SCOTUS Decision in Horne v. Department of Agriculture Scores Victories for Private Property Rights

The Horne plaintiffs and thousands of farmers like them have been forced to turn over portions of their crop yields to the federal government.

Earlier this week, the Supreme Court ruled 8-1 that the federal government must pay private property owners just compensation if it seizes their real property for the purpose of maintaining artificially high prices for consumers.

Worded that way, it seems surreal that there was ever any question.

But that is precisely what happened to Marvin and Laura Horne, the plaintiffs in Horne v. Department of Agriculture, and thousands of other farmers like them who have been forced to turn over portions of their crop yields year after year since 1937.

That year an act was passed allowing the Department of Agriculture to promulgate “marketing orders” to maintain stable markets for U.S. produce. That is newspeak for using a government-enforced cartel to maintain high prices. One such marketing order established a Raisin Administrative Committee. Think of the RAC as like the State Science Institute. The RAC sets annual “reserve requirements,” pursuant to which growers must turn over a percentage of their raisin crops to the government.

The government then disposes of those “reserve raisins” by selling them in non-competitive markets or donating them to federal agencies or foreign governments. The proceeds of the government’s sales pay for the administration of the program. Profits left after that, if any, are distributed back to the growers.

In 2002-2003, growers had to turn over 47 % of their crops to the government. In 2003-2004, it was 30%. In one of those years, they received no distribution of net proceeds at all. In the other, the distribution was less than the costs incurred in producing the raisins.

Starting in 2002, the Hornes refused to turn over any raisins to the government. The government sent trucks to their facility to take the raisins. The Hornes refused entry. The government assessed a fine equal to the RAC’s calculation of the fair market value of the withheld raisins, which was approximately $480,000, plus more than $200,000 in penalties for the Horne’s disobedience.

The Hornes sought relief in federal court, arguing that the fines and penalties were unlawful because the raisin reserve orders constituted unlawful takings without just compensation in violation of the Takings Clause of the Fifth Amendment to the Constitution. The Ninth Circuit sided with the government. The Hornes appealed.

In a decision written by Chief Justice John Roberts, the U.S. Supreme Court found 8-1 for the Hornes, reaching several holdings of interest to those concerned with private property rights.

Physical Appropriation of Private Property

All of the justices except Sotomayor agreed that the Fifth Amendment requires just compensation when the government takes personal property (just as when it takes real property) even if the property taken is a “fungible” commodity like raisins.

In reaching this holding, the Court distinguished between regulatory takings (requiring compensation when a regulation goes “too far”) and physical takings (where as in Horne title actually transfers to the government). Regulatory takings cases acknowledge different standards and expectations with respect to real and personal property. Physical takings cases do not.

The parties and the Court agreed that the government might achieve the same ends without running afoul of the Constitution by placing regulatory caps on the amount of raisins that producers could grow. The government attorneys and the dissent (Sotomayor) were baffled then that anyone could object to the reserve requirement on takings grounds. The majority responded (citations omitted):

A physical taking of raisins and a regulatory limit on production may have the same economic impact on a grower. The Constitution, however, is concerned with means as well as ends. The Government has broad powers, but the means it uses to achieve its ends must be “consist[ent] with the letter and spirit of the constitution.” … “[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.”

This may not be the jenga block that topples Wickard v. Filmore as some libertarians no doubt hoped. But it is an important holding. The distinction—between taking a percentage of crop yields versus placing a regulatory cap on production—is more than formulaic. The latter does not involve the same perverse incentives as the former, which for 75 years subsidized a bureaucracy that eventually existed for no better purpose than to perpetuate itself.

This issue was illustrated by the Hornes’ evidence that contrary to the government’s account of massive oversupply, the RAC was able to sell the vast majority of the 2003-2004 reserve raisins for more than the field price, resulting in RAC income of over $99,800,000. This income was spent on exporter subsidies, administrative costs and other RAC expenses. In other words, the RAC appropriated raisins that, according to the government’s own numbers, could have been sold in an unregulated market for $747 per ton, and it paid the producers nothing. Similarly in 2005-06, 2006-07, 2007-08, and 2008-09, the RAC also sold reserve raisins for tens of millions of dollars but distributed no proceeds to the growers.

The Supreme Court’s holding in Horne will function as a restriction on this perverse incentive. Limited to regulatory caps, rather than confiscatory takings that fund the administrative bureaucracy, we can allow ourselves a glimmer of hope the government will finally end its maintenance of the raisin market cartel.

Quid Pro Quo

In an effort to avoid the foregoing result, the government made an argument that the Court characterized as the “let them sell wine” argument: If raisin growers did not like the nice, orderly market the RAC had created, they should grow other crops, sell their grapes as table grapes, or use them in juice or wine. But if growers voluntarily chose to enter the raisin market, they could be required to cede their private property as a condition of engaging in that market, pursuant to the vast authority Wickard gave the federal government to regulate interstate commerce.

If this argument had succeeded, it would essentially have disposed of the constitutional requirement of just compensation for physical and regulatory takings. The Takings Clause would have been swallowed by the broad power of the Commerce Clause as interpreted by Wickard.

If this does not keep you up at night, I don’t know what would. Only eight individuals (individuals whom candidates like Mike Huckabee want to disempower) stand between private property owners and Congressional failures of this magnitude.

Those eight agreed that business owners cannot be required to cede their constitutional right to be compensated for takings as a condition of engaging in interstate commerce. Property rights “cannot be so easily manipulated,” and basic and familiar uses of private property cannot be treated as “government benefits” for which one must pay with his constitutional rights.

Selling produce in interstate commerce, although certainly subject to reasonable government regulation, is similarly not a special governmental benefit that the Government may hold hostage, to be ransomed by the waiver of constitutional protection.

Just Compensation

The fines levied against the Hornes had been based upon the RAC’s assessment of the fair market value of the reserve raisins. The government nevertheless argued that, if the Court found a taking, it had to remand the case for a calculation of just compensation. It further contended that said calculation should take into account what the value of the reserve raisins would have been without the existence of the price support program, as well as all the other benefits of the regulatory program. The government actually suggested that it might turn out that the Hornes had actually received a “net gain” from the program.

The Hornes presented evidence challenging the government’s rosy assertion of benefits generated by the regulatory program. In some of the years, said the Hornes, raisin growers could have sold their entire yields at prices not much below and in some cases higher than those set by the RAC. Moreover, even where introducing additional yields to the market would have driven down prices, growers still would have made more money as a result of the additional sales, benefitting both growers and consumers (citations omitted):

Take the 2003-04 crop year as an example. That year, the field price for raisins (the price that handlers paid to producers for free-tonnage raisins, and the amount the USDA assessed the Hornes for their undelivered reserve tonnage raisins) was $810 per ton. The government’s brief tells us that according to the Secretary’s econometric model, the price would have been $63 per ton less without the reserve, or $747 per ton. … We believe the $63-per-ton figure is greatly inflated. But accepting the Secretary’s calculation for heuristic purposes, a producer of 1,000 tons of raisins in that crop year could have sold them in an unregulated market for $747,000, from which should be deducted the state mandatory advertising fee of almost $5 per ton. Under the marketing order, however, the producer could sell only 70% of his crop, yielding $567,000. He received nothing for his reserve raisins that year, meaning he was worse off by $175,000. This, again, is under the government’s own numbers.

Ultimately, the Court held the benefits of the program were irrelevant. The government had already calculated the amount of just compensation when it fined the Hornes $483,843.53 as the fair market value of the raisins. In any case, the reserve requirement was unconstitutional, so the Hornes could not be fined or penalized for failing to comply with it. The appropriate remedy was to relieve them of said fines and penalties.

On this issue, the breakdown of votes was different.

Breyer, Ginsburg and Kagan bought the government’s argument. These justices would have remanded the case to allow the government to demonstrate that it had already “paid” for the taking via the benefits generated by its regulatory scheme.

Sotomayor did not reach the issue at all. She found that the raisin reserve requirement did not constitute a taking and therefore did not require any compensation.

Only five justices—Scalia, Thomas[1], Alito and Kennedy, joining Roberts—stood between individual property owners and the notion that the benefits of regulatory activity could constitute just compensation for a physical taking of private property.




[1] Thomas wrote separately to argue that the RAC’s conduct was an unconstitutional taking irrespective of just compensation because the taking was not “for public use.” Instead the government gave the confiscated property to exporters, foreign importers, and foreign governments.


The Charleston Shooting Is A Reminder That Man Is Not Inherently Good


The country is still in shock after the mass murder of nine worshippers at a African-American church in Charleston, South Carolina. The Charleston shooting shakes us at our very core because these victims were truly innocent. The shooter, a 21 year old racist punk, specifically targeted the church because it was a black church.

This monster still went through with the shooting despite the fact the people at the church were “nice” according to a media report. He went to that church intending to kill people.

Many of the usual chattering heads have speculated he was “mentally ill.” But that’s hard to believe. He rationally thought out the attack and acquired the firearms to do it. I find it hard to believe we’re dealing with a “mentally ill” person as opposed to an evil one.

Many times, we’re quick to dismiss those who commit murder and other terrible acts as “mentally ill.” As a society we literally cannot comprehend someone doing such a thing. We have forgotten that evil exists and that people are not inherently good.

As a species, we continue to think we have evolved past the mere primitive notion that violence solves issues. We believe that in this culture of lawyers, contracts, and instant communication that we have evolved past violence. That’s an absurd analysis.

A modern Germany exterminated tens of millions between 1933-45. The Balkans, before they exploded in their wars of extermination in the 1990s, were a mostly developed region. The massive oil wealth of the Middle East hasn’t stopped that region of the world from having their own religious and ethnic conflicts. If wealth and technological progress are measures of civilization, then I would hate to see what is uncivilized.

Man is a fallen creature and capable of both good and evil. It’s best to view humanity through that lens. We should be wary of attempts to make men “better.” Mass graves from France to Russia to Cambodia are a testament to that fallacy.

There are only two approaches to dealing with evil. You either deter it or you destroy it. You can deter evil by making the consequences of doing their deed so high that is not worth it. You can also destroy an evil person when they act. However, we should not kid ourselves and believe we can “eradicate” evil from the world.

This piece doesn’t have any ideas on how to end racism (short answer you won’t) or what kind of gun control could stop this (short answer not much). Instead what we can do is not be blind to the reality of man. Instead of providing ourselves with the false comfort that people are inherently good, we should open our eyes to the fact that man is capable of both great and evil deeds.

Only by acknowledging the truth in ourselves can we move forward with discussions how to prevent future atrocities like this.

Donald Trump: Corporatist Bully (Re-post)

I originally wrote the following post in the very early days of the 2012 presidential campaign. At the time, Donald Trump was threatening to enter the race but decided not to do so. A little over four years later, Trump has decided to run in an already very crowded 2016 Republican primary. I have friends and family members who are intrigued (who ought to know better) with the Donald. The reason I decided to re-publish this post is to remind readers why a President Donald Trump would be no friend of limited government or liberty.

I do not like Donald Trump. I don’t dislike him because of his wealth; he probably earned most of his wealth honestly. Some dislike Trump because he is a self promoter. I don’t dislike Trump for this reason either. Many successful individuals are great at self promotion and developing a successful brand (a very good attribute to have to have a successful political campaign).

No, the reason I really dislike Donald Trump – even putting aside his becoming the new face of the Birther movement in recent weeks, his support of the auto bailouts, raising taxes, his anti-free trade proposal that would place a 25% tariff on all Chinese products, and his support for single payer universal healthcare – is quite simply that he is a corporatist bully.

For those who don’t quite understand the difference between a capitalist and a corporatist, I highly encourage you to read Brad’s post “Mercantilism, Fascism, Corporatism — And Capitalism.” This distinction is an important one. Donald Trump is the poster child for what many on the Left as a greedy capitalist; a caricature of everything that is wrong with capitalism as preached by the Ralph Naders and Michael Moores of the world.

But those of us who know better know that Donald Trump isn’t a capitalist at all but a corporatist. Trump doesn’t try to work within a framework of a free market as a true capitalist would, but like far too many businessmen, he uses his wealth and influence to encourage the government to work on his behalf to his advantage (and at the expense of anyone else who would dare get in his way).

In the early 1990’s, an elderly widow by the name of Vera Coking was in the way. Coking’s home that she had lived in for 30 years was on a plot of land that the Donald coveted. The Donald wanted the property so he could add a limousine parking area to one of his Atlantic City casinos. When Coking turned down his $1 million offer to buy the property, the Donald decided to enlist the help of his goons on the New Jersey Casino Reinvestment Authority. In 1994, these government thugs filed a lawsuit to take Coking’s property for $251,000 and gave her 90 days to leave her property (if she were to stay beyond the 90 days, men in uniforms with guns would forcibly remove her from her home).

Fortunately, Coking’s case gained enough media publicity to gain the attention and help of The Institute for Justice (think a more libertarian ACLU with a focus on property rights). With the IJ’s help, Coking was able to keep her property. In 1998, a judge made a decision that turned out to be final finding that the Donald’s limousine parking area was not a “public use.”

John Stossel confronted the Donald about his failed attempts to take the widow’s home away; he reprinted this exchange in his book Give Me A Break on pages 152 and 153:

Donald Trump: Do you want to live in a city where you can’t build roads or highways or have access to hospitals? Condemnation is a necessary evil.

John Stossel: But we’re not talking about a hospital. This is a building a rich guy finds ugly.

Donald Trump: You’re talking about at the tip of this city, lies a little group of terrible, terrible tenements – just terrible stuff, tenement housing.

John Stossel: So what!

Donald Trump: So what?…Atlantic City does a lot less business, and senior citizens get a lot less money and a lot less taxes and a lot less this and that.

Earlier in the book (page 25) Stossel gives his impressions of this confrontational interview:

Donald Trump was offended when I called him a bully for trying to force an old lady out of her house to make more room for his Atlantic City casino. After the interview, the producer stayed behind to pack up our equipment. Trump came back into the room, puffed himself up, and started blustering, “Nobody talks to me that way!”

Well, someone should.

Had this case taken place after Kelo, the Donald may well have prevailed. In the wake of the Kelo decision, Neil Cavuto interviewed the Donald on Fox News (7/19/05) to get his reaction.


I happen to agree with [the Kelo decision] 100 percent, not that I would want to use it. But the fact is, if you have a person living in an area that’s not even necessarily a good area, and government, whether it’s local or whatever, government wants to build a tremendous economic development, where a lot of people are going to be put to work and make area that’s not good into a good area, and move the person that’s living there into a better place — now, I know it might not be their choice — but move the person to a better place and yet create thousands upon thousands of jobs and beautification and lots of other things, I think it happens to be good.

Donald Trump is not one who respects property rights (other than his own). “Tremendous economic development” and “jobs” are great reasons to employ the full police power of government to take away someone’s property in the Donald’s world view.

I shudder to think of what a Donald Trump presidency would look like. Imagine the Donald with control of our CIA and our military. The Donald doesn’t have any problem using force to get what the Donald wants.

Now consider President Trump with a vacancy on the U.S. Supreme Court. What sort of Justice would he appoint? Most likely one who would view Kelo quite favorably.

This bully, Donald Trump is the guy who is polling second place in some early Republican primary polls? Wake the hell up Republicans!

One of the Original “Liberty Papers” Turns 800


A mere 572 years before the U.S. Constitution and the Bill of Rights, 561 years before the Declaration of Independence, and 465 years before John Locke’s Two Treatises of Government was a government-limiting charter which inspired the authors of each of these was the Magna Carta. In June of 1215, a full 800 years ago, a group of land barons had decided that they had enough of the tyrannical rule of King John. Rather than depose the king outright, the barons forced King John to surrender some of his powers, thus creating the concepts British Common Law and the Rule of Law.

The history of the Magna Carta and how it was almost quashed is quite interesting:

There are four copies of the charter still in existence – one each in Lincoln and Salisbury Cathedrals, and two in the British Library.
The curator of the Library’s exhibit, Dr Claire Breay, told Sky News: “The most important thing about Magna Carta is that it established the principle of the rule of law.

“No free man shall be seized or imprisoned or stripped of his rights, or outlawed or exiled, except by the judgement of his equals or by the law of the land. And that clause is really at the heart of Magna Carta’s fame today.”

Those who negotiated the treaty would be astonished at how its reputation has survived eight centuries, because it was annulled after only 10 weeks.
The Pope ruled that King John had been forced to sign it under duress. Yet in the years afterwards, the language in the charter was revised and reintroduced and became part of the cornerstone of English law.

Vicor Hugo famously said “No army can stop an idea whose time has come.” Shortly after King John’s signing of the Magna Carta, the idea of the rule of law had come; the divine rights of kings was no longer universally accepted.

Men, Women and Rand Paul

Zuri Davis, Brittany Wilson and Grace Charlton Standing With Rand.

Since the issue is getting a lot of coverage now, I will explain why libertarians are “mostly dudes” and why women are not as statistically likely to support Rand Paul.

Let me begin by explaining why it does not matter.

People are not representatives of the groups to which they belong. We are all individuals in a category of one. Denying differences between broad classes of people, like “men” and “women,” is to deny reality. But it is also a denial of reality and a logical error, to generalize differences between those broad groups to the individuals within them.

The male and female bell curves of any trait encompass wide areas of overlap. They do so for height. They do so for mathematical ability. Other than whatever criteria is used to assign the individual data points to their respective categories in the first place, there is literally nothing true of all men, but not true of any women.

It is therefore almost never accurate or productive to say things like “men think or say or do or feel xyz, but women think or say or do or feel the opposite of xyz (or xyz to a lesser extent).” That is taking differences at the extremes and generalizing them in a way that obscures the wide areas of overlap for the vast majority of traits.

So headlines like “Women Don’t Like Libertarianism Because They Don’t Like Libertarianism” (which I will not link to here) are just insulting and inaccurate.

Two-thirds of libertarians are men.

I know math is supposedly hard for us ladies (hey, like libertarianism!). But by my calculations that means female libertarians are not exactly unicorns. They are 33 out of every 100 libertarians.

And I am one of them.

My mother and sister may not call themselves libertarians, but their political views are virtually indistinguishable from mine. I have a female second cousin who is a libertarian. I have worked in a small town in a ten-person office, unrelated to politics, where one other woman was a libertarian, and yet a third voted for Gary Johnson in 2012. My social media feeds are filled with libertarian(ish) women like Julie Borowski, Libertarian Girl, Elizabeth Nolan Brown, Shikha Dalmia, Cathy Reisenwitz, Veronique de Rugy, Lucy Steigerwald, Cathy Young, and more.

So I am not really perceiving this massive shortage of libertarian ladies.

But if I had to guess why there are not as many women as men who are libertarians, two answers seem intuitively compelling:

  1. Women as a group (not as individuals) are more likely to prefer belonging to in-groups and acting under established norms. They are less likely to be comfortable in out-groups or as outliers to established norms. Similarly, for example, women are only 36% of atheists.
  1. Women as a group (not as individuals) are more likely to have moral hierarchies that focus on empathy and connectedness, over liberty and autonomy.

(I hope since I am a libertarian, and since I spelled it out up above, it is clear that I recognize these things are not true of all women.)

So, no, Jeet Heer, it is not because libertarianism reflects nostalgia for a time when white men were freer, but women and minorities were less so.

We libertarians are more futurist and optimistic than such cynicism admits.

Various women commenting on Rand Paul’s “gender gap” have intuitively landed on one or both of the same explanations as I posited above. Mollie Hemingway pegs libertarian discourse as “high systemizing and low empathizing.” Julie Borowski notes:

Most libertarian women that I have met are very different than your “average woman.” I’d be lying if I didn’t say that I wasn’t intimidated by a lot of them. They’re strong and independent. They don’t give a *beep* what you think about them. Mess with them and they’ll kick your butt. Basically, they do what they want.

In order to speak out about “unpopular/marginal” ideas, you need to have that kind of personality. If you have a great desire to be liked, ha, don’t get involved in libertarianism. Or at least hide your views. If you post about it on Facebook, get ready to get defriended or uninvited to Thanksgiving dinner this year.

But what to Do About It?

First, do not succumb to handwringing. Libertarianism does not need an even split of men and women to be a worthwhile political philosophy. Neither liberalism nor conservatism are split evenly either.

Ideas should be judged on their merits, not by quotas.

Second, there is nothing we can do to make women (as a group, not as individuals) more comfortable being outliers, “going it alone,” or belonging to fringe groups. As libertarianism becomes increasingly mainstream, however, more women (and men) will be comfortable venturing into our territory and supporting candidates like Rand Paul and Gary Johnson.

Third, what we can do to nurture the process along is get better at explaining how our political philosophy is about empathy and fairness. Yes, we oppose minimum wage hikes because we care about the property rights of business owners. However, we also oppose minimum wage hikes because we understand how they hurt people, and hurt poor people most of all.

Too often we fail to defend the moral high ground when by rights it should be ours.

1 3 4 5 6 7 932