Summary of a Recent
Judicial
Development in
Marketing Orders
Actions of Marketing Order Committees May Be
Subject To Takings Clause Challenges
Alison E. PeckNational AgLaw Center Graduate Assistant
In Lion Raisins, Inc. v. United States, 416 F.3d 1356 (Fed. Cir. 2005), the Federal Circuit held that it had jurisdiction over claims under the Takings Clause against a "non-appropriated funds instrumentality" (NAFI) such as a committee appointed to implement a marketing order. The court went on to hold that the plaintiffs' claims in these particular cases were not cognizable under the Takings Clause. The court noted prior holdings that an NAFI is an agent of the United States, id. at 1363-64, and that its actions thus fall within the Tucker Act's grant of jurisdiction over "any claim against the United States founded … upon the Constitution." Id. at 1367-68. The court noted its prior holdings that contracts claims against NAFIs were not cognizable under the Tucker Act because NAFIs are not recipients of appropriated funds, and thus cannot contractually obligate the United States. Id. at 1366. The court held, however, that "this reasoning simply has no application to takings claims, where the United States does have the responsibility for the actions of its agents." Id. at 1366. Nevertheless, the court affirmed the dismissal of the plaintiffs' claims, holding the plaintiffs had failed to present true takings claims. Id. at 1368. In the first of two cases consolidated for appeal, a raisin producer claimed that the implementation of the Raisin Marketing Order violated the governing regulations. Id. at 1369-70. The court held that the claim was not a takings claim because "‘in a takings case we assume that the underlying governmental action was lawful.'" Id. at 1370. In the second case, a raisin handler sought monetary recovery for raisin bins that it alleged were improperly taken by the Raisin Administrative Committee in implementing the marketing order. Id. at 1361. The court held that no takings claim was presented because the regulations provided for administrative appeal, and subsequent judicial review, of challenges to "‘any obligation imposed in connection' with ‘any [marketing] order.'" Id. at 1371.
The case was decided on July 22, 2005; this summary was posted Nov. 2, 2005.