Supreme Court Rules that Agricultural Marketing Agreement Act of 1937 Withdraws Tucker Act Jurisdiction; Takings Claim Can Be Raised as Affirmative Defense in USDA Enforcement Proceeding

Posted:  June 11, 2013
 
In action involving a constitutional challenge to the California Raisin Marketing Order under the Agricultural Marketing Agreement Act of 1937(AMAA), 7 U.S.C. §§ 701-714, §§ 671-674 Horne v. United States Dep’t of Agric., No. 12-123, 2013 WL 2459521, -- S. Ct. – (June 10, 2013), the United States Supreme Court held in Horne v. United States Dep’t of Agric., No. 12-123, 2013 WL 2459521, -- S. Ct. – (June 10, 2013) that the AMAA withdrew Court of Federal Claims jurisdiction arising under the Tucker Act.  The Court further held that the petitioners’ takings claim could be raised as an affirmative defense against the USDA’s enforcement proceeding against them.  In so holding, the Court reversed the decision of the United States Court of Appeals for the Ninth Circuit and remanded the matter to the Ninth Circuit for further proceedings consistent with its opinion.

In 2004, USDA brought an enforcement action against Marvin and Laura Horne, et al., (hereinafter petitioners) that alleged that the petitioners were “handlers” under the raisin marketing order and that they had failed to comply with several requirements under the order.  The petitioners asserted, inter alia, that they were not “handlers” and, therefore, excluded from coverage of the marketing order.  In addition, the petitioners argued that the marketing order violated the Fifth Amendment of the U.S. Constitution as a taking without just compensation.
 
In 2006, an Administrative Law Judge (ALJ) held that petitioners were “handlers” under the AMAA and that they had, as alleged by  USDA, violated several marketing order requirements.  The ALJ rejected the petitioners’ takings claim as well.  On appeal, a Judicial Officer affirmed the decision that the petitioners were handlers, but declined to render a decision on the petitioners’ takings claim.  The matter was appealed to federal district court where it was held that the petitioners were handlers and that the marketing order did not constitute a takings.  
On appeal, the Ninth Circuit affirmed the federal district court ruling that the petitioners were handlers.  The Ninth Circuit further held that when a handler raises a takings claim against marketing orders promulgated under the AMAA, the Court of Federal Claims jurisdiction under the Tucker Act is removed by the AMAA.  Interestingly, however, the Ninth Circuit determined that the petitioners were “producers” – instead of handlers – for purposes of their takings claim and, therefore, there was nothing in AMAA that prohibited the petitioners from raising their takings claim in the Court of Federal Claims.  And, on that basis, the Ninth Circuit held that the petitioners’ takings claim was not ripe for adjudication.
In reaching its decision, the Supreme Court stated the following:

Under the AMAA's comprehensive remedial scheme, handlers may challenge the content, applicability, and enforcement of marketing orders. Pursuant to §§ 608c(15)(A)-(B), a handler may file with the Secretary a direct challenge to a marketing order and its applicability to him. We have held that “any handler” subject to a marketing order must raise any challenges to the order, including constitutional challenges, in administrative proceedings. See United States v. Ruzicka, 329 U.S. 287, 294, 67 S.Ct. 207, 91 L.Ed. 290 (1946). Once the Secretary issues a ruling, the federal district court where the “handler is an inhabitant, or has his principal place of business” is “vested with jurisdiction ... to review [the] ruling.” § 608c(15)(B). These statutory provisions afford handlers a ready avenue to bring takings claim against the USDA. We thus conclude that the AMAA withdraws Tucker Act jurisdiction over petitioners' takings claim. Petitioners (as handlers) have no alternative remedy, and their takings claim was not “premature” when presented to the Ninth Circuit.
The Court further held that “[a]lthough petitioners' claim was not 'premature' for Tucker Act purposes, the question remains whether a takings-based defense may be raised by a handler in the context of an enforcement proceeding initiated by the USDA under § 608c(14). We hold that it may.”