The Supreme Court ruled Monday that a 66-year-old program that lets the government take raisins away from farmers to help reduce supply and boost market prices is unconstitutional.
In an 8-1 ruling, the justices said forcing raisin growers to give up part of their annual crop without full payment is an illegal confiscation of private property.
The ruling is a victory for California farmers Marvin and Laura Horne, who claimed they were losing money under a 1940s-era program they call outdated and ineffective. They were fined $695,000 for trying to get around the program.
A federal appeals court said the program was acceptable because the farmers benefited from higher market prices and didn't lose the entire value of their crop.
The government argued that the Hornes benefited from increased raisin prices, but their cause had won wide support from conservative groups opposed to government action that infringes on private property rights.
Writing for the court, Chief Justice John Roberts said the government must pay "just compensation" when it takes personal goods just as when it takes land away. He rejected the government's argument that the Hornes voluntarily chose to participate in the raisin market and have the option of selling different crops if they don't like it.
"'Let them sell wine' is probably not much more comforting to the raisin growers than similar retorts have been to others throughout history," Roberts said. "Property rights cannot be so easily manipulated."
The program was authorized under a 1937 law that allows the U.S. Department of Agriculture to keep prices for raisins and other crops steady by helping to manage supply. A 1949 marketing order allowed farmers to form a Raisin Administrative Committee that would decide how much of the raisin crop handlers must turn over to the government each year.
These raisins would be placed into a reserve pool to be sold outside the open market, used for the school lunch program, or given away to charities and foreign governments. Any profits from these reserve sales would go toward funding the committee and anything left over went back to the farmers.
The Hornes refused to participate in the program in 2003 and 2004, when raisin production far exceeded the expected demand. They tried to get around the regulations by packaging crops on their own instead of going through a middleman. But the department fined them for violating the rules.
Raisin handlers were required to give up 47 percent of their crop in 2003 season, but received far less than their costs of production. Farmers gave up 30 percent of the crop in 2004 and were paid nothing.
Raisin prices have been relatively stable recently and the committee has not ordered farmers to put crops in reserve since 2010.
Only a small number of other crops are regulated in the same way, though federal officials say most of those programs are not active.