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

Supreme Court, US.

FILED

No. 14-275 APR - 8 2015

| OFFICE OF THE CLERK

au The

Supreme Court of the Gnited States

+

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

4

BRIEF OF AMICUS CURIAE INTERNATIONAL

MUNICIPAL LAWYERS ASSOCIATION

IN SUPPORT OF RESPONDENT

°

JOHN D. ECHEVERRIA

VERMONT Law SCHOOL

164 Chelsea Street

South Royalton, VT 05068

(802) 831-1386

JEcheverria@vermontlaw.edu

Counsel of Record

COCKLE LEGAL BRIEPS (800 ) 225-6964

_ WWW COCKLELEGALBERIEFS.COM

i

TABLE OF CONTENTS

Page

INTERESTS OF AMICUS CURIAE ..............2..00+. 1

INTRODUCTION AND SUMMARY OF ARGU-

SEINE cidtintadersseresconessesanemnssneninemsnbhassonnianmbeniannteis 2

TE biccitnitricsinpnennserentnniiemniniapinicgniineinnmminenes 6

I. Petitioners’ Takings Claim Fails as a Mat-

Il.

IIT.

ter of Law Because Petitioners, in Their

Capacity as Handlers, Never Owned Any

I irsitcinthiiitinninasistdnaniteniniennsbahtcinieigandiineate

The Court Should Reject Petitioners’ In-

vitation to Create a New Per Se Takings

Category for Interferences with Possessory

Interests in Personal Property....................

A Property Owner Generally Cannot De-

fend Against Sanctions for Violating a Law

on the Ground that Enforcement of the

Law Would Result in a Taking of Private

Property for Public Use ...........................004

IY sitsicncacicsincndisnuistinassneniidcndignbineiinnaienainia

11

rH

TABLE OF AUTHORITIES

Page

CASES:

Andrus v. Allard, 444 U.S. 51 (1979).........0...00..0.0000.. 11

Ark. Game & Fish Comm’n v. United States,

ey Gs CN Ci icticicrctsisininiindadbenpenennnennasoas 13, 15

Armstrong v. United States, 364 U.S. 40 (1960)........ 18

Bennis v. Michigan, 516 U.S. 442 (1996)...........000..... 17

Boom Co. v. Patterson, 98 U.S. 403 (1878) ................ 24

Bowen v. Gilliard, 483 U.S. 587 (1987) ....................24. so]

Broad. Music, Inc. v. Columbia Broad. Sys.,

ig Ge ee Ei icrccnectnnintsitntbindticintecdintnssetecsie 20

Brown v. Legal Found. of Wash., 538 U.S. 216

SE lncipcisinecinbaciiitinieainpiideinianiigeennalidadndinsadiatidipadintiadiandeice 16

Danforth v. United States, 308 U.S. 271 (1939) .......... 9

Dolan v. City of Tigard, 512 U.S. 374

Sarai cinesssncesistiieniteesicisdiinceicicieinibieitidiaaaticininniniindibieaitid 12, 30, 33, 34

Duke Power Co. v. Carolina Envtl. Study Grp.,

ing SR En TT icici ciaessiciiccnsialchcisecigiincitticeioeniclentnieneniis 26

E. Enters. v. Apfel, 524 U.S. 498 (1998) ....6, 7, 9, 27, 34

Eisenstadt v. Baird, 405 U.S. 438 (1972)................... 11

First English Evangelical Lutheran Church v.

County of Los Angeles, 482 U.S. 304 (1987).....25, 31

Gilman v. Philadelphia, 70 U.S. (3 Wall.) 713

SE Te a icieusiasiehatiteheeeciiatieanidaaiiieibiaieinhieaindeininatanadbaniahiatiaabininsitie 17

Horne v. Deptt of Agric., 2009 WL 4895362

Se EE ES Bile, SN iitccicitinesndetaitiiapnctininniases 19

ili

TABLE OF AUTHORITIES — Continued

Page

Horne v. Dep't of Agric., 133 S. Ct. 2053

Fe entvsninintictinssstniistonneintemasiintdainiieddaesennnimetan passim

Horne v. Dep't of Agric., 750 F.3d 1128 (9th Cir.

a a 19, 33, 34

Hurley v. Kincaid, 285 U.S. 95 (1932) ..............2........ 27

Kelo v. City of New London, 545 U.S. 469

REESE ESR een a ee MORO Oe EE AERP RET 26

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

ls eile SE A iciciccccnidenisecedconniie 29, 33, 34, 35

Larson v. Domestic & Foreign Commerce Corp.,

gg EIR Re re reo lee hence 26

Lexmark Int'l, Inc. v. Static Control Compo-

nents, Inc., 184 S. Ct. 1877 (BOWE).........cccccocccceseses. 11

Lingle v. Chevron U.S.A. Inc., 544 U.S. 528

EET eee A A RAE Dee eee Ree 25

Loretto v. Teleprompter Manhattan CATV

ig Se i Ge Ci icccscecectneseccecccescsesenie 13, 14

Lucas v. S.C. Coastal Council, 505 U.S. 1003

GIT iedniaccnsnsemeseniacssencinuntinenninsatenetinnessenttnnstints passim

Mo. Pac. Ry. Co. v. Nebraska, 217 U.S. 196

(1910).........0ecseseeseserees a a a a aaa 27, 28

Nollan v. Cal. Coastal Comm’n, 483 U.S. 825

SRE TIER SERS ERA SOs aor einer ew rte Sram eTee TIT 12, 33, 34

Palazzolo v. Rhode Island, 533 U.S. 606 (2001)........ 13

Penn Cent. Transp. Co. v. City of New York, 438

i 12, 22, 32

iv

TABLE OF AUTHORITIES — Continued

Page

Phillips v. Wash. Legal Found., 524 U.S. 156

EAN RCs ee ee RS Oe ee SN er 6

Preseault v. Interstate Commerce Comm’n, 494

EEE Rie eo ama 24, 25

Ruckelshaus v. Monsanto Co., 467 U.S. 986

ERS eet ERO eRe eee ee ae Pee renee, 25

Seaboard Air Line Ry. v. United States, 261

EER RL SLES SE See oD 24

Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg

Planning Agency, 535 U.S. 302 (2002) ................... 12

United States v. Causby, 328 U.S. 256 (1946) ........... 30

United States v. Clarke, 445 U.S. 253 (1980) ............ 30

United States v. Lee, 106 U.S. 196 (1882).................. 26

United States v. Riverside Bayview Homes,

ig GEE Ga Piccscccecccncsntnssnscssessonnssesezccese 25

United States v. Sperry Corp., 493 U.S. 52

RRR EEE SI Get RTE SS ee a one 14

Village of Norwood v. Baker, 172 U.S. 269

a sieenemndintadainn 29

Warth v. Seldin, 422 U.S. 490 (1975)................2..22002- 11

Webb’s Fabulous Pharmacies, Inc. v. Beckwith,

4 EEE reser eannes 6, 16

Williams-Yulee v. Fla. Bar, U.S. Supreme

Sg I STE cecicsiinininiianisibmnegeniinitindgiiindespiminaisinaeuat 30

Wright v. Georgia, 373 U.S. 284 (1963) piasininindbthiamniédd 29

Yee v. City of Escondido, 503 U.S. 519 (1992)............ 14

Youngstown Sheet & Tube Co. v. Sawyer, 343

EET SRE es Saeed EERE Yay ates Peete Se 26

Vv

TABLE OF AUTHORITIES ~— Continued

Page

CONSTITUTION, STATUTE, AND REGULATIONS:

Se IE TID ics etre retinaiiestmaiiiginiatinnil passim

Agricultural Marketing Agreement Act........... 8, 10, 23

TE a a a TT nT 20

Or ait iat 19

I a ili adamnaiimeaiaiinn 33

EDEL SE sere Role een EN Ee 33

MISCELLANEOUS:

Daniel Bensing, The Promulgation and Imple-

mentation of Federal Marketing Orders Reg-

ulating Fruit and Vegetable Crops Under the

Agricultural Marketing Agreement Act of

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

John D. Echeverria, Eschewing Anticipatory

Remedies for Takings: A Response to Profes-

sor Merrill, 128 Harv. L. Rev. F. (forthcoming

Sens MII ciclsciclecilenicescaibdnecchtbdmitanaaicihestbanacteisaianii 23

Why Does America Regulate the Trade in Rai-

sins?, The Economist (April 14, 2013).................... 20

1

The International Municipal Lawyers Association

respectfully submits this brief amicus curiae in sup-

port of Respondent Department of Agriculture.’

+

INTERESTS OF AMICUS CURIAE

The International Municipal Lawyers Association

(“IMLA”), an advocate and resource for local govern-

ment lawyers since 1935, serves as an international

clearinghouse for legal information and cooperation

on municipal legal matters for its 3,000 members.

IMLA frequently appears before the Court as amicus

curiae to represent the interests of its members in

cases that may affect local governments. IMLA has a

major interest in this case for two reasons. First,

Petitioners’ proposal that the Court create a new per

se category to govern takings claims based on impair-

ments of possessory interests in personal property, in-

cluding commercial products sold to the public, would

interfere with a variety of local government regulatory

activities that are essential to maintaining public

health and safety ~nd upholding important commu-

nity values. Second, Petitioners’ request that the

Court adopt the novel theory that property owners, in

* Pursuant to Supreme Court Rule 37.6, IMLA states that

no counse} for any party authored this brief in whole or in part,

nor did any person or entity, other than amicus curiae, make a

monetary contribution to the preparation or submission of this

brief. This brief is filed with the written consent of all the

parties.

2

general, can flout any law and then raise the Takings

Clause as a defense to sanctions for doing so would

undermine local governments’ ability to protect im-

portant features of the built and natural environ-

ments.

«

INTRODUCTION AND

SUMMARY OF ARGUMENT

This case presents a novel set of facts that Peti-

tioners and their amici seek to exploit to upend long-

standing takings principles. IMLA urges the Court to

reject this effort. There are few economic programs

similar to the raisin marketing program and almost

none at the local government level. Nevertheless, lo-

cal governments tow illegally parked vehicles, remove

unwholesome food from store shelves and prohibit

its sale, and remove abused and neglected animals

from their owners. Subjecting these and other similar

government interferences with possessory interests in

personal property to a per se takings rule would

seriously interfere with local governments’ authority

to protect public health and safety. Likewise, Pe-

titioners’ proposal to revolutionize takings doctrine

by allowing property owners to routinely flout laws

and then raise the Takings Clause as a defense to

sanctions for doing so would have serious adverse

effects on local governments. Apart from the fact that

Petitioners’ argument lacks any foundation in the

Constitution, acceptance of this argument would en-

courage frequent violations of zoning laws, historic

3

preservation ordinances, and other local rules and

regulations, threatening the economic health and liv-

ability of our communities.

The simplest and most direct way to resolve this

complex case is to recognize that Petitioners, in their

capacity as handlers, never owned any raisins and

therefore cannot assert a taking of their “private

property.” The text of the Takings Clause and nu-

merous Court precedents confirm that ownership of

“private property” is an essential precondition for

a viable takings claim. Petitioners’ case founders at

the threshold because (1) they are litigating this

case solely in their capacity as raisin “handlers” and

(2) Petitioners, in their capacity as handlers, never

owned any raisins. Petitioners seek to support their

claim by pointing to property interests held by raisin

producers, but a takings claimant cannot rely on an

alleged taking of property belonging to somebody else.

Even if Petitioners could overcome the lack of a

protected property interest (they cannot), the Court

should reject Petitioners’ request that it create a new

per se rule for alleged takings based on interferences

with possessory interests in personal property. The

Court has previously adopted categorical per se rules

for two narrow categories of regulatory takings cases

involving infringements of rights in land: total deni-

als of all economically viable use of land, and perma-

nent physical occupations of real property. Both of

these per se takings rules are rooted in the special

character of private property interests in land, and do

not logically support the creation of a different per se

4

rule applicable to personal property. Furthermore,

the Court’s justifications for the Lucas per se rule

affirmatively argue against a new per se rule for

government interferences with possessory rights in

personal property, especially commercial products

such as raisins.

The Court has generally eschewed mechanical

per se rules because they restrict the courts’ ability to

consider the factors that, in “fairness and justice,”

ordinarily should be considered in making a reasoned

judgment about whether a taking has occurred, in-

cluding the adverse economic impact (if any) of the

government action, the degree of interference with

reasonable investment-backed expectations, and the

character or purpose of the government action. In the

case of personal property—particularly fungible com-

mercial property that has been heavily regulated

for many decades—application of a per se rule is

especially likely to produce outcomes that fail the

tests of fairness and justice. The purpose and effect of

the Raisin Marketing Order are to confer substantial

economic benefits on raisin growers, at considerable

expense to the consuming public, and applying a per

se rule in this case would risk conferring an addi-

tional unfair windfall on growers at further public

expense.

Finally, IMLA urges the Court to reject the ar-

gument of Petitioners and several of their amici that

property owners, in general, should have the option

under the Takings Clause either to pursue a claim for

just compensation or to refuse to comply with a law

5

because they think it constitutes a taking and de-

fend against any subsequent penalties for noncom-

pliance by invoking the Takings Clause. Petitioners

make this argument despite the fact that the Court in

Horne I already determined, based on the specific

statutory scheme governing this case, that Peti-

tioners can present any takings argument they may

have in the context of this case. The much broader,

novel remedies theory Petitioners are now advancing

is contrary to established precedent and settled prin-

ciples. The exclusive remedy for an alleged taking of

private property for public use is ordinarily a suit for

just compensation. In exceptional cases, like this one,

when an alleged taking is for other than a “public

use,” or if “just compensation” is not an available

remedy, property owners are not required to pursue

the compensation remedy. In either of these circum-

stances, owners can invoke the Takings Clause as a

defense to sanctions for not complying with the law

(or seek to enjoin the government from acting). But,

absent these circumstances, the exclusive remedy for

a taking is a suit for just compensation. In sum, there

is no merit to Petitioners’ argument that property

owners, generally speaking, can defy laws they be-

lieve constitute takings and then litigate the takings

issue in response to government enforcement actions.

¢

6

ARGUMENT

I. Petitioners’ Takings Claim Fails as a Mat-

ter of Law Because Petitioners, in Their

Capacity as Handlers, Never Owned Any

Raisins.

The most straightforward basis for affirming the

judgment of the Ninth Circuit is that Petitioners, in

their capacity as handlers, never owned any raisins

and therefore cannot assert viable claims that the

Raisin Marketing Order threatened them with a

taking of their property. See Br. for Resp’t 51-55. The

text of the Takings Clause makes clear that owner-

ship of private property is an essential predicate for a

viable takings claim: “Nor shall private property be

taken for public use, without just compensation.” U.S.

Const. amend. V (emphasis added). Numerous Court

precedents illustrate that a takings claimant must

identify the private property allegedly taken. See,

e.g., Phillips v. Wash. Legal Found., 524 U.S. 156,

163-71 (1998); Webb’s Fabulous Pharmacies, Inc. v.

Beckwith, 449 U.S. 155, 160-61 (1980). Indeed, the

requirement that a takings claimant point to a pro-

tected property interest is such an essential require-

ment that the Court has raised sua sponte the lack of

predicate property interest and rejected a takings

claim on the merits on that basis. See E. Enters. v.

Apfel, 524 U.S. 498, 539-45 (1998) (Kennedy, J.,

concurring in the judgment and dissenting in part);

id. at 554-56 (Breyer, J., dissenting, joined by Ste-

vens, Souter and Ginsburg).

7

Petitioners’ case founders for lack of a property

interest because (1). Petitioners are litigating this

case solely in their capacity as raisin “handlers” and

(2) Petitioners, in their capacity as handlers, never

owned any of the raisins grown by raisin producers.

From the beginning of this case it was ambiguous in

what capacity Petitioners were litigating their claim;

after all, the United States argued in Horne v. De-

partment of Agriculture (Horne I), 133 S.Ct. 2053

(2013), that Petitioners should have pursued a claim

for just compensation in the Court of Federal Claims

because they were making a takings argument in

their capacity as producers. However, in Horne I, the

Court clarified that Petitioners are litigating this case

not as producers but solely in their capacity as han-

dlers. In their capacity as handlers, Petitioners have

no protected property interest in any raisins, and

therefore their case fails as a matter of law. See E.

Enters. v. Apfel, 524 U.S. at 543 (Kennedy, J., concur-

ring in the judgment and dissenting in part) (“We

have been careful not to lose sight of the importance

of identifying the property allegedly taken.”).

The Court’s opinion in Horne / is replete with

confirmations of the fact that Petitioners are litigat-

ing this case solely in their capacity as handlers, and

not as producers. See 133 S. Ct. at 2060 (“[TJhe civil

penalty, assessment, and reimbursement for failure

to reserve raisins were all levied on petitioners in

their capacity as ‘handlers.’”); id. (“It is undisputed

that the Marketing Order imposes duties on peti-

tioners only in their capacity as handlers.”); id. at

8

2061 (“Given that fines can only be levied on han-

dlers, petitioners’ takings claim makes sense only as

a defense to penalties imposed upon them in their

capacity as handlers.”) (emphasis in original); id.

(“The relevant question, then, is whether a federal

court has jurisdiction to adjudicate a takings defense

raised by a handler seeking review of a final agency

order.”); id. at 2062 (“petitioners (as handlers)”); id. at

2063 (“[pletitioners (as handlers)”); id. at 2064 (“peti-

tioners, in their capacity as handlers”).

It is also clear that Petitioners, as handlers, were

at no time owners of any of the raisins allegedly

threatened with a taking. Under the Agricultural Mar-

keting Agreement Act (“AMAA”), handlers acquire

custody of raisins designated as “reserve-tonnage rai-

sins,” but they do so “‘for the account’” of the Raisin

Administrative Committee, an agent of the United

States, meaning that the United States acquires an

ownership interest in the raisins. Jd. at 2058. In

addition, raisin producers retain a property interest

in the raisins they produce, even after the raisins are

transferred to handlers as “reserve-tonnage raisins,”

because they have a right to the profits from sale of

the reserve raisins. Jd. But handlers are not owners

of any of the reserve raisins. As the Department of

Agriculture Judicial Officer explained, handlers “ac-

quired” the raisins within the meaning of the Market-

ing Order, but “acquire” is “a term of art that does not

encompass an ownership interest,” App. to Pet. for

Cert. 122a; as Petitioners have correctly maintained

from the outset of this litigation, “[T]itle to the raisins

9

never transferred from the grower to Mr. Horne and

partners under California law.” Jd. at 121a-22a.

Because Petitioners are litigating this case solely

as handlers, and handlers have no ownership interest

in any raisins, Petitioners have no viable claim under

the Takings Clause. See E. Enters. v. Apfel, supra; see

also Bowen v. Gilliard, 483 U.S. 587, 605 (1987) (re-

jecting takings claim because plaintiffs had no prop-

erty right for takings purposes to continued welfare

benefits at same level); Danforth v. United States, 308

U.S. 271, 284 (1939) (the property owner “at the time

of the taking” is the only party entitled to assert a

claim under the Takings Clause); cf. Lucas v. S.C.

Coastal Council, 505 U.S. 1003, 1029 (1992) (stat-

ing that a takings claim fails at the threshold if

“background principles” of property or nuisance law

preclude a takings claimant from establishing a

protected property entitlement).

Petitioners’ attempt to rely on the property in-

terests of producers to support their takings argu-

ment not only conflicts with basic takings doctrine

but also with the Court’s reasoning in Horne I. In

Horne I the government contended that the District

Court lacked jurisdiction over this case because Pe-

titioners could present-+their argument that the gov-

ernment took producers’ property by filing suit in the

Court of Federal Claims. The Court rejected that ar-

gument. In so ruling the Court refused to conflate the

Petitioners’ status as handlers with their status as

producers, insisting that “the Marketing Order im-

poses duties on petitioners only in their capacity as

10

handlers.” 133 S. Ct. at 2060 (emphasis added). Given

this logic, Petitioners, in their capacity as handlers,

cannot now assert takings claims based on property

interests owned, not by them as handlers, but rather

by them in their capacity as producers or by other

producers.

Understandably, Petitioners want to try to have

their cake (present their takings argument in the Dis-

trict Court without regard to their ability, as pro-

ducers, to sue for just compensation) and eat it too

(prosecute their takings claim in the District Court by

invoking the property interests they hold as produc-

ers). But Horne I forecloses this strategy.

Importantly, the conclusion that Petitioners lack

a viable takings claim does not mean that the Raisin

Marketing Order can never be challenged as a taking,

or even that Petitioners, as producers, cannot present

their takings argument in court. It simply means

that, under the specific jurisdictional scheme created

by the Agricultural Marketing Agreement Act, raisin

growers such as Petitioners are required to pursue

their claims in the conventional fashion—by filing a

suit for just compensation in the U.S. Court of Fed-

eral Claims. That option was always open to them

and it is open to them in the future. What the Court

should not countenance, however, is permitting Peti-

tioners to assert without factual foundation a prop-

erty interest in raisins they do not own.

As the Department of Agriculture correctly ob-

serves, see Br. for Resp’t 54, there is no unfairness

in Petitioners having to pay fines and penalties for

11

violating the law. This outcome is simply the result of

the risk Petitioners_took in pursuing their ill-fated

scheme to escape the legal rules that other members

of the industry comply with. Moreover, Petitioners, as

producers, gained significant economic benefits by

selling their entire crop in the open market in viola-

tion of the Marketing Order, and these benefits offset

the burden of the fines and other penalties being

imposed on them as handlers.’

Il. The Court Should Reject Petitioners’ Invi-

tation to Create a New Per Se Takings Cat-

egory for Interferences with Possessory

Interests in Personal Property.

Apart from the fact that Petitioners’ case fails for

lack of a protected property interest, the Court should

* Petitioners’ lack of a property interest in raisins might

also be considered through the lens of standing doctrine. A liti-

gant “generally must assert his own rights and interests, and

cannot rest his claim to relief on the legal rights and interests of

third parties.” Warth v. Seldin, 422 U.S. 490, 499 (1975); see also

Andrus v. Allard, 444 U.S. 51, 64 n.21 (1979) (ruling that a

plaintiff lacked standing to assert a taking of property “owned by

others”). The Court has sometimes allowed litigants to represent

the interests of third parties where the third party lacks the

ability to sue to defend its own rights, see, e.g., Eisenstadt v.

Baird, 405 U.S. 438, 446 (1972), but that exception could not

apply here, given that producers are perfectly capable of suing

in the claims court. See also Lexmark Int'l, Inc. v. Static Control

Components, Inc., 134 S. Ct. 1377, 1387 n.3 (2014) (observing

that the Court has not resolved whether the prohibition on as-

sertion of third-party claims is a prudential limitation on stand-

ing or a requirement of Article III of the Constitution).

12

reject Petitioners’ proposal that the Court create a

new per se takings rule that would govern alleged

takings based on interferences with possessory inter-

ests in personal property, including goods sold to the

public. The multi-factor Penn Central analysis repre-

sents the Court’s “polestar” for determining whether

a governmental action constitutes a taking, Tahoe-

Sierra Pres. Council, Inc. v. Tahoe Reg Planning

Agency, 535 U.S. 302, 336 (2002) (citing Penn Cent.

Transp. Co. v. City of New York, 438 U.S. 104 (1978)),

and there is no sound reason to depart from that

approach in evaluating takings claims based on

interferences with possessory interests in personal

property. Petitioners assert that precedent of this

Court establishes that a per se rule applies in this

context, but they cite no authority actually support-

ing that assertion and, so far as we can determine,

there is no such authority.

The Court has identified two categories of regu-

latory takings cases in which a per se test applies

in lieu of the fact-specific analysis of Penn Central.’

First, the Court has said that per se “categorical

treatment” is appropriate “where regulation denies

all economically beneficial or productive use of land.”

Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1015

(1992). Second, the Court has said that regulations

* The Court has articulated other, special tests for cases

involving development exactions. See Nollan v. Cal. Coastal

Comm'n, 483 U.S. 825, 837 (1987); Dolan v. City of Tigard, 512

U.S. 374, 386 (1994). We agree with Petitioners that these tests

do not apply here.

13

resulting in “permanent physical occupations” of

property will be deemed to be takings “without regard

to other factors that a court might ordinarily exam-

ine.” Loretto v. Teleprompter Manhattan CATV Corp.,

458 U.S. 419, 432 (1982). But cf. Ark. Game & Fish

Comm’n v. United States, 133 S. Ct. 511, 522 (2012)

(declining to extend this per se rule to temporary

physical occupations of private property).

Both of these per se rules arose from cases involv-

ing land and are based on the unique character of

rights in land, and therefore do not support peti-

tioners’ proposal for a quite different per se rule

covering personal property. The Lucas case involved a

takings claim based on a coastal regulation that de-

prived the owner of all economically viable use of his

land. 505 U.S. at 1009. The Lucas Court stressed that

the per se rule it announced in that case was ex-

plained and justified by the special character of rights

in real property; “[i]n the case of land,” the Court

said, “we think the notion pressed by the Council that

title is somehow held subject to the ‘implied limita-

tion’ that the State may subsequently eliminate all

economically valuable use is inconsistent with the

historical compact recorded in the Takings Clause

that has become part of our constitutional culture.”

Id. at 1028 (emphasis “added). In subsequent cases,

the Court has stressed that this per se rule only ap-

plies to total denials of all use of real estate. See, e.g.,

Palazzolo v. Rhode Island, 533 U.S. 606, 631 (2001)

(ruling that there was no Lucas taking where owner

14

could build one substantial residence on an 18-acre

parcel).

Loretto reviewed a regulation that mandated the

permanent placement of cable television equipment

on a private apartment building. The Court again em-

phasized that the case involved real property, justify-

ing the application of a per se rule by observing that,

“[wlhen faced with a constitutional challenge to a

permanent physical occupation of real property, this

Court has invariably found a taking.” 458 U.S. at

426-27. The Court described a permanent physical

occupation of real property as “qualitatively more in-

trusive than perhaps any other category of property

regulation,” id. at 441, and noted that “[elJarly com-

mentators viewed a physical occupation of real prop-

erty as the quintessential deprivation of property.” Jd.

at 430 n.7. The Court has repeatedly declined to

extend the per se rule articulated in Loretto beyond

required, permanent physical occupations of real

property. See, e.g., Yee v. City of Escondido, 503 U.S.

519, 530 (1992); United States v. Sperry Corp., 493

U.S. 52, 62 n.9 (1989).

In addition to not supporting Petitioners’ pro-

posed per se rule, the Lucas decision explicitly con-

tradicts Petitioners’ proposed rule as applied to the

specific kind of property at issue in this case. “[I]n the

case of personal property,” the Court said, “by reason

of the State’s traditionally high degree of control over

commercial dealings, {a property owner] ought to be

aware of the possibility that new regulation might

even render his property economically worthless (at

15

least if the property’s only economically productive

use is sale or manufacture for sale).” 505 U.S. at

1027-28. In other words, the Lucas Court categori-

cally exempted personal property from the Lucas per

se rule, at least in the case of personal property sold

in commerce or produced for sale. This exemption

obviously applies to raisins grown and processed for

sale to the public.

Furthermore, the Lucas Court justified the per se

rule for denials of all use of land by observing that a

“total deprivation of beneficial use is, from the land-

owner’s point of view, the equivalent of a physical

appropriation.” Jd. at 1017. Because the Lucas Court

justified the per se rule it announced by analogizing a

regulation that deprives the owner of all use of land

to an “appropriation,” and the Court categorically

excluded commercial personal property from the

scope of the per se rule, the Lucas decision supports

the conclusion that, whatever rule may apply to ap-

propriations in general, a per se rule should not apply

to “appropriations” of personal property, at least

when the property is sold in commerce.

There is no debate that government interference

with possession represents a serious impairment of

property interests. Indeed, appropriations of personal

property may commonly result in takings, as the cases

cited in Petitioners’ brief amply demonstrate. And

physical seizures of real property are especially prob-

lematic under the Takings Clause. See Ark. Game &

Fish Comm’n v. United States, 133 S. Ct. 511, 518

16

(2012) (discussing cases addressing seizures of real

property interests). But the specific question pre-

sented by this case is whether the Court should cre-

ate a categorical per se rule for alleged takings based

on impairments of possessory interests in personal

property, including commercial goods. Adoption of

such a per se rule would preclude the courts, in every

case covered by the rule, from considering the facts

and circumstances of the particular case, including

the character and purpose of the government action,

whether claimants have suffered any economic loss,

and whether there has been any interference with

their reasonable investment-backed expectations.

There is no warrant in the Court’s precedents or

the logic of its decisions for adopting this new per se

rule. See Webb’s Fabulous Pharmacies v. Beckwith,

449 U.S. 155, 163 (1980) (holding that government

appropriation of interest accruing on an interpleader

fund was a taking, but observing that “[n]o police

power justification is offered for the deprivation”) (em-

phasis added); Brown v. Legal Found. of Wash., 538

U.S. 216, 235 (2003) (assuming, but only for the sake

of argument, that a requirement that interest earned

in bank accounts be transferred to the Washington

Legal Foundation was “akin” to a per se taking, and

then rejecting the takings claim on the merits).

Furthermore, the proposed per se rule would be

unworkable in practice. Local governments are com-

monly compelled to impair possessory interests in

personal property for a wide variety of important

17

public purposes and it is unthinkable that all such

actions could be per se takings. Every-day examples

of such “appropriations” by local governments include

towing illegally parked automobiles, removing un-

wholesome food from store shelves and prohibiting

its sale, and removing abused and mistreated pets

and other animals from the care of neglectful owners.

None of these actions can be takings, much less per se

takings. See Gilman v. Philadelphia, 70 U.S. (3 Wall.)

713, 730-31 (1865) (“[A] bale of goods, laden with

infection, may be seized under ‘health laws,’ and if it

cannot be purged of its poison, may be committed to

the flames.”). Other levels of government engage in

similar kinds of interferences with possessory inter-

ests, such as seizures of adulterated and dangerous

drugs or of pirated copyright materials. These types

of interferences with possessory interests may raise

important statutory, common law or even constitu-

tional questions in some instances. But the mere fact

that the government is physically “appropriating”

property cannot, by itself, support an automatic

finding of a taking. See Bennis v. Michigan, 516 U.S.

442, 452 (1996) (ruling that abatement of an owner’s

interest in an automobile pursuant to a Michigan for-

feiture law did not constitute a taking under the Fifth

Amendment). ~

The Court’s per se rules relating to real property

are subject to exceptions based on “background prin-

ciples” of nuisance and property law, Lucas, 505 U.S.

at 1027-30, and these background principles certainly

can defeat texings claims involving personal property

18

interests. But these background principles are too

narrow in scope to exempt from takings liability the

full range of government impairments of personal

property interests, especially in commercial products,

that have traditionally been recognized as entirely

acceptable. That is almost certainly why the Lucas

Court, in addition to recognizing that background prin-

ciples will defeat “total” takings claims, independ-

ently exempted the entire universe of commercial

personal property from the Lucas rule. See Brief for

the United States as Amicus Curiae in Support of

Reversal, Lucas v. S.C. Coastal Council, No. 91-453,

1991 WL 11004086, at *13-15 (cataloguing examples

illustrating why the per se denial-of-all-economically-

viable use rule could not sensibly be applied to many

types of personal property); cf. Lucas v. S.C. Coastal

Council, 505 U.S. at 1013 (Kennedy, J., concurring in

the judgment) (observing that, in the case of coastal

land, nuisance doctrine “cannot be the sole source of

state authority to impose severe restrictions,” given the

“unique concerns” raised by “a fragile land system”).

This particular case also illustrates why the

proposed per se rule for alleged takings based on

interferences with possessory interests in personal

property should be rejected. The purpose of the Tak-

ings Clause is to “bar 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). The fundamental problem with applying a per

se rule in this case is that it would compel the courts

to ignore all of the features of the raisin marketing

19

program which suggest that, as a matter of fairness

and justice, the public should not be required to pay

Petitioners under the Takings Clause. These features

include the fact that the program has been in place

for many decades and Petitioners voluntarily entered

this heavily regulated industry many years ago; Pe-

titioners cannot now assert that the continued opera-

tion of the raisin marketing program interferes in the

least with their reasonable investment-backed expec-

tations. To the contrary, Petitioners have sought to

evade the rules of the raisin marketing program in an

attempt to secure a new, special benefit for them-

selves at the expense of other, law-abiding members

of the industry. The purpose of the raisin marketing

program and the lack of adverse economic effect on

Petitioners also weigh against the claim.

While the general goal of the raisin marketing

program is to maintain an “orderly” market in rai-

sins, the most direct and immediate beneficiaries of

the program are members of the raisin industry. The

Raisin Marketing Order was promulgated “at the

request of the raisin industry,” App. to Pet. for Cert.

44a, and it persists today only because a majority of

producers have not voted to repeal it. See 7 U.S.C.

§ 608c(16)(B). Its basic purpose is to restrict the mar-

ket supply of raisins in_order to prop up raisin prices,

largely ior the benefit of raisin growers. See Horne v.

Dep't of Agric., 750 F.3d 1128, 1143 (9th Cir. 2014)

(“[The] program does not overly burden the producer’s

ability to compete while reducing to the producer's

benefit the potential instability of this particular mar-

ket.”) (emphasis added); Horne v. Dep’t of Agric., 2009

20

WL 4895362, at *23 (E.D. Cal. Dec. 11, 2009) (“[T]he

‘primary focus’ of the market control program is to ‘max-

imize return to the grower.”) (quoting Daniel Bensing,

The Promulgation and Implementation of Federal

Marketing Orders Regulating Fruit and Vegetable

Crops Under the Agricultural Marketing Agreement

Act of 1937, 5 San Joaquin Agric. L. Rev. 3, 6 (1995)).

In addition, the Raisin Administrative Com-

mittee (“RAC”), which oversees the implementation of

the Marketing Order, is composed almost entirely of

raisin producers and handlers. The industry's self-

evident motivation in supporting this system of self-

regulation has been to create what amounts to an

industry-wide cartel to control the market supply of

raisins and increase the profits of raisin growers.

Absent government authorization, the program would

appear to be a per se violation of Section 1 of the

Sherman Antitrust Act. See Broad. Music, Inc. v.

Columbia Broad. Sys., Inc., 441 U.S. 1, 19-20 (1979)

(stating that a “practice [that] facially appears to be

one that would always or almost always tends to re-

strict competition or decrease output,” will be deemed

a per se violation of Section 1 of the Sherman Anti-

trust Act).

The primary losers under this program, of course,

are consumers, who are forced to pay more for raisins

than they would under competitive market condi-

tions. See Brief for the Cato Inst. et al. as Amici

Curiae in Support of Petitioners 6 (“[T]he [RAC]

does consumers no favors either: its creation of ‘artifi-

cial raisin-scarcity drives up prices.’”) (quoting

Why Does America Regulate the Trade in Raisins?,

21

The Economist (April 14, 2013)).* On the other hand,

to the extent the program succeeds in raising prices

for any raisin producer, it raises prices for all raisin

producers, including those who wish it did not exist

at all. If this Court were to apply a per se takings rule

and overrule the prior precedent that the program

does not result in a taking, raisin producers who al-

ready benefit from this publicly-subsidized program

would reap a windfall at public expense. The litiga-

tion parade might be led by Petitioners and other

industry dissidents, but it is difficult to see why many

other moderately self-interested raisin growers would

not also file claims for financial compensation. The

upshot would be that the costly public subsidy now

enjoyed by the raisin industry would be expanded at

still more public expense. This outcome would cyni-

cally mock the principles of fairness and justice that

are supposed to govern takings law."

We recognize that Petitioners and their amici

contest the factual accuracy of the foregoing account

of how the Marketing Order benefits raisin growers

* Whether the raisin marketing program continues to merit

support by Congress does not, of course, affect the issue of

whether the program results in a taking.

* Adopting Petitioners” proposed per se rule also would be

unfair to raisin growers who both comply with the Marketing

Order and decline to sue the government under the Takings

Clause; their continued compliance with the Order ensures that

the market supply of raisins is still constrained, making it pos-

sible for law-breakers and/or takings claimants to continue to

reap windfalls.

22

at public expense. See Br. for Pet’rs 25-26; Brief of the

DKT Liberty Project and Eighteen Independent Rai-

sin Growers as Amici Curiae in Support of Petitioners

4-19. Setting aside the merits of that response, simply

by making the argument Petitioners acknowledge the

common-sense intuition that economic fairness must

be a relevant consideration in this case, a concession

that is inconsistent with Petitioners’ argument for a

per se rule. The ultimate bankruptcy of Petitioners’

position is revealed by the fact that, according to their

legal theory, their economic arguments are ultimately

mere coloration under a per se rule. According to their

position, even if it is correct that the Marketing Order

significantly enriches raisin producers at great public

expense, they are still entitled to invoke a per se rule

that would enrich them still further at yet further

public expense. In the interest of fairness and justice,

the Court should not adopt a new per se rule that

would support such an outlandish result.°

* Petitioners contend that the government could achieve the

same market supply outcome by restricting sales, without nec-

essarily requiring that reserve raisins be handed over to the

RAC. Br. for Pet’rs 25. It seems odd to think that a taking would

be less likely if the government required surplus raisin produc-

tion to rot in the sun rather than be put to productive use, in-

cluding paying over the net proceeds from raisin sales to raisin

growers. In any event, this argument simply reinforces why a

per se takings test is inappropriate; it is just this kind of case-

specific question about the purpose of the program that can be

weighed under Penn Central, but not under a per se test.

23

Il, A Property Owner Generally Cannot De-

fend Against Sanctions for Violating a Law

on the Ground that Enforcement of the

Law Would Result in a Taking of Private

Property for Public Use.

In all events, the Court should reject the argu-

ment by Petitioners and several of their amici that

property owners, in general, are entitled to violate a

law they believe constitutes a taking and then raise

the Takings Clause as a defense to sanctions for doing

so. See Br. for Pet’rs 20, 27-31; Brief of the States of

Texas, Arizona and North Dakota as Amici Curiae

in Support of Petitioners 12-14; Brief of Washington

Legal Foundation as Amicus Curiae in Support of

Petitioners 26-27. In Horne I the Court ruled that

Petitioners, as handlers, can raise the takings issue

as a defense to the sanctions being imposed on them

in this case, given that the special AMAA jurisdic-

tional provisions bar them from suing for just com-

pensation in the Court of Federa) Claims. Petitioners

and their amici are now making a much broader ar-

gument: that property owners in general can always

raise the takings issue as a defense to sanctions for

violating laws alleged to be takings, even when the

just compensation remedy is available. The Court

should reject this broader argument.’

” See generally John D. Echeverria, Eschewing Anticipatory

Remedies for Takings: A Response to Professor Merrill, 128 Harv.

L. Rev. F. (forthcoming Apr. 10, 2015).

24

A taking of private property involves an exer-

cise of eminent domain, the governmental power to

take private property from individual citizens to ad-

vance the common good. The power of eminent do-

main is an inherent attribute of sovereignty that

precedes the Constitution; as the Court put it long

ago: Eminent domain “appertains to every independent

government. It requires no constitutional recognition;

it is an attribute of sovereignty.” Boom Co. v. Patter-

son, 98 U.S. 403, 406 (1878). The Takings Clause—

“nor shall private property be taken for public use,

without just compensation”—places conditions on the

exercise of the eminent domain power. Specifically, it

prohibits a taking if it is for other than a “public use,”

or if the taking is without “just compensation.” By the

same token, the Takings Clause, by its terms, places

no constraint on the eminent domain power so long as

it is exercised for a public use and just compensation

is available.

With respect to the just compensation requirement,

the Takings Clause does not require that compensa-

tion be offered “in advance of or even contemporane-

ous with the taking” in order to satisfy the Takings

Clause. Preseault v. Interstate Commerce Comm’n,

494 U.S. 1, 11 (1990). “All that is required is the ex-

istence of a reasonable, certain and adequate provi-

sion for obtaining compensation at the time of the

taking.” Jd. (internal quotation and citation omitted).

In addition, a successful takings claimant is consti-

tutionally entitled to prejudgment interest as part

of the compensation award. Seaboard Air Line Ry. v.

United States, 261 U.S. 299, 306 (1923). Thus, in

25

practice, awards of just compensation equitably pro-

tect property owners from the economic losses occa-

sioned by takings for public use.

In accord with this basic understanding of the

eminent domain power and the Takings Clause, the

Court has repeatedly affirmed that the Takings

Clause “is designed not to limit the governmental in-

terference with property rights per se, but rather to

secure compensation in the event of a taking.”

First English Evangelical Lutheran Church v. County

of Los Angeles, 482 U.S. 304, 314 (1987) (emphasis in

original). Thus, “[I]n general, ‘[e]quitable relief is not

available to enjoin an alleged taking of private prop-

erty for a public use, duly authorized by law, when a

suit for compensation can be brought against the

sovereign subsequent to a taking.’” United States v.

Riverside Bayview Homes, Inc., 474 U.S. 121, 127-28

(1985) (quoting Ruckelshaus v. Monsanto Co., 467

U.S. 986, 1016 (1984)); see also Preseault, 494 U.S. at

11-17; Ruckelshaus, 467 U.S. at 1016; cf. Lingle v.

Chevron U.S.A. Inc., 544 U.S. 528, 544 (2005) (repu-

diating the “substantially advance” takings test in

part because it implied, contrary to this long line of

authority, that a successful takings claim might sup-

port a grant of injunctive relief).

For example, a farmer opposed to the Keystone

pipeline cannot sue under the Takings Clause to block

the taking of her property for a right of way for the

pipeline, so long as just compensation is available,

absent a showing the taking is unauthorized or other-

wise not for a public use. Likewise, if a local govern-

ment is regulating land use to protect the community

26

and the owner has the opportunity to seek compensa-

tion for any taking that might result, the owner can-

not invoke the Takings Clause in a bid to block the

regulation. The Takings Clause imposes the same ba-

sic constraints on takings regardless of whether the

government is condemning private property or the

owner has brought an inverse condemnation action.

The Court has said that, in exceptional cases, the

courts can block government from taking private

property, but only when the taking is not for a public

use or just compensation is not an available remedy.

Thus, invoking the public use requirement, the Court

has said that a taking may be enjoined if the taking

would serve an illegitimate purpose, see Kelo v. City

of New London, 545 U.S. 469, 477-78 (2005), or is

contrary to some other law. See Youngstown Sheet

& Tube Co. v. Sawyer, 343 U.S. 579, 585 (1952).

Similarly, invoking the just compensation require-

ment, the Court has said that an owner can seek to

enjoin a taking if no forum is available in which to

sue for compensation, see Larson v. Domestic & For-

eign Commerce Corp., 337 U.S. 682, 697 & n.17 (1949)

(discussing United States v. Lee, 106 U.S. 196 (1882)),

or if the alleged taking would generate “potentially

uncompensable damages.” Duke Power Co. v. Carolina

Envtl. Study Grp., Inc., 438 U.S. 59, 94 n.39 (1978).

In accord with these precedents, a plurality of the

Court has adopted the presumption that Congress

has not provided a just compensation remedy if an

alleged taking involves money, on the theory that Con-

gress could not sensibly embrace the pointless, circular

exercise of forcing a citizen to sue the government to

give back money the government is simultaneously

27

taking from that citizen. See E. Enters. v. Apfel, 524

U.S. 498, 521 (1998) (plurality opinion).

These exceptional cases do not detract from the

general principle that the exclusive remedy for a tak-

ing for a public use is a suit for just compensation, so

long as that remedy is actually available. Indeed, be-

cause these exceptions only apply either when the

taking is not for a public use or just compensation is

not available, they collectively uphold and reaffirm

the understanding that an injunction is not available

if a taking is for a public use and just compensation is

available. Because the eminent domain power is an

inherent attribute of sovereignty, so long as the tak-

ing is for a public use and just compensation is avail-

able, a court order based on the Takings Clause

blocking a taking would be an illegitimate exercise of

judicial power in derogation of the authority of the

other branches of government. See Hurley v. Kincaid,

285 U.S. 95, 104 (1932) (“[E]ven if the defendants are

acting illegally, under the Act, in threatening to pro-

ceed without first acquiring flowage rights over the

complainant’s lands, the illegality, on complainant’s

own contention, is confined to the failure to compen-

sate him for the taking, and affords no basis for an

injunction if such compensation may be procured in

an action at law.”).

=

There are relatively few cases involving efforts

by property owners to defend against monetary sanc-

tions for violating the law by arguing that enforce-

ment of the law would result in a taking. See, e.g.,

Mo. Pac. Rv. Co. v. Nebraska, 217 U.S. 196 (1910),

discussed below. It is self-evident, however, that

28

property owners can defend against sanctions by

raising a takings objection only if they can properly

seek to enjoin the government from proceeding with

the taking. Permitting a property owner to defy the

law and avoid sanctions for doing so under the Tak-

ings Clause is functionally equivalent to allowing a

property owner to enjoin the government from taking

private property. In either case, if the property own-

er’s argument prevails, she can stop the government

from acting.

Petitioners cite Missouri Pacific Railway Co. v.

Nebraska, 217 U.S. 196 (1910), as support for their

argument that “fines for refusal to submit to uncon-

stitutional takings may be challenged under the Tak-

ings Clause.” See Br. for Pet’rs 30. In that case the

Court allowed a railroad to raise the Takings Clause

as a defense to a sanction for violating a law requir-

ing railroads to build side rails at the request of grain

elevator operators. 217 U.S. at 208. But the Court

justified this approach by observing that Nebraska

law provided no procedure for claiming just compen-

sation for a taking. See id. at 205 (“It will have been

noticed that there is no provision in the statute for

compensation to the railroad for its outlay in building

and maintaining the side tracks required.”). This

decision fits squarely within the line of exceptional

cases recognizing that parties can seek to enjoin, or

avoid sanctions for violating, laws that allegedly take

private property when there is no opportunity to seek

just compensation. Missouri Pacific Railway Co. does

not support the argument that property owners can

raise the Takings Clause as a defense to a sanction

29

imposed for violating a law alleged to be a taking

when there is an opportunity to sue for just compen-

sation.

Petitioners also cite Village of Norwood v. Baker,

172 U.S. 269 (1898), for the proposition that a prop-

erty owner can resist a monetary sanction by invok-

ing the Takings Clause, see Br. for Pet’rs 29, but that

unique case does not support their theory either. In

that case, the government, confronted by the high

cost of condemning a parcel of property, attempted to

impose a special charge on the owner in order to raise

the funds necessary to finance acquisition of the prop-

erty. The Court saw through this gambit and declared

that the charge violated the Takings Clause. This

narrow precedent serves simply to “prevent[ ] circum-

vention of the Takings Clause by prohibiting the gov-

ernment from imposing a special assessment for the

full value of a property in advance of condemning it.”

Koontz v. St. Johns River Water Mgmt. Dist., 133

S. Ct. 2586, 2608-09 (2013) (Kagan, J., dissenting).

Village of Norwood does not support the different and

much broader theory advanced by Petitioners that a

property owner, at her option, can defy any law and

raise the Takings Clause as a defense to sanctions for

doing so.

The Court has stated, as a general proposition:

“[Ojne cannot be punished for failing to obey the com-

mand of an officer if that command is itself violative

of the Constitution.” Wright v. Georgia, 373-U.S. 284,

291-92 (1963). Thus, a citizen can generally raise

other provisions of the Bill of Rights as a defense to

30

the imposition of sanctions for disregarding a law if

the law is unconstitutional. See, e.g., Williams-Yulee

v. Fla. Bar, U.S. Supreme Court, No. 13-1499 (ad-

dressing whether sanctions for violating a Florida law

barring candidates running for office from soliciting

campaign contributions violate the First Amend-

ment). But this general proposition does not apply in

cases arising under the Takings Clause; if the con-

ditions of the Takings Clause are met, the Takings

Clause provides no basis for seeking to void sanctions

for violating the law.

Nor does this mean that the Takings Clause is in

any sense a “poor relation” to other constitutional

rights. Dolan v. City of Tigard, 512 U.S. 374, 392

(1994). The fact that, generally speaking, the Takings

Clause cannot be raised as a defense to sanctions for

breaking the law simply reflects the fact that, unlike

most other provisions of the Constitution, the Takings

Clause is not designed to prevent government from

acting but instead creates a right to compensation

when a government action amounts to a taking for

public use. See United States v. Causby, 328 U.S. 256,

267 (1946). In addition, the Court has said that the

requirement to pay compensation under the Taking

Clause is “self-executing,” meaning that no congres-

sional recognition of a right to sue is required to

ensure its enforcement. United States v. Clarke, 445

U.S. 253, 257 (1980). In sum, there is no need to

make a special effort to rescue the Takings Clause

from some mythical lesser status.

31

Allowing property owners to routinely raise a

takings argument against sanctions for violating the

law would have serious adverse effects on local gov-

ernments’ ability to advance important public goals.

As the Court explained in its landmark decision in

First English Evangelical Lutheran Church v. County

of Los Angeles, 482 U.S. 304 (1987), after a court

rules that a regulation represents a taking requiring

payment of just compensation, government officials

have a range of options. They cannot avoid liability

for a temporary taking from the date the taking

occurred, but they can rescind or modify the regula-

tion to eliminate liability going forward. Id. at 317.

Alternatively, they can decide that the government

objective is so important that they wish to continue to

enforce the regulation, even if they have to bear the

unanticipated financial burden of paying compensa-

tion under the Takings Clause. /d.

Allowing property owners to routinely raise a

takings defense to sanctions based on their violations

of the law would make the government’s options far

more limited. If a property owner violates a regula-

tion and a court subsequently rules that enforcement

of the regulation would have constituted a taking, the

public purpose of the regulation is completely thwart-

ed. This outcome contradicts the function of the

Takings Clause, which is “not to limit the governmen-

tal interference with property rights per se, but

rather to secure compensation in the event of a

taking.” Jd. at 314 (emphasis in original).

32

The magnitude of the harms local governments

and their citizens would suffer from this novel inter-

pretation of the Takings Clause would vary depend-

ing on the facts and circumstances. For example, a

community might seek to preserve a historic land-

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

438 U.S. 104 (1978). Under the traditional under-

standing of the Takings Clause, the government can

insist on enforcing a law protecting the landmark,

while accepting the risk of incurring financial liability

under the Takings Clause. Under Petitioners’ ap-

proach, however, property owners would be granted a

license under the Takings Clause to violate the law

and destroy the historic landmark, leaving the gov-

ernment only the option of pursuing sanctions. The

prospect of imposing sanctions would be useless in

term of advancing the community’s goal of protecting

the landmark, contrary to the purpose and design of

the Takings Clause. Many other examples can easily

be imagined where authorizing property owners with

takings objections to violate the law could seriously

and irreparably damage valuable resources.

Petitioners attempt to assign great significance

to the fact that the penalties imposed in this case

were based, in part, on the market value of the rai-

sins they and other growers declined to place in re-

serve. They suggest that, at least when the penalty

for breaking the law is the “dollar equivalent” of what

a court would award in just compensation if the

law were complied with, an order blocking sanctions

for violating the law is indistinguishable from a

33

compensation award for a taking. The economic im-

pact of these options may be comparable from the

property owner perspective, but these alternatives

are hardly the same from the governmental perspec-

tive, for the reasons discussed above. In any event,

the premise of the argument is mistaken, because in

this case the sanctions included an assessment of sev-

eral hundred thousand dollars over and above the

market value of the raisins that the Hornes and other

growers declined to place in reserve. In other cases

the sanctions a property owner might incur for violat-

ing a law could be much greater or much less than

the potential compensation award if the owner com-

plied with the law and prosecuted a takings claim.

See, e.g., 33 U.S.C. § 1319(gX3) (criteria for assessing

penalties under the Clean Water Act); 20 U.S.C.

§ 1268(a) (criteria for assessing penalties under the

Surface Mining Control and Reclamation Act). The

merits of Petitioners’ theory cannot possibly depend

on the specific size of the monetary sanctions imposed

for violations of the law.

Finally, the Court should reject the theory artic-

ulatea by the Ninth Circuit, based on the decision

in Koontz, that a property owner should be permitted

to raise a takings argument in opposition to sanctions

for violating the law. See Horne v. Dep't of Agric., 750

F.3d 1128, 1137-38 (9th Cir. 2014). In Koontz the Court

addressed the question of whether the Nollan/Dolan

standards that apply to traditional development ex-

actions should also apply to monetary exactions. To

support the conclusion that they should, the Court

reasoned that monetary exactions can properly be

34

viewed as takings for the purpose of applying the

Nollan/Dolan framework because they “‘operate upon

... an identified property interest,’” that is, the

property the owner is seeking to develop. 133 S. Ct.

at 2599 (quoting E. Enters. v. Apfel, 524 U.S. at 540

(Kennedy, J., concurring in the judgment and dissent-

ing in part)). The Ninth Circuit argued that, just as in

Koontz the “link” between a monetary exaction and a

piece of real property justifies applying the Nollan/

Dolan standards to a monetary exaction, the link

between the monetary sanctions in this case and

property interests in raisins justifies evaluating the

constitutionality of the sanctions by evaluating whether

implementation of the Marketing Order would have

resulted in a taking. Horne, 750 F.3d at 1137.

The Court should reject this extravagant and

unwarranted reading of Koontz, which in any event

was unnecessary in light of the ruling in Horne / that

Petitioners can challenge the sanctions in this case.

The Koontz Court focused on the question of the scope

of the application of the Nollan/Dolan standards, and

nothing in the Court’s discussion of that issue sup-

ports the very different argument that an owner can

routinely raise the Takings Clause as a defense for

violating the law. The simple fact that there was a

link between money and property in Koontz and that

there is also an arguable link between monetary sanc-

tions imposed on Petitioners and property interests in

raisins (owned by somebody else) is of no analytical

significance and does not support the Ninth Circuit’s

theory supposedly based on Koontz. Furthermore, the

Koontz Court expressly reaffirmed that just compen-

sation is the traditional remedy for a taking (“the

35

Fifth Amendment mandates a particular remedy—

just compensation—only for takings,” 133 S.Ct. at

2597) (emphasis in original), directly contradicting the

Ninth Circuit’s expansive interpretation of Koontz.

In sum, there is no debate that Petitioners, as

handlers, in this particular case can raise the Takings

Clause as a defense to the sanctions being imposed on

them, given that the usual just compensation remedy

is closed to them. But the Court should reject the

broader argument of Petitioners and their amici that

property owners, in general, can raise the Takings

Clause as a defense to sanctions for violating laws

alleged to be takings, even when the just compensa-

tion remedy is available.

«

CONCLUSION

For the foregoing reasons and for the reasons

stated in the brief of the Respondent Department of

Agriculture, the Court should affirm the judgment of

the U.S. Court of Appeals for the Ninth Circuit.

Respectfully submitted,

JOHN D. ECHEVERRIA

VERMONT Law SCHOOL

164 Chelsea Street

~ South Royalton, VT 05068

(802) 831-1386

JEcheverria@vermontlaw.edu

Counsel of Record

April 8, 2015