FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MARVIN D. HORNE and LAURA R.
HORNE, d.b.a. RAISIN VALLEY
FARMS, a partnership, and d.b.a.
RAISIN VALLEY FARMS MARKETING
ASSOCIATION, a.k.a. RAISIN VALLEY
MARKETING, an unincorporated
No. 10-15270
association; MARVIN D. HORNE;
LAURA R. HORNE; DON DURBAHN, D.C. No.
and the ESTATE OF RENA DURBAHN, 1:08-cv-01549-LJO-
d.b.a. LASSEN VINEYARDS, a SMS
partnership, OPINION
Plaintiffs-Appellants,
v.
UNITED STATES DEPARTMENT OF
AGRICULTURE,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of California
Lawrence J. O’Neill, District Judge, Presiding
Argued and Submitted
April 14, 2011—Pasadena, California
Filed July 25, 2011
Before: Stephen Reinhardt, Michael Daly Hawkins, and
Ronald M. Gould, Circuit Judges.
Opinion by Judge Hawkins
9453
HORNE v. USDA 9457
COUNSEL
Brian C. Leighton, Clovis, California, for the plaintiffs-
appellants.
Benjamin B. Wagner, United States Attorney, and Benjamin
E. Hall, Assistant United States Attorney, Fresno, California,
for the defendant-appellee.
OPINION
HAWKINS, Senior Circuit Judge:
This appeal of a United States Department of Agriculture
(“USDA”) administrative decision asks us to interpret and
pass on the constitutionality of a food product reserve pro-
gram authorized by the Agricultural Marketing Agreement
Act of 1937, as amended, 7 U.S.C. § 601 et seq. (“AMAA”),
and implemented by the Marketing Order Regulating the Han-
9458 HORNE v. USDA
dling of Raisins Produced from Grapes Grown in California,
7 C.F.R. Part 989 (“Raisin Marketing Order” or “the Order”),
first adopted in 1949. Farmers Marvin and Laura Horne (“the
Hornes”1) protest the USDA Judicial Officer’s (“JO”) imposi-
tion of civil penalties and assessments for their failure to com-
ply with the reserve requirements, among other regulatory
infractions, contending: (1) they are producers not subject to
the Raisin Marketing Order’s provisions; (2) even if subject
to those provisions, the requirement that they contribute a
specified percentage of their annual raisin crop to the
government-controlled reserve pool constitutes an uncompen-
sated per se taking in violation of the Fifth Amendment; and
(3) the penalties imposed for their “self-help” noncompliance
with the Raisin Marketing Order violate the Eighth Amend-
ment Excessive Fines Clause. We affirm.
BACKGROUND
I. Regulatory Framework
Raisins and other agricultural commodities are heavily reg-
ulated under federal marketing orders adopted pursuant to the
AMAA, a Depression-era statute enacted in response to plum-
meting commodity prices, market disequilibrium, and the
accompanying threat to the nation’s credit system. 7 U.S.C.
§ 601 et seq.; see Zuber v. Allen, 396 U.S. 168, 174-76
(1969); see generally 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
(1995). The declared purposes of the AMAA are, inter alia,
1
Collectively referred to as “the Hornes,” the Plaintiffs-Appellants are
Marvin and Laura Horne, d/b/a Raisin Valley Farms (a California general
partnership), and d/b/a Raisin Valley Farms Marketing Association (a Cal-
ifornia unincorporated association), together with their business partners
Don Durbahn and the Estate of Rena Durbahn, collectively d/b/a Lassen
Vineyards (a California general partnership).
HORNE v. USDA 9459
to help farmers achieve and maintain price parity for their
agricultural goods and to protect producers and consumers
alike from “unreasonable fluctuations in supplies and prices”
by establishing orderly marketing conditions. 7 U.S.C. § 602;
see Fla. Lime & Avocado Growers, Inc. v. Paul, 373 U.S.
132, 138 (1963); Pescosolido v. Block, 765 F.2d 827, 830 (9th
Cir. 1985).
[1] To achieve these goals, the AMAA delegates authority
to the Secretary of Agriculture (“Secretary”) to issue market-
ing orders2 regulating the sale and delivery of agricultural
goods, 7 U.S.C. § 608c, principally by imposing production
quotas or by restricting the supply of a commodity for sale on
the open market, either through marketing allotments or
reserve pools, see id. § 608c(6).3 The Secretary, in turn, is
authorized to delegate to industry committees the power to
administer marketing orders. 7 U.S.C. § 608c(7)(C); see 7
C.F.R. § 989.35 (2006). Marketing orders under the AMAA
2
According to the specific promulgation procedures mandated by the
AMAA, the Secretary may only issue a marketing order if, after providing
notice and opportunity for hearing, he finds that “the issuance of such
order . . . will tend to effectuate the declared policy” of the Act. 7 U.S.C.
§ 608c(3)-(4). Such order will not become effective until approved by both
(1) the handlers of at least 50 percent of the volume of the commodity
covered by the proposed order and (2) either (a) two-thirds of producers
of that commodity during a representative period or (b) producers of two-
thirds of the volume of that commodity during said period. Id. § 608c(8);
see id. § 608b. The Secretary may terminate or suspend any marketing
order upon finding it “obstructs or does not tend to effectuate the declared
policy” of the Act, or upon request of a majority of active producers dur-
ing a representative time period. Id. § 608c(16).
3
Section 8c of the AMAA, 7 U.S.C. § 608c, the key statutory provision
dealing with the marketing orders, originated in a 1935 amendment to the
Agricultural Adjustment Act of 1933, Pub. L. No. 73-10, 48 Stat. 31
(“AAA”). The Supreme Court invalidated parts of the AAA in 1936, see
United States v. Butler, 297 U.S. 1, 77 (1936), but Congress quickly reen-
acted most of the AAA’s production-control measures in the AMAA,
which the Supreme Court subsequently upheld against various constitu-
tional challenges, see United States v. Rock Royal Co-op, Inc., 307 U.S.
533 (1939).
9460 HORNE v. USDA
apply only to “handlers,” i.e., those who process and pack
agricultural goods for distribution,4 and do not apply to any
producer “in his capacity as a producer.”5 7 U.S.C.
§§ 608c(1), 608c(13)(B).6 Any handler who fails to comply
with the terms of a marketing order is subject to civil forfei-
ture, as well as possible civil and criminal penalties. 7 U.S.C.
§§ 608a(5), 608a(6), 608c(14) (authorizing civil penalties up
to $1,000 for each violation, with each day constituting a sep-
arate violation).
4
A “handler” under the Raisin Marketing Order is
(a) [a]ny processor or packer; (b) any person who places, ships,
or continues natural raisins in the current of commerce from
within [California] to any point outside thereof; (c) any person
who delivers off-grade raisins, other failing raisins or raisin resid-
ual material to other than a packer or other than into any eligible
non-normal outlet; or (d) any person who blends raisins [subject
to certain exceptions].
7 C.F.R. § 989.15. A “packer,” in turn, is “any person who, within [Cali-
fornia], stems, sorts, cleans, or seeds raisins, grades stemmed raisins, or
packages raisins for market as raisins,” but does not include a producer
who sorts and cleans his own raisins in their unstemmed form. Id.
§ 989.14.
5
A “producer” under the Raisin Marketing Order is “any person
engaged in a proprietary capacity in the production of grapes which are
sun-dried or dehydrated by artificial means until they become raisins.” 7
C.F.R. § 989.11.
6
The regulation of handlers, as opposed to growers, appears to be a ves-
tige of the historical context in which the AMAA was enacted, “an era
when small, independent growers were frequently left to the mercy of
large handlers who could benefit from their market power and position.”
Bensing, supra, at 8. In the raisin industry, producers generally own the
land on which the grapevines are located, and they typically pick the
grapes and dry them on trays before selling the unstemmed raisins to pack-
ers, or “handlers.” Packers then prepare the raisins for commercial sale
and distribution by cleaning, stemming, seeding, grading, sorting, and
packaging the raisins into containers. Packers then typically sell the
packed raisins to wholesalers, distributors, and other dealers for resale and
distribution to the public. Brown v. Parker, 39 F. Supp. 895, 896-97 (S.D.
Cal. 1941), rev’d on other grounds by Parker v. Brown, 317 U.S. 341
(1943).
HORNE v. USDA 9461
The Raisin Marketing Order was originally enacted in
1949, see 14 Fed. Reg. 5136 (Aug. 18, 1949) (codified, as
amended, at 7 C.F.R. Part 989), in an effort to stabilize raisin
prices by controlling production surpluses, which since 1920
had consistently been thirty to fifty percent of each year’s
crop. See Parker, 317 U.S. at 363-64.7 Like many other fruit
and vegetable orders issued under the AMAA,8 the Order pro-
vides for the establishment of annual reserve pools, as deter-
mined by each year’s crop yield, thereby removing surplus
raisins from sale on the open domestic market and indirectly
controlling prices. See 7 U.S.C. § 608c(6)(E); 7 C.F.R.
§§ 989.54(d), 989.65. By February 15 of each year, the Raisin
Administrative Committee (“RAC”)—an industry committee
charged with administration of the Raisin Marketing Order,9
7
The raisin industry has long been an important one in California, where
99.5 percent of the U.S. crop and 40 percent of the world’s crop are pro-
duced. See The California Raisin Industry, http://www.calraisins.org/
about/the-raisin-industry/ (last visited July 6, 2011). Raisin prices rose
rapidly between 1914 and 1920, peaking in 1921 at $235 per ton. This
price increase spurred increased production, which in turn caused prices
to plummet back down to between $40 and $60 per ton, even while pro-
duction continued to expand. As a result of this growing disparity between
increasing production and decreasing prices, the industry became “com-
pelled to sell at less than parity prices and in some years at prices regarded
by students of the industry as less than the cost of production,” finally
prompting federal government intervention with the Raisin Marketing
Order in 1949. See Parker, 317 U.S. at 363-64 & nn.9-10.
8
For a comparison of the Raisin Marketing Order and marketing orders
for other agricultural products, such as walnuts, almonds, prunes, tart cher-
ries, and spearmint, see Evans v. United States, 74 Fed. Cl. 554, 558
(2006), aff’d, 250 Fed. Appx. 321 (Fed. Cir. 2007).
9
The RAC is currently comprised of forty-seven industry-nominated
representatives appointed by the Secretary, of whom thirty-five represent
producers, ten represent handlers, one represents the cooperative bargain-
ing association, and one represents the public. See 7 C.F.R. §§ 989.26,
989.29, 989.30. The RAC is an agent of the federal government but
receives no federal appropriations. Instead, it is funded by assessments
levied on handlers per ton of raisins sold on the open market and by pro-
ceeds from the sale of reserve-tonnage raisins. See 7 C.F.R. §§ 989.53,
989.79, 989.80(a), 989.82.
9462 HORNE v. USDA
see 7 C.F.R. §§ 989.35, 989.36—recommends the “reserve-
tonnage” and “free-tonnage” percentages for that year, which
the Secretary then promulgates. See id. §§ 989.54(d), 989.55.
The reserve-tonnage requirement varies from year to year; for
example, in the 2002-03 and 2003-04 crop years at issue here,
the reserve percentages were set at forty-seven percent and
thirty percent of a producer’s crop, respectively.
As a result of the Order’s reserve program requirements, a
producer receives payment (at a pre-negotiated field market
price) upon delivery of raisins to a handler only for the free-
tonnage raisins, which the handler is then free to sell on the
domestic market without restrictions. See id. § 989.65. The
reserve-tonnage raisins, on the other hand, must be held by
the handler in segregated bins “for the account” of the RAC
until the RAC sells them to handlers for resale in export mar-
kets or directs that they be sold or disposed of in secondary,
non-competitive markets, such as school lunch programs,
either by direct sale or gift to U.S. agencies or foreign govern-
ments. Id. §§ 989.54, 989.56, 989.65, 989.67, 989.166,
989.167. The reserve pool sales are used to finance the RAC’s
administration, and any remaining net proceeds must then be
equitably distributed to the producers on a pro rata basis. See
7 U.S.C. § 608c(6)(E) (providing for “the equitable distribu-
tion of the net return derived from the sale [of reserve-pool
raisins] among the persons beneficially interested therein”); 7
C.F.R. § 989.66(h). Thus, although producers do not receive
payment for reserve-tonnage raisins at the time of delivery to
a handler, they retain a limited equity interest in the net pro-
ceeds of the RAC’s disposition of the reserve, to be paid at
a later time.
The RAC is tasked with selling the reserve raisins in a
manner “intended to maxim[ize] producer returns and achieve
maximum disposition of such raisins by the time reserve ton-
nage raisins from the subsequent crop year are available,” 7
C.F.R. § 989.67(d)(1), but the Hornes complain that they have
not received any reserve sale proceeds since the mid-1990s.
HORNE v. USDA 9463
For example the RAC designated forty-seven percent of the
2002-03 crop as reserve tonnage, which it then sold for $970
per ton, but none of the money the RAC received was paid
back to the raisin producers.
In addition to the reserve pool requirement, the Raisin Mar-
keting Order obliges handlers to, inter alia: file reports with
the RAC, pay assessments to the RAC, and grant the RAC
access to records for auditing purposes. See id. §§ 989.58,
989.59, 989.73, 989.77, 989.80.
II. The Hornes’ Raisin Enterprises
Marvin and Laura Horne have been producing raisins in
Fresno and Madera Counties in California since 1969 and in
1999 registered as a California general partnership under the
name Raisin Valley Farms. They also own and operate Lassen
Vineyards, another registered California general partnership,
in partnership with Laura’s parents, Don and Rena Durbahn.
Disillusioned with a regulatory scheme they deemed “outdat-
ed” and exploitive of farmers, the Hornes looked for ways to
avoid the Raisin Marketing Order’s requirements, particularly
its mandatory raisin reserve program. Because those require-
ments apply only to handlers, the Hornes implemented a plan
to bring their raisins to market without going through a tradi-
tional middle-man packer. As part of their plan, the Hornes
purchased their own equipment and facilities to clean, stem,
sort, and package raisins, which they installed on Lassen
Vineyards property in 2001. Not only did this facility handle
the raisins from Raisin Valley Farms and Lassen Vineyards,
it also contracted with more than sixty other raisin growers to
clean, stem, sort, and in some cases box and stack their raisins
for a per-pound fee, typically twelve cents per pound.10 USDA
records reflect that Lassen Vineyards packed out more than
10
This type of arrangement is known as “toll packing.” Toll packers do
not acquire ownership of the commodity but instead provide a packing
service for a fee.
9464 HORNE v. USDA
1.2 million pounds of raisins during the 2002-03 crop year
and more than 1.9 million pounds during the 2003-04 crop
year.
Meanwhile, the Hornes also organized these sixty-some
growers into the Raisin Valley Marketing Association, an
unincorporated association that marketed and sold raisins to
wholesale customers on its members’ behalf, while the grow-
ers maintained ownership over their own raisins. Raisin Val-
ley Marketing then held the sales funds on the growers’ behalf
in a trust account, from which it paid Lassen Vineyards its
packing fees, paid a third-party broker fee, and distributed the
net proceeds to the growers.
III. Proceedings Below
The Administrator of the Agricultural Marketing Service
initiated an enforcement action against the Hornes, alleging
violations of the AMAA and failure to comply with the Raisin
Marketing Order’s various requirements. On appeal from an
Administrative Law Judge’s decision following an on-the-
record hearing, the USDA JO found both Raisin Valley Farms
and Lassen Vineyards liable for: (1) twenty violations of 7
C.F.R. § 989.73 (filing of inaccurate reports); (2) fifty-eight
violations of 7 C.F.R. § 989.58(d) (failing to obtain incoming
inspections); (3) 592 violations of 7 C.F.R. § 989.66 and 7
C.F.R. § 989.166 (failing to hold reserve raisins for the 2002-
03 and 2003-04 crop years); (4) two violations of 7 C.F.R.
§ 989.80 (failing to pay assessments to the RAC); and (5) one
violation of 7 C.F.R. § 989.77 (failing to allow the Agricul-
tural Marketing Service access to records). The JO accord-
ingly ordered the Hornes to pay (1) $8,783.39 in unpaid
assessments for the 2002-03 and 2003-04 crop years, pursuant
to 7 C.F.R. § 989.80(a); (2) $483,843.53, the alleged dollar
equivalent of the withheld raisin reserve contributions for the
2002-03 (632,427 pounds) and 2003-04 (611,159 pounds11)
11
The Hornes do not challenge the JO’s calculation of these figures.
HORNE v. USDA 9465
crop years, pursuant to 7 C.F.R. § 989.166(c); and (3)
$202,600 in civil penalties, pursuant to 7 U.S.C.
§ 608c(14)(B).
The Hornes filed this action in district court seeking judi-
cial review of a final agency decision pursuant to 7 U.S.C.
§ 608c(14)(B).12 On cross-motions for summary judgment, the
district court granted summary judgment for the USDA, and
the Hornes timely appealed.
STANDARDS OF REVIEW
A district court’s grant of summary judgment is reviewed
de novo. Ariz. Life Coal., Inc. v. Stanton, 515 F.3d 956, 962
(9th Cir. 2008). Viewing the evidence in the light most favor-
able to the non-moving party, we must determine whether any
genuine issues of material fact remain and whether the district
court correctly applied the relevant substantive law. Lopez v.
Smith, 203 F.3d 1122, 1131 (9th Cir. 2000) (en banc). We
review de novo a constitutional challenge to a federal regula-
tion. Doe v. Rumsfeld, 435 F.3d 980, 984 (9th Cir. 2006) (cit-
ing Gonzales v. Metro. Transp. Auth., 174 F.3d 1016, 1018
(9th Cir. 1999)). We also review de novo whether a fine is
unconstitutionally excessive. United States v. Mackby, 339
F.3d 1013, 1016 (9th Cir. 2003) (citing United States v.
Bajakajian, 524 U.S. 321, 337 n.10 (1998)).
12
In a separate action not the subject of this appeal, the Hornes filed an
administrative petition before the Secretary of Agriculture in March 2007
pursuant to 7 U.S.C. § 608c(15)(A) challenging the Raisin Marketing
Order and its application to them. The JO granted the USDA’s motion to
dismiss for lack of standing. The Hornes filed a complaint in district court,
but the district court dismissed it for lack of subject matter jurisdiction
because it was not timely filed, and we affirmed. See Horne v. U.S. Dep’t
of Agric., 395 Fed. Appx. 486 (9th Cir. Sep. 27, 2010) (unpublished).
9466 HORNE v. USDA
DISCUSSION
I. Application of the Raisin Marketing Order to the
Hornes
For the reasons discussed in the district court’s opinion
below, we conclude that the Hornes, who admit that their toll-
packing business “stems, sorts, cleans,” and “packages raisins
for market as raisins,” 7 C.F.R. § 989.14, satisfy the regula-
tory definition of a “packer” and are thus “handlers” subject
to the Raisin Marketing Order’s provisions, see 7 C.F.R.
§ 989.15. See Horne v. U.S. Dep’t of Agric., 2009 U.S. Dist.
LEXIS 115464, at *20-49 (E.D. Cal. Dec. 11, 2009). The
USDA’s interpretation of its own regulation is not “plainly
erroneous or inconsistent with the regulation” and thus must
be given “controlling weight.” See Bowles v. Seminole Rock
& Sand Co., 325 U.S. 410, 414 (1945); accord Auer v. Rob-
bins, 519 U.S. 452, 461 (1997); Miller v. Cal. Speedway
Corp., 536 F.3d 1020, 1028 (9th Cir. 2008). Furthermore, its
findings regarding the Hornes’ handler operations are sup-
ported by substantial evidence and are neither arbitrary nor
capricious. See 5 U.S.C. § 706(2)(A), (E).
[2] The Hornes argue they are statutorily exempt from reg-
ulation because they also satisfy the regulatory definition of
a “producer,” and the AMAA provides that “[n]o order issued
under this chapter shall be applicable to any producer in his
capacity as a producer.” 7 U.S.C. § 608c(13)(B). However, by
expressly limiting the exemption from regulation only to a
producer “in his capacity as a producer,” the AMAA contem-
plates that an individual who performs both producer and han-
dler functions may still be regulated in his capacity as a
handler. Even if the AMAA is considered “silent or ambigu-
ous” on the regulation of individuals who perform both pro-
ducer and handler functions, we must give Chevron deference
to the permissible interpretation of the Secretary of Agricul-
ture, who is charged with administering the statute. Chevron,
USA, Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837,
HORNE v. USDA 9467
842-43 (1984); see 7 U.S.C. § 608c(1); see also Morales-
Izquierdo v. Dep’t of Homeland Sec., 600 F.3d 1076, 1086-87
(9th Cir. 2010); Midway Farms v. U.S. Dep’t of Agric., 188
F.3d 1136, 1140 n.5 (9th Cir. 1999). Other courts have simi-
larly rejected the Hornes’ argument that a producer who han-
dles his own product for market is statutorily exempt from
regulation under the AMAA. See, e.g., Freeman v. Vance, 319
F.2d 841, 842 (5th Cir. 1963) (per curiam); Ideal Farms, Inc.
v. Benson, 288 F.2d 608, 614 (3d Cir. 1961), cert. denied, 372
U.S. 965 (1963); Evans, 74 Fed. Cl. at 557-58. Deferring to
the agency’s permissible interpretation of the statute, as we
must, we conclude that applying the Raisin Marketing Order
to the Hornes in their capacity as handlers was not contrary
to the AMAA.
II. Takings Claim
Does the Raisin Marketing Order’s reserve requirement
program constitute a physical, per se taking of the Hornes’
personal property without just compensation, in violation of
the Fifth Amendment? See U.S. Const. amend. V (“[N]or
shall private property be taken for public use, without just
compensation.”). We join the Court of Federal Claims, which
not long ago decided this exact question, in holding it does
not. See Evans, 74 Fed. Cl. at 562-64; cf. Cal-Almond, Inc. v.
United States, 30 Fed. Cl. 244, 246-47 (1994) (rejecting a tak-
ings claim against a similar reserve program under the almond
marketing order).
The Fifth Amendment Takings Clause does not itself
authorize the taking of private property, nor does it prohibit
the government from doing so. Instead, it imposes conditions
on the government’s authority to act, providing that when
government takes private property, pursuant to the lawful
exercise of its constitutional powers, (1) it must take for pub-
lic rather than private use, and (2) it must provide owners with
just compensation, as measured by the property owner’s loss.
See Brown v. Legal Found. of Wash., 538 U.S. 216, 231-32,
9468 HORNE v. USDA
235-36 (2003); First English Evangelical Lutheran Church of
Glendale v. Cnty. of L.A., 482 U.S. 304, 314 (1987). The for-
mer condition ensures that government does not abuse its
powers by taking private property for another’s private gain,
see, e.g., Penn. Coal Co. v. Mahon, 260 U.S. 393, 413 (1922);
the latter ensures that even when government acts in the pub-
lic interest, it does not “forc[e] 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).
[3] In its earliest days, the Takings Clause was thought to
apply only to “direct appropriation of property, or the func-
tional equivalent of a practical ouster of the owner’s posses-
sion,” Lingle v. Chevron U.S.A., Inc., 544 U.S. 528, 537
(2005) (internal quotation marks and brackets omitted), i.e.,
“physical takings.” See Lucas v. S.C. Coastal Council, 505
U.S. 1003, 1028 n.15 (1992). Over the years, its reach has
extended to accommodate the modern reality that “govern-
ment regulation of private property may, in some instances,
be so onerous that its effect is tantamount to a direct appropri-
ation or ouster.” Lingle, 544 U.S. at 537; see also Loretto v.
Teleprompter Manhattan CATV Corp., 458 U.S. 419, 427-38
(1982) (surveying evolution of the takings doctrine). Most
takings challenges to governmental regulations must undergo
an ad hoc, fact-intensive inquiry focusing on (1) the economic
impact of the regulation on the claimant; (2) the extent to
which the regulation interferes with reasonable investment-
backed expectations; and (3) the character of the governmen-
tal action. Penn Cent. Transp. Co. v. N.Y.C., 438 U.S. 104,
124 (1978). Only in two situations does the Supreme Court
recognize that regulatory action per se “goes too far” in frus-
trating property rights, Mahon, 260 U.S. at 415: first, “where
government requires an owner to suffer a permanent physical
invasion of her property[,] however minor,” Lingle, 544 U.S.
at 538; see, e.g., Loretto, 458 U.S. at 438 (compensation
required where state law forced landlords to permit cable
companies to install cable facilities occupying one and one-
HORNE v. USDA 9469
half square feet of rooftops); Kaiser Aetna v. United States,
444 U.S. 164, 179-80 (1979) (same for imposition of naviga-
tional servitude upon private marina); United States v.
Causby, 328 U.S. 256, 265 & n.10 (1946) (same for physical
invasions of airspace); and second, where government regula-
tion “denies all economically beneficial or productive use of
land,” Lucas, 505 U.S. at 1015 (emphasis added) (compensa-
tion required where state law barring construction of any per-
manent habitable structures on beachfront property rendered
land parcels “valueless”). When government action results in
such a “total regulatory taking[ ],” id. at 1026, as opposed to
a mere “partial regulatory taking[ ],” Tahoe-Sierra Pres.
Council v. Tahoe Reg’l Planning Agency, 535 U.S. 302, 326
(2002), a property owner is categorically entitled to compen-
sation, without resort to the usual case-specific inquiry.
[4] The Hornes, however, do not claim that the Raisin
Marketing Order effects a regulatory taking, partial or total.
Instead, they insist we need look no further than the RAC’s
annual “direct appropriation” of their reserve-tonnage raisins
to conclude this is a classic physical taking. Though the sim-
plicity of their logic has some understandable appeal—their
raisins are personal property, personal property is protected
by the Fifth Amendment, and each year the RAC “takes”
some of their raisins, at least in the colloquial sense—their
argument rests on a fundamental misunderstanding of the
nature of property rights and instead clings to a phrase
divorced from context.
It is undisputed that the Fifth Amendment guarantees com-
pensation for the taking not only of real property but also of
personal property and even intangible property. See Phillips
v. Wash. Legal Found., 524 U.S. 156, 172 (1998) (interest
earned on lawyers’ trust account is a protected private prop-
erty); Brown, 538 U.S. at 235 (same); Ruckelshaus v. Mon-
santo Co., 467 U.S. 986, 1001-04 (1984) (same for trade
secrets). No one suggests the government could come onto the
Hornes’ farm uninvited and walk off with forty-seven percent
9470 HORNE v. USDA
of their crops without offering just compensation, even if the
seizure itself were justified (for example, as a wartime mea-
sure). See Dolan v. City of Tigard, 512 U.S. 374, 384 (1994);
Nollan v. Cal. Coastal Comm’n, 483 U.S. 825, 831 (1987);
United States v. Pewee Coal Co., 341 U.S. 114, 115-17
(1951) (government’s wartime seizure and operation of a coal
mine to prevent a national coal miners’ strike constituted a
compensable taking). Certainly, that government action is
authorized does not immunize it from a takings claim; indeed,
the Takings Clause presupposes that the government has
taken lawfully. Lingle, 544 U.S. at 543; see Kaiser Aetna, 444
U.S. at 172 (no “blanket exception” to the Takings Clause
simply because Congress has acted under lawful authority). If
the Raisin Marketing Order authorized an uninvited, forcible
taking of the Hornes’ crops, there is no question that the gov-
ernment would have “a categorical duty to compensate the
[Hornes], regardless of whether the interest that is taken con-
stitutes an entire parcel [i.e., all their crops,] or merely a part
thereof.” Tahoe-Sierra, 535 U.S. at 322 (internal citation
omitted).
[5] But a forcible taking is not what the Raisin Marketing
Order accomplishes. Far from compelling a physical taking of
the Hornes’ tangible property, the Raisin Marketing Order
applies to the Hornes only insofar as they voluntarily choose
to send their raisins into the stream of interstate commerce.
Simply put, it is a use restriction, not a direct appropriation.
The Secretary of Agriculture did not authorize a forced sei-
zure of forty-seven percent of the Hornes’ 2002-03 crops and
thirty percent of their 2003-04 crops, but rather imposed a
condition on the Hornes’ use of their crops by regulating their
sale. As we explained in a similar context over seventy years
ago, the Raisin Marketing Order “contains no absolute
requirement of the delivery of [reserve-tonnage raisins] to the
[RAC]” but rather only “a conditional one.” Wallace v.
Hudson-Duncan & Co., 98 F.2d 985, 989 (9th Cir. 1938)
(rejecting a takings challenge to a reserve requirement under
the walnut marketing order).
HORNE v. USDA 9471
In rejecting a claim that a local mobile home rent control
ordinance amounted to a physical taking of park owners’
property interest, the Supreme Court similarly explained that
“[t]he government effects a physical taking only where it
requires the landowner to submit to the physical occupation
of his land.” Yee v. City of Escondido, 503 U.S. 519, 527
(1992) (emphasis in original). Emphasizing that the “ ‘ele-
ment of required acquiescence is at the heart of the concept
of occupation,’ ” id. (quoting FCC v. Fla. Power Corp., 480
U.S. 245, 252 (1987)), the Court explained that the mobile
park owners had no physical takings claim because they vol-
untarily rented their land to mobile home owners and thus
acquiesced in the regulation not under government compul-
sion but of their own accord, id. at 527-28. This same logic
was used to defeat a takings challenge to a statute authorizing
the public disclosure of private data submitted by applicants
as a condition on registering their pesticides. See Ruckelshaus,
467 U.S. at 1007. Even though the applicants had a recog-
nized interest in their intellectual property, the Supreme Court
reasoned that “a voluntary submission of data by an applicant
in exchange for the economic advantages of a registration can
hardly be called a taking,” so long as the disclosure condition
was rationally related to a legitimate government interest and
the applicant was made aware of the condition in advance. Id.
[6] There are, of course, limits to what conditions the gov-
ernment can constitutionally impose. The government “may
not require a person to give up a constitutional right—[for
example,] the right to receive just compensation when prop-
erty is taken for a public use—in exchange for a discretionary
benefit conferred by the government where the benefit has lit-
tle or no relationship to the property.” Dolan, 512 U.S. at 385.
Thus, where the government conditioned the grant of a coastal
development permit on the granting of a public easement
bearing no nexus to the original purpose of the building
restriction, the Supreme Court held that the government could
not avoid paying compensation simply by shoehorning a tak-
ing into an unrelated exercise of its police powers. Nollan,
9472 HORNE v. USDA
483 U.S. at 837; see also Dolan, 512 U.S. at 395 (holding that
city could not require development permit applicant to grant
a public pathway easement where there was no reasonable
relationship between the proposed development and the con-
dition imposed). Here, however, the condition imposed is
rationally related to the government’s legitimate interest in
controlling the supply of raisins on the domestic market so as
to prevent price destabilization and corollary effects on the
economy, and the Hornes had ample prior notice of the condi-
tion before they voluntarily decided to enter the raisin market.
Nevertheless, the Hornes insist their so-called “voluntary”
subjection to the Raisin Marketing Order is in fact the product
of a Hobson’s choice, for they have no economically viable
alternative to selling their raisins and therefore must suffer the
complete and total taking of a designated percentage of their
raisins under compulsion. Their argument is founded on an
erroneous belief that they have a property right to “market
their [raisins] free of regulatory controls,” Cal-Almond, 30
Fed. Cl. at 246, and is unavailing.
Admittedly, the Raisin Marketing Order’s expansive defini-
tion of “handler,” which includes anyone who “packs” raisins
for sale even if the raisins are sold exclusively within the state
of California, renders its regulatory reach less escapable than
the marketing order at issue in Wallace, which did not apply
to walnuts sold within the state of production. See Wallace, 98
F.2d at 989. Nonetheless, we noted in Wallace a “distinction
between the direct appropriation of property and the destruc-
tion of property values in the exercise of governmental
power,” id., observing that the regulation would remain valid
“[e]ven if the [c]ompany were able to show . . . that the only
alternative to making delivery to the [government] of surplus
walnuts or their ‘credit value’ would be to go out of busi-
ness,” id. at 990.
[7] This seemingly draconian result flows from the long-
standing notion that “some [property] values are enjoyed
HORNE v. USDA 9473
under an implied limitation and must yield” to the govern-
ment’s regulatory powers. Mahon, 260 U.S. at 413. The
implied restrictions on our property rights “are the burdens we
all must bear in exchange for the advantage of living and
doing business in a civilized community,” Ruckelshaus, 467
U.S. at 1007 (internal quotation marks and citations omitted).
Our takings jurisprudence is “guided by the understandings of
our citizens regarding the content of, and the State’s power
over, the ‘bundle of rights’ that they acquire when they obtain
title to property,” Lucas, 505 U.S. at 1027, and not every
restriction on our use of property amounts to a compensable
taking.
Although the Fifth Amendment, as previously discussed,
protects real and personal property alike, the personal prop-
erty “bundle of rights” is not coextensive with the bundle
comprising real property, as they are informed by different
background principles. See id. at 1027-30. Consequently, the
same government action may effect a taking when applied to
one type of property but not the other. Whereas a regulation
depriving a landowner of “all economically beneficial uses”
of his land effects a categorical taking, see Lucas, 505 U.S.
at 1019 (emphasis in original), the same may not necessarily
be true of a regulation banning the sale of a commercial prod-
uct, see, e.g., Andrus v. Allard, 444 U.S. 51, 66-67 (1979)
(holding that prohibition on sale of eagle feathers was not a
taking); Ruppert v. Caffey, 251 U.S. 264 (1920) (upholding
sales ban on nonintoxicating alcoholic beverages against tak-
ings challenge); James Everard’s Breweries v. Day, 265 U.S.
545 (1924) (upholding ban on sale of all liquor, including
liquor lawfully manufactured before passage of the statute).
While the total deprivation of beneficial use of land carries a
“heightened risk that private property is being pressed into
some form of public service under the guise of mitigating
serious public harm,” Lucas, 505 U.S. at 1018, when it comes
to personal property, “the State’s traditionally high degree of
control over commercial dealings” ought to put a property
owner on notice “of the possibility that new regulation might
9474 HORNE v. USDA
even render his property economically worthless (at least if
the property’s only economically productive use is sale or
manufacture for sale),” id. at 1027-28. Thus, although the
right to sell their raisins is a significant one, it is but one
“strand” in the Hornes’ bundle, and even the destruction of
that single strand would not amount to a taking without under-
going Penn Central ad hoc review. See Andrus, 444 U.S. at
65-66 (“significant restriction . . . imposed on one means of
disposing of the artifacts” does not amount to a taking); see
also Rock Royal, 307 U.S. at 572 (“As the Congress would
have, clearly, the right to permit only limited amounts of milk
to move in interstate commerce, . . . it might permit the move-
ment on terms of pool settlement . . . .”).
[8] In any event, the Raisin Marketing Order does not
destroy that strand and does not deny raisin farmers all eco-
nomically beneficial use of their raisins, for the regulation
does not ban the sale of raisins altogether but only requires
the delivery to the RAC of a certain percentage of raisins pre-
pared for market. The Hornes insist the regulation effects a
total taking of those reserve-tonnage raisins, but they ignore
the Supreme Court’s repeated admonition that we must con-
sider the regulation’s impact on “the parcel as a whole” rather
than “divide a single parcel into discrete segments and
attempt to determine whether rights in a particular segment
have been entirely abrogated.” Penn Cent., 438 U.S. at 130-
131 & n.27; accord Tahoe-Sierra, 535 U.S. at 327. For exam-
ple, where a statute required coal companies to leave unmined
fifty percent of their coal beneath certain structures to prevent
land subsidence, the Supreme Court found no taking, reason-
ing that “[t]he 27 million tons of coal do not constitute a sepa-
rate segment of property for takings law purposes.” Keystone
Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 498
(1987).
[9] Accordingly, the Hornes’ argument that they have suf-
fered a complete and total taking of their reserve-tonnage rai-
sins is squarely foreclosed by case law, for the relevant parcel
HORNE v. USDA 9475
here is the entirety of their annual crop, not the individual rai-
sins destined for the reserve pool. Even if in absolute terms
they number in the billions, the reserve-tonnage raisins are but
a designated percentage of a producer’s total annual crop han-
dled for sale in the domestic market. Furthermore, the Hornes
have put forth no evidence that the Raisin Marketing Order
“makes it impossible for [them] to profitably engage in their
business.” Id. at 485. We imagine it would be difficult for the
Hornes to gather such evidence, given that the reserve-pool
restrictions on the market supply of raisins serve to raise
prices for the Hornes’ free-tonnage raisins, ostensibly making
their business more profitable than it would be in an unregu-
lated free market.
[10] The Hornes have suffered no compensable physical
taking of any portion of their crops, and thus the Fifth
Amendment poses no obstacle to the Secretary’s enforcement
of the Raisin Marketing Order against them. Because the
Hornes do not advance the alternative theory that the Raisin
Marketing Order effects a regulatory taking, we leave that
question for another day.
III. Excessive Fines Claim
Finally, in connection with their takings argument, the
Hornes protest the JO’s imposition of nearly $700,000 in
combined assessments and fines, which they believe exces-
sively penalizes them, in violation of the Eighth Amendment,
for their justified refusal to deliver their own private property
into the hands of the government. See U.S. Const. amend.
VIII (“Excessive bail shall not be required, nor excessive
fines imposed, nor cruel and unusual punishments inflicted.”).
[11] To prevail on an excessive fines claim, a plaintiff
must establish (1) the assessment is imposed, at least in part,
for punitive and not merely remedial purposes, and (2) the
fine is excessive, or “grossly disproportional to the gravity of
[the] offense” for which it is imposed. Bajakajian, 524 U.S.
9476 HORNE v. USDA
at 334; see Engquist v. Or. Dep’t of Agric., 478 F.3d 985,
1006 (9th Cir. 2007); Mackby, 339 F.3d at 1016. Although an
excessive punitive civil fine is not beyond the Eighth Amend-
ment’s reach, Hudson v. United States, 522 U.S. 93, 103
(1997), civil forfeiture that merely “provides a reasonable
form of liquidated damages” as compensation for government
losses resulting from the unlawful activity is remedial, not
punitive, and accordingly does not implicate the Eighth
Amendment, One Lot Emerald Cut Stones & One Ring v.
United States, 409 U.S. 232, 237 (1972); see United States v.
$273,969.04 U.S. Currency, 164 F.3d 462, 466 (9th Cir.
1999); Austin v. United States, 509 U.S. 602, 622 n.14 (1993)
(“[A] fine that serves purely remedial purposes cannot be con-
sidered ‘excessive’ in any event.”).
[12] Here, the district court correctly determined that the
$8,783.39 in unpaid assessments imposed pursuant to 7
C.F.R. § 989.80(a) and the $483,843.53 in compensation for
the withheld reserve-tonnage raisins imposed pursuant to 7
C.F.R. § 989.166(c) amounted to remedial rather than puni-
tive forfeitures and that the Excessive Fines Clause therefore
is inapplicable to those penalties. The JO’s order that the
Hornes pay assessments to the RAC was calculated solely to
compensate the RAC for the mandatory assessments not paid.
See 7 C.F.R. § 989.80(a) (“Each handler shall, with respect to
free tonnage acquired by him . . . pay to the committee, upon
demand, his pro rata share of the expenses . . . which the Sec-
retary finds will be incurred, as aforesaid, by the committee
during each crop year . . . .”). Similarly, the JO’s order that
the Hornes compensate the RAC for the withheld reserve-
tonnage raisins flowed inexorably from another remedial,
non-punitive provision of the regulations. See id. § 989.166(c)
(“A handler who fails to deliver to the Committee, upon
request, any reserve tonnage raisins in the quantity and quality
for which he has become obligated . . . shall compensate the
Committee for the amount of the loss resulting from his fail-
ure to so deliver,” as determined by a fixed formula.). Calcu-
lation of the compensation amount is nondiscretionary and is
HORNE v. USDA 9477
limited by the extent of the government’s loss. Cf.
$273,969.04, 164 F.3d at 466 (inferring punitive nature of a
sanction where it was not limited by the extent of the govern-
ment’s loss and was tied to commission of a crime). The JO’s
use of the “field price” to calculate the compensatory amount
the Hornes owed the RAC for their withheld reserve-tonnage
raisins was consistent with the regulations. See 7 C.F.R.
§ 989.166(c).
[13] The only sanction that implicates the Excessive Fines
Clause is the $202,600 fine imposed pursuant to 7 U.S.C.
§ 608c(14)(B), but we again agree with the district court that
this civil penalty, less than one-third the authorized statutory
amount, is not “grossly disproportional to the gravity of [the
Hornes’] offense.” Bajakajian, 524 U.S. at 334. Although we
have no set formula for determining the proportionality of a
given penalty, relevant factors include the severity of the
offense, the statutory maximum penalty available, and the
harm caused by the offense. Mackby, 339 F.3d at 1016; see
also United States v. 3814 NW Thurman St., 164 F.3d 1191,
1197-98 (9th Cir. 1999).
We have previously recognized that noncompliance with a
marketing order’s reporting and reserve requirements are seri-
ous offenses that threaten the Secretary’s ability to regulate a
given market and prevent price destabilization, while also
unjustly enriching the offenders who profit from selling their
reserve-tonnage goods on the open market. See Balice v. U.S.
Dep’t of Agric., 203 F.3d 684, 693, 695, 698-99 (9th Cir.
2000) (upholding a fine of $225,500 imposed on an almond
handler subject to up to $528,000 in fines for violations of
various reporting and reserve requirements). Furthermore, that
Congress authorized a much steeper fine ($1,000 for each of
the Hornes’ 673 separate offenses spanning a two-year period,
for a total of $673,000) than what the JO actually imposed,
while not dispositive, weighs heavily against finding the fine
grossly disproportional to the Hornes’ offense, for “judgments
about the appropriate punishment for an offense belong in the
9478 HORNE v. USDA
first instance to the legislature.” Bajakajian, 524 U.S. at 336,
339 n.14; accord Balice, 203 F.3d at 699.13 In light of these
factors, we cannot say the district court erred in finding the
penalties consistent with the Eighth Amendment.14
CONCLUSION
The Hornes are clearly dissatisfied and frustrated with a
regulatory scheme they believe no longer serves the interests
of the farmers it was designed, in large part, to protect. That
being the case, the Hornes may wish to “take their case to the
Secretary for a reevaluation of the [Raisin Marketing] Order
and the regulations, for although the [Raisin Marketing] Order
and the regulations are lawful, plaintiffs and other producers
may prevail upon the Secretary to change them in order to
better achieve the purpose behind the [AMAA].” Prune Bar-
gaining Ass’n v. Butz, 444 F. Supp. 785, 793 (N.D. Cal.
13
Although in Balice it appears the JO imposed penalties under only 7
U.S.C. § 608c(14) and not under the regulation’s forfeiture provisions,
whereas here the JO imposed both, nothing in the statutory or regulatory
language seems to preclude simultaneous imposition of remedial and puni-
tive sanctions under the respective provisions. To the contrary, 7 C.F.R.
§ 989.166(c) expressly provides that compensation for failure to deliver
reserve-tonnage raisins “shall be in addition to, and not exclusive of, any
or all of the remedies or penalties prescribed in the act” for noncompliance
with the act or regulation’s requirements, and the Hornes do not challenge
the legitimacy of this provision.
14
We also reject the Hornes’ contention that 7 U.S.C. § 608c(14)(B)
exempts them from liability for their Raisin Marketing Order violations
because in 2007 they filed an administrative petition pursuant to 7 U.S.C.
§ 608c(15)(A). See 7 U.S.C. § 608c(14)(B) (immunizing from civil pen-
alty any handler who “in good faith and not for delay” files and prosecutes
a qualifying administrative petition). First, this argument was already dis-
posed of in one of our earlier decisions, see Horne, 397 Fed. Appx. at 486,
and is not properly before us now. Moreover, even if the matter were
properly before us, it is without merit. Section 608c(14)(B) only immu-
nizes handlers from penalties otherwise incurred during the pendency of
their administrative petition; it does not apply retroactively. Therefore, an
administrative petition not filed until 2007 cannot immunize the Hornes
from fines relating to their conduct in 2002-04.
HORNE v. USDA 9479
1975), aff’d sub nom. Prune Bargaining Ass’n v. Bergland,
571 F.2d 1132 (9th Cir. 1978) (per curiam); see 7 U.S.C.
§ 608c(16) (prescribing mechanism for termination or suspen-
sion of marketing orders). Our role, however, is limited to
reviewing the constitutionality and not the wisdom of the cur-
rent regulation. Finding no constitutional infirmity in either
the Raisin Marketing Order or the Secretary’s application of
it to the Hornes, the summary judgment of the district court
is AFFIRMED.