crop got paid for part of it had part of it taken and wanted to be and want to be paid for the balance that's the case under california law reasons are private property their reasons were taken when they were delivered to market each year in a fraction that was determined by the united states the taken raisins were used for public purposes those public purposes included funding the school lunch program and for a variety of other purposes some of honor it's true yes your honor the raise in marketing order provides that there is to be a fund to generated by what happens to those reserve raisins and that it is to be returned back to the producers but that would only be partial compensation for what is taken here because unlike all of the other marketing orders these reasons have their title actually transferred from the producer to the united states they become the property of the government the government decides how to use them when to sell them what to do with the money and what fraction to give back it could be we win either way whether it's a physical or a very well that is why but we still think we went under a regulatory taking and here's here's why and i don't want to i really don't want to focus on the weaker side of the case but i want to answer your question and let me say that last week this court issued an opinion again in a case you seem to have trouble getting rid of in c in aga in which you said on pages twenty nine or thirty that partial compensation coming from something that you get back from the government is only a part of the compensation formula and that doesn't eliminate the need to complete the compensation process and we think that's a part of the answer to the question here so i've covered the issues really about why  there's a physical taking our property is simply stripped away from us title passes to the government and it had that happens when it goes in bins but now let's talk about the regulatory side of what occurs because from a lawyers point of view it's more fascinat that well what happens here is that we produce the reasons we own them we have only one way to market them and that's to deliver them to a handler or be a handler ourselves and when that happens at that moment some fraction up to forty seven percent of the title to the reasons automatically passes to the government in one of the six years it was actually zero it range from zero to forty seven during the six years that issue the secretary of agriculture and not in that year not in that year but that's simply one of the years in this re in every other year there was a taking the whatever fraction the secretary of agriculture chose you know in that year there was no physical taking because the government decided not to take just as though the government was building an interstate highway and decided to jogging one mile to the west and not go through johnson's farm and johnson would never tak election of arguments in the course of the in the course of the oral argument the inquiry was if there's no physical taking i'm sorry is there a physical taking or are you depending entirely on a regulatory taking in our response was there is a physical taking that occurs here your honor and that is our position there is a physical taking that occurs here it happens as a result of a regulatory scheme we also argue that if as a matter of fact the government were to prevail on the point that somehow this is to use the government's analogy a toll that we have to pay in order to get rid of these reasons that we produce so the nation can have them then the taking that occurs so  feats our investment base expectations and so invades our ability to be engaged in this business and is so clearly imbued with a government purpose that that taking us regulatory theoretically that's a possibility that would not however of void our status as a handler because the definition of handler under the regulation is so small so broad pardon me that it covers that's one of the things that it covers is taking the reasons outside of california the area as defined within the regulation is the state of california on the right of we could not however sort them stem them clean them or wash them we have to sell them wrong because sorting them stemming them cleaning them and washing them makes us a packer and a packer by definition is a handler and the handler it well there is no there there is no government conferred benefit for that your honor that simply allows us to sell a portion of the crop in the free market the free market is not given by the government it is hundred forty nine when the order was passed that was precisely the theory of the order that by an orderly progression of movement of raisins to the market the market would be stabilized and improved exactly now we allege in our complaint and therefore at this stage of the proceedings at stake it is true that in fact what is now happening and has been happening since two thousand is that a fraction of the crop taken from us each year in which there is a tak taking is given back to packer's in what is called the raise in back program the packers get those from the government free or at a reduced price and then in turn can use them for serial reasons  for reasons sold to stores and delis for reasons in commerce so what's happening is that both in the foreign trade aspect and in the domestic trade aspect of the use of the taken raisins the domestic price is being the precise reason for the order in one thousand nine hundred nine is subverted and that allegations made overtly in our complaint so we believe there is in fact a physical taking we do not believe and we respect the argument of the government that we you know we don't have to do this we could sell these reasons is that as a rule at a roadside stand done stand unclaimed unsorted but in that condition they are not what any of us know is raisins they are simply products that are virtually useless for maybe that well the secretary of agriculture decides the amount of the board makes a recommendation that's answer number one so our claim is against the secretary in the federal government number two i think that a fair response to your question would involve a very dramatic dip into the politics and the economic and political structure of the raisin industry and there is no question that is at substantial issue here as well thank you very much i'll reserve my good morning me good morning may please the court my first point that is that at least with respect to the crappier two thousand for two thousand and five in which there was zero percent reserve we have a concession now that there was no physical taking there and at least the court should affirm with respect to that year but more broadly with respect to the regulatory takings claim we put in our sentimental appendix the the only one one page in in the very first line of that page  producers below said this is a physical not regulatory take this case so any attempt now to convert this into a regulatory takings case is improper and the and the courts should not should not entertain any regulatory takings claim by the producers here because that is a very different claim that is a claim that's that's covered by the pen central factors which is a very very different claim than one in which the property owner says that the government has reached out and seized or appropriated or somehow or well the government takes before us we that is what they allege and at least for purposes of the motion we have to take that is true and and there is authority for that the ninety nine point sixty six a talks about extent that the title to any property transfer is during a consensual transaction between a property owner and a and a purchaser it's consensual as the alternative is as counsel conceded that he could sell his raisins wrong he could and this happens brokers for example go around to i go around to this that i could stop those trucks on the road and offer to buy those trucks full of by the raisins in those trucks and then i would bring them to the handler and my transaction of those raisins to the handler would be subject to the regulations of which they complain and the producers yes apparently there is a market for unclean understand and sort of reasons in so far as brokers go to raise and producers and buy those reasons in place as long as the  footnote nine deals with what those producers were claiming in line reasons which was they took our raisins by taking by converting or by mishandling that equity interest and the courts and and this court said if you're complaining about the equity interest you can't say it's a taking of the reasons because by the time it gets by the time you get an equity interest they're no longer your reasons so it wasn't directed that that was the second basis upon which the producers taking claim was dismissed the first was that they were alleging an improper application of the of the equity reserve interest which because they allege it was unlawful could not be the basis of a takings claim in the first place but yes if the court wants to look at it that way then and the reason we prevail is because the the the government the rock in the person of the wreck only gets a hold of the raisins once the once the handler aside and the handler only gets them once the once the producer gives them to the handler so there's a step the government is one step removed from the from from the producers transaction with the handler by just that that the transaction with the hand with the government never and and this is the reason we focused so much on their insistence that this was a physical taking the government never exercised its authority to go and get those reasons after those reasons would never come within the purview of agree that it's an odd claim to characterize as a physical takings claim that is their claim they insist upon it in the same way as the property owner in norman this court's norman opinion insisted that it was a physical takings case and this court said that because they couldn't point to anything that required them to transfer that land to that nonprofit or association the transfer or the transfer itself could not become the basis of a physical takings claim this is analogous because they point to what happens as a result of a transaction that the government never pushed him into they made the business choice to drive those raisins to the handler to get presumably whatever additional benefits whatever better price is available through marketing and marketing raisins or having handlers market those raisins as opposed to having me buy those raisins in their trucks or me go to their farm and buy those raisins in place but that is their business choice and line raise and sat which was a claim that the equity pool is not being lawfully managed not being properly managed which takes it out of the takings wrong because no allegation of unlawful or improper government conduct can be the  thousand crop year they had a fifteen percent reserve there was a fifteen percent research while their allegation presumably would be that we were entitled to fifteen percent we had a fifteen percent interest in the sales of those raisins and they only gave us forty yes but that would not be a proper takings claim because they would have to argue somehow that they should it should have been so for five hundred and yet it was sold for four hundred but a take and that was wrong and therefore were owed money but that would be a takings claim because the allegation would be they should have sold it for five hundred but that's not the same as saying they did sell for five hundred they kept a hundred and they sent four hundred back to us that would be a takings claim that there would be a claim that the government took their equity interest took one fifth of their equity interest that the government took that hundred dollars still has it and we're owed that hundred dollars but they don't make anything like that and even if they'd even if they did they can't say if they make that if they make that claim we'll see what the government says against  i don't know of any i don't know of any contract between producers and the rock that would be the basis of a defense like that  respect to omens that those segregated elements become the property of the wreck they're not set aside at least the regulations don't talk about this to the account of the wreck so reason produces as producers don't have it in the ministry of remedy at least and here i'm not addressing the exception that judge alito noted that might exist but the statute gives a handler the right to go to the secretary and complain about whatever he wants to complain about but as we pointed out these regulations don't even apply and as the court in line recently said these preparations don't even apply to producers so it is so although they don't produce as producers don't have a remedy before that before the secretary nor do the regulations require anything of a producer so it makes sense that they don't have remedies since they don't and they don't even come within their p the handlers are are not representing the interests of the rx so much as abiding by a regulation to do something with reserve pool raisins  so it might be to both they as i view the regulations they have a they have a responsibility to put those reasons to the account of the government but also to do accounting that allows for the return of the equity interest the equity interest in the sale of any future i'm sorry the proceeds of any future sale of those raisins to the producers so i say that they have a fiduciary obligation to order and not in that case like this the the producers said that they were essentially forced into that the thing that they said constituted the taking in that case it was the sale within twenty four hours there was an alternative there the peanut producers could have cleaned those peanuts instead of selling them they made the business choice to sell the same way that these producers made the business choice to deliver and so like in korea this is not any kind of a taking in the court of claims pointed out that in that case there was no direct appropriation or confiscation there's no one has a takings clause right to participate in an unregulated market and that's what these producers want they want the benefits of a regulated market without having to pay the toll to enter that market toll which they freely paid thank  you please the court what's clear is that my clients don't have the reasons they don't have their money what may not be quite so clear is that they do not participate in a regulated market the free chinese raisins are sold in a cash and run it regulated market the reserve regimes are not sold this is not a case involving a choice to be in a regulated market at all that's not an accurate statement furthermore there's some confusion here about whether or not there are transfers to handlers going on the definition of handler is so broad that it includes any processor packer any person who places ships or continues major condition raisins in the current commerce from within an area to the point outside any person who delivers off greater feeling reasons or any person who blends them if we're going to sell the product that we set about in the beginning of the year to produce and before that when we planted our vines some of which predate the statute we wanted to produce raisins we didn't want to produce animal feed we didn't want to produce an unclean product we wanted to produce raisins the government has taken from us the opportunity to market a part of what we set about to produce that is in fact a physical taking it comes about as a result of a scheme that was designed in the beginning to even the market at that point there was some market regulation there is not one allegation in the complaint that there is any market even ing going on nor is there any argument by the government to that effect instead these reasons are used for federal purposes as the federal government sees their acquired for nothing or nearly nothing there used to support foreign trade and to give back to the packers who are politically savvy and the producers are shorted the fifth amendments the remedy thank you i prefer this branch of the government your honor thank you very much