So we're reviewing today's Supreme Court opinion in Horne v. U S. Dep't of Agriculture, No. 12-123 (June 10, 2013), and we come across the Court's description of the raisin marketing program, the New Deal-era federal statute and related regulations that determine how and when raisins are marketed and sold.
The Court's description of the program is a libertarian's nightmare, and reminds us that if these are the regulations that govern the growing and selling of raisins (and a wide variety of other agricultural products, see n.1 on page 3), now we are beginning to see why some decry the regulations that are being promulaged for nationalized health care:
The AMAA {Agricultural Marketing Agreement Act of 1937] does not directly regulate the “producer[s]”who grow agricultural commodities, §608c(13)(B); it only regulates “handlers,” which the AMAA defines as “processors, associations of producers, and others engaged in the handling” of covered agricultural commodities. §608c(1). Handlers who violate the Secretary’s marketing orders may be subject to civil and criminal penalties. §§608a(5),608a(6), and 608c(14).The Secretary promulgated a marketing order for California raisins in 1949. See 14 Fed. Reg. 5136 (codified, as amended, at 7 CFR pt. 989 (2013)). In particular, “[t]he Raisin Marketing Order, like other fruit and vegetable orders adopted under the AMAA, [sought] to stabilize producer returns by limiting the quantity of raisins sold by handlers in the domestic competitive market.” Lion Raisins, Inc. v. United States, 416 F.3d 1356, 1359 (CA Fed. 2005). The Marketing Order defines a raisin “handler” as “(a) [a]ny processor or packer; (b) [a]ny person who places . . . raisins in the current of commerce fromwithin [California] to any point outside thereof; (c) [a]ny person who delivers off-grade raisins . . . into any eligible non-normal outlet; or (d) [a]ny person who blends raisins [subject to certain exceptions].” 7 CFR §989.15.The Marketing Order also established the Raisin Administrative Committee (RAC), which consists of 47 members, with 35 representing producers, ten representing handlers, one representing the cooperative bargaining associations, and one member of the public. See §989.26.The Marketing Order authorizes the RAC to recommend setting up annual reserve pools of raisins that are not to be sold on the open domestic market. See 7 U.S.C. § 608c(6)(E); 7 CFR §§989.54(d) and 989.65. Each year, the RAC reviews crop yield, inventories, and shipments and makes recommendations to the Secretary whether or not there should be a reserve pool. §989.54. If the RAC recommends a reserve pool, it also recommends what portion of that year’s production should be included in the pool(“reserve-tonnage”). The rest of that year’s production remains available for sale on the open market (“free tonnage”). §§989.54(d), (a). The Secretary approves the recommendation if he determines that the recommendation would “effectuate the declared policy of the Act.” §989.55. The reserve-tonnage, calculated as a percentage of a producer’s crop, varies from year to year.Under the Marketing Order’s reserve requirements, a producer is only paid for the free-tonnage raisins. §989.65. The reserve-tonnage raisins, on the other hand, must beheld by the handler in segregated bins “for the account” of the RAC. §989.66(f). The RAC may then sell the reserve tonnage raisins to handlers for resale in overseas markets, or may alternatively direct that they be sold or given at no cost to secondary, noncompetitive domestic markets, such as school lunch programs. §989.67(b). The reserve pool sales proceeds are used to finance the RAC’s administrative costs. §989.53(a). In the event that there are any remaining funds, the producers receive a pro rata share. 7 U.S.C. § 608c(6)(E); 7 CFR §989.66(h). As a result, even though producers do not receive payment for reserve tonnage raisins at the time of delivery to a handler, they retain a limited interest in the net proceeds of the RAC’sdisposition of the reserve pool.Handlers have other duties beyond managing the RAC’s reserve pool. The Marketing Order requires them to file certain reports with the RAC, such as reports concerning the quantity of raisins that they hold or acquire. §989.73.They are also required to allow the RAC access to their premises, raisins, and business records to verify the accuracy of the handlers’ reports, §989.77, to obtain inspections of raisins acquired, §989.58(d), and to pay certain assessments, §989.80, which help cover the RAC’s administrative costs. A handler who violates any provision of the Order or its implementing regulations is subject to a civil penalty of up to $1,100 per day. 7 U. S. C. §608c(14)(B); 7 CFR §3.91(b)(1)(vii). A handler who does not comply with the reserve requirement must “compensate the [RAC] for the amount of the loss resulting from his failure to . . . deliver” the requisite raisins.§989.166(c).
Slip op. at 2-5 (footnote omitted). To summarize (if we can):
- The distinction between "producer" and "handler" was initially so confusing that at oral arguments, various Justices referred to the program as "an old Abbott and Costello movie," and "the world's most outdated law," and even arguing counsel got mixed up whether his clients were one or the other.
- The marketing order was promulgated in 1949. That's 64 years ago, folks.
- There's a 35-member Committee established to determine the yearly reserve tonnages. Thirty-five members. That's not a committee, that's practically a symphony orchestra.
- The set asides for the two years at issue in the Horne case were 47% and 30% of a producer's crop.
- Raisin producers must hold reserve-tonnage raisins in separate bins for the Committee.
- Proceeds from the sale of these raisins are used to fund the Committee.
- Raisin handlers must file reports about the quality of the raisins they either hold or acquire, and their facilities and records are open to inspection by the Committee, and to pay assessments which help cover the Committee's costs.
- There are large daily penalties for not complying.
Raisin death panel, indeed!
