Appendix — South Carolina v. Block

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IN THE SUPREME COURT

OF THE UNITED STATES

October Term, 1983

STATE OF SOUTn CAROLINA, et al.,

Petitioners,

JOHN R. BLOCK, SECRETARY OF THE

UNITED STATES DEPARTMENT OF

AGRICULTURE, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

APPENDICES

DONALD M. BARNES D. PAUL ALAGIA, JR.

COUNSEL OF RECORD RICHARD A. GLADSTONE

SALVATORE A. ROMANO COUNSEL OF RECORD

JOYCE L. BARTOO SYDNEY J. RUTLER

ARENT, FOX, KINTNER' BARNETT & ALAGIA

PLOTKIN & KAHN 1000 Thomas Jefferson

1050 Connecticut St., N.W.

Ave., N.W. Washington D.C. 20007

Washington, D.C. (202) 342-0342

29036

(202) 857-6000

Counsel for Counsel for

Petitioner Assoc- Petitioners Suncoast

iated Milk Milk Producers

Producers, Inc. Cooperative, Inc.

et. al.

Additional Counsel Listed on Inside Cover

T. TRAVIS MEDLOCK

Attorney General

CLIFFORD O. KOON, JR.

Assistant Attorney General

JOSEPH A. WILSON IT

Chief Deputy Attorney General

COUNSEL OF RECORD

State of South Carolina

Rembert Dennis Bldg., Rm. 642

1000 Assembly St.

Columbia, South Carolina 29211

(803) 758-2072

RAYMON E. RUSSELL W. TEMPLETON

LARK, JR. COUNSEL OF RECORD

Assistant 1 Monckton Blvd.

Consumer Advocate Columbia, S.C. 29206

COUNSEL OF RECORD (803) 782-0235

2801 Divine St.

P.O. Box 5757 Counsel for Peti-

Columbia, S.C. tioners South

29205 Carolina

(803) 758-5011 Farm Bureau

Counsel for

and Frank Flowers,

W. Charles McGinnis

Petitioner South and Lawrence

Carolina

Department of

fairs

Consumer Af

Weathers

Apoendix A

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 83-1426

No. =1s

State of South Carolina ex

rel Leslie E. Tindal, Com-

missioner of Agriculture;

Steven W. Hamm, as South

Carolina Consumer Advocate;

South Carolina Farm Bureau;

Frank Flowers; W. Charles

McGinnis; Lawrence

Weathers; Suncoast Milk

Producers Cooperative;

Independent Dairy Farmers

Association, Inc.; Tampa

Independent Dairy Farmers'

Association, Inc.; "Upper

Florida Milk Producers

Association; Georgia Milk

Producers, Incec.; Coble

Dairy Products Cooperative,

Inc.; Inter-State Milk

Producers Cooperative;

Dairymen, Inc.; Associated

Milk Producers, Inc.,

John R. Block, Secretary of

the United States Depart-

Appellees,

ment of Agriculture, United

States Department of Agri-

culture and Commodity

Credit Corporation,

Appellants.

State of Minnesota,

Amicus

Pennsylvania Farmers Union,

Amicus

Dairy Farmer Distributors

of America and Gustafson,

Amicus

State of New York and

Upstate Milk Cooperatives,

Inc.

Amicus

Appeal from the United States

Curiae.

District

Court for the District of South Carolina,

at Columbia. Matthew J. Perry,

Judge.

Arqued: July 12, 1983

District

Decided: September 9, 1983

Before PHILLIPS, SPROUSE and ERVIN,

Circuit Judges.

Douglas Letter (Leonard Schaitman,

Nicholas Zeppos, Sarah Greenberg, Appel-

late Staff, Civil Division, Dept. of

Justice; J. Paul McGrath, Assistant

Attorney General; Henry Dargan McMaster,

United States Attorney on brief) for

Appellants; Morgan Hollander (D. Paul

Alagia, Jr., Richard A. Gladstone, Sydney

J. Butler, Paul S. Davidson, Barnett &

Alagia; Donald M. Barnes, Salvatore A.

Romano, Joyce L. Bartoo, Arent, Fox,

Kintner, Plotkin & Kahn; T. Travis

Medlock, Attorney General, Clifford oO.

Koon, Jr., Assistant Attorney General;

Russell H. Putnam, Jr.; Russell WwW.

Templeton; Hubert E. Long, tong

Boukniqht, Nicholson & Mavis; Venable

Vermont on brief) for Appellees; (Hubert

H. Humphrey, III, Attorney General, Jon

K. Murphy, Special Assistant Attorney

General, Catharine F. Haukendahl, Special

Assistant Attorney General on brief)

for Amicus Curiae.

SPROUSE, Circuit Judge:

John R. Block, the Secretary of the

United States Department of Agriculture

(the Secretary), appeals from the judq-

ment of the district court enjoining him

from implementing his decision to impose

a 50-cent deduction on the proceeds of

all milk sold commercially. The Secre-

tary officially announced his decision by

issuing a “notice of determination,"

which incorporated, amonq other thinas,

regulations for implementing the deci-

sion._/ This action was taken pursu-

1/ 48 Fed. Req. 11,253 (March 17,

1983). The deduction applies to the

proceeds of milk sold during the period

April 16, 1983, through September 30,

1983. Id. Collection procedures are set

forth fn the "final rule" published on

November 30, 1983. 7 C.P.R. § 1430.291

et seq. (1983). The party responsible

For collecting the deduction may be the

milk producer or purchaser, depending on

the circumstances. To the extent a pro-

ducer markets his own milk directly to

consumers, he is responsible to remit to

the Commodity Credit Corporation (CCC) 50

cents ver hundredweight of milk sold. To

the extent a producer sells his milk to

nonconsumers, the purchaser is' respon-

Sible to deduct 50 cents per hundred-

FOOTNOTE CONT'D ON NEXT PAGE

ant to a recent congressional amendment

to section 201 of the Agriculture Act of

1949,2/ which generally established

the present structure of the milk price

support program. The purposes of the

deduction, as described by both Conaress

and the Secretary, are to encourage dairy

farmers to reduce milk production and to

offset a portion of the cost of the milk

price support program.2/ The Secre-

tary is not required by law to impose the

deduction, but is authorized by Congress

to take that action in his discretion if

he believes it will encourage a reduction

FOOTNOTE CONT'D FROM PREVIOUS’ PAGE

weight of milk bought from the producer

proceeds and remit the collections to the

ccc. 7 U.S.C. § 1446(4)(4)3 7 C.P.R.

§ 1430.295 (1983).

2/ Pub. t. NO. 97-253, § 101, 96

Stat. 763 (Sept. 8, 1982) (amending 7

U.S.C. § 1446).

3/ See 7 U.S.C. © 1446(d)(2); 48

Fed. Req. 3764, 3766 (Jan. 27, 1983); see

also note 9 infra. a

in milk production. It is conceded that

the deduction will reduce the gross

income of farmers by approximately 4

percent A/

The State of South Carolina, several

dairy farmers and a number of intervenina

4/ 7 U.S.C. § 1446(d)(2). Conaress

First orovided in the amendment that the

Secretary shall support the price of

milk at not less than $13.10 per hundred-

weight, allowing the Secretary to

increase that level in his discretion

Id. § 1446(d)(1). The Secretary has set

the price support level for the fiscal

year October 1, 1982, through September

30, 1983, at the statutory minimum. 47

Fed. Req. 42,128 (Sept. 24, 1982). The

amendment further gave the Secretary

discretion to impose two 5)-cent deduc-

tions if CCC purchases of surplus milk

products were projected to exceed certain

levels. 7 U.S.C. § 144 6(4)(2), (3)-

The Secretary estimated that a 50-cent

per hundredweight deduction represented

about 4 percent of a farmer's aqross

income. 48 Fed. Req. 3764, 3765 (Jan.

27, 1983). By imposing both deductions,

the Secretary would reduce a farmer's

income by about 8 percent. Td. The

Secretary to date has imposed only one of

the 50-cent deductions, which is the

deduction challenged in this litigation.

agricultural qroups (hereinafter collec-

tively referred to as “dairy parties")

filed this suit in district court alleq-

ing administrative law and constitutional

violations, and seeking injunctive relief

preventing implementation of the deduc-

tion program. Following an evidentiary

hearing, the court found that the Secre-

tary had violated the Administrative

Procedure Act (APA) in its rulemakina

proceedings .2/ It then issued a pre-

$/ South Carolina v. Block, C/A

No. 82=3172-0 (D.5.C. June 3, 1983)

(3lock II). The court, having found

administrative law violations, did not

address the constitutional claims.

District courts in several other

circuits recently considered some of the

Same issues before the district court,

and all refused to issue injunctions.

Pennsylvania Farmers Union, Inc. v.

oc , - . = “lelve Pa . April

28, 1983); National Farmers' Orqaniza-

tion, Inc. v. Block, 501! Ff. Supp. 1201

ceD. Wis. 1983); Mulroy v. Block, C/A

FOOTNOTE CONT'D ON NEXT PAGE

liminary injunction on June 3, 1983,

enjoining further collections of the

deduction and ordering the return of all

monies collected pursuant to the requla-

tion.£/ We hold that the Secretary

complied with the APA and that the legis-

lation aranting him discretion to act

does not violate any provision of the

Constitution, and vacate the district

court's order.

Conaress, in section 291 of the

Agriculture Act, authorizes and directs

FOOTNOTE CONT'D FROM PREVIOUS PAGE

Larsen v. Block, C/A No. NC=-82-0222W (D.

Ntan March 28, 1983); Yaworth v. Block,

C/A No. 82-4187 (D. Idaho March 5,

1983).

6 / The order was stayed by this

court on June 13, 1983, pending appeal,

and Chief Justice Burger, on June 27,

1983, denied a motion to dissolve the

Stay .

the Secretary to support the price of

milk. 7 U.S.C. § 1446. The express

purposes of the dairy price support

legislation are “to assure an adequate

supply of pure and wholesome milk to meet

Current needs, reflect changes in the

cost of production, and assure a level of

farm income adequate to maintain produc-

tive capacity sufficient to meet antici-

pated future needs." Id. § 1446(c).

The Secretary is not authorized to pay

direct subsidies to producers, but sup-

ports the price of milk by standing ready

to purchase unlimited quantities of milk

products at announced prices. Id.; 48

Fed. Reg. 11,253. The Commodity Credit

Corporation (CCC), a federal corporate

entity within the United States Depart-

ment of Agriculture ,./ removes excess

milk from the market through purchases of

Surplus butter, cheese, and nonfat dry

milk. This program effectively creates a

floor for the prices of the products

purchased and, indirectly, a floor for

the price of all milk and milk products.

In recent years, milk production has

greatly exceeded consumer demand. In

each of the past two dairy marketing

years, the CCC purchased the equivalent

of 10 percent of all milk produced in the

United States. See 48 Fed. Req. at 3766.

This has created massive inventories of

hundreds of millions of pounds each of

butter, cheese, and dry milk, with cur-

rent annual storage costs of around $50

million. In 1982, the federal government

/ This corporation is created in 15

-S.C. § 714.

spent approximately $2.3 billion on the

milk price support program, °/ Id. at

3785.

Congress, responding to the problems

of milk overproduction and the increasing

cost of the dairy support program,2/

enacted the amendment in issue as part of

8/ In 1982, the CCC purchased

approximately 68 percent of all nonfat

dry milk, 30 percent of all butter and 22

percent of all American cheese produced

in this country. As of November 12,

1982, the CCC had inventories of over 400

million pounds of butter, 790 million

pounds of cheese, and 1.2 billion pounds

of nonfat dry milk. See National

Farmers' Organization Inc. v. Block,

FPF. Supp. at 1203.

9/ See 7 U.S.C. § 1446(d)(2) ("the

Secretary may provide a deduction of 50

cents . . . to offset a portion of the

cost of the price support program.");

H.R. Rep. No. 97-687, 97th Cona., 2d

Sess. at 8 (1982) (the House Committee on

Aqriculture revorted favorably on a pro-

gram designed “to achieve supply adjust-

ments by alleviating surpluses which, in

the case of the dairy program, have

resulted in excessive government costs");

S. Rep. No. 97-504, 97th Cona., 2° Sess.

at 83-84.

12a

the Omnibus Budget Reconciliation Act of

198210/ (the 1982 amendment). The

amendment modifies the price support

Statute in three respects. Pirst, it

established the price at which milk shall

be supported at not less than $13.10 per

hundredweight during the period October

1, 1982, until September 30, 1984, and

mandated that .this price level be main-

tained at a comparable percentage of

paritytl/ for the fiscal year

1984,12/ Second, Congress authorized

the 50-cent deduction challenaed in this

Suit. That portion of the amendment

10/ Pub. LL. NO. 97-253, 6 101, 96

Stat. 763. The Omnibus Budaet Reconcili-

ation Act of 1982 sought "to achieve

+ « « @ramatic reductions in Federal

spending . . . to wage an effective hat-

tle aqainst Federal deficits." S. Ren.

No. 97-504, 97th Cong., 2d Sess. at 4.

11/ See 7 U.S.C. §§ 602, 608c(18),

Ol(a).

12/ 7 U.S.C. § 1446(d)(1).

provides:

13a

Effective for

the period beginning

October 1, 1982, and

ending September 30,

1985, the Secretary

may orovide for a

deduction of 50 cents

per hundredweight

from the proceeds of

eeie OF «11. milk

marketed commercially

by producers to be

remitted to the Com-

modity Credit Corpor-

ation to offset a

portion of the cost

of the milk price

support program.

Authority for requir-

ing such deductions

shall not aoply for

any fiscal year for

which the Secretary

estimates that net

price support pur-

chases of milk or the

products of milk

would be less than 5

billion pounds”) milk

equivalent.

7 U.S.C. § 1446(d)(2). Third,

authorized

additional

Congress

the Secretary to impose an

50-cent deduction

effective

14a

April 1, 1983, that would be refundable

to producers who reduce their commercial

marketings.13/

The Secretary, on September 22,

1982, projected that for the fiscal year

beginning October 1, 1982, the net price

support purchases of milk products would

be 12.6 billion pounds. The Secretary

then published a “notice of determina-

tion" in the federal reqister establish-

ing the price support level at $13.10 for

fiscal year October 1, 1982, and imposing

the first 50-cent deduction beginning on

December 1, 1982. He also published a

“_

13/ Id. § 1446(d)(3). This second

deduction can be imposed only if esti-

mated CCC purchases of milk products

exceeds 7.5 billion pounds. While the

Secretary has projected that CCC pur-

chases will exceed that amount for fiscal

year 1983, he has not yet imposed that

deduction. This appeal concerns only the

exercise by the Secretary of his discre-

tion to impose the first deduction.

15a

proposed procedure for implementing the

deduction program, and invited public

comments on “whether the dairy collection

plan should be implemented in the manner

set forth in this proposed rule. ..."

47 Fed. Reg. 42,112 (Sept. 24, 1982).

The final rule detailing the collection

plan was published on November 30, 1982,

and was essentially the same as the pro-

posed rule,

The plaintiffs in the district court

challenged the Secretary's imposition of

the deduction on two qrounds: that the

legislation was unconstitutional and that

the Secretary did not comply with the

Administrative Procedure Act in issuing

the determination. The district court

entered its first preliminary injunction

against the deduction on January 11,

1983. The court, considering only the

16a

administrative law challenges, found that

the Secretary failed to comply with the

Administrative Procedure Act, and that

his action imposing the deduction was

therefore illegal. State of South

Carolina v. Block, 558 F. Supp. 1004

(D.S.C. 1983) (Block I). The court spe-

cifically found, among other things,

that: (1) the appellants’ determination

of September 24, 1982, constituted sub-

Stantive rulemaking under the Administra-

tive Procedure Act, 5 U.S.C. § 551(4);

(2) the 1982 amendment vested in the

appellants the discretion to impose the

50-cent deduction, but did not require

the imposition of the assessment; (3) the

Secretary had acted to impose the assess-

ment without complying with the notice

and comment provisions of the Administra-

tive Procedure Act; (4) dairy farmers

17a

would be irreparably harmed by the Secre-

tary's action, while the government would

not suffer undue harm due to issuance of

an injunction; and (5) that issuance of a

preliminary injunction was in the public

interest. Id.

The Secretary did not appeal the

January 11 district court order.

Instead, he published another notice

designed to remedy the notice and comment

defects found by the district

court..4/ 48 Fed. Reg. 3764 (Jan. 27,

1983). The notice included a "Summary of

Preliminary Regulatory Impact Analysis"

and an “Initial Requlatory Flexibility

Impact Analysis." Id. at 3765-66. The

notice further invited the submission of

comments, and stated that the comments

14/ The Secretary at this time esti-

mated CCC purchases for fiscal year 1983

at 14.2 billion pounds.

18a

submitted in response to the September 24

"notice of determination"15/ would be

considered in determining whether to

impose the new deduction requirement.

Id. at 3764. The Secretary allowed a

30-day period to receive comments ,16/

and then published a final rule imposing

the first S0-cents per hundredweight

deduction, beqinning on April 16, 1983,

and extending through September, 1983.

48 Fed. Req. 11,253 (March 17,

1983) ¢l2/ In its final determination,

15/ Some 25,900 comments were sub-

mitted, and a number of petitions were

received containing 23,900 siqnatures.

Virtually all comments were against the

deduction.

16/ Approximately 5000 comments and

petitions containing in excess of 500

Signatures were received with regard to

the second proposed determination.

17/ The final rule states that the

deduction "is to be collected in accor-

dance with the regulations published on

November 30, 1982 (47 Fed. Req. 53,831)

[7 C.FP.R. © 1430.291 et seg. (1983))." 48

Ped. Reg. at 11,254.

19a

the Secretary responded to the public

comments and provided a "Summary of Final

Regulatory Impact Analysis." Id. at

1254-55.

The plaintiffs aqain challenged the

program contending that the statutory

amendment was unconstitutional, and con-

tending that the Secretary's second

attempt to implement the deduction also

violated the Administrative Procedure

Act. The district court aqain did not

address the constitutional claims, stat-

ing that “the problems concerning admin-

istrative law are so grave that these

alone resolve the case aaqainst defen-

dants.”" Block II, slip op. at 13. The

court essentially found that the Secre-

tary's second action in promulgatina the

rule for the deduction was arbitrary and

capricious in three critical respects:

20a

(1) the Secretary did not comply with his

Statutory resvonsibility under the Aaqri-

cultural Act by failing to consider such

Factors as: the cost of production,

returns to producers and the _ support

prices of other commodities; (2) the

Secretary had failed to consider impor-

tant and relevant factors prerequisite to

a reasoned decision such as: the impact

on dairy farmers, the impact on the

economy dependent on dairy farmers, and

the regional impact of the program on

dairy production; and (3) the Secretary

violated the notice and comment require-

ments of the Administrative Procedure

Act, 5 U.S.C. § 553, by failing to fairly

apprise interested parties of the issues

involved in the proposed proqram, by

failing meaningfully to consider impor-

tant and substantive comments on the

proposed action, and by failing to

explain his decision adequately. The

district court issued the preliminary

injunction!8/ against the Secretary

involved in this appeal, but declined to

18/ In support of its preliminary

Injunction, the district court further

found that:

(1) the plaintiffs have estab-

lished a strong showing that,

unless they are allowed injunc-

tive relief by this court, they

will suffer injuries of a sort

which cannot be adequately

compensated by a later return

of the monies in question;

(2) the defendants have failed

to show that an injunction will

cause them hariship of a level

comparable to the harm that the

plaintiffs will suffer if no

injunction is issued;

(3) the public interest

strongly favors an injunction

to prohibit the collection of

this deduction.

Block II, slip. op. at 118, See

ackwelder Furniture Co. v. SeiTi

tT.

22a

grant permanent injunctive relief statina

that “the matter is not yet ripe for

final resolution." Block II, slip op. at

13.

The Secretary on appeal insists that

he complied with the APA, The dairy

parties, however, relying on the same

three objections Successfully raised

below, argue that: he failed to consider

factors required by the Agricultural

Act ,L9/ that he failed to consider

Other factors which, although not speci-

fied by the *qricultural Act, were cri-

tically relevant to his decision, and

third, that he violated the notice and

comment requirements of the Administra-

tive Procedure Act.

The dairy parties' contentions,

19/ See 7 U.S C. 66 1421(b),

T946(c), 1446b.

23a

however, are misplaced. Congress, in

passing the controlling legislation,

narrowly defined the factors which the

Secretary must consider in exercising his

discretion, and the record shows that

the Secretary considered those factors.

The record also reveals that he complied

with the notice and comment requirements.

His published notice clearly delineates

the proposed rule and we feel he suffi-

ciently considered the comments submitted

in response to the notice.

Normally, we would not consider the

constitutional arauments raised but not

considered in the district court. The

government contends, however, and we

agree, that the record is fully developed

and the constitutional questions are ripe

for review. Since we feel that the

answers to the constitutional questions

24a

are obvious, a remand for initial deter-

mination by the district court would be a

needless burden on judicial resources.

Tt would also impose needless delays in

the final resolution of this matter,

which is of crucial and immediate impor-

tance to dairy farmers and others in the

industry, as well as the govern-

ment .20/ We therefore hold that the

legislation in issue2!/ and the Secre-

tary's action pursuant to it22/ are

not violative of any provision of the

constitution. We thus remand with

instructions that the complaint be

dismissed.

20/ See Allstate Ins. Co. Vv.

McNeill, 382 F.20 84 (4th Cir. 196);

Furwitz v. Directors Guild, 364 F.2d 67

Cede COEt. en e 385 U.S. 971

(1966).

21/7 U.S C. © 1446(4)(2).

22/48 Fed. Req. 11,253.

25a

II.

The critical provision of the Agri-

culture Act in this litiqation is sec-

tion 1446, which defines the price sup-

port level for several commodities,

including milk. The basic price support

scheme contained in that section has heen

in place since 1949, Prior to the 1982

amendments, section 1446, with reaard to

dairy products, merely authorized the

Secretary to support the price of milk

through purchases of milk and milk prod-

ucts at announced prices. The price

Support level, which has been periodic-

ally adjusted by Congress, generally has

been expressed as a price above a sneci-

fied minimum level or as Falling within a

certain range based on the Parity price.

The Secretary determines the precise

Support level for a particular year. One

26a

of the dairy parties’ attacks is that the

Secretary, in determining to impose the

deduction vel non, must act upon the same

economic considerations that he is

required to consider in fixing the milk

price support level. The factors which

the Secgetary must consider in fixina the

Support level are specifically contained

in section 1446 and other provisions of

the Agricultural Act. See, @.9., 7

U.S.C. §§ 1421(b), 1446b.

Section 1446, as amended by the

Omnibus Budget Reconciliation Act of

1982, provides in pertinent part:

The Secretary is

authorized and

directed to make

available .. . wrice

support to producers

SOS «as MAR 6 6.

as follows:

shall be supported at

such level not in

excess of 90 per

27a

centum nor less than

75 per centum of the

parity price therefor

as the Secretary

determines necessary

in order to assure an

adequate supply of

pure and wholesome

milk to meet current

needs, reflect

changes in the cost

of production, and

assure a level of

farm income adequate

to maintain produc-

tive capacity suffi-

cient to meet antici-

pated future needs.

Such price support

shall be provided

through the purchase

of milk and products

of milk.

(dad) Notwithstanding

any other provision

of law--

(1)(A) Effective for

the period beginning

October 1, 1982, and

ending September 30,

1984, the price of

milk shall be sup-

ported at not less

than $13.10 oer

hundredweiaqht of milk

containing 3.67 per

centum milkfat.

28a

(Cc) The price of

milk shall be sup-

ported through the

purchase of milk and

the products of milk.

(2) E€ fective for

the period heqinning

October 1, 1982, and

ending September 30,

1985, the Secretary

may provide for a

deduction of 59 cents

per hundredweight from

the proceeds of sale

of all milk marketed

commercially by ovro-

ducers to be remitted

to the Commodity

Credit Corporation to

offset a portion of

the cost of the milk

price support proqram.,

Authority for requir-

ing such deductions

shall not apply for

any fiscal year for

which the Secretary

estimates that net

price support pur-

chases of mil« or the

products of milk would

be less than 5 billion

pounds milk eauiva-

lent. If at any time

during a fiscal year

the Secretary should

estimate that such net

price support pur-

chases during that

29a

fiscal year would be

less than 5 billion

pounds, the authority

for requiring such

deduction shall not

apply for the balance

of the year.

(3) (A) Effective for

the period beginning

April 1, 1983, and

ending September 30,

1985, the Secretary

may orovide for a

deduction of 59 cents

per hundredweight, in

addition to the deduc-

tion referred to in

paragraph (2), from

the proceeds of sale

of all milk marketed

commercially by oro-

ducers to be remitted

to the Corporation.

The deduction autho-

rized by this subpara-

graph shall be imple-

mented only if the

Secretary establishes

a program whereby the

funds resulting from

such deductions would

be refunded in the

manner provided in

this maragraph to

producers who reduce

their commercial mar-

ketings from such

marketinas during the

base period.

30a

To reiterate, Congress again, in this

1982 Omnibus amendment, adjusted the

price support level, o»roviding for a

minimum level of $13.10 throuah September

30, 1984, Significantly, Congress

departed from the historical anvproach it

had pursued in this area of aaricultural

legislation. In the past, conaressional

action sinply concerned fixing the price

level at which milk products would be

supported. In the 1982 amendment, the

Secretary was given authority to require

dairy farmers to deduct and remit to the

Secretary fifty cents from the price they

received for each hundredweight of milk.

Tt is this discretion given the Secretary

which is central to the issues in this

aopeal. That discretion to impose the

59-cent deduction is contingent on the

Secretary's projection of milk purchases

by the CCC exceedina a snecified amount.

7 U.S.C. § 1446(d)(2). Such authority

was given to the Secretary for the period

October 1, 1982, through September 30,

1985. Id. Congress never before under

the dairy support program had authorized

the Secretary to reduce the income of

dairy farmers or to affect the price of

milk except by fixing the price support

level.

The dairy ovoarties concede that

Congress, hy aranting the Secretary

authority to impose the 50-cent deduc-

tion, departed from the historical 3truc-

ture of the Agriculture Act. They never-

theless insist that all of the historical

provisions of the Act aoply to and con-

32a

trol the Secretary's discretion in impos-

ing the deduction. Specifically, they

contend, and the district court held,

that sections 1421(a), 1445(c), and 1446b

describe "factors" which the Secretary

must consider in exercising his discre-

tion to impose the deduction vel

non .23/ Section 1446(c) is quoted

above. Section 1421(b) describes factors

which the Secretary must consider in

determining orice supoort. It provides

in part:

(5) Except as other-

wise provided in this

Act, the amounts,

terms, and conditions

of price sunvdport

operations and the

extent to which such

23/ The district court also held

that 7 U.S.C. § 1441a applied to the

Secretary's determination to impose the

deduction. That section, however, nerely

gives the Secretary the qeneral duty to

conduct ongoing studies on the cost of

production of certain commodities.

Id.

33a

operations are car-

ried, shall be deter-

mined or approved by

the Secretary. The

Following factors

shall be taken into

consideration in

determining, ... in

the case of any com-

modity for which

price support is

mandatory [such as

milk], the level of

Support in excess of

the minimum level

prescribed for such

commodity: (1) the

supply of the commod-

ity in relation to

the demand therefor,

(2) the price levels

at which other com-

modities are heing

supported, . . .- (3)

the availability of

funds, (4) the per-

ishability of the

commodity, (5) the

importance of the

commodity to agricul-

ture and the national

economy, (6) the

ability to dispose of

stocks acquired

throuqh a oprice-

support ovneration,

(7) the need for

offsetting temporary

losses of export

markets, (2) the

34a

ability and willing-

ness of producers to

keep supplies in line

with demand.

1446b provides:

The oroduction and

use of abundant sup-

plies of high quality

milk and dairy »orod-

ucts are essential to

the health anda

general welfare of

the Nation; a devend-

able domestic source

of supply of these

foods in the form of

high grade dairy

herds and modern,

Sanitary dairy eauip-

ment is important to

the national defense;

and an economically

sound dairy industry

affects beneficially

the economy of the

country as a whole,

It is the policy of

Congress to assume a

Stabilized annual

production of ade-

quate supodlies of

milk and dairy orod-

ucts; to promote the

increased use of

these essential

foods; to imorove the

domestic source of

supply of milk and

35a

butterfat by encour-

aging dairy farmers

to develop efficient

production units

consisting of high-

grade, disease-free

cattle and modern

Sanitary equipment;

and to stabilize the

economy of dairy

farmers at a level

which will provide a

fair return for their

labor and investment

when compared with

the cost of thinas

that farmers buy.

Contrary to the dairy ovarties' conten-

tions, however, it seems clear that what

Congress intended in enacting section

1446(4)(2) was a self-contained, tempor-

ary change in the dairy support proqram

in resoonse to the immediate problems of

increasing overproduction and the bur-

geoning cost of the orice support pro-

gram. Conaress prefaced section 1446(d)

with the phrase "([n]otwithstanding any

other orovision of law." It then articu-

36a

lated in section 1446(d)(2) specific

factors the Secretary must consider in

deciding to impose the first 5%-cent

deduction: the overproduction of milk;

the cost of the milk price support pro-

gram; the expected amount of CCC pur-

chases; and the relevant time periods.

The legislative hnistory shows that

Congress considered the effects on the

economy of imposing the 50-cent deduc-

tion, the government bhudaetary problems

and the individualized hardishins it would

imvose on dairy farmers. After consider-

ing these factors in hearings and

debates, it vrovided the Secretary with a

narrowly-defined discretionary authority

to implement the deduction. The statu-

tory parameters of his discretion were

set forth in section 1446(4)(2), which

provides that the Secretary has such

37a

authority for only three fiscal years,

October 1, 1982 through Senotember 30,

1985, that such authority applies only if

the Secretary estimates that the Ccc will

purchase in excess of 5 billion pounds of

milk products, and the proceeds must be

“remitted to the CCC to offset a portion

of the cost of the milk price support

program." There is no indication that

Conaress intended for the Secretary to

consider factors contained in other pro-

visions of the Agriculture Act.

The substance of all the statutory

provisions which the dairy parties would

have the Secretary apply in exercising

his discretion to impose the deduction

waS in place long before the 1982 amend-

ment became law. Section 1421(6) speci-

fically states that it applies to the

Secretary's actions under the milk

38a

proqram only for purposes of “determining

» « « the level of support in excess of

the minimum level porescribed for [milk].”"

Section 1446(c), in listing the factors

to be considered by the Secretary,

specifically states that they are to he

considered in setting the price support

level for milk. Section 1446h is

entitled “Promotion of increased use of

dairy products," a concern of little

relevance to the ovurposes of section

1446(d) (2) .24.24/ Indeed, most, if

not all, of the factors listed in the

above provisions were considered by Con-

gress in enactina the deduction portion

of the 1982 amendment. See Schweiker v.

Gray Panthers, 453 U.S. 34, 50 n.22

24/ In decidina to exercise his

discretion, however, the Secretary did

consider many of the factors listed in

section 1446b. See 48 Fed. Req. at

11,255. ra.

39a

(1981).

We conclude that the statutory

factors reflecting congressional policy

contained in 7 U.S.C. §§ 1421(6), 1446(c)

and 1446b apply only to the Secretary's

resvonsibility in fixing the price sup-

port level, not to his responsibility in

determinina whether. to impose the

deduction. QO the contrary, Conaress

narrowly defined the factors he should

consider in exercising this latter dis-

cretion: whether surplus milk production

would exceed five billion pounds) and

whether this deduction proaram would

lower the qovernment milk support costs.

The record reflects that the Secretary

considered the statutory requirements

imposed upon him by Congress. Tf

Statutory requirements are satisfied, a

court cannot set aside an administrative

decision simply because it "is unhappv

with the result reached." Vermont Yankee

Nuclear Power Corp. v. NRDC, 435 U .S.

519, 558 (1978).

The Secretary orojected milk produc-

tion and CCC purchases with and without

imposition of the 50-cent deduction for

fiscal year 1983 as shown in his “Summary

Of Final Regulatory Impact Analysis" as

follows:

With price sup-

port at $13.19 per

hundredweight, oro-

duction is projected

to he 138.6 billion

pounds for fiscal

year 1983 if there is

no deduction program,

up 3.6 billion pounds

From fiscal year

1932. Relatively low

feed prices, result-

ing from record crop

production, will keep

milk feed price rela-

tionships favorable

for increased produc-

tion. Commercial

consumption is pro-

jected to increase

41a

1.9 billion pounds to

124.9 billion pounds,

milk equivalent ,

because of relatively

Stable retail prices

and increased popula-

tion. te is

estimated that TCC

removals in fiscal

year 1983 will he

14.7 billion pounds,

up about 0.9 billion

pounds or about 38.5

percent more than a

year earlier. Nes-

pite the upward trend

in consumption, 2%ur-

chases would continue

to exceed disposi-

tions and ccc stocks

would continue to

build--a condition

that has existed

Since October 1979.

Even with imple-

mentation of a 590 =

cents per hundred-

weight deduction on

April 16, 1983, milk

production in fiscal

year 1983 is likely

to increase from the

fiscal year 1982

level by 3.2 billion

pounds. Implementa-

tion of a $1.90 per

hundredweiqht deduc-

tion would result in

production increasing

eee

42a

by 2.8 billion

pounds. Neither of

the two deduction

programs would have a

great downward effect

upon milk production

this fiscal year

because they would

not hecome effective

until the season of

highest milk produc-

tion has begun.

Net orice sup-

port purchases durina

fiscal year 1983 are

projected to he 14.3

billion nounds, at a

cost of $2,375 mil-

lion if a 50-cent per

hundredweiaht deduc-

tion is imposed on

April 16, 1983 and

13.9 billion pounds,

at a cost of $2,314

million if the deduc-

tion is $1.90 per

hundredweigqht. Net

outlays before deduc-

tions, are projected

to he $2,433 million

with a 5N-cent per

hundredweight deduc-

tion and $2,372 mil-

lion with a $1.90 per

hundredweight deduc-

tion. NDurina the

period April 16,

cx eo throudganh

September 30, 1983, a

43a

50-cent per hundred-

weight deduction will

likely total $324

million and $1.90 per

hundredweight 4deduc-

tion will total %3646

million. Therefore,

net CCC outlays for

the fiscal year,

after deductions, are

projected to be

$2,109 million assum-

ing a 50-cent deduc-

tion and $1,726 mil-

lion assuming a $1.90

deduction. These

fiqures compare with

an estimated purchase

cost of $2,282 mil-

lion and a net outlay

Of $2,438 million for

fiscal year 1982, and

an estimated ourchase

cost of $2,438 and a

net outlay of $2,496

million for fiscal

year 19383 if there is

no deduction.

48 Fed. Reg. at 11,254-55. The Secretary

also determined that the 50-cent deduc-

tion would help to reduce the overvro-

duction of milk, as shown in his “Initial

Regulatory Flexibility Impact Analysis"

as follows:

44a

Failure to

implement any deduc-

tion would fail to

accomplish ecc's

Stated objectives and

would result in a

continuation of the

present Situation

where milk production

exceeds commercial

consumption and Com-

modity Credit Corpo-

ration Purchases

larqe amounts of

dairy products under

the milk price sun-

port oroqram at great

expense,

Neither of the

two deduction pro-

grams will have a

great downward effect

upon milk production

during this fiscal

year because they

would not hecome

effective until the

season of highest

milk productions (the

flush) has bhegqun.

The effect upon milk

production will beaqin

to be felt after the

Flush in the summer

months as pastures

begin to deteriorate,

and later in the fall

when cows are taken

45a

off pasture and moved

into barns.

48 Fed. Req. at 37466.

Moreover, althouagh the Secretary was

reguired to consider only the three stat-

utory factors, he in fact ranaed over a

broader spectrum of considerations in

decidina to exercise his discretion to

impose the 50-cent deduction. The Secre-

tary's impact analysis is illustrative

where he states:

The proposal will

assure an adequate

supply of milk and

dairy products and

will encourage effi-

cient oroduction

units consisting of

high-grade, disease-

free cattle and

modern sanitary

equipment. Tt also

will assure dairy

farmers as a whole of

a fair return for

their labor and

investment while

assuring an adequate

supply of oure and

wholesome milk to

46a

meet current needs.

The vroposal will

assure a level of

farm income adeauate

to maintain produc-

tive capacity suffi-

cient to meet antici-

pated future needs.

The proposal also

reflects the recent

reduction in the cost

of feed and increased

efficiency in produc-

tion. Some marginal

Operators may not be

able to owrofit under

the provosal but the

Statute does not

guarantee each and

every dairy farmer a

profit while requir-

ing the accumulation

of huge CCC stocks of

surolus dairy

oroducts

48 Fed. Req at 3765-64. See 7 U.S.C.

§ 1446b.

We conclude, therefore, that the

Secretary did not act in an arbitrary and

capricious manner by failing to consider

additional factors contained in other

provisions of the Agriculture Act in

implementing the 59%-cent deduction. He

not only considered the specific factors

Congress leaislatively required of hin,

but also considered other qeneral poli-

cies underlying the national economy and

the price support program.

The district court held that the

Secretary was reauired by the Adminis-

trative Procedure Act not only to con-

Sider the legislative factors previously

listed, but other general factors nowhere

explicitly mentioned in the controlling

legislation. 5 U.S.C. © 796(2). It spe-

cifically found, among other thinas, that

the Secretary improperly failed to con-

sider in determining to impose the deduc-

tion: (1) the immact on dairy farmers;

(2) the impact on the economy dependent

48a

on dairy farmers; (3) the regional impact

on the dairy industry; and (4) the imnact

on milk production,

The district court fell into the

Same error in making these findings as it

did in concluding that additional sec-

tions of the Aqriculture Act must he

considered. Again, Conaress snecifical-

ly, and we think emphatically, aranted

the Secretary discretion to decide

whether to impose the deduction. Tt

directed him to project whether CCC our-

chases would exceed 5 hillion pounds and

whether the deduction program would lower

the cost to the government of the support

program.23/ As already noted, the

Secretary properly considered these fac-

tors. Courts are not free to add sub-

Stantive or pvrocedural hurdles for aaen-

25/7 68.0. © 1446(4) (2).

49a

cies to overcome if Congress has not

established such reauirements. See

Baltimore Gas & Elec Co. v. NRDC, 76

L.@4. 437 (1983). Having met those

requirements, it cannot be said that the

Secretary's actions were arbitrary and

capricious for failure to consider the

factors which a court miaqaht feel are

appropriate but which were either con-

sidered and rejected by Conaress, or

simply not included by Congress as fac-

tors which the administrative agency must

consider.

The finding that the Secretary

failed to comply with the notice and

comment requirements of the APA, 5 U.S.C.

§ 553, was also in erroc. The district

court held first that the information

made available to the public was criti-

cally deficient in that it did not reveal

50a

the information animating the defendant's

prownosal to a sufficient degree to allow

effective public comment; second, that

the Secretary did not adequately respond

to comments; and third, that he failed

adequately to exolain his decision. We

consider these district court findinags in

that sequential order.

First, section 553(5)(3) pvwrovides

that a “notice” shall include “either the

terms or substance of the proposed rule

Or a description of the subjects and

issues involved." The notice requirement

is to fairly appraise interested parties

of the issues involved in the rulemaking

proceedings. Spartan Radiocasting Co. v.

PCC, 619 F.2G 314, 32 t<-22 (4th Cir.

1980); Consolidation Coal Co. v. Costle,

604 F.2 d 239, 248 (4th Cir. 1979).

Notice is sufficient if it affords inter-

Sia

ested parties a reasonable onportunity to

participate in the rulemaking process.

Forester v. Consumer Product Safety

Comm'n, 559 F.2d 774, 78788 (9.C. Cir.

1977).

We believe the dairy parties and the

interested public were fairly apprised

of the "subjects and issues’ involved"

reaqardinqg the Secretary's proposal to

implement the S0-cent deduction. 5

U.8.C. § 5§53(5)(3). The vrooosal

exnlained the background of the prooosed

rule, described the milk price support

program, and provided a summary of the

proposed rule. It further discussed the

expected effect of the requlation, the

reasons for the action, the objectives

and leqal basis for the pronosed rule,

and a number of other’ considerations

The deduction program was designed by

52a

Conaress itself following hearinas and

debate. Leaders in the dairy industry

Followed those congressional proceedings

closely. As to them, the notice did not

newly introduce the problem.

Second, the Secretary adequately

responded to comments he had received

after publishing the notice. The pourpose

Of allowing comments is to omernit an

exchanqe of views, information, and

Criticism between interested persons and

the aaency. See Home Box Office, Inc. v.

FCC, 567 F.2d 9, 35>: (D.C. | Cived, GREt.

denied, 434 U.S. S29 CUSTT ke There is

no requirement for the Secretary to dis-

cuss every fact or opinion contained in

the public comments. General Telephone

Co. v. United States, 449 F.2d 846, %62

(5th Cir. 1971); diatt-Grain-& Feed, Inc.

v. Beraland, 446 F. Supp. 457, 484 (D.

53a

Kan 1978), aff'd, 4692 F.2d 919 (10th

Cir. 1979), cert. denied, 444 ¥J.S. 1073

(1980). Instead, the Secretary is obli-

gated to identify and comment on only the

relevant and significant issues raised

during the proceeding. Home Box Office,

567 F.2d at 35 n.58; Community Nutrition

Institute v. Bergland, 493 F.Supp. 488,

492-93 (D.C. 1980).

The Secretary enumerated all of the

comments he had received with reqard to

the proposed deduction rules, and stated

that “all comments bearing on the deter-

mination have been considered " 48 Fed.

R¢g. at 11,254. He responded specifical-

ly to a number of comments, such as ones

Stating that the deduction would not

reduce milk production, that it would not

balance sunply and demand, that larae

numbers of small farmers would be put out

S4a

of business, and other comments sugqest-

ing increased donations of dairy prod-

ucts, a reduction in the support price,

termination of the milk price support

program, and an exemption from the deduc-

tion for producer-handlers. Id. Most of

the comments concerned alternatives to

the deduction program outside the scope

of the Secretary's authority, or con-

cerned factors and issues irrelevant to

implementation of the deduction or which

had already been considered by Congress

in enacting the deduction amendment. See

Schweiker v. Gray Panthers, 453 U.S. 34,

50 netd (7981). Having resnonded to the

comments concerning the major factors

relevant to a decision to implement the

deduction and a number of others, the

Secretary did not violate the comment

requirement contained in 5 U.S.C.

55a

§ 553(c).

Third, the district court ruled that

the Secretary's explanation of the final

rule did not enable the court to discern

the agency's reasoning, and thus frus-

trated judicial review 5 .S.C. § 553(c).

We feel that the Secretary adequately

explained his decision to impose the

first 50-cent deduction.

The APA does not require an exhaus-

tive explanation of an administrator's

reasoning for adopting a rule. Required

is "a concise general statement [of the

regulation's] basis and purpose.”

Appalachian Power Co. v. EPA, 579 F.2d

846, 854 (4th Cir 1978), quotina United

States v. Alleaheny-Ludlum Steel Corp ,

406 0.8. 742, 758 (1972). There is no

Obliaation to make references in the

agency explanation “to all the specific

56a

issues raised in comments." Appalachian

Power Co., 579 F.2d at 854, quoting

Kennecott Copper Corp v. EPA, 462 F.24

846, 850 (D.C. Cir. 1972); Consumers

Union of U.S., Inc. v. Consumer Product

Safety Comm'n, 491 F.2d 810, $12 (2d Cir.

1974). The agency's explanation must

simply enable a reviewing court "to see

what major issues of policy were venti-

lated by the informal proceedings and why

the agency reacted to them the way it

did.” General Telephone Co. v. United

States, 449 F.2d 846, 862 (5th Cir.

1971), quoting Automotive Parts &

Accessories Ass'n v. Boyd, 407 F.2d 330,

338 (D.C. Cir. 1968). See also Amoco Oil

Co. v. EPA, 501 F.2d 722, 739 (D.C. Cir.

1974).

The facts and policy concerns relied

on by the Secretary are clearly set forth

57a

in the statement of basis and purpose in

the final rule. [In his “Summary of Final

Regulatory Impact Analvsis," the Secre-

tary demonstrates that milk production is

expected to increase; that CCC purchases

will continue to increase despite a

deduction program; and that without a

deduction program, the CCC will have to

spend accelerating amounts to support the

price of dairy products. The Secretary

also projected that CCC purchases would

greatly exceed 5 billion pounds in fiscal

year 1983, and that imposing the 50-cent

deduction would reduce the amount the

government would have to spend in that

fiscal year. The Secretary thus articu-

lated an adequate factual basis for his

decision to impose a 50-cent deduction

and clearly explained that decision.

58a

III.

The constitutional contentions merit

little discussion. As we previously

indicated, we normally would not enter-

tain these issues since they were not

considered by the district court and the

resolution of the constitutional ques-

tions are not necessary to support our

decision to reverse the action of the

district court issuing the preliminary

injunction. Tf we ruled solely on the

district court's holding relating to

violation of the APA, however, the con-

Stitutional issues surely would be raised

again on remand with attendant delays of

hearing and appeal. Since we have

decided the administrative law issues

adversely to the dairy parties, only

their constitutional claims remain. No

factual issues inhibit our full under

59a

standing of those claims, and the

asserted constitutional principles are

well settled, The development of those

issues in district court would provide us

with little assistance in disposing of

the constitutional arguments. Therefore,

with some hesitancy in departing from our

well-established and trusted rule that we

not meet constitutional problems unless

necessary to the resolution of the

appeal, we briefly consider the fully

developed facts under well established

principles of constitutional law.

The dairy parties first arque that

the deduction, which is to be imposed by

the Secretary, violates the constitu-

tional provisions qoverninag the taxina

power. They specifically argue that it

violates Art. I, § 7, el. 1, in that it

is a tax not oriqinating in the House of

60a

Representatives. They further argue that

the deduction violates Art. TI, § 8,

cl. 1, because Conqress cannot delegate

the “power to lay and collect taxes," and

because the funds generated by the deduc-

tion do not go to the United States Trea-

sury for the "general welfare."

The deduction, however, is not a

tax. The mere fact a statute raises

revenue does not imprint upon it the

characteristics of a law by which the

taxing power is exercised. Head Money

Cases, 112 U.S 580 (1884). The imposi-

tion of assessments have long been held

to be a legitimate means of requlating

commerce. See, @a , Wickard v. Filburn,

317 U.S. 111 (1942). T& regulation is the

primary purpose of a Statute, revenue

raised under the statute will he consid-

ered a fee rather than a tax. Mnited

fila

States v. Stangland, 242 F.2d 843, 848

(7th Cir. 1957); Rodgers v. United

States, 138 F.2d 992, 994 (6th Cir.

1943).

The clear language and structure of

the 1982 amendment indicates that its

primary purpose is regulation. The stat-

ute's regulatory ourpose is to reduce

overproduction of milk and shift some of

the financial burden of the price support

program. Accordingly, the dairy amend-

ment bears the indelible imprimatur of

the commerce power and is not an uncon-

Stitutional exercise of the taxing

power.

There likewise is no merit to the

contention that the involved statute

unconstitutionally delegates leqislative

power to the Secretary. The leqislative

history of section 1446(d)(2) reveals

62a

that Congress clearly delineated the

policy objectives of reducing milk prod-

uction and reducing the increasing cost

of the milk price support program. The

Statute clearly describes the effective

dates during which the deduction may he

implemented, the specific amount of the

deduction, and requires a minimum level

of expected government purchases before

the deduction can he imposed. Conaress

thus clearly delineated “tne qeneral

policy, the public agency which will

apply it, and the boundaries of the dele-

gated authority." Electric Power & Light

Corp v. SEC, 329 J.S. 90, 105 (1946).

The dairy parties finally contend

that section 1446(d)(2) is not a valid

exercise under the commerce clause,

Art. 1, © 8, el. 3. The test of this

issue is simply stated by the Supreme

43a

Court ruling in Hodel v. Indiana , 452

U.S 314 (1981): "A court may invalidate

legislation under the commerce clause

only if it is clear that there is no

rational basis between the regulatory

means selected and the asserted ends.”

Id. at 323-24. The dairy oarties them-

selves are reaching for the irrational,

contending that there exists no rational

basis hetween the means -- lowering the

financial rate on milk -- and the ends

sought by Congress -- a decrease in milk

production and a contribution by milk

suppliers to the cost of the support

program. Indeed, the milk support

program, which has been in effect for

many years without challenge, is premised

on the link between profitability and

64a

product ion.28/

IV.

We may well consider the tool qiven

the Secretary to be blunt, and its use

by the Secretary to effectively drive

some producers “out-of-business" to he

harsh as it applies to small dairy opera-

tions. Tt is clear, however, that Con-

gress was aware of the possibility of

harsh results to some small farmers. The

Secretary, on appeal, admits that reduc-

tion to qross income by 4 percent will

force some dairy families to cease their

26/ The dairy industry also

Alleged that section 1446(d)(2) as

imposed violates the equal protection and

due orocess requirements of the fifth

amendment. These claims are clearly

without merit. See Reed v. Reed, 404

U.S. 71, 75 -76 (T9571); Williamson v.

Lee Optical Coy, 348 U.S. 483 (1955);

Larsen v. Block, C/A No. NC=87-9222w (Nn.

Ntan March 28, 19 83).

65a

farming operations. The current unprece-

dented high expense of farming, the

inherent cost inefficiency of operating a

family farm, and the resulting small

percentage of gross income ultimately

realized as a profit, makes this some-

times cruel prospect a stark reality.

Were we the Secretary, we might well have

searched long for a more humane alterna-

tive, but our judicial task is not to

Substitute our judqment for that of the

administrative agency. We are limited in

Our review to determining whether the

Secretary acted constitutionally under a

constitutional statute, followed the

mandate of Conqress, and in accordance

with the APA,

The Secretary's actions implementing

the 50-cent deduction authorized in sec-

tion 1446(d)(2) were not, under our

66a

standard of review, arbitrary or capri-

cious, nor in excess of statutory

authority or limitations. 5 uU.S C.

§ 706(2). We further hold that section

1446(d)(2) and its application withstand

constitutional scrutiny. The order of

the district court, therefore, is vacated

and remanded for dismissal of the

complaint.

VACATED AND REMANDED.

67a

IN THE UNITED STATES

DISTRICT COURT

FOR THE DISTRICT OF SOUTH

CAROLINA

COLUMBIA DIVISION

STATE OF SOUTH CAROLINA,

ex rel D. LESLIE TINDAL,

Commissioner of

Aqriculture,

STEVEN W. HAMM,

as South Carolina

Consumer Advocate,

SOUTH CAROLINA FARM BUREAU,

FRANK FLOWERS,

W. CHARLFS McGINNIS,

LAWRENCE WEATHERS

CIVIL

ACTION

NO.

32-3172-0

Plaintiffs,

SUNCOAST MILK PRODUCERS

COOPERATIVE

1009 S7th Street East

Bradenton, FL 33508

INDEPENDENT DAIRY FARMERS

ASSOCIATION, INC.

4400 Southeast 36th Street

Fort Lauderdale, FL 33314

PRELIMINRY

INJUNCTION

TAMPA INDEPENDENT DAIRY

FARMERS'ASSOCTATION, INC.

501 East Kennedy Boulevard

]

}

]

}

]

}

]

}

]

Tampa, FL 33601 ]

68a

UPPER FLORIDA MILK

PRODUCERS ASSOCIATION

5654 Dunn Avenue

Jacksonville, FL 32218

GEORGIA MILK PRODUCERS,

INC.

177 Washington Street, S.W.

Atlanta, GA 30303

COBLE DAIRY PRODUCTS

COOPERATIVE, INC.

North Main Street

Lexington, NC 27292

INTER-STATE MILK PRODUCERS

COOPERATIVE, INC.

1225 Industrial Highway

Southampton, PA 18966

DAIRYMEN, INC.

19140 Linn Station Road

Louisville, KY 40223

ASSOCIATED MILK PRODUCERS,

INCORPORATED,

Wedgewood Prof. Bldg.

6609 Blanco Road

San Antonio, TX 78216

Plaintiffs-Intervenors,

JOHN R. BLOCK, Secretary

of the Vnited States

Department of Agriculture,

UNITED STATES DEPARTMENT

OF AGRICULTURE, and

COMMODITY CREDIT CORP,

Defendants.

a a a ee a a ee ee ee ee ed

For the reasons set forth in the

Memorandum Opinion and Order separately

filed this date in this action,

It is hereby Ordered that, vending

further order of this Court, the defen-

dants John R. Block, Secretary of the

United States Department of Agriculture,

the United States Department of Agricul-

ture, and the Commodity Credit Corpora-

tion, and all persons, firms and agencies

acting in concert with them, he and each

of them is preliminarily enjoined from

implementing the Determination made and

announced by the Secretary of Agriculture

on March 17, 1983, 48 Fed. Rea. 1062332

(1983), by collection or requiring the

deduction of fifty cents per hundred-

weiaht from the sale of milk marketed

commercially in the United States.

70a

Further, the defendants are hereby

Ordered to return forthwith any and all

sums of money heretofrom collected under

the authority of tte MNetermination

announced by the Secretary of Agriculture

of March 17, 1983.

IT IS SO ORDERED.

/s/

MATTHEW J. PERRY

UNITED STATES DISTRICT JUDGE

Columbia, South Carolina

June 3, 1983

IN THE UNITED STATES

DISTRICT COURT

FOR THE DISTRICT OF SOUTH

CAROLINA

COLUMBIA DIVISION

STATE OF SOUTH CAROLINA,

ex rel D. LESLIE TINDPAL,

Commissioner of

Agriculture,

STEVEN W. HAMM,

as South Carolina

Consumer Advocate,

SOUTH CAROLINA FARM BUREAU,

FRANK FLOWERS,

W. CHARLES MCGINNIS,

LAWRENCE WEATHERS

Plaintiffs,

SUNCOAST MILK PRODUCERS

COOPERATIVE

1009 57th Street East

Bradenton, FL 33508

INDEPENDENT DAIRY FARMERS

ASSOCIATION, INC.

4400 Southeast 36th Street

Fort Lauderdale, FL 33314

TAMPA INDEPENDENT DAIRY

FARMERS'ASSOCIATION, INC.

501 East Kennedy Boulevard ]

Tampa, *L 33601 ]

)

]

}

]

}

]

}

]

CIVIL

ACTION

NO.

82-3172-0

MEMORANDUM

OPINION

AND ORDER

72a

UPPER FLORIDA MILK

PRODUCERS ASSOCIATION

5654 Dunn Avenue

Jacksonville, FL 32213

GEORGIA MILK PRODUCERS,

INC.

177 Washington Street, S.W.

Atlanta, GA 30303

COBLE DAIRY PRODUCTS

COOPERATIVE, INC.

North Main Street

Lexington, NC 27292

INTER-STATE MILK PRODUCERS

COOPERATIVE, INC.

1225 Industrial Highway

Southampton, PA 18966

DAIRYMEN, INC.

19140 Linn Station Road

Louisville, KY 40223

ASSOCIATED MILK PRODUCERS,

INCORPORATED,

Wedgewood Prof. Bldg.

6609 Blanco Road

San Antonio, TX 78216

Plaintiffs-Intervenors,

JOHN R. BLOCK, Secretary

of the United States

Department of Agriculture,

UNITED STATES DEPARTMENT

OF AGRICULTURE, and

a a ae a ee ee i

73a

COMMODITY CREDIT CORP. }

Defendants. }

INTRODUCTION

This matter is before the Court

pursuant to motions by the plaintiffs

and the plaintiffs-intervenors for an

injunction against implementation by the

defendants of a second “determination”

by the Secretary of Aqriculture of the

United States requiring a deduction of

fifty cents per hundredweight from the

proceeds of milk marketed commercially

in the United States. A decision by

the Secretary to impose ae previously

announced deduction was enjoined by this

Court on January 11, 1983. State of

South Carolina ex rel Patrick v. Block,

74a

558 F. Supp. 1004 (D9. S.C. 1983). There-

after, on March 17, 1983, the Secretary

promulgated the determination which

precipitated the filing of the instant

motions. The plaintitfs and the inter-

venors claim the right to relief as to

this determination for all of the reasons

which they advanced in their original

pleadings concerning the Secretary's

previous determination. Those alleqa-

tions were summarized in the January 11,

1983 opinion and order of this Court.

See, 558 F. Supp. at 1006, 1007, The

defendants contend inter alia that the

Secretary has now complied with all of

the requirements of the Administrative

Procedure Act, 5 U.S.C. § 551 et seq. in

promulgating this regulation and that,

moreover, contrary to contentions made

by the intervenors, imposition of the

75a

fifty cents per hundredweight deduction

is not an unconstitutional tax.

Additionally, the parties have filed

cross motions for summary judqment as to

all pending issues,

A hearing on pending motions was

held on April 12-14, 1983. The Court

granted plaintiffs' motions for change

of counsel, for change o€ relator and

to supplement the complaint. The Court

also granted the motion of Associated

Milk Producers, Inc. (AMPI) to intervene

as a Marty plaintiff. AMPI had anpeared

in the prior heading in the cases as

amicus curiae. The Court has also

received, and has granted, vnetitions

for leave to submit memoranda from the

Commonwealth of Puerto Rico and the

Pennsylvania Farms Union, Inc, as amicus

curiae. As previously noted 558 F. Supp.

at 1007, collectively, the plaintiffs,

the intervenors and the amicus curiae

represent a substantial seament o€ the

dairy farmers of America.

During the hearing on April 12,

1983, the Court heard from several wit-

nesses for plaintiffs and plaintiffs-

intervenors. On April 13, the defendants

were oermitted to present a previously

undisclosed witness, “r. Mawson Ahat,

Acting Deputy Undersecretary for Inter-

national Affairs and Commodity Programs.

Prior to Mr. Ahalt's testimony, the

defendants presented the testimony of

Dr. Charles Shaw, Leader of the Dairy/

Sweetners Groun, Analysis Division of the

Agriculture Stabilization and Conserva-

tion Service of the Department of Aqri-

Culture. Or. Shaw had previously testi-

fied at the hearing of January 3-4. The

77a

Court also received from the defendants

the “administrative record" a hox of

photocopied materials, primarily official

Department of Agriculture publications,

an estimated 5,990 pages, gross weight:

41 pounds ../ The Court also took

1/ Prom the cover letter explainina

these materials: The enclosed documents

are arranged by "“books" as follows:

(a) Book 1--All official documents and

related press releases produced in con-

nection with the March 17, 1983 determi-

nation; (5) Book 2--the July 1980 through

March 1982 issue of Dairy Situation, an

official Department of Agriculture (USDA)

dairy report; (c) Book 3--miscellanous

current statistical summaries, includina

estimates orepared by USDA's Dairy Inter-

agency Estimates Committee; (4) Books 4

and S5--copies of the January 1982 and

subsequent issues of Dairy Market News, a

weekly bulletin of dairy market develop-

ments; (@) Book 4--copies of recent

issues of 'SDA's Dairy Products and Milk

Production (statistical publications

relating to dairy oroduction); (f) Book

7--copies of the Agricultural Supply and

Demand Estimates; (2) 300K 8%--coples of

the 1on0-H. issues of 'SDA' Cold Storage,

report of nationwide cold storage data;

and (hn) Rook 9--the monthly issues from

May 1981 through December 1982 of USDA's

FOOTNOTE CONT'D ON NEXT PAGE

— ia

78a

judicial notice of the record of the

earlier proceedings in this case.

At the close of the hearina, the

Court indicated its views. Tt appeared

to the Court at the time that the defen-

dants had complied with at least the

Salient features of notice and comment

rulemaking under 5 U.S.C. § 553, and the

course of conduct did not appear to ‘be

arbitrary or capricious. The Court

therefore did mot at the time, aqrant

the motions for injunctive relief, takina

the matter under advisement.

At that juncture, this Court was

deeply troubled by this case and sua-

gested at the close of the hearing that

it appeared that the key questions were

FOOTNOTE CONT'D FROM PREVIOUS PAGE

Agricultural prices, a report of aaricul-

ture prices for a number of commodities

and the 1980 and 1981 annual summaries of

the same publication,

79a

constitutional.

Subsequently, in bringing order to

the complex and voluminous record in this

case, my suspicions of a breakdown were

borne out: I find unavoidable the con-

Clusion that the Secretary is acting

contrary to the applicable law. T have

found, however, that the violations were

Of administrative law rather than consti-

tutional law.

By May 5, although not prepared to

respond fully to the many complex ques-

tions raised in the case, the Court was

convinced that the Secretary, in imposina

the fifty-cents per hundredweiqht deduc-

tion, had violated the Administrative

Procedure Act. Aware ‘that the actual

collection process, the takina of money,

was about to commence for grade 8B milk

producers, the Court on May 5 issued a

80a

Temporary Restraining Order barring col-

lection of the deduction pending issuance

of this Opinion. That Temporary

Restraining Order was stayed on May 13,

by an Order of the Court of Appeals for

the Fourth Circuit, nending issuance of

this opinion.

Having carefully considered the

issues in this case, this Court adheres

to the position suagested by the

Temporary Restraining Order of May 5.

The Secretary has violated the Adminis-

trative Procedure Act, 5 U.S.C. § 551 et

Therefore, under 5 U.S.C. § 706,

|®

the fifty-cents per hundredweiaht deduc-

tion on the commercial sale of milk is

held unlawful; the Secretary's imposition

of the deduction requirement is set

aside; all further collection under the

Secretary's determination is enjoined;

and the Secretary is ordered to return

forthwith all monies previously col-

lected.

THE FACTS

On September 8, 1982, the President

siqned into law the Omnibus 3udaet Recon-

Ciliation Act of 1982. One section of

that multi-faceted act, § 1091, concerns

the dairy support price system. Inder

that section, now codified as 7 U.S.C.

§§ 1446(c) & (d), the Congress deleqated

to the Secretary of Agriculture the dis-

cretionary authority to impose two fifty-

cents per hundredweight deductions on all

commercial sales of milk. See P.L. 97-

253.

On September 24, 1983, by a Notice

82a

of Determination published in the Federal

Reqister, the Secretary of Aqriculture

announced the imposition of the first

deduction requirement authorized by sec-

tion 191. 47 Fed. Req. 42,128 (Sept. 24,

1982).

Subsequently, the plaintiffs herein

brought an action in this Court to enjoin

the collection of this deduction. The

Plaintiffs contended that the defendants

had failed to observe the leqal mandates

of the Administrative Procedure Act, 5

U.S.C. § 551 et seg., and specifically

had failed to provide for notice-and-

comment in informal rulemaking as is

required by that statute.

The action came on for an initial

hearing on December 21, 1982. At that

time, the Court entered a temporary

restraining order, barring the collection

83a

pending a more comprehensive hearina.

The matter came on for hearing on January

3-4, 1983. During that hearing, this

Court heard a thorough presentation of

evidence and arqument by all sides. At

the close of the hearing, the Court took

the matter under advisement, continuina

its temporary restraining order.

On January 10, 1983, this Court

issued an injunction against the collec-

tion of the deduction requirement pro-

mulqated in the Notice of Determination

of September 24, 1982. In an opinion

and Order issued on January 11, 1983,

the Court discussed at length the various

claims concerning the deduction require-

ment, finding that the imnosition of this

deduction requirement is rulemaking as

defined by the Administrative Procedure

Act, 5 ¥Y.S.C. § 551, and is therefore

R4a

Subject to the requirements of 5 U.S.C.

§ 553; that the Secretary of Agriculture

has waived the "benefits" exception and

cannot take advantage of this exemption

to the notice and comment procedures

required by 5 U.S.C. § 553; that there

was no “good cause" excusing the Secre-

tary from the notice and comment require-

ment of 5 U.S.C. § 553(0)(B); and that

the Secretary's actions in imposing the

deduction did not constitute "substantial

compliance,” but were rather an eqgqreqious

violation of the Administrative Procedure

Act. State of South Carolina ex rel.

Patrick v. Block, 558 F. Supp. 1094

(D. S.C. 1983).

Based on these findings, this Court

concluded that the plaintiffs in the

January action had established an over-

whelming likelihood of success on the

85a

merits. 558 F. Supp. at 1022-23. The

Court also found that the plaintiffs

had made a substantial showing that the

implementation of the deduction reauire-

ment would cause irreparable injury; that

the defendants had not shown that the

imposition of a preliminary injunction

would cause them irreparable injury, so

that the balance of hardship favored the

issuance of an injunction for the plain-

tiffs; and that the public interest, and

particularly the need to hold the defen-

dants to a close observance of the law

favored issuance of an injunction.

Following the issuance of the preli-

minary injunction the defendants’ took

no appeal. Rather, on January 21, the

defendants Secretary of Agriculture

announced that the qovernment would

issue a proposed rulemaking under which

R6a

it would proposed to implement both the

first and the second fifty-cents per

hundredweight deductions authorized by

the Omnibus Budqet Reconciliation Act.

On January 27, 1983, there appeared in

the Federal Register a Notice of Proposed

Determination (48 Fed. Req. 3,764 (Jan.

27, 1983)). 3y this Notice:

Commodity Credit

Corporation provoses

» 2 « enet $1.00 per

hundredweight to he

deducted from the

proceeds of sale of

all milk marketed

commercially by

producers during the

period April 1, 1983

through September 30,

1983, with 50-cents

per hundredweiaqht

being refuned to

producers who reduce

their commercial milk

marketings by 10.3

percent from mar-

ketinqgs during a

designated based

period.

48 Fed. Req. at

eee

87a

3,764.

This Notice invited the submission

of comments, and promised that comments

submitted in response to the September 24

Notice of Determination would also be

considered in determining whether or not

to impose the new deduction requirement.

See 48 Fed. Reg. at 3,764 (1983).

On February 15, counsel for the

plaintiffs-intervenors, Suncoast Milk

Producers Cooperative, et l1., hand-

carried to the Department a letter

reauesting that they be provided with

certain underlying studies which they

viewed as pertinent to an evaluation of

the proposed deduction requirement. The

defendants have never responded to this

letter.

On February 28, 1983, the Secretary

met with a delegation of farmers from

upstate New York who had come to

Washington, 0.C., to orotest the deduc-

tion requirement. Tn meeting with these

dairy farmers, the Secretary made state-

ments indicating his determination to

impose the deduction.2/

On March 16, 1983, the defendants

announced that the first fFifty-cents per

hundredweight assessment would be

imposed, effective April 16. Explaining

the reason for the imposition of the

deduction requirement, the Secretary

——

2/ The defendants have objected

to this Court's consideration of these

Statements by the Secretary, citina as

authority Hiatt Grain Feed, Incorporated

v. Bergland, 446 F. Supp. 457, 453-54 (D.

Kan. 1975). MIpon reading that case, I

find it is totally inapposite to this

situation. The statements complained of

in that case were general statements made

before Mr. Bergland ever took his posi-

tion as Secretary of Agriculture, and

certainly never had any specific relation

to a rulemaking which he was considering

at the time the statement were made.

Stated:

89a

We have no choice but

tO aqain implement

the first assessment

ee [W]e really

have no other alter-

native, That is the

Only option Congress

has given to us, and

it would be fiscally

irresponsible to

ignore a tool which

will save up to s60

million per month of

the taxpayers’ money.

Block said the first

assessment would be

maintained from April

16 until new leqisla-

tion hecomes effec-

tive. "If sufficient

resolution is not

Forthcoming hy Auq.

1, we will he forced

tO look again to

implementation of

the second 50-cent

assessment. .. =,"

Press Release, at 1

1983).

Yet we at the Depart-

ment had no choice

in the matter. The

assessment was the

Only tool that Con-

(Mar.

16,

9Na

gress handed to us

that would bring down

program costs. It

wasn't a mandatory

assessment, but it

might as well have

been, Congress

actually took credit

for the savings in

the budget.

Dairy Policy Statement by Agricul-

ture Secretary John R. Block at 4 (Mar.

16, 1983).

[(Tlhis was the only

tool given to us by

Congress. Something

had to be done ¢t9

keep the cost to the

taxpayers down, .. .

Id. at 5.

First, we have no

choice but to imple-

ment the first 50-

cent assessment.

That is the only

option Congress has

given to us, and it

would be fiscally

irresponsible to

iqnore a tool which

will save up to $40

million per month

of the tax payers'

Gla

money. For that rea-

son, T have directed

that the first 50-

cent assessment he

implemented, effec-

tive April 16.

Id. at 8.

The following day, the Secretary

published in the Federal Register a

Notice of Determination statina:

The Commodity Credit

Corporation cccCc)

hereby determines

that as part of the

milk price support

program, 50-cents per

hundredweiqht shall

be deducted from the

proceeds of sale of

all milk marketed

commercially by pro-

ducers during the

period of April 16,

198 3 through

Septmeber 30, 1983.

48 Fed. Req. 11, 253 (Mar.

17, 1983).

Discussing the impact of this Aeduc-

tion requirement, the Notice stated:

Some individual pro-

Nhs —

92a

ducers will be more

seriously affected by

the deduction than

others, The price

Support program,

however, does not

guarantee profit to

every dairy farmer.

* * ® [Tlhe first

of the two statutory

conditions that must

be met hefore a

deduction of $1.90

per hundredweight on

commercial milk mar-

keting is imposed has

been satisfied.

However, the statute

also requires that

there be a program

for refunding S50-cent

Of *t*net -37:.808--eo5

producers who reduce

commercial marketing

by a prescribed

amount. The Depart-

ment published, on

January 27, 1983, a

Proposal for the

implementation of a

$1.90 per hundred

weight deduction and

a refund program, but

no final requlation

establishing a refund

program has been

published, There-

fore, only a 50-cent,

not the proposed

93a

$1.90, ner hundred-

weight deduction may

be imposed at this

time

* * * Relatively

low feed oprices,

resulting from record

crop production, will

keep milk-feed price

relationships favor-

able for increased

production.

48 Fed. Reg. at

"(E]very nilk pro-

ducer in the United

States who markets

milk commercially

will he affected by

the program. A 50-

cent deduction reore-

sents less than 4

percent of producers

gross income from

milk and a $1.90

deduction represents

less than 8 percent

of producers gross

income from milk.

Since this determina-

tion is effective

only for the period

April 14, 1983,

through September 30,

1983, this effective

will be approximately

halved for producers’

income during fiscal

year 1983,

11,254.

94a

48 Fed. Req. at 11,255.

In response to this Notice, the

plaintiffs and plaintiffs-intervenors

moved for suoplemental preliminary

injunctive relief. The matter came on

for hearing on April 12-14, 1983. Muring

the April 12 taking of evidence, the

plaintiffs and plaintiff-intervenors

introduced evidence, both in the form of

documentary exhibits and in the form of

the testimony of an expert witness, evi-

dence pointina to deficiencies in the

various impact statements which had been

proffered to the Court as ovart of the

defendants’ administrative record.

At the close of the hearina on April

14 this Court took the matter under

advisement to consider the many questions

which this case presented. As with the

January litigation, these questions can

95a

be broadly grouped under two dqeneral

headings: Constitutional law and

administrative law.

Although in initially appeared to

this Court that the vore-eminent questions

were those concerning the constitu-

tionality of § 191 of the Omnibus Budget

Reconciliation Act, on thorough consi-

deration, T have determined that the

oroblems concerning administrative law

are so grave that these alone resolve the

case against the defendants. Therefore,

the Court confines its resolution to

these questions. Further, I believe the

matter is not yet ripe for final resolu-

tion via summary judgment, and will

therefore, for the time being deny the

cross-motions for summary judqment, with

all parties having leave to renew these

motions in the future.

96a

II.

ON INJUNCTIONS

In this cfrcuit, the leading case

expounding the requirements for the

issuance of a preliminary injunction is

Blackwelder Furniture Company of States-

ville, Incorporated v. Seiling Manufac-

turing Company, 550 F.2d 189 (4th Cir.

977) As the Court therein indicated,

the proper test for resolving a motion

for preliminary injunction involves the

flexible interpnvlay of four factors:

1) the possibility of irreparable harm to

the plaintiffs if injunctive relief is

deined; 2) the apparent strength of the

plaintiffs' case on the merits; 3) the

potential harm to the defendant if the

preliminary injunctive relief does issue;

97a

and 4) the public interest.

The court in Blackwélder, and many

othe courts speaking to this question,

have emphasized that all four of these

factors are to be considered in decidina

whether a preliminary injunction should

issue pending a full trial on the merits

of the controversy. Turther, the courts

have stressed the need for a flexible

interplay among these four factors, the

goal in any case being the preservation

of the status quo pending full litiga-

tion. See, @.g., Federal Leasinag, Inc.

v. Underwriters at Lloyd's, 650 F.2d

495 (4th Cir. 1981); Telvest, Inc. v.

Bradshaw, 613 F.2d 1029, 1032 (4th Cir.

1980); Jacksonville Port Authority v.

Adams, 556 F.2d 52 (D.C. Cir. 1977);

Banks v. Trainor, 525 F.2d 837, 841 (7th

Cir. 1975); Virainia Petroleum Jobbers

98a

Assoc. v. Federal Power Commission, 259

F.2d 921 (D.C. Cir. 1985) [sic]; 0. Fiss,

Injunctions 168 (1972).

In this case, as in the January

litigation in this controversy, the

leading factor is the strength of the

plaintiffs' case on the merits. While

this Court has not heard a full trial on

the merits, and has not received a full

administrative record, there has been a

very extensive presentation of evidence,

particularly of the documents which

entered into the Secretary's decision to

impose the fifty-cents per hundredweight

deduction, This evidence clearly indi-

cates the merits of the plaintiffs’ and

plaintiffs-intervenors' case,

If this matter were to proceed to a

full trial on the merits, the defendants

could undoubtedly augment the record.

99a

This Court, however, has aqrave doubts

that the defendants could produce evi-

dence which would counter the strona

showing which the plaintiffs have made

that the Secretary has imposed this

deduction requirement through a course of

action which involves serious violations

of the law. The determination is there-

fore a nullity.

Because of the importance which I

give to the plaintiffs' showing on the

merits, I will turn to this matter first.

T would emphasize however, that I believe

that the plaintiffs' showing on each of

the four factors involved in the deter-

mination of the injunction question is

quite strong.

100a

III.

REVIEWABILITY

The Administrative Procedure Act, 5

U.S.C. SS 701(a) renders administrative

actions reviewable subject to two narrow

exceptions:

This chapter applies,

according to the

provisions thereof,

except to the extent

that--

(1) Statutes

preclude

judicial

review; or

(2) agency

action is

committed

to agency

discretion

by law.

The defendants argue that the Secretary's

action taken under § 101 of the Omnibus

Budget Reconciliation Act, now 7 U.S.C.

§ 1446(c) & (da), is unreviewable because

101a

of 7 U.S.C. § 1429.2/

To establish unreviewability, the

defendant must carry a heavy burden. The

case law requires proof of unreviewabi-

lity by clear and convincing evidence.

Dunlop v. Bachowski, 421 U.S. 560, 567

(1975); Citizen to Preserve Overton Park,

Incorporated v. Volpe, 401 U.S. 402

(1971); Abbott Laboratories v. Gardner,

387 U.S. 136, 139 (1967); Rusk v. Cort,

369 U.S. 367-80 (1962); Shaughnessy v.

Pedreiro, 349 U.S. 48, 51 (1955);

Heikkila v. Barber, 345 U.S. 229 (1953);

National Corn Growers Association v.

Bergland, 471 °. Supp. 1199, 1205-06

3/ That section provides:

Determinations made by the

Secretary under this Act shall be final

and conclusive; Provided, That the scope

and nature of such determinations shall

not be inconsistent with the provisions

of the Commodity Credit Corporation

Charter Act.

102a

(S.D. Towa 1974), app. dismissed, 611

F.2d 730 (8th Cir. 1980). The construc-

tion of statutes under which an aqency

claims its actions are unreviewable is

a question for the courts rather than

the administrative agency. Barlow v.

Collins, 397 U.S. 159, 165 (1970), see

also Texas Gas Transmission Corporation

v. Shell Oil Company, 363 U.S. 263,

268-70 (1960); Yardin v. Kentucky Uti-

lities Company, 390 U.S. 1, 14 (1968)

(Harlan, J., daissenting). Preclusion

must appear on the face of the act, and

Cannot be established from a mere failure

to specifically allow review. OMDunlop v.

Bachowski, supra; Citizens to Preserve

Overton Park, supra; Wirtz v. Bottle

Blowers Association, 389 U.S. 463, 468

(1968); Abbott Laboratories v. Gardner,

supra; National Corn Growers Association,

103a

Supra; Legislative History, S. Doc. No.

248, 79th Cong., 2d Sess., 212, 275,

quoted in Heikkila v. Barber, supra, 345

U.S. at 232. Ambiquous'9 language

referring to “finality” will be construed

as desiaqnating administrative finality

and ripeness for review rather than

preclusion of judicial review. Johnson

v. Robinson, 415 U.S. 361 (1974); Harmon

vv. Brucker, 355 U.S. $79 (1958);

Shaughnessy v. Pedreiro, supra; Ralpho v.

Bell, 569 F.2d 607 (D.C. Cir. 1977);

Arlington Oil Mills, Incorporated v.

Knebel, 543 F.2d 1092, 1098-99 (Sth Cir.

1976). By contrast, the generous

provisions aranting reviewability are to

be hospitably construed. Nunlop v.

Bachowski, supra; Abbott Laboratories v.

Gardner, supra; Shaughnessy v. Pedreiro,

Supra; cf. American School of Magnetic

104a

Healing v. McAnnulty, 187 J.S. 94 (1902).

Particularly where the party seeking

review is the beneficiary of the statute

in question, there is a stronq presump-

tion that Congress intended reviewability

to insure that its statutory objectives

would be realized. Barlow v. Collins,

supra, 397 U.S. at 167; see also id. 397

U.S. at 174-75 (separate opinion of

Brennan, J.).

The intent of the Congress which

enacted 7 U.S.C. § 1429 is an academic

question.4/ The Conaqress which

enacted the Omnibus Budget Reconciliation

Act of 1982 unquestionably did not intend

77 Two courts have spoken to its,

finding reviewability. Ganzale Vv.

Greeman, 334 F.2d 579 (D.C. Cir. LEI

National Corn Growers Association v.

Bergland, 471 F. Supp. 1199, 1205-06

(S.). lowa 1974); appeal dismissed, 411

F.2d 730 (8th Cir. TSB0), vacated on

other grounds, 484 F.Supp. 13427 (s.0.

Towa 1980).

105a

to make action under § 101 thereof

unreviewable../ Paragraph (d)(6)(A)

5/ section 191, naragraph (d)(6)

(6)(A) The district

courts of the United

States are vested

with jurisdiction

specifically to

enforce, and to pre-

vent and restrain any

person from violating

any provision of this

subsection or any

requlation issued

under this subsec-

tion. Any such civil

action authorized to

be brought under this

subsection shall he

referred to the

Attorney General for

appropriate action.

Nothing in this sub-

section may be con-

strued as requiring

the Secretary to

refer to the Attorney

General minor viola-

tions of this subsec-

tion whenever the

Secretary believes

that the administra-

tion and enforcement

of this subsection

FOOTNOTE CONT'D ON NEXT PAGE

106a

of § 101 qrants the Secretary access to

this Court for actions to prevent and

FOOTNOTE CONT'D FROM PREVIOUS PAGE

would be adequately

served by suitable

written notice or

warning to any person

committing such

violation.

(B) Any person who

willfully violates any

provision of this subh-

section or any requla-

tion issued under this

subsection, or who

willfully fails or

refuses to remit any

amounts due thereunder

shall be liable, in

addition to payment of

the full amount due

plus interest, for a

civil penalty (to be

assessed by the

Secretary) of not more

than $1,900 for each

such violation which

shall accrue to the

nited States and may

be recovered in a civil

suit brought by the

United States.

vided in subparagraphs

FOOTNOTE CONT'D ON NEXT PAGE

1N7a

restrain any violation of § 101 of the

Omnibus Budget Reconciliation Act. There

is no evidence Congress intended this

court to re entertain such actions while

precluded from inquiring into their

legality of the underlying deduction.

Paragraph (d)(6)(B) creates a quasi-

Criminal action for violation of the

deduction plan. There is no evidence

that Congress intended this Court to

entertain such while precluded from exam-

ining the legality of the requlation

being violated. Paraqraph (6)(c) unequi-

vocally indicates the availability of

equitable remedies.

A lona-established canon of statu-

FOOTNOTE CONT'D FROM PREVIOUS PAGE

(A) and (B) shall be in

addition to, and not

exclusive of, remedies

otherwise provided at

law or in equity.

tory construction requires that this

Court construe § 101 of the Omnibus Bud-

get Reconciliation Act as a whole.

Weinberger v. Hynson, Westcott & Dunnina,

Incorporated, 412 U.S. 609, 633-34

(1973); °ederal Trade Commission v..-

Manacer, Retail Credit Company, 515 F.2d

645, 652-53 (4th Cir. 1974); D'Antoni,

Incorporated v. Great Atlantic & Pacific

Tea Company, 496 F.2d 1378 (5th Cir.

1974); City of New York v. Train, 494

F.2d 1033, 1049-50 (D.C. Cir. 1974),

aff'd. 420 U.S. 35 (1975); 3.S.V. Phar-

maceutical Corporation v. Richardson, 461

F.223, 227 (9th Cir. 1972), aff'd. 412

U.S. 655 (1973); "Inited States v. Hunter,

459 F.2d 205, 210-11 (4th Cir.), cert.

denied, 409 U.S. 934 (1972), reh'a

denied, 413 U.S. 923 (1973); Cardno v.

Finch, 311 F.Supp. 251 (E.9. La. 1970).

109a

As applied to § 191 of the Omnibus Budget

Reconciliation Act, this principal

requires that the availability of equit-

able remedies be extended to all portions

of that section, now codified at 7 U.S.C.

§ 1446(C) & (d).

Additionally the determination by

the Secretary which is the subiect of

this action, 48 Fed. Req. 11,253 (March

17, 1983), replaces of the earlier deter-

mination of September 24, 1983, 47 Fed.

Req. 42,128 (1982). Collection of the

determination of September 24, 1982 was

enjoined by this Court's Order of January

11, 19863. Because of the relationship

between this action and this Court's

Order of January 11, this Court has the

power to review the Secretary's determi-

nation as part of its inherent contempt

power.

110a

* * *® the power of a

court to make an order

carries with it the

equal power to punish

for a disobedience of

that order, and the

inquiry as to the

question of disobe-

dience has been, from

time immemorial, the

special function of

the court. And this

is no technical rule.

In order that a court

may compel obedience

to its orders it must

have the right to

inquire whether there

has been any disobe-

dience thereof.

llla

In re Debs, 158 U.S.

564, 594-95 (1895).

This Court finds its inherent power quite

sufficient to sustain its review of the

Secretary's determination. Shillitani v.

United States, 384 U.S. 364, 370-71

(1966); McComb v. Jacksonville Paper

Company, 336 U.S. 187, 193 (1949);

Penfield Company v. Securities and

Exchange Commission, 330 U.S. 585,

593-94, reh'g. denied, 331 U.S. 865

(1947); Ex parte Robinson, 86 U.S. (19

Wall.) 505 (1873); United States v.

Fidanian, 465 F.2d 755, 757-58 (5th

Cir.), cert. denied, 409 U.S. 1044

(1972); United States v. Dickinson, 465

P.246 496, $10 (Sth Cir. 1972); In re

Russo, 53 F.R.D. 564, 573 (C.D. Cal.

1971); In re Williams, 306 F.Supp. 617

112a

(D.0.C. 1969); Rhodes v. Houston 202

F.Supp. 624, 630 (D. Neb.) aff'd 309

F.959 (8th Cir. 1962).

This Court concludes that the

actions of the defendant Secretary under

§ 101 of the Omnibus Budget Reconcilia-

tion Act, now 7 U.S.C. S&S 1446(c) & (d)

are judicially reviewable,

IV.

COMPLIANCE WITH THE ORDER OF

JANUARY 11, 1983

The defendants may regard the

mention of the contempt power as mere

ritual invocation. In the Motion to Stay

filed with the United States Court of

Appeals for this circuit, the defendants

assert:

We are unaware of any

indication in the

record or elsewhere

that the Secretary

113a

will refuse to obey

the final decision by

the courts regarding

this program.

Defendants' Motion for an Immediate Stay

Pending Appeal And, In The Alternative, A

Petition for a Writ of Mandamus at 18,

This Court, however, has a very

serious question: have the defendants,

in good faith obeyed the final decision

of the courts regarding their program of

September-January, 1982. In this Order

of January 11, 1983, this Court

Summarized its conclusions of law,

saying:

a ) The

Secretary's "“determ-

ination" imposing the

deduction was sub-

Stantive rule-making,

and thus came within

the purview of 5

U.S.C. $ $53.

b) The

Department of

Agriculture has waived

the “benefits” excep-

114a

tion, and thus cannot

take advantage of the

exemption of 5 U.S.C.

§ 553(a)(2).

c) There was no

"good cause" which

would excuse the

Secretary from the

notice and comment

requirements of 5

U.S.C. § 553(b(B).

Order at 45-46, 558 F.Supp. at

1022.

The Notice of Determination for 1982-83

Milk Price Support Program, 48 Fed. Req.

11,253 (Mar. 17, 1983), announced a

deduction requirement legally identical

to that voided by the Order of January

11, 1983. The record shows that it is

normal Department procedure that all

material for publication in the Federal

Counsel of the Department of Agriculture

before publication. See Hearing of April

115a

12-14, Tr. 276 (Shaw); Transcript of

Preliminary Injunction Proceedings, Jan

3, 1983, Tr. 219-20, testimony of Dr.

Charles N. Shaw responding to questions

by the Court.

Over the signature of the defendant

Secretary of Agriculture there appears

the statement:

The Regulatory

Flexibility Act (5

U.S.C. 601 et seq.)

is not applficabf[e to

this notice of deter-

mination since CCC is

not required by 5

UeoeCe 953 OF any

other provision of

law to publish a

notice of proposed

rulemaking with

respect to the sub-

ject matter of this

notice. While the

seeretary of

Agriculture has

determined that CCC

will voluntarily

comoly with the pro-

visions of 5 U.S.C,

553(b) and (c), the

Regulatory Flexibil-

ity Act does not

116a

apply in the case of

voluntar agency

compliance with pro-

posed rulemaking

requirements.

48 Ped. Reg. at

11,253. (emphasis

added).

This statement indicates that the

Secretary's compliance with the notice

and* comment requirements of 5 U.S.C.

§ 553 is not required, is voluntary.

This issue was fully discussed in this

Court's Order of January 11. See Order,

esp. 12-49, 553 F.Supo. at 1010-22. The

question of whether or not the Secretary

was required to adhere to the notice and

comment requirements of 5 U.S.C. 6 553

was resolved emphatically against the

defendants. The Secretary is required to

comply.

This Court has discovered only one

item expanding on this statement of the

‘

117a

Secretary's power to dispense with the

rulemaking requirements of 5 U.S.C.

§ 553. This is an introductory phrase to

a headnote and a footnote to the headnote

in the defendants’ Memorandum to this

Court, filed April 11, 1983, The head-

note begins:

Assuming That The APA

Procedural Require-

ments Are Applic-~

able, ..,

Defendane gs °

Memorandum at 34.

The footnote reads:

In opposing the

initial motion for a

Preliminary injunc-

tion, defendants took

the position that the

rulemaking require-

ments of the APA were

inapplicable to the

Secretary's September

24, 1982, determina-

tion implementing the

59 cent deduction

because it "related

to" a "grant* or

"benefit*" under 5

U.8.C. € 553(a)(2).

118a

Defendants also

argued that although

former Secretary of

Agriculture Clifford

M. Hardin had

announced on July 20,

iS fk 2 that the

Department would as a

"matter of policy"

voluntarily utilize

the APA's notice and

comment procedures,

such a policy state-

ment did not consti-

tute binding law.

The defendants

have not abandonded

these positions and

accordingly incor-

porated herein by

reference those arqu-

ments. See Defen-

dants' Memorandum Of

Points and Authori-

ties in Opposition to

Motion for Prelimin-

ary Injunction, pp.

29-34. However, in

view of the uncontro-

verted facts set out

below showing that

the Secretary has

fully and literally

complied with the

APA's rulemaking

requirements, with

regard to the deter-

mination to impose

the 50-cent deduction

119a

as of April 16, and

because the Secretary

has decided to make no

attempt to seek legal

approval to collect

the deduction based

on the September 24,

1982 determination,

the Secretary does

not urge those

arguments at this

juncture.

Defendants’ Memorandum, foot-

note at 34.

In the Order of January 11, 1983,

this Court addressed the position

advanced in the ahove-quoted footnote, at

14-20, 558 F.Supp. 1010-13. This

material speaks with sufficient force and

Clarity that I reproduce a substantial

portion verbatim:

{beainning of quotation]

[T)]he Administrative Conference of

the United States recommended that

agencies afford the public the opportun-

ity to participate in rule-making bearing

120a

on matters mentioned in 5 U.S.C.

§ 553(a) (2), the exemptions of that pro-

vision notwithstanding. On July 24,

1971, the Secretary of Agriculture

publis.ied an announcement that, effective

that date, the Department of Agriculture

would follow the reauirements of 5 U.S.C.

§ 553(b) and (c). 36 Fed. Rea. 13,804

(July 24, 1971) 5/

In their brief, the defendants con-

tend that this was merely a voluntary

undertaking, a general statement of

policy, which "does not impose any rights

and obligation. ..- +" De fendants'

Memorandum of Law at 33, quoting Texaco

67 “The Secretary did state that

the Department would continue to use the

"good cause" exceptions provided by 5

U.S.C. § 553(5)(3), Dut pledaed that the

Department would use these sparingly,

only when there was substantial basis for

their use, and observing full procedural

formalities involved in their use. 36

Ped. Req. 13,804 (July 24, 1971).

121a

Inc. v. Federal Power Commission, 412

F.2d 740, 744 (3d Cir. 1969).

While a general statement of policy

does not impose riahts or obliaations, I

find that the waiver made by the

Secretary of Agriculture in 1971 does

create rights and obligations. Thus, as

with the Notice of Determination in the

instant case, it is the substance of the

Secretary's action rather than the label

given his action which controls.

Columbia Broadcasting Systems, Inc. v.

United States, supra; Cerro Metal

Products v. Marshall, 620 F.2d 964, 981

(3d Cir. 1980); 3rown Express, Inc. v.

United States, 607 F.2d 695, 700 (5th

Cir. 979); Lewis-Monta v. Secretary of

Labor, 469 F.2d 478, 481 (2d Cir. 1972);

Texaco, Inc. v. Federal Power Commission,

412 *.2d 740, 744 (30 Cir. 1969); City of

122a

New York v. Diamond, 379 Ff. Supp. 503,

518 (S.NO.N.Y. 1974); Pharmceutical

Manufactures Association v. Finch, 307 F.

Supp. 858, 863 (D. Del. 1970).

The substantive impact of 36 Fed,

Req. 13,804 (1971), was; decided by the

District of Columbia Court of Appeals in

the case of Rodway v. -United States

Department of Agriculture, 514 F.2d 809

[Bale CaP. 19735) Therein, Judqe J,

Skelly Wright stated:

On July 24, 1971,

however, as a result

of a recommendation

of the Administrative

Conference of the

United States, "SDA

promulgated a regqula-

tion making ‘the pro-

cedural requirements

of Section 4 of the

APA [5 U.S.C. § 533]

applicable to all of

its rule-makina

relating to ‘public

property, loans,

benefits, or con-

tracts.’ The requla-

tion was effective

123a

immediately. 36 Fed.

Reg. 13,804. | eS

of course, well

settled that validly

issued administrative

regulations have the

force and effect of

law [Citations

omitted. ] Thus, the

regulation fully

bound the Secretary

to comply thereafter

with the procedural

demands of the APA.

514 F.2d at 814.

While the defendants contend that

the holding and the reasoning of

Rodway is in error, it is endorsed by

courts in the Second, Be 4 the

Third,2/ the Pifth,2/ and the Ninth

7/ Tyson v. Maher, 523 F.2d 972,

375 _6 744 Cir. 1975)

8 / Reyes v. Klein, 411 F.Supp.

7241 (D.N.J. 1976).

9/ Arlington Oil Mills Inc. Vv.

Knebel, 543 F.2d 1092 (5th Cir. 1976);

See also Crown Zellerbach Corporation v.

Marshall, 441 F.Supp. 1110, TITS (E.0.

)(similar waiver of § 553(a)(2)

FOOTNOTE CONT* D ON NEXT PAGE

124a

Circuits ,.0/ and the defendants have

cited no case in which a court has

rejected Rodway.

FOOTNOTE CONT'D FROM PREVIOUS PAGF

exemptions is legally binding on the

Department of Labor).

10/ Anderson v. Butz, 428 F.Supp.

345, 249 (E.D. Cal. 1975), aff'd 550 F.2d

459 (9th Cir. 1977).

I also draw the parties’ attention

to the recent case of Buschmann v.

Schweiker, 676 F.2d 352 (9th Cir. 1982).

Therein at nage 356, footnote 4, the

court said:

The Administrative Procedures

(sic) Act is applicable to

rulemaking by the Secretary of

Health and human Services.

Although 5 U.S.C. & 553(a) (2)

would have exempted the rule

making procedure now in dis-

pute, the then Secretary of

Health Education and Welfare,

in a policy statement dated

January 28, 1971, (36 Fed Reg.

2532), required all agencies

utilize the public participa-

tion and officers in his

department to procedures of

§ 553. The Secretary does not

contest his yeqet <blicatton to

comply w | procedures.

[emphasis added]

Accord, tewis v. Weinberaer, 415 F.Supp.

125a

The defendants concede that the 1971

announcement must be regarded as “an

announcement of how an agency may he

expected to exercise discretion which it

possesses (Defendants' Memorandum of Law

at 33). Counsel for the defendants ac-

knowledge that the proper course for the

Secretary to withdraw from the 1971 posi-

tion, should the Secretary be determined

to do so, is tO announce a new position

with respect to the Administrative Proce-

dure Act requirements and thereby warn

those affected of the new policy. Such a

new policy will have sweeping ramifica-

tions and impact on the lives of many

people. Tt is manifestly unfair for the

defendants to announce it in a way that

does not aive notice to those who are

126a

affected, such as in briefs in litiqa-

tion.

[end of quotation]

Order at 17-20, 558 F.Supp. 1010-13

[footnotes renumbered].

The defendants’ failure to acknowl-

edge the existence of this portion of

this Court's Order notwithstanding, this

Court's Order as quoted above was the

final decision by the courts as to the

"grant or benefit" exception to 5 U.S.C.

§ 553 before their Memorandum was filed

with this Court. The time for appeal

challenging this Court's Order of

January 11, 1983 expired on March 14,

1983, the first business day after the

60th day after the filing of this Court's

Order. See Fed. 8. App. ©. 4(a)(1). The

defendants did not appeal this Court's

Order of January 11. With the expiration

127a

of the appeal period, the Order of

January 11, 1983 became the law of the

case. The Notice of Determination was

published on March 17, 1983, and the

defendants' Memorandum was filed with

this Court on April 11, 1983.

It appears from the announcement

above that the defendants concede that

they cannot collect moneys which would

have been due under the deduction

requirement imposed September 24, 1982,

but regard as untouched their position

that the Administrative Procedures Act is

not applicable to the Secretary's

attempts to impose these deduction

reauirements. The Court cannot overlook

the virtual identity of lanquage in the

announcements of September 24, (47 Fed.

Reg. 42,129 and 47 Fed. Reg. at 42,112),

of November 30, 1982 (47 Ped. Rea.

128a

53,831) and of March 17, 1983 (48 Fed,

Reg. 11,253). See Order at 9, 11 & n.5,

558 F.Supo. at 1009-10 & n.5. This

Court's Order of January 11 was not

restricted to the specific question of

the deduction at issue.

The Secretary's compliance with 5

U.S.C. § 553 is mandatory. If the Order

can be given a contrary reading it is by

a path of reasoning this Court has not

yet discerned.

The law of the case controls. This

proposition needs no citation of authori-

ty. Tf there is authority to the con-

trary -- that is, authority allowing the

defendants, at their discretion, to

iqnore a final order of the courts --

this Court has not yet found it. Tf such

authority exists, and if the defendants

adhere to this position, this Court

129a

expects they will elevate the discussion

to a fullness and dignity greater than a

footnote.

This Court finds as a fact that the

Statement contained in the Notice of

Determination of March 17, 1983 stating

that “the CCC is not required by 5 U.S.C.

§ 553 or any other provision of law to

publish a notice of rulemaking with res-

pect to the subject matter of this

Notice" and the restatement of that posi-

tion in the footnote to their Memorandum

cannot he read except as a refusal to

obey of this Court's Order of January 11,

1983.

The defendants declare that they

have met the requirements of the Adminis-

trative Procedure Act. If this were so,

this Court would face a difficult choice.

I would have to decide if the challenae

to this Court's authority is so offensive

as to taint any rulemaking in which it

was voiced.

Fortunately such choice thrust upon

the Court. I find that the Secretary has

nok met the requirements of the Adminis-

trative Procedure Act. Even if this

Court could overlook the challenaqe to its

authority, the Secretary's attempted

rulemaking is so flawed that it cannot

stand.

SCOPE OF REVIEW

In this case, the key legal issues

is the scope of this Court's review.

Although the defendants do not provide

any clear exposition of this topic, by

various comments throuqhout their Memo-

randum, they indicate that they believe

131a

this case involves question on which this

Court is confined to a very restricted

review..!/ Although the defendants do

TT7 There is no discrete discussion

In the defendants' Memorandum which spe-

cifically addresses the question of the

scone of review. Having reviewed the

defendants' memorandum, I believe the

Followina quotations are an accurate

indication of the defendants' position on

this question. Citations are omitted

from these quotations.

The scope of this

review is narrow.

eo e « TRe Court’s

function on review is

simply to ensure that

a rational basis

exists for the Secre-

tary's decision.

Nefendants' Memoran-

dum at 43.

[Tlhis Court's review

of the Secretary's

decision in a case

such as this is

limited to ascertain-

ing whether he has

provided an adequate

explanation of the

reasons for imposing

the deduction.

FOOTNOTE CONT'D ON NEXT PAGE

132a

delineate their position, it appears that

they regard this as a case in which this

Court is reviewing a factual judqment

made by the Secretary.

This Court takes a different view.

The fundamental question under review is

not one of facts, but of law: what is

the proper construction of § 101 of the

Omnibus Budget Reconciliation Act of

1982. It is axiomatic that the review of

conclusions of law, such as questions of

FOOTNOTE CONT'D FROM PREVIOUS PAGE

Id. at Sti.

This Court's role is

BAaG3CG@G tO .« «6 «

determining whether

the Secretary has

supplied adequate

reasons and explana-

tions for his deci-

sion to permit the

Court to review the

underlying rationali-

ty of his action.

Id. at 56.

statutory interpretation, is under

Standards different from the review of

findings of fact. The Supreme Court in

Citizen to Preserve Overton Park,

Incorporated v. Volpve, 401 U.S. 402 at

415 (1971), noted this distinction,

beginning its analysis of the scope of

review by saying:

The court is first

required to decide

whether the Secretary

acted within the

scope of his authori-

ty. Schilling v.

Rogers, 363 U.S. 666,

676 (1960). This

determination natu-

rally beqins with a

delineation of the

scove of the Secre-

tary's authority and

discretion. tt. Jaff,

Judicial Control of

Administrative Action

359 (1965).

Similarly, the controlling statute, 5

G.8. 8 70612/ indicates that ques-

tions of law are handled differently than

FOOTNOTE CONT'D ON NEXT PAGE

§/96. Scope of review

To the extent necessary to decision

and when presented, the reviewing

court shall decide all relevant

questions of law, interpret consti-

tutional and statutory provisions,

and determine the meaning or appli-

cability of the terms of an aqency

action. The reviewing court shall

(1) compel agency action un-

lawfully withheld or unreasonably

delayed; and

(2) hold unlawful and set

aside agency action, findings, and

conclusions found to be --

(A) arbitrary, capri-

cious, an abuse of discretion,

Or otherwise not in accordance

with law;

(8B) contrary to constitu-

tional right, rower, orivilege,

or immunity;

(Cc) in excess of statu-

tory jurisdiction, authority,

Or limitations, or short of

Statutory right;

135a

questions of fact. The opening sentence

of that section to the courts, specifi-

cally reserves questions of statutory

interpretation and under § 706(2)(c),

this Court is to “hold unlawful and set

aside agency . . . conclusions found to

be -- in excess of statutory jurisdic-

FOOTNOTE CONT'D FROM PREVIOUS’ PAGE

(D) without observance of

procedure required by law;

(E) unsupported by sub-

Stantial evidence in a case

subject to section 556 and 557

of this title or otherwise

reviewed on the record of an

agency hearing provided by

Statute; or

(F) unwarranted by the

Facts to the extent that the

facts are subject to trial de

novo by the reviewing court.

In making the foregoing determina-

tions, the court shall review the

whole record or those parts of it

cited by a party, and due account

shall be taken of the rule of

prejudicial error.

tion, authority, or limitations."

In reviewing an administrative aqen-

cy's interpretation of a statute, the

agency's view is entitled to some defer-

ence. National Labor Relations Board v.

Bell Aerospace Company, 416 U.S. 267, 275

(1974); Zuber v. Allen, 396 U.S. 168,

192-93 (1969); Undall v. Tallman, 380

U.S. 1 (1965); Patagonia Corporation v.

Board of Governors of the Federal Reserve

System, 517 F.2d 803 (9th Cir. 1975).

The final determination of question of

law, however, remains for this Court,

which although it may adoot the agency's

interpretation, is not required to do.

Volkswaqenwerk Aktienaqesellschaft v.

Federal Maritime Commission, 390 U.S.

261, 272 (1968); Estate of Sanford v.

Commissioner, 308 U.S. 39, 52 (1939);

Nestern Coal Traffic Leaaque v. United

137a

States, 694 F.2d 378, 383-84 (Sth Cir.

1982); Patagonia Corporation v. Board of

Governors, supra, 517 F.2d at 812; Reryl-

lium Corporation v. United States, 449

F.2d 362, 366 (Ct. Cl. 1971); Sunstrand

Turbo v. United States, 389 F.2d 406, 411

(Ct. Cl. 1968); First National Bank in

Billings v. First Bank Stock Company, 306

F.2d 937, 941 (9th Cir. 1962); ‘Inited

States v. Ekberg, 291 F.2d 913, 921-22

(8th Cir.), cert. denied, 368 U.S. 920

(1961); General Railway Signal Company v.

Washington Metropolitan Area Transit

Authority, 527 F.Supp. 359 (D.D.C. 1979),

aff'd. 664 F.2d 296 (D.C. Cir. 1980); cf.

fsen. Cir. 1982) (interoretation of a

document is a auestion of law reserved

for the courts); Crowder v. United

States, 255 F.Supp. 873 (N.N. Cal. 1964),

aff'd. 362 F.2d 1911 (9th Cir. 1964)

(same).

In construing statutes, it is the

intent of the Congress which must con-

trol, not the views of either the agency

or the courts. Southeastern Community

Colleqe v. Davis, 442 U.S. 397, 411-12

(1979); Securities & Exchange Commission

vy. Sloan, 436 U.S. 103, 118 (1978):

United States v. Larinoff, 431 U.S. 864,

874 & n.12 (1977); Federal Maritime Com-

mission v. Seatrain Lines, Incorporated,

411 U.S. 726, 745-46 (1973); Volkswagen-

werk Aktiengesellschaft, supra, 390 U.S.

261, 272; National Labor Relations Board

v. Brown, 380 U.S. 278, 291 (1965);

Western Coal Traffic League, supra;

Greater Boston Television Corporation v.

Federal Communications Commission, 444

P.20 641, $50 (D.C. Cif. WWrebe Gert.

denied, 403 U.S. 923 (1971); Committee

for Independent P-I v. Smith, 549 F.Supp.

985 (W.D. Wash 1982); University of

Richmond v. Bell, 543 F.Sup 321 (E.ND. Va.

1982); Union Oil Company of California v.

United States Department of Energy, 539

F.Supp. 717 (C.D. Cal. 1982). In the

area of statutory construction, adminis-

trative aqencies hold no special exper-

tise as against the courts. Federal

Election Commission v. Democratic Senato-

rial Campaign Committee, 454 U.S. 27,

31-32 (1981); Barlow v. Collins, 397 U.S.

159, 166 (1970); Western Coal Traffic

League, supra, 694 F.2d at 383-84. This

is particularly so when the statute in

question is, as is § 191 of the Omnibus

Act, legislation defining the outer

limits of the agency's powers. As the

Supreme Court said in Social Security

140a

Board v. Nierotko, 327 U.S. 358, 369

(1945), "An agency may not finally decide

the limits of its statutory power. That

is a judicial function." See also

Western Coal Traffic Leaque, supra, 694

F.2d at 384.

This rule of judicial control rests

on the realization that the construction

of controlling statutes is frequently a

process ripe with policymaking considera-

tions, and policymaking remains preemi-

nently a congressional, not an adminis-

trative task. American Ship Building

Company v. National Labor’ Relations

Board, 380 U.S. 300, 318 (1965); 4i-Craft

Clothing Company v. National Labor Rela-

tions Board, 660 F.2d 919, 915 (3d Cir.

1981).

Thus, while this Court should give a

certain deference to the construction

which the Secretary has given § 101 of

the Omnibus Budget Reconciliation Act,

where this court is “convinced that a

certain reading, or application, of the

Statute is the correct -- or the only

faithful -- reading or application, [this

Court] should intervene and so declare."

L. Jaffe, Judicial Control of Adminis-

trative Action 572 (1965).

The deference which is due to an

administrative construction of a statute

varies with the factual circumstances of

each case, In this case, this Court

finds absent of the factors which would

call for deference to the Secretary's

construction. This is an entirely new

Statute, authorizing an unprecedented

program, so that there has been no londg-

Standing congressional acquiescence. Cf.

International Brotherhood of Teamsters v.

142a

Daniel, 439 U.S. 551, 566 n.20 (1979);

Hi-Craft Clothing Company, supra, 660

F.2d at 916. The Nepartment of Aaricul-

ture did not play a controlling role in

shaping this legislation. Indeed, the

Secretary has described the enactment of

this statute as a defeat in Congress.

See Dairy Policy Statement by Agriculture

Secretary Jonn R. Block, 4, 8, 10

(March 16, 1983); cf. Ford Motor Credit

Corporation v. Milhollin, 444 U.S. 555

(1980); di-Craft Clothing Company, supra.

Further, the matters at issue in the

construction of this statute are matters

OF qeneral legislative policy rather than

matters close to the everyday administra-

tion of the Department's proaram, Cf.

Process Gas Consumers Group v. United

States Department of Agriculture, 694

F.2d 778, 791-92 (D.C. Cir. 1982); Mid-

143a

Louisiana Gas Company v. Federal Energy

Regulatory Commission, 664 F.2d 530,

534-35, reh'q. denied, 669 F.2d 729 (Sth

Cie. 1961). Finally, the implementation

of this statute represents a siqnificant

change in Department policy. That a

policy is in flux makes it all the more

important that statutory construction be

left to the courts. Greater Boston Tele-

vision Corporation, supra, 444 F.2d at

352; Marine Space Enclosures, Incorpo-

rated v. Federal Maritime Commission, 420

F.2d 577, 585 (D.C. Cir. 1969); New

Castle County Airport Commission v. Civil

Aeronautics Board, 371 F.2d 733, 735

(D.C. Cir. 1966, cert. denied, 387 U.S.

930 (1967).

Finding an absence of factors which

would tend to favor deference to the

agency's interpretation, and the presence

144a

of factors which caution against such

deference, this Court concludes that the

construction of this statute is a task

for this Court rather than for the

defendants. National Labor Relations

Board v. Hearst Publications, Incorpo-

rated, 322 U.S. 111, 130-31 (1944);

Western Coal Traffic Leagque, supra, 694

F.2d at 383-84; Charter Limousine, Incor-

porated v. Dade County Board of Commis-

sioners, 678 F.2d 586, 588 (5th Cir.

1982); 4. W. Wilson Company v. United

States, 580 F.2d 33 (2d Cir. 1978).

Finally, this Court's review of

findings of fact determined by the Secre-

tary is not so deferential as the defen-

dants appear to believe, While this

Court is not to substitute its judgment

for that of the administrative agency in

matters of fact-finding, review is not to

be a rubber stamp. This Court is

required to give a “thorough, probing,

in-depth review" to insure that all rele-

vant factors have been considered.

Citizens to Preserve Overton Park, supra

401 U.S. 415, 4146; accord, Bowman Trans-

portation Incorporated v. Arkansas Best

Freight System, Incorporated, 419 U.S.

281, 285-86 (1974); Wawszkiewicz v.

Department of Treasury, 670 F.2d 296, 301

(D.C. Cir. 1981); Environmental Defense

Fund, Incorporated v. Costle, 657 F.2d

275, 283 (D.C. Cir. 1981)3 Diplomat

Lakewood, Incorporated v. Harris, 4613

F.2d 1909, 1018 (D.C. Cir. 1979); Home

Box Office, Incorporated v. Federal Com-

munications Commission, 567 F.2d 9, 34-36

(D.C. Cir.), cert. denied, 434 U.S. 829

(1977); American Frozen Foods Institute

146a

1976); American Paper Institute v. Train,

539 F.2d 328, 338 (D.C. Cir.), cert.

dismissed, 429 U.S. 967 (1976); Transcon-

tinental Pipe Line Company v. Federal

Power Commission, 488 F.2d 1325, 1329

(D.C. Cir. 1973); Medical Committee for

Human Riqhts v. Securities & Exchanae

Commission, 432 F.2d 659, 675 (D.C. Cir.

1970); Michigan Consolidated Gas Company

v. Federal Power Commission, 283 F.2d

204, 226 (D.C. Cir.), cert. denied, 364

U.S. 913 (1960); Aeron Marine Shipping

Company v. United States, 525 F.Supp.

$27, 535 (D.D.C. 1981).

With these principles in mind, I

turn to the construction of the statute

at issue in this case, § 101 of the Omni-

bus RBudqet Reconciliation Act, now codi-

fied as 7 7.S.C. 66 14446(c) & (da).

147a

VI.

STATUTORY CONSTRUCTION!3/

In this case, the Secretary's action

is clear. The legal basis for that

action, however, has not been precisely

defined. In imposing this deduction

requirement, the Secretary apparently

relies on a combination of statutory

authority and discretionary power.

The Secretary of Aqriculture is not

a primary lawmaker. His role is funda-

mentally one of law implementina. The

137 The defendants have brought to

this Court's attention several opinions

by other district courts in which the

Secretary's action has been upheld. Of

these, only one has dealt specifically

with the administrative law issue,

National Farmers' Organization v. Block,

“Pe - = e've S. or. ’

1983). I have reviewed this decision,

and find that the court therein appar-

ently accepts without examination the

construction which the defendants qive to

§ 101 of the Omnibus Budaqet Reconcilia-

tion Act. Thus, I helieve this Court is

the first to undertake an examination of

this issue.

148a

Secretary is an agent, created by the

Congress, delegated powers by the Con-

gress, and charged with carrying out

policies mandated by the Congress. Many

of the Secretary's actions, of course, do

have the force and effect of law, see

e.g., Rodway v. United States Department

of Aariculture, 514 F.2d 809 (D.C. Cir.

1975), but in his actions, the Secretary

must draw authority from legislative

delegation. He must implement the intent

of the Congress. While the Secretary may

draw on discretionary authority to carry

Out the intent of Congress, he does not

have authority, discretionary or other-

wise, to act outside that intent. His

discretionary authority is interstitial

to the legislative directive of the Con-

gress, not independent thereof. NInited

States v. Larionoff, 431 U.S. 864, 873 &

149a

n.12 (1977); Dixon v. United States, 381

U.S. 68, 74 (1965); Social Security Board

(1946), and cases cited therein;

Manhattan General Equipment Company v.

Commissioner of Internal Revenue, 297

U.S. 129, 134 (1936); Insurance of North

America v. Gee, 702 F.2d 411, 414 (24d

Cir. 1983); Oliver v. United States

Postal Service, 696 F.2d 1129, 1131 (5th

Cir. 19933); Meade Township v. Andrus, 695

F.2d 1006-1009-10 (6th Cir. 1982); Union

Oil Company of California v. United

States Department of Energy, 530 F.Supp.

717, 724-25 (C.M. Cal. 1982): 3rown v.

Harris, 491 F.Supp. 845, 847 (N.N. Cal.

1980); Dickinson, Administrative Justice

and Supremacy of Law 41 (1927); see also

Greater Boston Television Corporation v.

Federal Communications Commission, 444

150a

paign Clean Water, Inc. v. Train, 489

F.2d 492, 498 (4th Cir. 1973), vacated on

other grounds, 415 U.S. 36 (1975) (find-

ing that agency inaction violated other

Statutory language); Ross v. Community

Services, 396 F.Supp. 278 (D. Md. 1975)

(same).

In this Court, the Secretary con-

tends that his actions are taken pursuant

to the mandate of Congress as expressed

in § 101 of the Omnibus RBudget Reconcili-

ation Act of 1982, now? Bahi€ se

§§ 1446(c) & (d). While acknowledging

that the Congress did not explicitly

endorse every action which he has taken,

the Secretary argues that the essence of

his action is taken pursuant to § 101,

with any action not specifically autho-

rized therein based on the Secretary's

151a

discretionary power to effectuate the

intent of the Congress as expressed in

that statute.

In taking this position, the Secre-

tary gives a particular reading to para-

graph (d)(2) of §& 101, now codified as

7 U.S.C. § 1446(d)(2). It is the Secre-

tary's view that Congress mandated that

the Secretary save $60 million per month

by imposing the deduction requirement.

To carry out this mandate, the Secretary

argues, Congress implicitly gave the

Secretary plenary discretion as to his

course of action: he could do whatever

he felt was necessary to produce this

Savings. ‘Jnder this reading of 7 U.S.C.

§ 1446(d)(2), the Secretary was free to

disregard any other statute which he felt

interfered with his course of action.

See, @.g., Notice of Determination, 48

152a

Fed. Reg. at 11,255 (1983); Def. Memo at

45-47.

Having reviewed the statutory lan-

guage of 7 U.S.C. § 1446(d)(2), and § 101

of the Omnibus Budget Reconciliation Act

in its entirety, and having also consid-

ered the history of that provision, this

Court believes that it is far more rea-

sonable to give subsection (d)(2) a more

limited readina. Inder this construc-

tion, the Congress delegated only limited

authority to the Secretary. The Congress

calculated that a deduction program, if

implemented, would substantially reduce

the cost of the dairy price support pro-

gram. The Congress authorized the Secre-

tary to initiate rulemaking procedures

directed towards imposing the deduction

requirements. The Congress expected the

Secretary to implement this rulemaking.

153a

The Congress also expected and intended

that the Secretary would observe all

existing legal restraints on his

authority.

In construing this statute, there-

fore, this Court must decide whether the

various sources showing the intent of the

Congress point toward a qrant of plenary

discretion directed toward a single over-

riding financial qoal or toward a right

to initiate procedures within the con-

fines of the existing statutory system

surrounding milk price supports.

A. The Statutory Language.

The controlling source indicating

the intent of the Congress is the statute

itself. It is the statute, and not any

interpretation thereof, which the Con-

gress has enacted as law. Matala v.

Consolidated Coal Company, 647 F.2d 427,

154a

429 (4th Cir. 1981); Chicago Transit

Authority v. Adams, 607 F.2d 1284, 1289

(7th Cir. 1979), cert. denied, 446 U.S.

946 (1980); Pettis ex rel. United States

v. Morris-Knudsen Company, Inc., 577 F.2d

688, 672 (9th Cir. 1978) (“we assume

Congress said what it meant and meant

what it said"); Water Control Board v.

Train, 559 F.2d 921, 924-25 n.20 (4th

Cir. 1977); Sierra Club v. Train, 557

F.2d 485, 489 (Sth Cir. 1977); Carrier

Corporation v. United States, 534 F.2d

244, 248-49 (Ct. Cl. 1976); PRataqonia

Corporation v. Board of Governors of the

Federal Reserve System, 517 F.2d 803, $13

(9th Cir. 1975); Lykes Brothers Steamship

Company, Inc. v. United States, 513 F.2d

1342, 1349 (Ct. Cl. 1975); Dupuy v.

Dupuy, 511 F.2d 641 (5th Cir. 1975);

Frankfurter, Some Reflections on the

155a

Reading of Statutes, 47 Colum. L. Rev.

527, 535-38 (1947).

The statutory provision on which the

Secretary relies, § 191 of the Omnibus

Budget Reconciliation Act, is now codi-

fied as 7 U.S.C. §§ 1446(¢c) & (d).

Because several of the provisions of this

section are not germane to this discus-

sion, I beqin by outlining this statutory

material.

support system.

(da) "Notwithstanding any other

provision of law."

(1)(A) Support price will be

Sit 36'Ge

(8) Support price will be

readjusted in 1984.

ported by milk pur-

chases.

(2) The first 50-cent deduc-

tion is authorized.

(3)(A) The second 50-cent

156a

deduction is authorized,

but with a base period.

(B) Refund system.

on the second deduc-

tion.

(D) Period for refunds.

(4) Deductions collected are

to be remitted to the

cece

(5S) Parmers to keep records

and Secretary to have

general investigatory

power.

(6)(A) Courts to hear enforce-

ment actions.

(B) Civil fine for willful

violation.

cial relief.

(7) Secretary to cooperate

with existing programs.

This Court finds that a construction of

this statute requires specific considera-

tion of seven parts of this action: (c),

(4d), (4)(1)(A), (4)(1)(B), (4d)(1)(C),

(d)(2), and (d)(3)(A).

XX shall be supported at

157a

such level not in

excess of 90 per

centum nor less than

75 per centum of the

parity price therefor

as the Secretary

determines necessary

in order to assure an

adequate supply of

pure and wholesome

milk to meet current

needs, reflect

changes in the cost

Of production, and

assure a level of

farm income adequate

to maintain produc-

tive capacity suffi-

cient to meet antici-

pated future needs.

Such price support

Shall be provided

through the purchase

Of milk and the prod-

ucts of milk.

(4d) Notwithstanding any

other provision of

law --

(1)(A) Effective for

the period bheginnina

October 1, 1982, and

ending September 30,

1984, the price of

milk shall he sup-

ported at not less

than Ss73.76 per

hundred-weight of

milk containing 3.67

158a

per centum milkfat.

(83) Effective

for the fiscal year

beginning October 1,

1984, the price of

milk shall be sup-

ported at not less

than such level that

represents the per-

centage of parity

that the Secretary

determines $13.10

represented as of

October 1, 1983.

of milk shall he

Supported through the

purchase of milk and

the products of

milk.

(2) Effective for the

period beqinning

October 1, 1982, and

ending September 30,

1985, the Secretary

may provide for a

deduction of 50 cents

per hundred-weiqht

From the proceeds of

sale of all milk

marketed commercially

by producers to he

remitted to the Com-

modity Credit Torpo-

ration to offset a

portion of the cost

of the milk price

159a

support orogram.

Authority for requir-

ing such deductions

shall not apply for

any fiscal year for

which the Secretary

estimates that net

price support pur-

chases of milk or the

products of milk

would be less than

5 billion pounds milk

equivalent. Tf at

any time during a

fiscal year the

Secretary should

estimate that such

net orice support

purchases during that

fiscal year would be

less than 5 billion

pounds, the authority

for requiring such

deduction shall not

apply for the balance

of the year.

(3)(A) Effective for

the period beginning

April 1, 1983, ending

September 30, 1985,

the Secretary may

provide for a deduc-

tion of 50 cents per

hundred-weight, in

addition to the

deduction referred to

in paragraph (2),

from the proceeds of

sale of all milx

160a

marketed commercially

by producers to be

remitted to the Cor-

poration. The deduc-

tion authorized by

this subparagraph

shall be implemented

only if the Secretary

establishes a program

whereby the funds

resulting from_ such

deductions would be

refunded in the man-

ner provided in this

paragraph to produc-

ers who reduce their

commercial marketings

from such marketings

during the base peri-

od. For the purpose

of from of this para-

graoh, the hase peri-

od shall be the fis-

cal year beginning

October 1, 1981, or

at the option of the

Secretary, the aver-

age of the two fiscal

years beginning

October 1, 1980. The

Secretary may make

such adjustments in

individual bases

under this’ subpara-

graph as the Secre-

tary determines

necessary to correct

for abnormal factors

as the Secretary

determines should be

161a

considered in deter-

mining a fair and

equitable base,

B. The Congressional Budget "Line-Item".

Throughout these proceedings, the

Secretary has placed areat weight on

the fact that the Congress counted the

money that could be recovered from these

deductions as already having heen saved,

See e.g., Secretary's press statement, at

1, 4 (March 16, 1983); see also Hearina

of January 3, 1983, Tr. 158 (Shaw).

These savings are nowhere mentioned

in § 101 of the Omnibus Budaqet Reconcili-

ation Act. The Congress took credit for

these savings apparently by entering a

"line-item" in a congressional budaet

resolution, The precise location and

amount of this "line-item" has not been

brought to this Court's attention. The

defendants also have not specified which

162a

budget resolution it occurs in, whether

the preliminary or a later resolution.

The defendants have not indicated whether

the savings called for can be achieved

through the implementation of the first

50-cent deduction alone or would reauire

the implementation of both deductions.

The Congressional Record suggests that it

was nothing more than a Congressional

Budget Office projection assuming hoth

deductions and not based on current pro-

duction data. Tt appears to have been

less a studied mandate than a hypotheti-

cal arithmetic projection. See 128 Conq.

Rec. S. 190770 (reading of conference

report); 128 Cong. Rec. H. 6362 (State-

ment of Rep. Jeffords).

A review of the Conaressional 83udaet

Act, 2 U.S.C. S§ 621 et seg., shows that

in the budget process the Congress adopts

a series of Sudqet resolutions. These

resolutions are not statutes. They do

not have the force and effect of stat-

utes. They are never formally presented

to the President, and they become effec-

tive without his approval. For many

Purposes they are very important, but

they do not and they cannot repeal a

Statute. See H. Rep. No. 658, 93 Conq.,

24 Sess., reprinted i 1974 U.S. Code,

Cong. & Ad News 3462; Conf. Rep. No. 924,

934d Cong., 2d Sess., reprinted in 1974

U.S. Code Cong. & Ad. News 3591.

This Court also notes that the Con-

gress has not modified 7 U.S.C. § 1733,

which quarantees an open appropriation

for the Commodity Credit Corporation.

The Court finds that there is noth-

ing in the adoption of the "line-item" in

a congressional budget which would neces-

164a

Sarily authorize any action by the Secre-

tary not consistent with the provisions

of the United States Code, including but

not limited to the Administrative Proce-

dure Act, 5 U.S.C. § 551 et seq., and

7 U.S.C. §§ 1421(b) and 1441(a), 1446(c),

and 1446(b).

This Court further finds that the

adoption of a "line-item" in a conares-

Sional budget resolution is entirely

consistent with a reading of § 101 as

authorizing the Secretary to initiate

procedures to impose the deduction

requirements as specified in that statu-

tory provision.

This Court further finds there is no

credible evidence that the Congress

intended, by entering a budget "“"line-

item" to authorize the Secretary to

exclude consideration of financial impact

1645a

to dairy farmers.

C. Section 101, Paraaraph (c).

Turning then to the actual lanquage

of § 101, the first provision which is

of significance is paragraph (c), now

7 U.S.C. § 1446(c).

This paraqraph sets forth the fac-

tors which are to be considered in set-

ting a support price for milk. Specifi-

cally, this paragraph states that the

Secretary is to set a support price which

inter alia will “reflect changes in the

cost of production."

This is not a new provision. Tt has

been part of the United States Code since

at least 1973. By including it in § 101

of the Omnibus B3udget Reconciliation Act,

the Congress was plainly reenacting old

legislation rather than enacting a new

provision.

1645a

The reenactment of this lanquage is

meaningful only as a reaffirmation of

these criteria as the appropriate quide-

lines in making price support determina-

tions. Sound construction requires that

this paragraph be read in this way to

give it meaning.

The defendants apparently agree that

7 U.S.C. § 1446(c) establishes criteria

which control the Secretary's discretion

under § 1446(d). They would, however,

read this statute iqnoring the reference

to cost of production. [In their memoran-

dum, the defendants quote this subsec-

tion, Defs'. Memo. at 5, but in the only

substantive discussion in their argument,

the defendants state: "The major qoal of

the [dairy price support] program is to

promote the general welfare of the nation

by assuring that enough milk is produced

147a

to meet current needs and anticipate

future needs. 7 U.S.C. § 1446(¢c).”*

Defs'. Memo at 46.

This Court finds that this reading

of 7 U.S.C. § 1446(c) unsound, because it

would render the phrase "reflect changes

in the cost of production" a nullity.

This Court finds that the plain meaning

of this provision is that the Secretary,

in making a vorice support determination,

must consider the cost o€ production.

The Secretary's construction would vio-

late the axiom that a court should avoid

a construction of a statute which renders

any part thereof meaningless or insiqni-

ficant. Weinberer v. Hynson, Westcott &

Dunnina, Inc., 412 U.S. 609, 633 (1973);

United States v. Menasche, 348 U.S. 528,

538-39 (1955); Sunshine Coal Company v.

Adkins, 310 U.S. 381,: 392 (1940);

168a

Washington Market Co. v. Hoffman, 101

U.S. 112, 115 (1940) (preferred construc-

tion requires that "no clause, sentence

or word shall he superfluous, void or

insignificant"); Woodfork v. Marine Cooks

& Stewards Union, 642 F.2d 966, 970-71

(Sth Cir. 1981); National State Bank of

Elizabeth, New Jersey v. Smith, 591

F.223, 231 (3d Cir. 1979); state of

Allen, 558 F.2d 14, 20-21 (Ct. Cl. 1977);

Zeigler Coal Co. v. Kleepe, 536 F.2d 398,

406 (D.C. Cir. 1976); Pataaqonia Corpora-

tion v. Board of Governors of the Federal

Reserve System, 517 F.2d 803, 813 (9th

Cir. 1975); Marsano v. Laird, 412 F.2d

65, 70 (2d Cir. 1969); Tabor v. Ulloa,

323 F.2d 823, 824 (9th Cir. 1963);

Jptagrafft v. United States, 315 F.2d

200, 204 (4th Cir., cert. denied, 375

U.S. 818 (1963) ("We shall not and do not

169a

Suppose that Congress intended to enact

unnecessary statutory amendments").

D. Section 101, Paragraph (d)-(d)(1).

Section 1446(d) begins with the

phrase “Notwithstanding any other provi-

sion of law --"

This is an ambiguous phrase, which

must draw its meaning from the language

which precedes and that which follows it.

It is also, I believe, a reflection of

the fact that this statute, assembled in

the haste of conference committee discus-

sions, when the minds of the Congress

were largely distracted, was not drafted

with great precision. See also 128 Conq.

Rec. H. 6362 (Statement of Rep. Jeffords)

(Expressing concern of vagueness of

language).

This phrase must be read within its

context and draw its meanina from the

170a

Surrounding terms. There is nothing in

the record or the legislative history

which suqgests that it means anything

more than that the specific provisions of

§ 1446(4d) are regarded as refinements on

the existing price support system, to he

administered consistently with the exist-

ing system. Two specific provisions of

§ 1446(d) specifically Support this read-

ing of this "notwithstanding" language:

Paragraph (d)(6)(C) allows arievants the

"remedies otherwise provided at law or in

equity,” and paragraoh (d)(7) commends to

the Secretary's use federal, state and

local administrative systems.

If the "notwithstanding" clause is

allowed to draw its meaning from the

Surrounding lanquage, then para-

graph (d)(1)(A) in effect instructs the

Secretary of Agriculture as to the proper

answer he is to reach in setting the

basic support price: consideration of

the need to assure an adequate supply,

the changes in the cost of production,

and the need to meet future needs will

result in a minimum support price level

of $13.10.

This reading of this paragraph is

consistent with the plain meaning of the

language. It also challenges the Secre-

tary's reading of paragraph (d)(2). The

Congress has, in the past, set guidelines

for the Secretary, as in paragraph (c),

Hut has left final determination to the

Secretary. Paragraph (d)(1)(A) restricts

the discretionary power of the Secretary,

Since the Conqress has made a determina-

tion which it has heretofore delegated to

the Secretary. Congress presumably acted

with a relatively consistent overall

intent throughout this section. There-

fore, it is at least curious for the

Secretary to contend that the Congress

imolicitly gave him a sweeping grant of

discretion under some paragraphs of § 101

when under this paragraph it explicitly

restricted his discretion.

Paragraph (d)(1)(B) likewise

restricts the Secretary's discretion. He

is required to reset the support level in

October, 1984, to compensate for infla-

tion during the intervening period. As

with (d)(1)(A), this voaragraph cannot he

easily reconciled with the reading which

the Secretary qives to this statute.

First, as in paragraph (d)(1)(A), the

Congress has clearly restricted the

Secretary's discretion in setting the

minimum support price level. While no

specific dollars-and-cents figure is

173a

given for the new supoort orice, a formu-

la is given which will yield an exact

Support price. The Secretary clearly

does not have discretion to set the mini-

mum support price at other than the

figure which “represents the percentage

of parity that the Secretary determines

$13.10 represented as of October 1,

1983." This provision is aqain inconsis-

tent with the reading which the Secretary

would give to this statute because it

shows clearly that in resetting support

price levels in the future, the Secretary

is to consider inflation. This, in turn,

undercuts the reading which the Secretary

would give to this section. Tt would

require considerable inconsistency for

the Congress to make such concerns as

inflation mandatory with respect to one

paragraph, while aiving the Secretary

174a

complete discretion to dispense with them

with respect to another.

E. Section 101, Paragraph (d)(2).

The critical paragraph in this

section is (d)(2), which authorizes the

Secretary to impose the deduction which

is the subject of this litiaqation. Three

factors are to be noticed. First, the

authorizing lanquage is discretionary:

"the Secretary may nrovide. .. ." See

also Order at 23-24, 558 F.Supp at 1914.

Second, the only specifically mentioned

condition was that the anticipated sur-

plus exceed five million pounds” milk

equivalent. Because of the longstanding

history of surpluses far higher than this

and the widespread expectation that the

Surplus would continue to increase, it is

apparent that Congress expected this

condition to occur. Third, beyond the

175a

amount of the surplus, there is no expli-

cation of factors which the Secretary is

to consider in determining whether there

is or is not to be a deduction. The

mention of the level of surplus produc-

tion does not apvear to this Court to be

an exclusive criteria for deciding wheth-

er or not the deduction will be imposed.

Rather, it is a condition precedent to

the Secretary's authority; unless there

is a surplus of at least the prescribed

level, th

Secretary cannot impose this

deduction. This Court finds the exclu-

Sive mentioning of this factor, varticu-

larly in its context, no intent of by the

Congress to make this the factor which

the Secretary was to consider in deciding

whether there would be a deduction.

The Memorandum which the defendants

have filed with this Court Clearly sug-

gests that they take a contrary position.

Throughout the Memorandum, indeed

throughout the defendants' entire handl-

ing of this action, there has been an

implicit view that the impact of this

program on dairy farmers is a factor

which the Secretary was free to exclude

From his consideration. This position is

clearly imolied from the following state-

ment, quoted from the defendants' Memo-

randum to this Court at 53:

To the extent that

Intervenors' argu-

ments are based on

the financial impact

resulting from the

deduction, they are

entirely without

merit. Congress did

not tell the Secre-

tary that he should

refrain from imposina

the deduction because

of such consequences.

Rather, within cer-

tain other well-

defined limits Con-

gress left discretion

to the Secretary. As

177a

long as the Secretary

has remained within

those limits and

given adequate consi-

deration to the con-

gressional goals --

as he has -- he has

not abused his dis-

cretion.

Passages expressing a similar view can be

found at defendants’ Memorandum 51, 56-

57, 58, 60 and 62.

Having considered paragraph (4d)(2)

in the context of § 101, this Court Finds

that there is no explicit language con-

tained in that paraqraoh which authorizes

the Secretary to exclude impact to dairy

farmers from his consideration.

This Court also finds that there is

no necessary implication from para-

graph (d)(2), read either in isolation or

in the context of the entirety of § 101

of the Omnibus Budget Reconciliation Act,

which indicates that the Secretary of

Agriculture should exclude impact from

his consideration in deciding whether or

not to impose the deduction requirement.

This Court finds additionally that

there is nothing in the language of para-

graph (4)(2) or in any necessary implica-

tion therefrom which limits the applica-

Sility of Paragraph (c) or any Dart

thereof in the implementation of this

deduction requirement.

PF. Section 101, Daragraph (d)(3)(A),

This Daragraph authorizes the second

deduction, the deduction proposed but

not implemented. Whether the Secretary's

decision not to implement this provision

can be reconciled with his Claim that the

First deduction "might as well have been"

mandatory, I postpone momentarily.

(Dairy Policy Statement by Agriculture

Secretary John R. Block of (March 16,

179a

1983)).

Purther on in 7 U.S.C.

§ 1446(4)(3)(A) is languaae which does

not appear in 7 .S.C. 1446(4d)(2), and is

thus not directly connected with the

first 50-cent deduction requirement. The

final sentence of the paragraph provides:

"The Secretary may make such adjustments

in individual cases under this subpara-

graph as the Secretary determines neces-

Sary to correct for abnormal factors

affecting production and to reflect such

other factors as the Secretary determines

should be considered in determining a

fair and equitable base."

Although the language concerning

adjustments is discretionary ("may"

rather than "“"shall") Congress obviously

intended the Secretary to consider fair-

ness and equity. This explicit mention

180a

of the fairness and equity of base peri-

ods raises a serious question: was the

Secretary free to exclude such considera-

tions entirely from the implementation of

the first deduction requirement, the

subject of this litiqation? Ye was not

required to implement refunds under

7 U.S.C. § 1446(d)(2), but the language

of the statute does not suqgest a grant

of discretion to exclude fairness and

equity. See also H.R. Rep. No. 97-687,

97th Cong., 2d Sess. at R=-11 (1982) (it

was a goal of the House to have equity in

any reduction program).

G. Section 101 and Other Statutory

Provisions.

There is no lanquage in 7 U.S.C.

§ 1446(c) or (4) explicitly repealina

Or narrowing any other provision of the

United States Code, It is a firmly

181a

recognized canon of statutory construc-

tion that repeal of existing provisions

is not to be lightly implied. It is not

enough that the new orovision is not

merely arguably in conflict with the old.

There must he positive repuqnance.

YWnited States v. Welden, 377 U.S. 95,

102-03, n.12 (1964); United States v.

Borden, 308 U.S. 188, 198-99 (1939); Ely

v. Velde, 451 F.2d 1130, 1134-35 (4th

Cir. 1971); Fannina v. United Fruit Com-

pany, 355 F.2d 147 (4th Cir. 1966);

Baines v. City of Danville, Virginia, 337

F.2d 579, 590-91 (4th Cir. 1964) (en

banc), cert. denied, 381 U.S. 939

(1964).

Four provisions have been cited as

being in conflict with the reading which

the Secretary would give to 7 U.S.C.

§ 1446(d). These are 7 U.S.C. §&§

182a

1421(b), 1441(a), 1446(c), and 1446(b).

The defendants nowhere specifically

discuss 7 U.S.C. § 1421(b).14/ under

this section, the Secretary is required

to consider, inter alia, “the price

levels at which other commodities are

being supported." This Court finds as a

fact that there is no necessary conflict

7. Title 7 U.S.C. § 1421(b6) pro-

vides in pertinent part:

The following factors

shall be taken into

consideration in

determining, in the

case of any commodity

for which price sup-

port is discretion-

ary, whether a price-

Support operation

shall be undertaken

and the level of such

Support .. . (2) the

price levels at which

other commodities are

being supported, and,

in the case of feed

grains, the feed

values of such grains

in relation to corn,

between the provisions of 7 U.S.C.

§ 1421(6) and the provisions of 7 U.S.C.

§ 1446(d). It follows from this that the

Secretary was legally required to consid-

er the level at which other commodities

were being supported.

The second cited sections, 7 U.S.C.

§ 1441(a)t3/ requires the Secretary

15/7 Title 7/7 U.S.C. § 1441(a). Cost

Of Production study; establishment of

current national weianted average cost of

production; annual revision of _ study;

Criteria for study:

The Secretary of

Agriculture, in coop-

eration with the land

grant colleges, com-

modity organizations,

general farm organi-

zations, and indivi-

dual farmers, shall

conduct a cost of

production study of

the wheat, feed

grain, eotton and

dairy commodities

under the various

production practices

and establish a cur-

POOTNOTE CONT'D ON NEXT PAGE

184a

to prepare for Congress a study concern-

ing the cost of production in dairy

farms. There is no indication in

7 U.S.C. § 1446(c) or (d) that the Con-

gress in any way lessened the importance

it attaches to cost of production. This

Court finds that Congress intended that

FOOTNOTE CONT'D FROM PREVIOUS PAGE

rent national

weighted averaqe cost

of production. This

study shall be up-

dated annually and

shall include all

typical variable

costs, a return on

fixed costs equal to

the existing interest

rates charged by the

Federal Land Bank,

and return for

management comparable

to the normal manage-

ment fees charged by

other comparable

industries. These

studies shall he

based upon the size

unit that reauires

one man to farm on a

full-time basis.

185a

the Secretary consider costs of produc-

tion in determining whether he would or

would not impose the deduction require-

ment under § 1446(d).

The only one of the cited provisions

to which the defendants address them-

selves is 7 U.S.C. § 1446(b).1§/ this

16/ Title / U.S.C. § 1446(b).

Policy with regard to dairy products:

The production and

use of abundant sup-

plies of high quality

milk and dairy prod-

ucts are essential to

the health and gener-

al welfare of the

Nation; a ‘Aependable

domestic source of

supply of these foods

in the form of high

grade dairy herds and

modern, Sanitary

dairy equipment is

important to the

national defense; and

an economically sound

dairy industry

affects beneficially

the economy of the

country as a whole.

FOOTNOTE CONT'D ON NEXT PAGE

Statute declares that it is the policy of

Conaress, inter alia, “to stabilize the

economy of dairy farmers at a level which

will provide a fair return for their

FOOTNOTE CONT'D FROM PREVIOUS PAGE

It is the policy of

Congress to assure a

stabilized annual

production of ade-

quate supplies of

milk and dairy prod-

ucts; to promote the

increased use of

these essential

foods; to improve the

domestic source of

suoply of milk and

butterfat by encour-

aging dairy farmers

to develop efficient

production units

consisting of high-

grade, disease-free

cattle and modern

sanitary equipment;

and to stabilize the

economy of dairy

farmers at a level

which will provide a

fair return for their

labor and investment

when compared with

the cost of things

that farmers buy.

labor and investment when compared with

the cost of things that farmers buy."

In the Notice of Determination, the

Secretary stated: "The qeneral non-

binding policy of section 204 [7 U.S.C.

§ 1446(b)] 1s, of course, subject to the

specific statutory standards of sec-

tion 201(c) [7 U.S.C. § 1446(c)]" 48 Fed.

Req. at 11,255. This statement in the

Notice of Determination parallels the

explanation given in the Defendants’

Memorandum. MDefs'. Memo. at 45-47. This

reading is, however, quite untenable,

because it assumes that the Congressional

enactment of 7 J.S.C. § 1446(5) is a

frivolous section.

Having carefully read 7 WY.S.C.

§ 1446(c) and 7 U.S.C. § 1446(b), this

Court Finds that there is no necessary

conflict between these two provisions,

188a

and therefore no need to construe one to

the exclusion of the other. There is no

repugnance in a _ price support program

which is based on the factors set forth

in 17 U.S.C. § 1446(c) which also consid-

ers the Congressional policy of providina

a fair return to dairy ;farmers for their

labor and investment.

Therefore, this Court finds’ that

there is no factual basis for the conten-

tion that the Secretary should exclude

consideration of the policies set forth

in 17 U.S.C. § 1446(¢c) in implementing

the deduction requirement.

This Court has already noted that

the Congress re-enacted 7 U.S.C.

§ 1446(c) as part of § 191 of the Omnibus

Budaqet Reconciliation Act. This Court

regards this congressional action as

fatal to the reading which the Secretary

189a

would give to § 1446(d) as giving him

sueepine discretionary powers. The re-

enactment of § 1446(c) with its specific

mention of the cost of production makes

the Secretary's reading of this statute

sound only if this language is iqnored.

This Court cannot ignore the plain lan-

guage of the statute. There is nothing

in the language of § 1446(d) which even

Suggests that the Congress intended the

Secretary of Agriculture not to adhere

faithfully to these four statutory provi-

sions in making his decision concerning

the implementation of the deduction

requirement. Indeed the simultaneous

re-enactment of § 1445(c) is an unequivo-

cal indication that the Conqress intended

for concerns related to the cost of pro-

duction to enter into the Secretary's

decision-making process. Oherwise, as

190a

noted above, the re-enactment of this

provision would have been a grand nul-

lity. Conaress does not engage in such

nullities.

H. Legislative History.

In construing a statute, it is

appropriate for this Court to look to

extrinsic aids in order to shed light on

the meaning of the Act. YWnited States v.

Zacks, 375 U.S. 59, 69 (1963); Portland

Cement Association v. Ruckleshaus, 486

F.2d 375, 379-80 n.13 (D.C. Cir. 1973),

cert. denied, 417 U.S. 921 (1974); United

States v. State of Louisiana, 225 F.Supp.

353, 361 (E.M. La. 1963) (3-judge panel

per Wisdom, J.), aff'd. 380 U.S. 145

(1965).

The siaqnificance which a reviewing

court should gqive legislative history

materials is, however, limited by the

fact that it is the statute which the

Congress enacted, not the history. While

legislative history may clarify ambiguous

language, cannot negate the unambiquous

direction which the Congress has qiven in

7 U.S.C. § %1666(e). Ynited States v.

Oregon, 366 U.S. 643, 648 (1961), reh'da.

denied, 368 U.S. 870 (1961); Doski v. M.

Goldseker, 539 F.2d 1326, 1332 (4th Cir.

1976); Aviation Consumer Action Project

v. Washburn, 535 F.2d 101, 106 (D.C. Cir.

1976); United States v. Deluxe Cleaners &

Laundry, Incorporated, 511 F.2d 926, 929

(4th Cir. 1975); Shackleford v. United

States, 383 £°.2d 212, 215 (D.C. Cir.

1967); General Ciaqar Company v. Lancaster

Leaf Tobacco Company, 323 F.Supp. 931,

937 (D. MA. 1971); United States v.

Gerhardt, 275 F. Suppo. 443, 456 (3.0.

W. Va. 1967).

I undertake a rather brief examina-

tion of the legislative history to demon-

Strate that as in State Water Control

Board v. Train, 559 F.2d 921, 924 (4th

Cir. 1977), “that history actually tends

to reinforce the ‘plain meaning' of the

text.*

According to the Secretary's own

explanation, he approached the Conaress

in May Of 1982, asking for discretionary

authority to lower the price support

level. Mairy Policy Statement 4,10. The

Conaqress refused to adonot this plan.

Indeed, the House of Representatives had

adopted a completely different plan.

Inder the House plan, the authority to

vary support price levels would be vested

in an entirely new body, which would he

composed of 15 representatives of the

dairy industry and the Secretary. See

193a

128 Cong. Rec. H-6020-21, 6097 (Auq. 16,

1982). Any contention that consideration

of impact of a deduction requirement

would have been excluded under this plan

is unbelievable.

The legislative history indicates

that the fine points of dairy policy were

hardly uppermost in the mind of the Con-

gress. As counsel for the defendants

arqued in the hearing of January 4, the

Omnibus Budget Reconciliation Act was an

obvious compromise. Hearing of Jan 3-4,

1983 at 341 (McGrath). The entire Omni-

bus Budget Reconciliation Act was viewed

aS a necessary prerequisite to the Tax

Equity and Responsibility Act of 1982.

The measure was a compromise, from which

little coherent legislative history

emerged (hearing of January 3-4, 1983,

Tr. 341 (“McGrath)), and in which there

194a

was probably little clear intent. The

evidence to which the Secretary points is

two pages of the daily session of the

Conaressional record. In the Senate,

debate on the entire measure, covering

many provisions other than the deduction

authority, was limited to two hours. The

report which the conferees made during

this discussion amounted to little more

than a summary of the provisions of the

Act. 128 Cong. Rec. S. 10762=-70

(Aug. 18, 1982). The House of Represen-

tatives qave the measure little more

consideration. The record in the House

does not show an intent to enact any

substantial change to the existing system

Of law. 128 Conq. Rec. H. 6029-21, 6093,

6997, (Auq. 16, 1982); id. at H. 6360-63

(Aug. 18, 1982).

This is general floor debate. As

195a

such, the materials cited by the defen-

dants are the least credible of leqisla-

tive history materials. Ernst & Ernst v.

Hochfelder, 425 U.S. 185, 203 on. 24,

reh'g. denied, 425 U.S. 986 (1976);

United States v. United Mine Workers,

330 U.S. 258, 276-77 (1974); United

States v. Wrightwood Dairy Company,

315 U.S. 110, 125 (1942).

I also find conspicuous that oppo-

nents of the compromise measure never

mentioned a sweeping grant of power to

the Secretary. I am aware that remarks

made by opponents of legislation as gen-

erally entitled to little weight. The

Supreme Court has explained that’ the

reason for this is because "In their zeal

to defeat a bill, they understandably

tend to overstate its reach." National

Labor Relations Board v. Fruit and Veqe-

196a

table Packers and Warehousemen, Local

760, 377 U.S. 58, 66 (1964). In this

instance, the proponents and opponents

alike were silent on expansion of the

Secretary's discretion. This Court finds

the absence of any discussion of expand-

ing the Secretary's discretion indicates

that this was never considered by the

Congress.

Having examined the Congressional

Record and considered the comments of the

various members of the House of Represen-

tatives and the Senate as to this

measure, this Court finds that the Con-

gressional Record shows no evidence which

would support an expansive grant of power

to the Secretary of Agriculture with

respect to the deduction requirements

authorized by § 101 of the Omnibus Budget

Reconciliation Act. The evidence points

197a

entirely to a grant of the right to

initiate rulemaking as to these deduction

requirements consistent with and confined

to the existing legal framework. Thus,

the legislative history of this provision

reenforces the plain lanquage of this

Act, and both the plain language and the

the legislative history stand against the

Secretary's interpretation.

I. The Issue of Lead Time.

In describing his approach to the

Congress in May, 1982, the Secretary

has said: "At that time, I also promised

not to adjust the supvort level until

January 1, 1983. I made that pledge in

May to allow the producers enough time to

begin making the necessary cutbacks and

still have the benefit of the higher

price support.” Dairy Policy Statement

at 3 (Mar. 16, 1983).

198a

In the hearing of January 3-4, 1983,

the defendants contended that the need to

provide lead time was so urgent that it

constituted “good cause” sufficient to

excuse them from compliance with the

notice-and-comment requirements of

S OGeeeGe & 553. See Hearing of

snuary 3-4, 1983, Tr. 152, 161, 172, 182

(Shaw), and 341, 344-45, 348 (McGrath).

In imposing the current deduction

requirement, the Secretary allowed only

one month lead-time, despite the fact

that the spring of the year is one of the

financially tightest seasons which dairy

farmers face, See Hearing of April 12-

14, Tr. 75-76 (Yokeley).

This Court finds that the Secretary

has offered no explanation for why he has

provided no lead-time for this program

when he felt compelled to promise lead-

199a

time when he approached the Congress.

J. The Secretary's Application of

§ 101.

One aspect of the Secretary's action

which deeply undercuts any claim that

he is acting to implement the intent of

the Congress is the Secretary's

inconsistency of application of the

statute.

The two deductions authorized by

§ 101 are both authorized in identical

language. See 7 U.S.C. § 1446(d)(2) and

§ 1446(d)(3)(A) ("the Secretary may pro-

vide for"). It is a well accepted canon

of statutory construction that where

Congress uses identical language in two

parts of a statute, the language is to

have a consistent meaning, absent strondq

indications to the contrary. Atlantic

Cleaners & Dryers, Inc. v. United States,

200a

286 U.S. 427, 433 (1932); Director,

Officer of Workers' Compensation v.

Forsyth Energy, 666 F.2d 1104, 1198 (7th

Cir. 1981); Alabama Power Company v.

Costle, 636 F.2d 323, 396 (D.C. Cir.

1979); Fortin v. Marshall, 608 F.2d 525

(1st Cir. 1979); United States v. Nunez,

573 F.2d 769, 771 (2d Cir.) cert. denied,

436 0.S. 930 (1978); Hotel Equities Corp.

v. Commissioner, 546 F.2d 725, 728 (7th

Cir. 1976); Myer v. United States,

175 F.2d 45, 47 (2d Cir. 1949); Lewellyn

v. Harbison, 31 F.2d 740, 742 (3d Cir.

1929).

This Court has found no evidence in

the statutory language or the leqislative

history suqgesting that Congress intended

these words to have different meaninas.

The Secretary's handling of the two

deductions is entirely different. The

201a

first he has imposed with a great ten-

acity. The second he has not imposed.

The official reason given for the Secre-

tary's non-imposition of the second

deduction requirement is:

The Department § pub-

lished, in January,

1983, a proposal for

the implementation of

a $1.90 per hundred-

weight deduction and

a refund proaram, but

no final requlation

establishing a refund

program has been

published. There-

fore, only a 50-cent,

not the proposed

$1.90 per hundred-

weight deduction may

be imposed at this

time.

48 Fed. Req. 11,254 (1983).

This response is unbelievable.

First of all, it suggests that the fail-

ure to publish a rule precludes a deci-

sion to implement the second deduction.

The suggestion is specious. Publication

202a

follows and memorializes the decision; it

is not a precondition to the decision.

Second, the Secre

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