captioning performed by vitac i see that now. wait, before -- because i want you to get back to the experience. the thing that also sticks in my mind is that indiana case. do you remember the one i'm talking about? because in fact you look at the words, but they're nested, they're nested in a set of other crimes. >> yes. >> and really you would like to know in empirical fact how is this bit of a larger nest actually used in indiana? it might be. but it is really used against people who are involved in violent kind of situation. or it might not be. because there are a whole lot of other ones around. and now you turn to experience.

i use experience -- you know, i have no idea whatsoever. and pozner suggested, i think i picked that up go and do empirical research. why doesn't the government do it? commissions tried to do it. doesn't know where to begin. there are so many statutes. >> i think, justice breyer the very difficulty and unmanageability of the enterprise suggests it is not what congress had in mind. what congress had in mind was identifying classes of offenses that judges are confident involve serious potential risks of physical injury to another possibly the similarity in kind inquiry when the mens rea isn't satisfied. what congress expected courts to do was to analyze what the conduct is that is involved in it, compare it to the listed offenses and see if the risks are similar. >> does the department of justice -- does the department of justice do any of that?

is one that the prosecutor asks for, and is there any guidance coming from the department of justice, guidance to the u.s. attorneys, who are going to be asking for acca sentences when they should and when they should shouldn't? >> yes, and the guidance key is, justice ginsburg this court's decisions, we use primarily an analysis that focuses on looking at the conduct that the elements of the crimes embrace and logically analyzing what does it entail? does it entail a risk of confrontation? the other kind of risk that -- >> is it written guidance from the department of justice to the u.s. attorney? >> yes there is. in the form of guidance memos we regard as work product but they involve analytical efforts to separate different offenses into different categories, based on the conduct and to the extent that statistics come into play, i know justice breyer your opinion cited statistics, you talked about the need for

statistics, we think they play exactly the role the court used them for in sykes. first, the court talked in sykes about what happens when someone flees from a police officer. what are the risks of -- >> what about extortion? i mean extortion, that doesn't -- the other three i can see, burglary arson, explosives, sure. but what about extortion? i thought -- the cobs act, i would be amazed if many of those involve violence. you would know. >> violence by the extortee. i mean it certainly is -- >> at the other end of a postal communication or something, i mean if you don't give me some money, i'm in new york you're in hawaii, i'm going to reveal such and such. what are the facts on that? >> i think that what congress had in mind was the kind of extortion where somebody threatens to inflict injury on a personal property and if it is -- in order to achieve a demand. and congress was concerned that the person who makes that threat

poses a risk of carrying it out which creates a degree of danger. >> is that the justice department's position, that other extortion is not covered by the provision? >> i don't think -- >> if it is just blackmail, you threaten to reveal something about the person's life, that isn't covered? >> we would argue the generic definition of extortion is seeking to get property from a person with his consent by the use of threats of force or fear. >> threats of force. >> yes. >> or fear. >> yes. >> well, you -- i mean, fear includes being afraid that some offense of your prior life -- >> that's right. >> so you don't assert that extortion means only the extortion that the mafia might, you know pay up or we're going to hurt you? >> i think a normal method of construction doesn't quite get you to the narrower view of extortion you expressed in your

separate opinion in james, i believe. but that is a legal question. the government may make that argument and this court might conclude that under the principle that similar words should be construed similarly, extortion has a narrower meaning. >> the problem is -- the problem is not what the government argues when it gets in the court. the problem is what the prosecutor threatens when he's in -- entered into plea bargain negotiations. this is the point that justice ginsburg touched on. you were putting the defense council in a position where they have to interpret the vagueness in making the decision whether they want to plead five years or risk mandatory minimum of 15. and your guidelines say a lot, but i thought one of the things your guidelines say is you should prosecute the maximum extent that you can right? you should charge the maximum if you charge. and the prosecutors go in and say, look, i could charge you this much. and -- or i could -- or i could -- i could add this charge to what i've got and then you face 15 years.

the defense council said, all right, let me see if we're guilty of that. he'll read that and have no idea whether they're covered by it or not. >> i think no idea is -- >> it is an exaggeration. >> it is an exaggeration. this may not -- not enough of an idea to risk an extra ten years for their client. >> these aren't charges in the same way that a criminal charges in an indictment. criminal at that point the parties are more aware of whether the defendant might be exposed to the armed career criminal act or not. sometimes analysis is done and can be done fairly reliably. again, this court sees cases that really pose hard questions that have generated circuit splits, that result in legal questions that divided the lower courts. there is a wealth of activity below the surface that doesn't get to this court in which there isn't nearly as much difficulty in figuring it out. now, on pages 8 and 9 of our

brief, which my friend referred to several times we cited 17 examples of what we thought were easy cases. the petitioner came back and said, three of those aren't easy because they're circuit splits. in two of them the splits are because the definitions of the offenses, the elements of the offenses were quite different. child abuse meant something very different in one jurisdiction from another. >> you take the position, so long as there is some easy cases, the statute can't be vague. >> i don't think the court has to go nearly that far, justice scalia. in this case you have four -- >> you don't take that position? >> this court -- >> i thought your brief took that position. >> this court's decision do suggest that. i don't think the court has to go all the way to that position in order to conclude -- >> what is the standard? this goes back to what justice scalia was saying before, i mean, there is conduct that everybody agrees is annoying. there are rates that everybody agrees are just -- unjust and unreasonable. how much do we have to say that

the core has shrunk and the margins have taken over before we're willing to do this? >> i think the starting point is to look at whether the statute states something of an objective standard or a subjective standard. in the instance of unreasonable rates, that is a standard that -- administrative agency could flush that out. but for a court to do it, it would involve an application -- >> i feel as though it is really the same inquiry. even as you describe it it is identify crimes where, you know danger is stuff. crimes that pose a risk of danger. how much danger? well, as much danger as these four enumerated offenses. how much danger do they pose? nobody is really sure. one of them seems only to pose that a lot of danger and a few select cases. it is a really -- it just seems even as you describe it, as the kind of thing that congress ought to be doing. >> let me add one thing justice

kagan, to your description of what courts should do when they apply this analysis. first, they're going to look to see if they can identify the ordinary case. then they're going to try to determine whether the risk is essentially, i think analogous to the burglary, extortion risk of confrontation or the arson explosives risk of unleashing a destructive force. and then finally there may be some cases where the beguy analysis applies. this is the really important point i want your honor to think about in this context. if the court is not satisfied on any one of those issues, the government loses. not because the statute is vague, but because if the court is not confident that in an offense fits within the normative criteria that congress established, the tie goes to the defendant. >> no such thing as a vague statute. whenever a statute is vague the government loses on the rule of lenity. therefore, there is no such thing as a vague statute. >> i think the kind of things

that are vague statutes are either those where there is a tinge of first amendment or other protected activity like in the annoying example, or cases like elco where the standard is unreasonable rates and everybody would agree that some rates are unreasonable. it is a very subjective standard. >> the hardest part of this -- of this test is determining what is the typical case of -- of this particular violation. what is the typical case of extortion, to take one of the four enumerated? what is the typical case of extortion? you seem to think it is i'll break your leg unless you pay up. i would think the typical case is, you know, i'll disclose something about your life unless you pay up. >> and i think that if the court is faced with that kind of conundrum, it looks to reported decisions of convicted cases as the court indicated in james and it attempts to determine whether

it can identify the ordinary convicted case. and if it cannot conclude the ordinary case involves the greater degree of violence then it will conclude that the government has not -- >> what about one you think is easy kidnapping? what if the statistics would show that in 40% of the cases they're talking about the parent that does not have custodial rights, you know taking the child from school. and not returning him or her, but whatever. i mean that doesn't pose, i would say, not a serious risk of potential violence that the parent is not going to harm the child. and yet you say that's an easy case. it is easy if it is at the margin. if 1% of the cases are, i don't know whether kidnapping is prosecuted more often in a case like that or in another more you know violent case or where it is extortion for money as opposed to just wanting more custody of the child. >> we would have to undertake

the effort to try to persuade a court of what we thought the ordinary case was. if we failed if we did not muster whatever the court thought it needed to understand -- >> how do you do that? do you look at every charged case of kidnapping in the state of arkansas if it involves a law from arkansas? >> we would look at the reported cases in arkansas. we would look to -- >> the report misses -- the problem is -- i want to just get to justice kagan's earlier question, if that's all right -- is it? okay. because for the reasons that you've heard, i would just like you to spend an hour sometime before you sit down, a minute on the suggestion of limiting it through the use of the -- your appendix, which you heard described a minute ago. looking at the language, i think it is possible within the language to go to that interpretation. >> so i don't really think that interpretation is correct, because if you look at the exemplar crimes -- >> i don't know what you're talking about. >> what i'm talking about specifically is you read the words otherwise involves conduct

that presents a serious potential risk of serious injury to another, you look at the four examples, you say in each of the four examples there was a jury determination that it fell within one of the four, and we should read those words too as requiring the jury to make a determination that there is a serious potential risk and the way you do that is that you insist that an element of the crime has the words or the equivalent of serious potential risk. now, that's roughly what the suggestion was on the other side. i just didn't want you to sit down and at any point you would like without addressing that possibility. >> can i address it quickly, justice breyer. i don't think it is construction of the statute that really works. the exemplar crimes -- she didn't pose is as a construction of the statute. she said clearly this court could not adopt that but congress could. she was asked, you know how congress could fix this. that was her proposal about how congress could fix it.

>> yes. >> just wanted to -- i think we agree with the petitioner on this one, the exemplar crimes burglary, arson and so forth don't involve as an element characteristically -- it arises because of the elements of the crime. and the residual crimes illustrate -- >> back to justice kagan. >> that i think is not really a viable solution to it. but i do think the viable solution in this area is that for many crimes, they don't pose the empirical conundrums that can be hypothesized. and when they do and the government is not able to satisfy the court or the court isn't through its own research able to become satisfied, that is a fix on the ordinary case that it can say with some degree of confidence that the risk is comparable to the exemplar crimes, the crime falls out. so you have in the acca world many crimes that no one ever

contests are covered. mail fraud gambling, and then you have crimes that we have listed that are not seriously contested. we listed 17 of them. they contested three. i think two of the contests really have to be set aside -- >> i think even -- please. >> justice kagan. >> i think even in the ones that you think are easy that they're only easy in the abstract. the vehicular flight one was a good example of that in the abstract. everybody just has a sense that it is really dangerous. if people flee from a police officer, in a car, but then it turns out there are all kinds of degrees and we have zero idea what the charging is. and i think that's not -- that was not a fluke of that case. that's kind of every case is that we don't have a sense of how all the statutes connect to each other, and what statutes are used for the dangerous ones and what statutes are used for more minor variants of the same

offenses. and that that's kind of an endemic problem in this, is that not right? >> justice kagan i think what the court is asking itself when it attempts to apply acca is not a question of that fine grained level of empirical precision. congress understood for example, that in most burglaries, probably not used hurt. many extortions nobody realizes the threat. and yet it regarded the kind of person who is willing to undertake a crime that could lead to that kind of confrontation as properly subject to an enhanced sentence when they have not just one but two other convictions and then they go out and use a gun. >> but then you're talking about a very different inquiry, it seems to me. then you're talking to about just a gut check. do people that -- is this the kind of conduct that a bad person engages in? >> no i don't think that it is quite that amorphsis.

there is a much more specific inquiry into the risk and the way the courts have conducted it i think is really, you know, in this court's decision in sykes was an scamexemplar, but there are many more cases where they look at the conduct examine the conduct, is this a sex crime that involves a minor what is likely to ensue. i think it is kind of critical to keep a perspective here that the idea of substantial risk is shot through criminal law. >> that brings me to the statutes in your appendix. it did -- it does seem to me those statutes do require a case by case determination by the foundry of fact that there was a danger in the particular case. and so that is different from the categorical approach. >> yes. and justice kennedy -- >> and most of those statutes it seems to me would survive if

this court ruled against you here. >> it depends on the rational, justice kennedy. if the rational were the concept of substantial risk is itself too amorphous to be grasped at all and applied in a consistent manner, i think that would raise -- >> we would never say that. we would never say that. >> i think as a logical matter, that's essentially what petitioner is saying, that it is not possible to really get a fix on what those words -- >> she's saying you can't tell what the typical crime is and when you can't tell what the typical crime is, you can't tell what the risk is. >> and my answer to that is -- >> -- can't do it for extortion. >> if you can't tell what the typical crime is the government loses. >> that's not an answer. that sounds wonderful. the government loses because the rule that tie goes to the defendant. that sounds wonderful. but the fact is one court will say, yes the government loses. another court, given the

vagueness of it, will say the government wins. >> but i don't think -- >> are we going to have to review every one of these until the law is clear? >> no i think the court does what it typically does, review cases and establish general principles and the lower courts make an effort to harmonize their rulings in light of them. it is not unique that this statute has generated a lot of litigation. section 924-c, this court had three different cases interpreting the meaning of the word use and one interpreting the word carry. that's a higher ratio of cases to words than this statute. i think what it says is that when there is a lot at stake, when many years of prison time are at stake, people litigate hard. >> is the test the same here for vagueness as when we determine the validity of a statute that specifies a crime? >> so i don't think that's so clear, justice kennedy. this court in chapman indicated there is a lesser degree of clarity required for vagueness

doctrine in the sentencing context. >> why should that be when it is a mandatory -- this is mandatory as five years no possibility, in this case is such a good illustration because the judge said if it were up to me this person should get half or most what did he say, two-thirds? that would more than suffice. i'm locked into this by acca, shouldn't we demand from congress, if it wants to have that kind of enhancement really clear statement? >> let me say two things about that, justice ginsburg. this statute involves recidivism. there was never any question that petitioners should have had about what conduct was prohibbed and not prohibited. he knew or should have known that he could not possess a gun. and the second thing is because this statute is applied as a matter of law by courts with denoble appellate review it achieves a degree of clarity through the litigation process

that i think is going to be sufficient to meet whatever heightened standard the court might impose on it. i want to come back -- >> before you do i disagree with the statement you made. because there are so many years involved, people will litigate hard. i think because there are so many years involved people won't litigate at all. if they're facing -- if they go to trial such a large enhancement, i think they're going to be compelled -- it gives so much more power to the prosecutor in the plea negotiations which is, of course, where almost all of the cases -- >> not so much here for two reasons, mr. chief justice. one is that section 922-g prohibits possession of a weapon by a firearm. i won't say there are no contested cases, but it is not the hardest crime to prove. if you're found in a car with a gun and the suppression motion fails, trial is not going to get you a lot. the second thing is, it is not totally up to the prosecutor. the presentence report will indicate the defendant's criminal history and the judge is obligated to apply acca

whether or not the government asks for it to be applied if in fact it is legally applicable. i don't think this context presents quite the same plea bargaining pressure that -- >> you don't have know about the prior crimes, how is the judge supposed to know about the prior crimes unless the prosecutor tells the court? >> may i answer? the presentence report, which is required to be prepared by the probation officer does a criminal history check gathers that information synthesizes it, makes recommendations to the sentencing court. >> thank you counsel. >> thank you. >> miss menendez you have three minutes remaining. >> first i think lenity is a usery solution in this case. after they looked at that as an answer, we looked through every opinion we could find. we did not find a single case nationwide where a court has applied lenity to find a marginal case should not count

under the residual clause. if it is going to pose a solution that the government suggests, it needs substantial invigoration by this court to be the answer in the gray areas. the second thought is this suggestion that the court can decide what the ordinary case is from reported decisions is actually also skewed in favor of the government. consider a standard offense where somebody commits a much less egregious case. resisting arest where all they do is refuse to be handcuffed, versus resisting arrest where they kick and punch and fight the officer. this case is likely to get a higher sentence and more likely to lead to appeals and challenges and a reported decision. this case is perhaps more likely to be resolved with the suspend suspended sentence and never to appear in the reported case law at all. so if all we're doing is turning to the reported case law to try to determine what the ordinary case is, that's going to give an artificially skewed sense of aggressive nature of those cases. finally, your honors, while it

is true this court has grappled with things like 924-c repeatedly 924-c prize anovides an example of what is supposed to happen, when when court points out a flaw in the statute, which you've done four different times, congress answered. changed 924-c to try to address the court's decision and address the court's concerns from bailey. and then that answer led to additional questions. that give and take, that discourse is missing in this case, where it has been clear for a long time that this statute needs help and there has been inaction on the part of congress. your honors, i think the idea that the tie should go to the defendant is important but it is just not happening because of the suggestive gut check your honor mentioned. judges substitute a feeling, a sexual offense involving a minor sounds bad and it sounds violent, so therefore it must count. but i invite your honors to look at the photo note in our brief where we highlight there is

actually several cases that final that where the offense is unlawful because of the age of the victim it doesn't count as a violent offense. so that gut check has to mean -- has to be more quantified, has to be limited, has to have specific guidance. the last point i'd like to make is that whether this court decides in favor of mr. johnson on the merits, or an application of the rule of lenity whether this court decides this statute is unconstitutionally vague as applied to possessory offenses, or whether this court takes the step that i think it is time for and that clears this clause unconstitutionally vague in every instance i think the appropriate result is for mr. johnson to win and be resentenced. >> thank you, counsel. the case is submitted. >> more now from the supreme court. the justices heard oral argument in a case dealing with a government backed board that requires raisin handlers to turn

over a part of their crop to the government. marvin and laura horne in 2002 set up a business arrangement to avoid the program and were fined almost $700,000 by the agriculture department. they argue that the program is unconstitutional under the fifth amendment's takings clause, which says private property cannot be taken for public use without just compensation. >> -- argument this morning in case 14275, horne versus department of agriculture. mr. mcconnell? >> mr. chief justice may it please the court, thank you for being willing to hear this little case a second time. it does involve some important principles and the livelihoods of marvin and laura horne and more indirectly hundreds of small california raisin growers will be profoundly affected. this is an administrative enforcement proceeding that was brought by the department of

agriculture against my clients commanding the relinquishment of funds connected to specific pieces of property namely reserve raisins. my clients appear in their capacity as handlers, but under their -- in the particular facts of this case, the economic circumstances are somewhat different than are ordinarily true in this industry because as handlers, the horns actually assumed the full financial responsibility for the raisins that were not turned over to the department of agriculture. the producers in this case were fully paid for their raisins. this is a factual finding, to be found in the judicial officer's opinion at 66-a of the appendix to the petition. the horns paid the producers for their raisins according to the judicial officer those raisins became part of the inventory of

the horns. when the raisin administrative committee, which i'll refer to as the rac, came after the raisins, it was the horns and the horns only who bore the economic burden of this taking. >> i thought that -- i thought the growers were paid only for the volume that they were permit permitted permitted, that was permitted, the permitted volume and that they were not paid for what goes in the reserve pool. >> justice ginsburg, that's true in the ordinary course. that was not true in this particular case because of the unusual business model of my clients. these producers are paid for all of their raisins. >> are you objecting to the volume limitation or is it just that the -- that the reserve pool that you find --

>> we believe a volume limitation would be a use restriction, it might possibly be challengeable under the pen central test but not a per se taking. in this case, because the government rac, an agent of the department of agriculture, actually takes possession ownership of the raisins it is -- it is that aspect of the case which we're challenging. >> that's so puzzling because if you're not challenging the volume itself you can't sell more than 60% of your crop. >> that's correct. >> and what happens to the rest of it? >> in the ordinary case the reserve percentage, which in one case is 37%, and -- was 30% in the other case, 47% is handed over to the raisin administrative committee.

>> if it wasn't if we just had a volume you cannot sell more than x amount then i take it that the grower would get nothing, nothing at all, at least with this reserve pool there is the possibility of getting some money. >> well, it all depends the way volume controls generally work is that the owner of the produce is permitted -- they have to hold back a certain amount in the reserve and then permitted to sell that reserve as the market conditions continue. in this case, of course, the r ax c sold the raisins and in some cases even above the field price. there was a market for the raisins, so i would assume that volume controls under these economic conditions might have left the particular people better off than under the current -- >> so what you're complaining

about is theed ed aadministrative expenses. i don't understand why this makes this pen central case as opposed to a per se taking. you've given up on this being a pen central case. >> we have never claimed it was a pen central case. >> and so basically you see a nexus between the regulation and its purpose? >> we do, but more fundamentally, this is an actual transfer of the raisins themselves to the government. this is -- >> how is this different than leonard? >> well leonard involved oyster shells, which are onlied by the state. they're wild animals. they're the property of the state. and the oyster men had no property interest in them other than what the state chose to license them to harvest. >> is that really true mr. mcconnell? when these fishermen took the oysters, including the shells

from the day or other waters, you know they could then sell the oysters why weren't the oyster shells theirs at that point? >> they have whatever property interests the state of maryland provided for them. and the state of maryland withheld the 10% of the oyster shells for the purpose of essentially fertilizing the oyster. >> i would have thought that as soon as they bring the oysters out of the bay, and they pull their cash to shore, that what they have hauled to shore is then theirs. >> except for the 10% that the state reserved yes. >> so i guess what justice sotomayor's question is is why wouldn't the same be true as to raisins? >> because raisins are not wild animals. even if they're dancing. and they did not originally belong to the federal government. >> so you think that leonard is an animus case as opposed to a, you know, the state can tax your

property case? >> yes, i do. >> -- by the court. >> they did also call it a tax. and i'm perfectly happy to address whether this is a tax because under the court's standards for criteria for determining a tax, this certainly is not one referring to the criteria and the nfib case, this is not in the internal revenue code, not collected by the internal revenue service it is not -- there is no tax authorized by congress. the proceeds of the tax do not go into the general treasury. this is not -- >> it didn't happen that way in leonard either. the court was basically saying the government could do this because this is a good -- as long as it can meet the pen central test, that there is some

nexus between the government's goal and the regular -- and the regulation, then it is okay. now, there they use it to fertilize oyster bonds or refertilize the oysters. here they're doing it to maintain prices and giving you whatever -- whatever is left over on the reserve. >> the fact of the matter is that the oysters belong to the state of maryland and when the state of maryland decides to allow fishermen to harvest the -- >> you told me where in leonard that was discussed? >> it is -- i would be very happy to file a supplemental brief with the maryland citations indicating that the oysters belong to the state of maryland. >> i thought that the -- what the constitution required for taking was just compensation, not a reasonable nexus to a good

policy. am i wrong about that? >> you are not wrong about that. >> i suppose that question -- underlying the government's briefs, and he canwe can ask them what their position is or you can characterize their position if you choose, since we can do this other ways what difference does it make? do you understand that to be their -- an underlying premise in their argument? or is that unfair on my part? >> well they certainly say that from time to time. and this court, two years ago rejected arguments of that of that sort. but, in fact there is a fundamental difference between a volume control, which is present for a number of agricultural products, versus the taking because in this case, the government literally takes possession of the raisins. it can use the raisins as collateral to get a loan. it can give the raiseins away.

it can sell the raisins. >> you're attacking this reserve arrangement, and the possession the government's possession of the raisins themselves. and as far as i've heard so far, you are not attacking -- you cannot market more than x amount. why didn't you then ask the department of agriculture for an exemption from the reserve pool? instead of -- you're trying to do now is to get rid of the volume limit as well. >> in this particular program there is no separate volume control in the sense that -- there is no regulation that tells you that producers or handlers how to use or sell raisins. instead, they're told to set aside the raisins and give them to the government. here there is a taking. and -- >> but the part that isn't given to the government suppose we

just -- couldn't you have asked to ex-ize that part of and still limit the use on the market. we have a provision on what goes in the reserve and what can be marketed. >> the way this case arose is department of agriculture came after my clients we did not -- this is not our lawsuit. the department came after our clients -- >> is it a counterclaim? >> it is a defense. >> a defense. >> it is a defense. the department says give us either raisins or the monetary equivalent and we say that's not constitutional -- >> if there was a taking would there be any obligation on your part to propose an alternative to the taking? >> the government comes and takes your property, can't you just resist the taking without saying, oh, government you can do this in another way please do it in a different way, you don't have to do that, do you? >> we do not. and i'm not sure that any alternative ways would even be

permitted under the -- >> my question is -- it goes on from this. i mean, maybe the answers just don't decide that, but, look, i assume with you for the moment for argument's sake have some raisins, in my basement, i'm in this program, the government comes with a shovel and burlap sacks and takes the raisins. i would say, well, sounds like a taking to me. the next point the constitution doesn't forbid takings. it says what you have to do is pay just compensation. now, it is at that point i want to know what happens because i guess the government could argue look at this program. it is a big program. this program what it does is it gives raisin farmers at the public's expense more money. so if in fact you don't want us to take your raisins, all right fine. but there will be no program, if everybody said that. we have a rule against free

riders. now we'll give you what it costs you to take your raisins. what it costs you is, in fact the difference between what you receive given the program and what you would receive without the program. that difference works in your favor. it gives you money. it doesn't take money. so there is no compensation due. in fact if we were to have compensation, you should pay us the government. so how are you going to get by that part. and if you can't get by that part, how are you going to avoid paying the fine. i don't see the relation between the taking argument, which is maybe all we have to decide, and how eventually you either get some money or you don't have to pay the fine. if you have a minute, i would appreciate just the explanation. >> i would love to. they're supposed to -- there is a conceptual and practical response. let me give the practical response first. my clients are certainly not

better off. by the secretary's own calculation, the price of raisins was $63 per ton higher with the volume controls than it would have been in an unregulated market. the field price that year was $810 person. taking away 30% of their raisins does not end up with the -- with my clients better off as a result of the program, quite the contrary. they lose money. we have the calculation in our -- >> i don't want to interrupt. you'll get to the theoretical argument. but isn't the response that -- the price you just quoted is because of this program and that circular, or am i wrong? >> by the secretary's own calculations, $63 of that $810 is attributable to the volume controls in the program. only $63.

>> we told the demand for raisins is elastic. you'll have what happened before the rca. you'll have prices dropping. that's the purpose of free competition, isn't it? >> actually under today's conditions, the elasticity is not as enormous as it would need to be for this to be a -- >> that's today. you haven't paid a reserve in years, now. >> we're talking -- when i say today, what i mean is the -- >> one of your orders could be -- >> the conceptual point is that this is a per se taking. and it is -- if there were benefits, such as i don't believe there were, if there were, that would at most go to whether there was implicit in kind compensation for the taking, which would go to the -- to the question of compensation.

implicit in kind compensation is a complicated matter. it has to do with whether there were special benefits that -- there is a split all over the country on that. i don't think we want to get into whether this would be a special benefit. >> we should say in your view do you have any objection to my writing if i were to write it like this. taking, yeah it is a taking. okay. but the constitution forbids takings without compensation. the object of the program is at least in general to give farmers more compensation than they would have without it. programs can work badly. sometimes are counterproductive but if this is working well that's what happens. so we send it back to the court to see did the program work well, did it work to actually make your client better off, what rules do we follow? that's how we should do this in your opinion. >> i think not. if i -- i'm close to there. if this were an imminent domain proceeding, then the lower court would determine whether there

was implicit in kind contribution. if it were an inverse compensation proceeding possibly the same, but this is actually an enforcement action. it is specifically guided by the regulations in the seven cfr. under those regulations, we know exactly what takes place. andist preliminary in kind contribution is not provided for in those regulations. what is provided in those regulations is that the -- if reserve pool raisins are not handed over to the rac, the handler must pay a -- multiply the number of raisins by the field price, and that is it. now, that is also the measure of the value of the raisins. so that if they take have the compensation is exactly that and the two things simply are a wash. because the regulation -- i

think the broader principle here is that this is actually not a program which is designed to provide compensation. the government almost concedes this. this is not -- this is not like getting land for a post office where the government intends to pay. this is more like a program like a kyzer aetna or some of the others where if it is a taking, the government has no intention of paying a compensation. that's not the kind of program it is. and in cases -- may i just -- in cases where there is a taking, and the program does not contemplate compensation the standard judicial remedy for that is to -- is to forbid the taking. >> can i -- >> mr. mcconnell whether it is a taking point, and i just have been trying to think about whether your argument would apply to other kinds of programs and how it might apply to other kinds of programs.

so how about just programs where the government says give us -- produce records for us. i'm sure there are a lot of programs like that in the world. and there is something intuitive about your saying whether the government is asking us to turn over stuff. and i'm wondering, it seems to me the government asks people to turn over stuff all the time in the form of records. how would that fare under your argument? >> well, if the records -- if what the government is asking for is information, this is not going to be a taking if the records are themselves of historical value as they were in nixon versus -- they want to put them in the museum. >> i don't know if they're historical value. just physical objects in the way that raisins are physical objects and the government wants some records. >> the government does not take permanent possession of records. if i'm saying an irs audit and they ask me to show records to

establish my tax deductions i show them the records they see the information, it is not a taking. >> you're saying the government couldn't ask you to deliver records to them? >> i did not say that. they can ask me to do that. and it is not a taking unless they have taken a permanent possessory interest. if they sell the records the way they sell the raisins -- >> they're just keeping the records. they're keeping the records. >> if they're keeping the records forever i -- i'm not sure but i doubt very much that would be a taking. again, the value -- if the value of the records is the information, which is what i assume it is in a regulatory program, we're not talking about actual physical -- >> there are cases on custodial -- government all the time, in criminal cases takes control of valuable objects for evidence and sometimes it keeps

it forever and ever and in those cases i think there is a taking. if it is too long we've said that or other courts have said that. only so long as reasonably necessary for the -- you have a valuable diamond ring which is evidence and the government keeps it, but it keeps it only for so long as -- >> i think they're complicated sets of rules having to do with contraband and property that is used in the instrumentality of a crime. but this is extremely far afield from raisins, which are a -- which are a valuable piece of property. >> i guess i'm trying to understand where it is far afield and what it is far afield from. you even said well information is no problem. the people have property interests in information all the time. and if the government says you have to give us that information, which counts as property, why is that not subject to your rule? >> information can be property

when it is intellectual property, for example, trade secrets can be property. i don't think ordinary records such as the irs demands from taxpayers as a taking. >> where we said the turning over of trade secrets, which is a property, you've just admitted that, for the privilege of selling other commodities, pesticides was okay. wasn't the taking. how do you deal with that case? >> there is broad language in that case, which this court cut back upon in nolan versus california coastal commission. and in nolan the court held that monday that monsanto, it is an affirmative benefit to allow them to use their property in an

ordinary sense. there has to be an actual affirmative government grant of a benefit for the conditions. >> getting $63 more a pound for what you sell seems like a significant benefit. >> they're not given -- the $63 results from volume controls. that does not require a taking. the taking itself is of absolutely no value to the producers or anyone else other than the -- those who receive the export subsidies from the sale of the raisens. they're the only ones that benefit from the actual taking. >> but you couldn't do it. you would have a product that would be valueless. except for that which you could eat at home. but you didn't intend to eat it at home, because you gave it up for sale. if i gave you the raisins, would you be able to export them and get the government subsidy? >> if they -- my clients are not

actually in the export business. if the -- if my clients were selling raisins for export, they would be entitled to receive a -- the export subsidy, but that's not theexport subsidy, but that's not the business that they are in. >> my point is just you couldn't otherwise sell this commodity. if all they did was put it in the house and say to the producers sell 60% this year, what would you do with the raisins? >> well, the way other programs of volume controls work is that there is an initial reserve and then as market conditions develop and more information is available the owners of the product are permitted to release more and more into the market. >> suppose it goes the other way? >> that would certainly be a different case. if it went completely the other way it could well be that the

owners of the raisins receive no money at all. but it's still a restriction on their use. the raisins haven't been taken from them. in this case the raisins are actually taken from them and the government sells them. in fact, in one of these years the government was able to sell the raisins for more than the field price. >> there is still what do we do about the fine. the reason that maybe it is a curly q on the case. i don't think i will ask it. i will figure it out myself. thank you. >> if there are no further questions i will reserve the remainder of my time for rebuttal. >> thank you, counsel. >> mr. chief justice and may it please the court. petitioners isolate one feature of the comprehensive program

regulating commercial marketing for the fungible agricultural product, a regulatory program established with producer approval and established if their benefit. it is a cooperative program among the secretary producers and handlers. the raisins are not put into the program for the benefit of the government. they are put into the program for the benefit of the producers. and they enter the stream of commerce. the producer is effected by the program -- these petitioners do not want the program but the program was established on the premise that it is for the benefit -- >> one little feature of an overall program. that little feature happens to be the taking of raisins. you can have a lot of features. there is no objection to having many features. where one of them is a taking you have to justify it by just

compensation. >> the question is whether it is a taking. we believe it is not. >> used to say it is not a taking if it involves just personal property, only real estate. >> that has not been our position. we have not argued that personal property is not subject to the just compensation clause such that if the government came in and took someone's car or -- the government has not taken the raisins. if i could set this up and explain how it operates. this program operates only when the producer, the grower, has voluntarily committed to raisins to the stream of commerce. they have been put into the stream of commerce. they are turned over to the handler. it regulates only the conduct of handlers. >> the government can prevent you from putting something into the stream of commerce and charge you? >> i think the government can

attach reasonable conditions on entering the stream of commerce. >> including taking? >> that i think is the lesser -- >> it is an unconstitutional condition not without just compensation would be unconstitutional condition for putting something into the stream of commerce. >> that analysis would apply if there was a taking on the nolan dolan analogy. >> is there any limit to the argument. there are examples in the briefs that are startling. could the government say to manufacturer of cell phones however every fifth one you have to give to us. or you can sell cars in the united states but every third car you have to give to the united states? >> i think that would present a very different question. >> why would it be different? >> because this is part of a comprehensive regulatory program that it isn't just acquiring.

>> so you are saying if the government took all of gm's cars then it would be okay, but just not a third. >> we are not saying that at all. >> before you do, the rationale the government can come up with a rationale to justify the examples really easily. you say cell phone providers benefit greatly if there is a broader cell phone market so we are going to take every fifth one and give it to people who might otherwise not be able to afford a cell phone and that will help cell phone manufacturers because more people will have them and want them therefore it is okay. that is the same rationale you are applying here. this is for the good of the people whose property we are taking. >> these programs go back to the 1930s when the agricultural industry in this country was in serious trouble and particularly in california. prices were below cost of production. and you can do what you have done in most other marketing

orders which is not take the raisins and say you can only plant 63% of your acreage this year or only produce 28 tons. that's how most of them work. most of them are analyzed under penn central. this is different because you come up with the truck and get the shovels and take raisins probably in the dark of night. >> that is not what the government does. the way the order operates is that the producer submits the raisins to the handler. the handler then dwoids them into two categories. the handler is required by the order to maintain and separate the reserve raisins but they are separated for later sale. they don't go to the government. they are separated for later sale. the proceeds are pulled -- >> what do you mean they don't go to the government. do you deny that the government owns them? >> for purposes of this case we

concede that the government gets legal title. that doesn't mean the government has entire interest in the raisins. the government has legal title so that it may -- we will assume for purposes of the case so that the government can or that the committee, not secretary of agriculture, the committee can sell the raisins. the proceeds of those sales are pulled and distributed back to the producers. >> how much from those sales did these petitioners acquire in the two years at issue here? how much money was given back to them? >> in one year there was $272 per ton and the other year there were no proceeds back because the cost of administering the reserve program exceeded -- there was no net proceeds afterwards. >> over the history of the program it starts in 1949, right? >> yes. >> so how many years while the

program is in effect was there a distribution to the growers? >> i do not know that how many years, but a great number of years. in fact, the three years leading up to this particular time one of the years here was $47 million was returned. and the prior years it was 50 some million and another 37 something million. so the experience has been that theretypically has been -- >> i, too, am troubled like justice alito about his every fifth telephone or every fifth car to give to the government. i know you have answered that question. what's the basis to distinguish it? >> this is a comprehensive governmental program. and it governs quality.

it governs timing of sales. and it's important to recognize that is all that is going on here. the reserve raisins are set aside by the handler after the producer has voluntarily turned them over they are set aside by the handler for later sale. petitioners concede on page 23 that the government can regulate the when manner and channel of sales. that's exactly what the reserve program does. they are turned over to the handler. the handler sets them aside in reserve and decides when and where to sell them. >> this is a historical work you have to defend. you can achieve government's objectives through volume limitations that don't require a physical taking. for whatever reason in the history of the new deal this was set up differently. and so we are here dealing with a classical physical taking. we are not going to jeopardize the marketing, agriculture department's marketing order

regime. by the way, it better be the department of agriculture that takes these or else you have a lot of trouble in your government speech cases where you make the point these committees are not government. >> i am saying the operation of the program is not for the government's benefit but the producers benefit. >> this is -- i'm having trouble with the same thing. i agree so far with what the chief justice said. go back to the new deal. you can in fact, burn raisins. the point of which is to have fewer raisins. the result of which was to raise the price of raisins from $100 a pound or bushel to $400. that was thought to make the farmer better off. which it did. and it made customers worst off. then someone had a good idea and said it is wasteful to burn raisins. let's take the raisins we would

burn and give them to school children and maybe we could sell a few. and if we do we will get that extra money to the farmer, too. now we have school children with raisins. we have the farmer having more money. sounds like a pretty good program. of course, you have taken some raisins. but what i don't see is how either the farmer or the school children are any the worst off. and if they are no worse off, what compensation are these farmers entitled to? of course, free riders could become yet better off. they could charge at the higher price that the program creates $800. but after all that isn't the issue because you have to have as a rule no free riders. and once you admit that as a rule everyone including perhaps these plaintiffs are better off than none at all. that is a very simple argument. it is what i understand to be

the economics to the fdr, 1949 et cetera. yet we have had endless cases complexities opinions and fines. therefore i am probably wrong with my simply argument. of course, i doubt that i'm wrong but i want you to explain what is wrong with it. >> we agree with much of what you said except it is not a taking of the raisins. it is a regulatory program classically analyzed under penn central because there is resperocity of advantage. this does not effect the petitioners. it applies to all producers. petitioners are correct. since 1949 every year there has been a reserve requirement every producer has had a per se taking. >> i largely agree with what the chief justice said, just the way

i think about the program is that this does seem a weird historical anomaly. am i right that all of the rest of these agricultural programs are done differently such that saying that this was a taking would not effect other agricultural programs? and also are there any other programs out there, forget agricultural programs but are there other programs that we should be concerned about if we were to think about this as a taking? >> well with respect to agricultural programs i think there are eight or ten other programs that have reserve provisions in them. i think most of those are not active in the sense that there is currently reserve just like this one is not. if this one has outlived usefulness the program is working exactly like it should. the committee which is responsible has decided not to

impose a reserve requirement. >> you said there are eight or ten other programs -- >> they have like this one provisions permitting the use of a reserve system. but like this one they are not actively utilizing it. >> how long have they not been actively utilized? >> i think most of this has been in the last decade. one of the things that has happened in this industry in the last ten years is it has changed greatly. you will see from the brief filed by sunday in the raisin bargaining association they now believe that the reserve requirement should no longer be instituted but they also firmly believe the petitioners should not be permitted to be free riders on this program. >> are there other regulatory programs where the government says produce something that is

characterizable as property? >> i think most immediate relevant one which this court sustain was in the monstanto case. that was the case in which as a condition for marketing pesticides the manufacturer had to submit information to epa. >> we know about that one. anything else out there? tell me what the realm of regulatory programs is that we ought to be concerned about if we were to say something like the production of something, the production of stuff that somebody claims a property interest in is a taken. >> i'm not specifically aware of other programs but monsanto and the requirement to submit information to the government, for example is wide spread in our society. and what the court basically said there was that if it was known when someone before they entered commerce and applied their application, if they knew that the material would be

disclosed to the public or used by the government for approving other applications there was no -- >> government can prohibit the introduction of harmful pesticides into interstate commerce. i'm not sure it can prohibit the introduction of raisins. dangerous raisins, i can understand imposing that condition on monsanto and that would not be unconstitutional condition. >> the court's rationale in monsanto was not based on the fact that the product was dangerous although that was obviously the setting. it was the fact that the manufacturer knew when submitting the information to epa that it would be subject to disclosure and therefore property value either eliminated or appropriated by the government as it were for use in evaluating other applications. >> in the case from monsanto you say that producers who are

dissatisfied with the reserve regulations may plant different crops. that is a pretty audacious statement. if you don't like our regulations, do something else. >> that's not the only option that they have. they have option of selling grapes for other purposes. >> you mean wine? >> wine or grape juice. these grapes the overwhelming majority of them have a variety of uses. that's one of the things that a grower would take into account. >> if you don't like regulations you can challenge them in court to see if they comply with the constitution. the answer is always you can do something else it seems we will never have these kinds of cases. >> this is a substantive point i'm making. the substantive point is there is market regulation, people who are growing crops in this industry know what the

regulation is. they have operated under this order for 30 years before they challenged it. >> it seems to me what your argument is saying is even if it is a taking it's okay. it will be okay. everything will work out. that's what i get from it. >> our fundamental argument is that it is not a taking to begin with because the grower voluntarily submits the total amount of its raisins to the handler. the handler then separates them into two quarters one to be sold now and one to be sold later, but they both have to do with the timing and regulation of sale which petitioners acknowledge the government can regulate the timing and manner of sales. that is exactly what happens here. there are basically two markets. one is the free market and the other is regulated market for exports and other outlets that do not compete with the domestic market. >> if you don't like the pledge

of allegiance in public schools and if you don't like it, go to a different school. i don't understand why that is not the same analysis here. this may be a taking of your raisins or not and if you don't like it grow something else. >> i do not believe that nolan cut back on the rationale of monsanto. what the foot note said is we do not regard the ability to built on your real property to build a house as a governmental benefit. it did not say. it reaffirmed the idea that there was an exchange where the government was giving a benefit of clearing the product for use. >> whereas you say that introducing raisins into interstate commerce is a government benefit? >> we think the regulatory program is a governmental benefit. >> you are saying the activity which is subjected to the taking is the introduction of raisins

in the state commerce. you say that is something that the benign government can give or with hold. >> permission to do it which is what the court said in monsanto. monsanto is not the only case. the same thing was said with respect to real property involving the mobile home park. it was claimed a taking there because the mobile park owner was subject to rent control. it was argued that that was just like loreto because it was a forced physical occupation. the court said the critical distinction was that they had voluntarily chosen to enter the rental market into a commercial transaction and the government could then because they had voluntarily done it regulate the price that was being charged. >> mr. mcconnell was asked a number of questions about the leonard case. i take it that you don't think that the leonard case has very important bearing on this case because you cited one time in

your brief it is a passing reference on the issue of fungible goods. am i correct there? >> we think that is a critical point. we are not -- >> you didn't suggest to us that this case is just another version of leonard and therefore we should affirm based on leonard? >> to the extent leonard was about tax this was not -- this program was not identified as a tax partly because the raisins don't come to the government. the raisins go into a pool that belongs to all of the producers and then is divided among the producers. this is not -- these are not things appropriated for the government's own use. we think leonard is critically instructive for the point that with respect to property like this like the oyster shells or like raisins what the court said is that they are fungible their only value is for commercial sale. this is not like the ownership of real property in loreto which

is unique and personally identified. these raisins are valuable only for sale and as i said this order kicks in only when the producer has committed the raisins to sale like handing them to a handler. >> put all of the regulatory aspects of the program aside for a moment and say this were a much simpler program and it said the government says to the raisin industry we could tax you and say you have to deliver 2% of your net profits. we are not going to do that. we are just going to take 2% of your raisins. would that be constitutional? would that be a taking? >> that would be i think like leonard. it would be a tax. i don't think anything would prohibit that being done. we think the fact that that would be okay is instructive here as the court's discussion of leonard suggests. >> you said you don't think of

this case in that way. why don't you? >> it is analogous in the sense that congress may be able to do this in a different way. the reason i said it is different is that the oysters -- the raisins, excuse me, are not being used for the government's program. they do not go to school lunch programs. if the government wants raisins it buys it. >> we don't usually allow committees of producers to impose taxes. that is usually done by congress. this essentially is done by some committee. >> it is a committee elected by producers. >> so they can impose taxes you are saying? this sounds like a tax. >> what i was saying is the government may well be able to impose something, some exaction as a tax. this is a regulatory program adopted by producers. it's important to recognize. this goes back to the new deal. this court has had numerous cases involving marketing

orders. >> these people disagree. >> they do disagree but the disagreement is not converted into a taking. if they believe the program is not operating correctly there are other -- >> i'm just saying it doesn't carry much to say this is a program adopted by producers if 51% of the producers want to do it there are 49 that don't want to do it. >> i think it's a pretty good indication that the premises on which congress enacted this statute in 1937 operated then and operate now for the benefit of producers. and it shouldn't be necessary in any one particular year in which the regulatory program is in place to calibrate whether the benefits outweigh the burdens. >> central planning was thought very well in 1937 and russia tried it for a long time. >> if this program is not

working it can be modified. in fact, the committee compromised of producers has decided not to impose a reserve. >> you made the point several times that the government sells raisins for the benefit of the producers. what if the producers think they can do a better job of selling them? they can get a better price because they are better producers and better marketers. they have export contacts that others don't. >> this is just standard regulation. what congress has said if you are going to sell you have to sell in the manner set up under the program. >> that's not usually what when you are talking about that type of regulation i understand the raisins have to be so big or you can't call them raisins and have to have safety inspections. you have been presenting this is because we sell the raisins and give some of what is left to the producers. i don't think that is a common approach to market regulation. >> there are two pools of

raisins. and how you treat or how you implement the notion that there are two different pools of raisins may vary. where you have that similarities are much more fundamental. you have the raisins which the grower is immediately paid for and the handler can immediately put on the market. there was a judgment made when this marketing order was established and the raisin association believe it was true going into the years that if you had a big surplus as there was around the turn of the century it would make prices plummet if those extra raisins were put on the open market because the demand for raisins is elastic. what this marketing order does is it estimates where it operates and what the requirement will be and that is completely open to the market. the reserve raisins, they are

essentially valueless because you don't need them to satisfy the existing market. you take them off the market to prop up the prices of the free tonnage raisins and then the committee will sell them in a manner that will not undermine -- >> suppose the same sort of program were carried out with respect to real property would you provide the same answers? suppose owners of real property in a particular area think the value of their property would be increased if they surrendered a certain amount of the property to the government for the purpose of creating a park or for some other reason. so they get the municipality to set up this program and one of them objects to surrendering this part of his or her land, would that not be a taking? >> i think that would be fundamentally different. >> i thought you said you were

not arguing there is a difference. >> i think the lucas decision is very instructive there. when the court was talking about the ability to regulate real property it said there is a big difference between real property and personal property at least personal property being used for commercial purposes which might be rendered valueless by virtue of governmental regulations. >> what statute of limitations on a takings? >> six years i think it would be. >> has there been any reserves created in the last six years? >> i think the last one was 2009-2010. i wanted to correct one fact -- >> explain to me why the market for raisins is inelastic? people won't buy more raisins if they are cheaper? >> that is basically correct. it is the quality of raisins. raisins are primarily used as

food ingredients in raisin bran and things like that. and the price doesn't effect demand. and therefore if you put a great surplus on the domestic market prices will crater. this has a very sensible approach. >> you don't have to convince us that this is a sensible program for you to prevail do you? you can think this is a ridiculous program? >> but it is one that has been around since 1949 and petitioners argument means every grower has had a per se taking. >> you acknowledge it. >> it is not -- let me be clear, a ridiculous program. >> this is a serious point because the ridiculousness or sensibleness of a program is really not for us to decide.

>> i agree with that completely. this is a regulatory program and should be thought of under the court's -- >> you asked this before and your answer wasn't clear. you said there were eight or ten. have any others been operative as this one has been. >> most of them are not operative in the sense that the reserve provision has been triggered. >> the government selling the reserve? >> i think it is true of maybe several others. i'm not sure. some of them have to do with the handler, difference between handler and producer. i wanted to correct a factual error on the computation. in the one year there was $810 was the field price.

because of the mathematical calculations the claim was petitioners would have been better off without the reserve. that's not correct. the mistake is assumption that all raisins would have been sold at field price if all put on the market. that is inconsistent. the only reason there is a high field price for the raisins is that others are taken off the market so they would not have been recovered in that way. >> how many of these programs are there? of marketing orders? >> i think there are scores of them. >> i'm trying to put the eight to ten in relation. >> i don't know the total number, but we can follow that up with a supplemental letter. i think there are scores of them. this is not fundamentally different from others. the government is not acquiring these raisins for itself. the government doesn't keep them in its possession. it tells the handler to keep them and sell them later rather

than selling them now. that is not an appropriation of private property. >> thank you. thank you, mr. chief justice. several things have been cleared up. the government now does concede that the government takes legal title to the raisins. the government -- >> to the extent that we take formal titles as meaningful with respect to actual control or actual benefit. trustees take title and but it's not for their benefit but for the benefit of their beneficiary. >> that's true justice sotomayor. the government is not a trustee here. >> in a form yes. to sell the reserve raisins at

the best price it can get given the limitations on the free market. >> it sells for the best prices and then uses proceeds for its own regulatory purposes. >> you have only four minutes of rebuttal. as to the factual point it is not our calculations are not based upon selling all of the raisins at the field price. our calculations are based upon being able to sell all raisins at the price that the secretary has said would be the price in an unregulated market which is $747 per ton. and that is certainly not true that these reserve raisins are valueless. they are an extremely valuable commodity. most of the years the producers of the raisins receive absolutely nothing for them. the important point here,

though, is that it is not any less of a taking even if there is a benefit. i have no doubt for example that in loreto that the value of the apartment went up because there was a cable because it became cable ready for its tenants. that did not make it any less of a taking as this is a per se taking and any benefits only go to whether there might be any kind of implicit compensation as a result of the benefit. if this were imminent todomain this might be relevant. this is administrative enforcement action in which the question is whether the department of agriculture was entitled under the constitution to demand either raisins or monetary equivalent without payment of compensation. >> why isn't it for them to make

that argument? >> if you would look at -- you will see that that is the provision for what happens when the handler does not turn over reserve raisins to the department of agriculture. it has very specific provisions for what happens and there is no provision in that for implicit inkind compensation. >> can they argue that the fact that all raisin producers are better off because of the program including you that's what is the compensation. can they at least argue that? >> under this regulation i do not think it is open to the department of agriculture to argue that. i think that would be a logical argument if this were an

imminute domain proceeding and simply trying to figure out what the proper value of the raisins is. reserving the point that we believe that this program does not benefit the producers. we believe that this program actually makes the producers demonstrbly worse off. the only people who benefit of the program are recipients of the export subsidies. >> can i take you back to the first thing you said in this argument? you saidtypically the handler doesn't take the product and the handler doesn't pay for the product. and you would think that the hornes would only have a takings claim assuming they have a takings claim for raisins that they produced and not for the raisins that other people produced. you said that is not correct in this case? >> it is not because a check went out from the raisin marketing association to the producers for every raisin, not

just the free tonnage raisins but for the reserve tonnage raisins, as well. so the hornes are the only with the -- >> what has the impact of the drought been on raisin producers? >> it is not good. [ laughter ] >> carefully guarded response. >> i wonder if i will be able to take a shower when i go home. >> thank you counsel. the case is submitted. coming up here on c-span 3 appropriation hearing on spending. transportation secretary anthony foxx on his department's spending request and fema director on emergency

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c-span 3 created by the cable tv industry and funded by your local cable or satellite provider. watch us in hd like us on facebook and follow us on twitter. defense secretary ashton carter will release the pentagon's annual report on sexual assault in the military beginning at 1:00 p.m. eastern. you will be able to watch it live on our companion network c-span 2. 150 years ago this weekend a grieving nation gathered along the route of abraham lincoln's funeral train as it made its way to the final resting place in springfield, illinois. this afternoon we are live from oak ridge cemetery to commemorate the anniversary of president lincoln's funeral with over 1,000 reenactors and a re-creation of the 1865 eulogy as well as historians and

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written many books. join the conversation with jon ronson who will be taking your phone calls e-mail, facebook comments and tweets. get the complete schedule at c span.org. transportation secretary anthony foxx testified before a senate appropriations subcommittee about his department's budget for 2016 and answered questions about the highway trust fund. he talked about the federal aviation administration and cyber security. good morning. the subcommittee will come to order. while we're waiting for secretary foxx to arrive and recognize on cue he comes through the door. i want to explain that we moved

up the time of the hearing by a half hour. and to mr. secretary i feel your pain on the traffic because it has never taken me longer to get to work than it did today because of the protests and the street closures. but today we do welcome secretary foxx to testify about the administration's fiscal year 2016 budget request from the department of transportation. the administration is proposing $94 billion in mandatory and discretionary spending for the department of transportation in fiscal year 2016 included in its budget is a proposed six-year $478 billion service transportation reauthorization paid for by a one-time 14% tax

on the repatriation of foreign and gas tax revenues. while a support a repatriation proposal and open to using resulting funds for our infrastructure, the president's budget is based on reauthorization that is funded by a band aid approach. it really fails to propose any real reforms necessary to bring about the long-term solvency of the highway and mass transit trust funds. it is perplexing to hear the administration talk about how important our nation's infrastructure is. indeed, there was an event just yesterday to highlight the problems. and yet at the same time the administration continues to

remain silent on trust fund reforms that must be put in place in order to address our crumbling roads bridges now and in the future. simply saying that we are happy to work with congress is not an acceptable answer. this administration has had six years to provide congress with specific proposals to reform the trust fund yet year after year it has chosen to ignore what is an essential part of the service transportation equation. this is a critical year for transportation both for the administration and congress as we must confront not only reauthorization of the surface transportation programs expiring in may but also a multi year faa authorization expiring at the end of the fiscal year.

that being said today our focus is on the fiscal year 2016 budgetary needs of the department of transportation based on current authorizations. i am very pleased to see that the administration continues to highlight and fund the important tiger program, but i'm disappointed in the unrealistic proposal to shift funding to mandatory spending, a budget gimmick that simply will not happen in the appropriations bill. i have advocated strongly for the tiger program since joining the appropriations committee in 2009. and i have seen first-hand how this terrific program supports economic growth and job creation nationally regionally and

locally. it's been essential to many bridge, railroad and port projects in my home state of maine that otherwise would not have been undertaken when they needed to be. moving on to faa our aviation system supports 11.8 million jobs here in the united states. with an average of 2 million passengers flying in our country each day and 58,000 tons of freight being transported daily by air the nation's aviation system depends upon a safe efficient and modern air traffic control system. the president's request includes nearly $16 billion to support investments in keeping our aviation system the safest and most efficient air space in the world. while i am pleased of the

essential air service program is fully funded in the request i am disappointed with the omission of the small community air service development program as well as the reduced funding for the airports improvement program. rural states like maine and other states represented by members on this committee benefit greatly from services that connect rural america with the larger transportation network. in many instances air service would otherwise never have been established if it were not for the support of the small community air service development program. with regard to our rail system i am deeply concerned by the number of train accidents that have occurred over the past three years. this issue has special resonance in my home because the horrific

accident in quebec which killed 47 people and consumed much of a small community's downtown happened only ten miles from the maine border and many of our first responders rushed to assist their canadian counter parts. the faa's budget request highlights passenger railroad safety, grade crossing and pedestrian safety and safe transportation of energy products as areas that may need additional resources. i will lee looking closely at how we can best target federal funds in order to reduce accidents and save lives. this subcommittee has worked hard to provide the department of transportation with resources to improve rail safety but the results have not fully reflected

those investments. for example, despite the increased resources we have provided for the safe transportation of crude oil it is baffling to me that the department and this administration have yet to finalize regulations to replace the d.o.t. 111 tank cars to make other improvements. the department has failed to even begin consideration of rules that would require comprehensive oil spill response plans for rail tank cars. i also remain concerned about the ability of the department to hire the rail and pipeline inspectors previously funded in the bill. the subcommittee will hold the department accountable for every dollar provided for these important safety issues. another of my concerns is that some of the figures in the administration's budget proposal are simply unrealistic.

for example, the budget includes nearly $3.3 billion for fta capital investment grants, more than $1.1 billion above current levels. i recognize your interest in promoting public transit and other programs and i acknowledge reauthorization would shift funding to mandatory. this subcommittee must operate mt. real world one in which this program must be funded with discretionary appropriations and where we continue to face severe fiscal challenges. with that let me turn over the podium to my colleague, senator reid and say once again what a great pleasure it is to have him as our ranking member. senator reed. >> thank you for your excellent testimony and statement and leadership. welcome secretary foxx. this is a lesson today on grid

lock. we need to do more for the roads in d.c. and everywhere. you're exhibit one. >> thank you very much. >> we appreciate your leadership and look forward to discussing this budget request with you. if includes as indicated by senator collins a robust long term reauthorization proposal but before i get any further let me thank you for coming up to rhode island and visiting and seeing first-hand some of our transportation issues at airport, car shipment facility, thank you very much. as you recognized that day our airport is a catalyst for economic growth and we are still lagging the country in terms of employment. we are tied for tenth highest unemployment rate improvement. we used to be vying for one which you don't want to be in that kind of competition. we can do more. thank you again for coming up to rhode island. i really appreciate it.

you had a chance to look at our infrastructure up there. it's similar to many places around the country. we need functioning airport. we have the port of davisville. it has been very successful. last year it had another record year of 178,000 automobiles imported through the port. i must say and concur with senator collins grants helped a lot. that is another graphic example of how those funds can be used flexbly by local authorities to create jobs which is what we want to do. we also understand too, that the future is going to mean more because of the new panama canal and arctic ocean becoming a commercial transit area which it has never been in the past. so what we are doing today is

going to help us in the future dramatically. we have, as you saw on our island, significant needs. one out of every four bridges needs repair in the state of rhode island. they can't handle today's traffic. it is just going to get worst. 20% of our bridges are in this situation. and it will be 40% by 2025. and we don't fund them it's going to get worst and doesn't stay the same. it will take $80 million year to reverse this trend for rhode island. amtrak which is another key component of our transportation system has a $7 billion state of goods repair back log for northeast alone. that's a big number and effects maine and massachusetts and all the way up and down the coast. the faa has $5 million back log in maintenance needs which puts

air traffic control system at risk. we are talking about things we need to fix and not things we want to build. that is what is distressing about this hearing. you have proposed a plan that i think will begin to grapple with these issues. i commend you for that. if we could reauthorize appropriately and re-organize the authorizing committee responsibilities to come up with revenues to pass a meaningful bill we could begin this process. i applaud you for laying it on the table for us and asking for those funds. i'm afraid that we going to be stuck here and not going to make tough choices about raising revenues and in order to invest in our future. there is no better investment than infrastructure. every american will tell you that. everyone on this committee will tell you that. the real key is finding the revenues. that is what we have to do. we also have to recognize state

and local governments have been struggling and will struggle. if we can't give them the certainty of a four or five year plan of committed federal funding at a reasonable and we hope robust level they will be on their own and frankly they will perform even worst because they have a certain degree of resources. so i look forward to being supporter of what you are doing. i commend you. as i said you have in this budget a $1.25 billion request. $2.4 billion for amtrak to stop the process for occurring. $908 million for national highway traffic safety administration which is necessary because we have seen recently a lot of situations where vehicles are on the road that should have been recalled and the companies were not held at a level of accountability that a robust traffic safety

administration should and must. the federal railroad administration will support 850 additional inspectors. raised the issue of how supervising passenger and freight rails in the united states. we have to do that. $15.8 billion to the faa which not only funds our air traffic controllers which we take for granted each and everyone of us when we get on the plane like friday or maybe tomorrow and also $956 million to next genwhich is important. these programs all rely on resources that come through this bill and we have to ensure that they are there. one point i want to conclude about is that we have a collective responsibility i think to somehow avoid sequestration. it will be detrimental not only in the monetary impacts on the budget but again the reduction

of accounts without any opportunity for secretary to say this makes sense and this doesn't make sense. and also it will further undermine the predictability uncertainty that state companies and private companies must have. we are able through great work to delay it. we need a repetition of that work in the days ahead so that we can go forward. with that, thank you. >> thank you very much senator reed. i want to acknowledge the presence of several of our members. and i'm sure other members will,

as well. we did change the time of the hearing and i very much appreciate the secretary accommodating the schedule in light of the votes that we have so please proceed with your statement. >> madame chairman, ranking member reed and all members of the subcommittee i want to thank you for having me here today. i want to say particular thanks to madame chairman for being flexible in scheduling the date of this hearing. really much appreciate given some of the challenges i have had recently with my knee. i will jump right in. last month we sent congress a new and improved grow america act. it is a long term bill and it would provide $478 billion of funding over six years. having a six-year bill is very important because it will give communities a stable, predictable amount of funding so they can plan for the long term

as has been mentioned. i know this committee is very focused on this upcoming fiscal year. so let me tell you what this bill means for fy '16. of the $478 billion approximately $95 billion accounts for our budget request in fiscal year '16. within the request we invest $7.5 billion to clear back log of deefficient bridges and highways. there is $1 billion for a new freight program and over $1 billion increase for capital investment grants which help build praulgojects. we recognize that sequestration will take effect next january absent congressional action. sequestration would have a devastating impact threatening resources needed to conduct

safety inspections and enforce critical safety rules. grow america lays down a marker. it shows us the funding level necessary to actually improve the condition of our of our transportation system and the grow america act is fully paid for. it's part of a larger administration budget that avoids sequestration, keeps our safety inspectors and air traffic controllers on the job, makes investments in our nation that we need to support for a growing population and a growing economy. i believe we can accomplish this on a bipartisan basis. and there is a long history of precedent in this country of having done so. i want to specifically thank, you, chairman collins for the work that you did last year and even before that on the issue of safely transporting energy. it's an important issue. one that all of us care about.

and i also want this subcommittee to know both democratic and republican members that your history of working together to support critical infrastructure investments like our tiger grant and our capital investment grant programs matter a great deal to communities all across america and it's appreciated. and ranking member reed, i want to thank you for being such a great voice for the need to fix the short fall in the highway trust fund and for long-term stability in the funding. before i take your questions, let me close by saying this. we're speaking today about fiscal year 2016 but as the chairman has also acknowledged, we have to recognize that we have a more immediate issue with the highway trust fund on may 31st. next month, the current

authorization for the highway trust fund will expire and when states come to look -- come to us looking for money we won't be able to guarantee that it will be there. plans will be shelved, new jobs won't be created and current ones will be at risk. we have already seen about six states pull back close to $2 billion in projects because of federal funding uncertainty. i know there's been a lot of talk about passing a couple of months of funding to get by this latest highway cliff. but the -- as you know, the definition of insanity is doing the same thing over and over again and expecting a different result. frankly, having been at the local level, i can tell you that communities are stuck in the planning process and in the process of get projects moved through because of this uncertainty. and a band-aid on the transportation system is not what we need. last summer, congress passed patch funding for ten months. three months into that ten-month

patch, tennessee announced they were moth balling projects. as i said before, five more states have joined tennessee, since then, canceling about $2 billion worth of projects. maybe if america wasn't growing and it didn't need to prepare if a larger population, a larger economy, perhaps this wouldn't be so bad. but that is far from the case. america will be home to 70 million more people by 2045. we'll have to move 45% more freight. never before has the demand on our system been so high and our response in terms of investment been so low. madame chair, if we have to go through the struggle of passing a funding bill, let's do it the right way. let's do something big. i'm ready to work with you and all members of congress to get something done and i look forward to your questions. >> thank you very much for your testimony. i mentioned in my opening statement the tragic incident in canada very close to the maine border which prompted the administration and the department to look at the design of the tank cars that are carrying crude oil. given the recent uptick in crude

by rail accidents, most recently west virginia and illinois, i'm simply astonished that we're once again waiting for omb to sign off on these important regulations. i'm also concerned that the department has failed to publish a draft regulation to require comprehensive oil spill response plan from the railroads. we've given substantial increases and resources for more inspectors, for example. could you update us and explain why more progress hasn't been made in this truly critical area? >> well, first of all, madame chairman, your searches are our concerns.

and we certainly take this issue very seriously and i want to describe a few steps that we have taken to answer your question. first of all, on the issue of just the overall issue of crude by rail, the department very early on in this process took 24 steps along with industry to basically provide a bridge between lac-megantic and getting a comprehensive rule in place. just last week we announced several additional steps we have taken as a result and the work on the crude oil rule continues. i will point out that one of the challenges of doing this rule is that we are talking not only about retrospective risk but the fact that this industry is continuing to grow and so there's a lot of focus also on prospective risk, and as a result, we are working very, very closely with omb to get a comprehensive rule that not only addresses tank cars but

addresses things like speed and other areas that will help impact mitigation, prevention and emergency response. secondly, on the issue of the oil spill response plans, i want to point out that we did issue an advance notice of proposed rule making on august 1st, 2014, that was designed to put questions out to stakeholders that we thought were very important and ultimately addressing a final rule. questions such as the volume of oil and the number of tank cars in a train that should trigger such an oil response plan. we have received comments on that. i expect that we will have an oil spill response plan notice of proposed rule making put out this summer, probably as soon as june and so i look forward to making progress there. and then finally on the issue of

inspectors, we appreciate the work of the appropriations committee providing us the resources to hire inspectors, i will only point out as we try to hire more inspectors to meet the demands of this emerging area we're also competing in hiring the inspectors with industry and continuing to compete for the very best talent we can in that space and i promise you we will push hard to get the numbers up on those inspectors by the end of the fiscal year. >> thank you. that is absolutely critical because the condition of the rail tracks is also an issue. mr. secretary, i'm concerned about a recent attempt to change d.o.t.'s regulation of nine to 15-person passenger vans that are used for summer camp transportation. i believe you having experience in having a child go to summer camp and the great state of maine.

as do many americans. without a change in law, without going through any regulatory process, one regional office within fmcsa is treating these small, passenger vans as if they were greyhound buses or trailway buses providing year around commercial services. for example, when camps in maine transport children from the airport in manchester, new hampshire, across state lines, they're in no way offering transportation services to the general public. this is simply an incidental cost of the overall summer camp experience. yet the agency's new interpretation in just the region that affects the state of maine requires camps to offer continuous and adequate service, post prices, schedules, and other commercial-like services to the public or lose their operating authority.

this makes no sense at all for a van that's being used in the summer months to pick up kids at the airport. even a camper who flies directly into maine and is driven in a passenger van within the state itself can be subject to these interstate regulations because the combined summer camp package includes airfare from another state. now, i want to be clear. i am not advocating that summer camps be relieved from obtaining the necessary liability insurance to cover safety matters. but it makes no sense to treat them as if they are commercial entities that are solely in the business of providing transportation services year around.

the reason omnibus or cromnibus required d.o.t. to include a comment and rule making so that there could be some public input on changing this guidance, can you assure me that d.o.t. will comply with public notice and comment requirements and take a hard look at whether this really makes sense? this strikes me as government overkill at its worse. >> i can absolutely assure you that we will take seriously the notice and comment period. i will also do you one better. because of the unique circumstances of maine and the camping industry there, i will also send a team to solicit comments directly from stakeholders in maine who are dealing with this unique issue that you have raised. >> thank you. that would be terrific. senator reed. >> well, thank you very much, madame chair, for your questions and, again, for your leadership