When Can the Government Take Property without Paying Compensation?

The Fifth Amendment to the United States Constitution requires the federal government to pay “just compensation” when it takes private property. While that rule sounds clear in principle, it doesn’t often seem to mean what it says either to government or to the courts. On the contrary, it seems as though the federal government actually can and does take private property for its own use without paying “just compensation” or, in fact, without paying any compensation. Moreover, the practice seems quite acceptable to certain courts.

For instance, a recent piece for the Washington Post’s Volokh Conspiracy, Professor Will Baude of the University of Chicago’s Law School notes a recent Ninth Circuit decision upholding Department of Agriculture regulations which require raisin growers to reserve a portion of their crop to be sold by the federal government. Those regulations apparently authorize the federal government to determine how much of a grower’s crop the government will appropriate for itself each year and the price at which the government will sell the raisins it takes; even if the government decides to give the raisins it has taken away for free. The article is here.

As Professor Baude observes, “ . . . when the government takes your property away from you, as opposed to regulating it, that’s a taking.”

To the contrary, the Ninth Circuit held in Horne v. USDA, case no. 10-15270 decided May 9, 2014, that the government wasn’t really taking the grower’s raisins so that it was obligated to pay fair compensation at market prices to the grower as the Fifth Amendment would seem to require. Instead, the Ninth Circuit said that there was no governmental “taking” for Fifth Amendment purposes because the grower still had a right to the proceeds from the government’s sale; even if the government alone decided what price it would sell them for and even if the price it chose meant that there would be no proceeds from sale.
© 12/31/2014 Lawrence B. Hunt of Hunt & Associates, P.C. All rights reserved.

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