FREE FOR THE TAKING

Shortly before the U.S. Supreme Court set aside EPA's mercury emission rules, the Court also set aside the federal government's raison crop regulatory program.*

Under the Agricultural Marketing Agreement Act of 1937, the government established the Raison Administrative Committee. Each year, the Committee required raison producers to give to the government, free of charge, a percentage of their crop. According to the Court's opinion, in 2002-2003, for example, the percentage of free taking was 47%. If a producer refused to give the government its raison, the producer would be fined the fair market value of the raisons, plus civil penalties.

In the case before the Court, certain raison producers fined by the government for refusal to give raison away sued, asserting that the requirement to give raisons to the government was an unconstitutional taking of their property contrary to the Fifth Amendment requirement of payment of just compensation for any taking.

The Supreme Court held that the government cannot take raisons without paying just compensation, measured as the market value of the raisons taken. The Court also said that there is no distinction between a taking of personal property and a taking of real property. A physical taking of either is a per se action that requires payment of just compensation.

The Court did make a distinction between a per se physical taking of property and a so-called regulatory taking, such as a use restriction on property. An example of a use restriction could be imposition of a condition on issuance of a land use permit. In the case of a regulatory taking, the Court said, just compensation was required only if the regulation went "too far." Going "too far" would require an ad hoc factual inquiry , according to the Court, "considering factors such as the economic impact of the regulation, its interference with reasonable investment backed expectations, and the character of the government action."

What may be evolving now could be judicial restraints on administrative agency regulatory actions perceived to cross the line into unfairness. In the case of the mercury emission rules, discussed in my prior posting, the Court stated that EPA rulemaking required consideration of costs and benefits. In the raison decision, the Court stated that regulation may require just compensation if is a physical taking or a regulatory taking that goes "too far."

These Court decisions may provide precedent beyond certain air emission rules or raisons. For example, they may be relevant to regulation of water and wastewater utility services and to regulations on the use of water resources.
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*Horne v. Department of Agriculture, 576 U.S.___(2015)