entertainment pro-

gramming, and ultimately a richer cultural milieu.

Thus, the “disposition” of the owners’ property “in-

ure[d] to [their] benefit.” Pet. App. 22a.

Such arguments could be made for any taking.

For instance, “even the family that gets booted from

its home to make room for a freeway will get the ben-

efit of a much faster commute from the park bench

whence it must take up residence.” WLF, 271 F.3d at

866 (Kozinski, J., dissenting). “In a complex world, a

property owner will alWays get some benefit, real or

theoretical, from a taking of his property.” Ibid.

As it turns out, an argument akin to the govern-

ment’s here was made in Loretto—and rejected. As

the Court explained, even if the taking “serve[d] the

legitimate public purpose of ‘rapid development of

20

and maximum penetration by a means of communica-

tion which has important educational and community

aspects,” that “is a separate question” from whether

a taking occurred. 458 U.S. at 425. “[A] permanent

physical occupation authorized by government is a

taking without regard to the public interests that it

may serve.” Id. at 426.

If the government and the ruling below are right,

then Loretto is wrong. Indeed, many of this Court’s

taking cases must be wrong. “[T]he physical taking

of any property by the government * * * is a compen-

sable taking, even if the property owner gets an off-

setting—or even a net—benefit.” WLF, 271 F.3d at

866 (Kozinski, J., dissenting). Regardless of “the

wisdom” of the government’s policy, where that policy

“transfer[s] an interest in property from the land-

owner to the government,” it “amount[s] to a per se

taking.” Koontz v. St. Johns River Water Mgmt. Dist.,

133 S. Ct. 2686, 2600 (2013). As Justice Holmes put

it long ago: “[A] strong public desire to improve the

public condition is not enough to warrant achieving

the desire by a shorter cut than the constitutional

way of paying for the change.” Pa. Coal Co. v. Ma-

hon, 260 U.S. 393, 416 (1922).

C. Evisceration of the per se takings rule

would undermine property ownership,

autonomy, and reliance interests.

1. By making it easy for governments to avoid the

per se takings rule, the decision below would under-

mine the foundational values of American property

law. The Fifth Amendment embodies the principle

that property rights are central to a free people and a

just government. Property cannot be taken without

21

“due process”; and when it is taken, the government

must pay “just compensation.” U.S. Const. amend. V.

These guarantees reflect the many values inher-

ent in private property. They promote individual

achievement, privacy, and autonomy from govern-

ment intrusion. Loretto, 458 U.S. at 436 (“[P]roperty

law has long protected an owner’s expectation that he

will be relatively undisturbed at least in the posses-

sion of his property.”). They also protect settled ex-

pectations and reliance interests. Moreover, they fos-

ter equal treatment under the law by barring the

government “from forcing some people alone to bear

public burdens which, in all fairness and justice,

should be borne by the public as a whole.” Armstrong

v. United States, 364 U.S. 40, 49 (1960). But under

the Ninth Circuit’s decision, most takings would be

assessed only under the malleable Penn Central

standard. Applying that standard broadly would

provide scant protection to core property rights.

As this Court has recognized, “[t]he traditional

rule” embodied by Loretto “avoids otherwise difficult

line-drawing problems.” Loretto, 458 U.S. at 436.

Since Penn Central, the Court has expressed discon-

tent with that decision’s “essentially ad hoc, factual

inquirly].” Koontz, 133 S. Ct. at 2600 (quoting Penn

Central, 438 U.S. at 124). In Koontz, the Court de-

clined to apply, “much less extend that ‘already diffi-

cult and uncertain rule” to a monetary exaction.

Ibid. (quoting E. Enters. v. Apfel, 524 U.S. 498, 542

(1998) (Kennedy, J., concurring in the judgment and

dissenting in part)). Indeed, the question of when a

taking occurs under Penn Central is “among the most

litigated and perplexing in current law.” E. Enters.,

524 U.S. at 541 (Kennedy, J.).

22

2. The central weakness in Penn Centrals three-

factor balancing test is that it is readily susceptible to

manipulation. Whether a taking occurs depends on a

balancing of: (1) the regulation’s “economic impact”

on the property owner; (2) “the extent to which the

regulation has interfered with distinct investment-

backed expectations”; and (3) “the character of the

governmental action.” 438 U.S. at 124. Those factors

are not amenable to being applied consistently—and

should not be extended beyond regulatory takings, to

actual physical takings.

The first factor examines the economic impact on

the property owner. Which way this factor points de-

pends on how the impact is characterized. A court

sympathetic to a taking can easily invoke the “bundle

of rights” concept and frame the taking as one that

removes only a couple twigs from the bundle—as the

Ninth Circuit did here. Pet. App. 18a, 20a; see Eric

R. Claeys, The Penn Central Test and Tensions in

Liberal Property Theory, 30 Harv. Envtl. L. Rev. 339,

357 (2006). By contrast, courts less sympathetic to

the government can “construe[] the owners’ interest

much more broadly,” often by characterizing the right

taken as one of the bundle’s more significant sticks.

Id. at 361.

The second factor focuses on “investment-backed

expectations.” But this phrase obscures more than it

illuminates. As Professor Richard Epstein has ob-

served, “we should be deeply suspicious of the phrase

‘investment-backed expectations’ because it is not

possible to identify even the paradigmatic case of its

use.” Richard A. Epstein, Lucas v. South Carolina

Coastal Council: A Tangled Web of Expectations, 45

Stan. L. Rev. 1369, 1370 (1993). If the phrase is sup-

posed “to convey the idea that property is protected

23

only where it has been acquired by purchase or labor,

then it is clearly inaccurate”: “The government can-

not take property from a donee anymore than it can

take it from a buyer.” Ibid. And this factor can

swing either way depending on whether the court

chooses to frame the property interest in commercial

terms.

The third factor, the character of the government

action, is likewise unpredictable and easily manipu-

lated. If a court characterizes the government action

“by focusing on the invasiveness of the regulation,”

this factor will point toward a taking. Claeys, supra,

at 357. But if the court “tak[es] at face value the

purposes for which the government professed to act”

and gives these purposes “close to rational-basis def-

erence,” this factor will point the other way. Ibid.

“Whether one or the other of the competing charac-

terizations will come to one’s lips in a particular case

depends primarily upon one’s evaluation of the worth

of competing uses of real estate.” Lucas, 505 U.S. at

1025.

3. Penn Centrals malleability erodes the values

served by the protection of private property, creating

uncertainty at the public’s expense. Citizens “will not

be able to make informed choices” about their proper-

ty if the Court does not apply “clear standards to de-

termine when compensation will be paid.” Susan

Rose-Ackerman, Against Ad Hocery: A Comment on

Michelman, 88 Colum. ED. Rev. 1697, 1700 (1988). Be-

cause the Takings Clause “is an attempt to reconcile

an unpredictable, democratically responsible polity

with the existence of a capitalist economy based on

private property and individual initiative,” ad hoc

takings rules “introduce[] an element of uncertainty

into private investment decisions that could make the

24

coexistence of democracy and private property more,

rather than less, difficult.” Jd. at 1701-1702.

Further, unpredictable standards tend to destroy

“the appearance of equal treatment.” Antonin Scalia,

The Rule of Law as a Law of Rules, 56 U. Chi. L. Rev.

1175, 1178 (1989). Because Penn Central, “with its

lack of objective criteria, does not impart knowledge

of the legal rights and obligations of either property

owners or public officials,” its application has “re-

sult[ed] in protracted litigation and arbitrary out-

comes.” Steven J. Eagle, The Four-Factor Penn Cen-

tral Regulatory Takings Test, 118 Penn St. L. Rev.

601, 605 (2014).

The per se framework produces fairer and more

predictable results than Penn Central, and it should

generally be favored by the law. Under the decision

below, however, the per se rule would rarely apply.

Whenever the government offered some contingent

interest in the taken property—even if that interest

was worthless or had value only in the government’s

eyes—there would never be a per se taking. Instead,

Penn Central would apply, permitting property rights

of all sorts to be “balanced” away. To preserve the

core protection of the Takings Clause, the Ninth Cir-

cuit’s decision must be reversed.

CONCLUSION

For the foregoing reasons, the judgment below

should be reversed.

25

Respectfully submitted.

WILLIAM P. FERRANTI STEFFEN N. JOHNSON

Winston & Strawn LLP Counsel of Record

35 West Wacker Drive EIMERIC REIG-PLESSIS

Chicago, IL 60601 CHRISTOPHER E. MILLS

(212) 558-5600 Winston & Strawn LLP

1700 K Street, NW

Washington, DC 20006

(202) 282-5000

sjohnson@winston.com

Counsel for Amici Curiae

MARCH 2015

ILYA SHAPIRO

Cato Institute

1000 Mass. Ave., NW

Washington, DC 20001

(202) 842-0200

itshapiro@cato.org

Counsel for Cato

Institute

KAREN R. HARNED

ELIZABETH MILITO

LUKE A. WAKE

NFIB Small Business

Legai Center

1201 F St., NW, Ste. 200

Washington, DC 20004

(202) 406-4443

elizabeth. milito@nfib.org

Counsel for National

Federation of Independ-

ent Business

MANUEL S. KLAUSNER

Law Offices of Manuel

S. Klausner, P.C.

One Bunker Hill Bldg.

601 West Fifth St.

Los Angeles, CA 90071

(213) 617-0414

mklausner @kiausnerinc.com

Counsel for Reason

Foundation

26

THOMAS J. WARD

DEVALA A. JANARDAN

National Association of

Home Builders

1201 15th Street, NW

Washington, DC 20005

(202) 266-8200

tward@nahb.org

djanardan@nahb.org

Counsel for National

Association of Home

Builders

SHANNON L. GOESSLING

Southeastern Legal

Foundation

2255 Sewell Mill Rd.

Suite 220

Marietta, GA 30062

(770) 977-2131

shannon @southeasternlegal.org

Counsel for Southeastern

Legal Foundation

APPENDIX

APPENDIX: LIST OF AMICI CURIAE

The Cato Institute was established in 1977 as a

nonpartisan public-policy research foundation dedi-

cated to advancing the principles of individual liber-

ty, free markets, and limited government. Cato’s

Center for Constitutional Studies was established in

1989 to help restore the principles of limited constitu-

tional government that are the foundation of liberty.

Toward those ends, Cato publishes books and studies,

conducts conferences, publishes the annual Cato Su-

preme Court Review, and files amicus briefs, includ-

ing in various cases concerning property rights. This

case is of central concern to Cato because it impli-

cates the safeguards the Constitution provides for the

protection of property rights against wrongful tak-

ings.

The National Federation of Independent Business

(NFIB) is the nation’s leading small business associa-

tion, representing members in Washington, D.C., and

all 60 state capitals. Founded in 1943 as a nonprofit,

nonpartisan organization, NFIB’s mission is to pro-

mote and protect the right of its members to own, op-

erate, and grow their businesses. NFIB represents

about 350,000 member businesses nationwide, and its

membership spans the spectrum of business opera-

tions, ranging from sole proprietor enterprises to

firms with hundreds of employees. While there is no

standard definition of a “small business,” the typical

NFIB member employs 10 people and reports gross

sales of about $500,000 a year. The NFIB member-

ship is a reflection of American small business.

The National Federation of Independent Business

Small Business Legal Center (NFIB Legal Center) is

a nonprofit, public interest law firm established to

2a

provide legal resources and be the voice for small

businesses in the nation’s courts on issues of public

interest affecting small businesses. To fulfill its role

as the voice for small business, the NFIB Legal Cen-

ter frequently files amicus briefs in cases that will

impact small businesses.

The National Association of Home Builders

(NAHB) is a Washington, D.C.-based trade associa-

tion whose mission is to enhance the climate for hous-

ing and the building industry. Chief among NAHB’s

goals is providing and expanding opportunities for all

people to have safe, decent, and affordable housing.

Founded in 1942, NAHB is a federation of more than

800 state and local associations. About one-third of

NAHB’s approximately 140,000 members are home

builders or remodelers, and they constitute 80% of all

home construction in the United States. NAHB is a

vigilant advocate in the nation’s courts. It frequently

participates as a party litigant and amicus curiae to

safeguard the constitutional and statutory rights and

business interests of its members and those similarly

situated.

The Reason Foundation is a national, nonparti-

san, and nonprofit public policy think tank, founded

in 1978. Reason’s mission is to advance a free society

by developing, applying, and promoting libertarian

principles and policies—including free markets, indi-

vidual liberty, and the rule of law. Reason supports

dynamic market-based public policies that allow and

encourage individuals and voluntary institutions to

flourish. Reason advances its mission by publishing

Reason magazine, as well as commentary on its web-

sites, www.reason.com and www .reason.tv, and by is-

suing policy research reports. To further Reason’s

commitment to “Free Minds and Free Markets,” Rea-

3a

son selectively participates as amicus curiae in cases

raising significant constitutional issues.

Southeastern Legal Foundation (SLF), founded in

1976, is a national non-profit, public intérest law firm

and policy center that promotes the public interest in

the proper construction and enforcement of the laws

and Constitution of the United States in the courts of

law and through public discourse. SLF advocates

constitutional individual liberties, private property

rights, limited government, and the free enterprise

system in its litigation cases and amicus participa-

tion in state and federal courts.