# Petition for Writ of Certiorari — Morrison Milling Co. v. Freeman > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385603_0137%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1967 - **Citation:** 385 U.S. 1024 ## Text ve SERENE TST Otten Slftome s™] . 2 ie : emnt ‘mo e@)! i. CRTATIONS eee Holly Hill Frit Product, Tne, neh 822 US. 607 (1944) for intnenemnnnnnnnnn Son, “FTC v. Son Ol Co Ee SOE PR geer eer res BTL U.S. 505 (1968) “iy. onsen eee, a Gould v. Gould’ ats bene wisely site o aS. renee: i re Jarecki v. G. D. Searle & Co. AO HOS Caer SRE SS : 967 WS PB (TOGA) 8a iscipnelatdecenne B.: ‘. 2" ulate siihage 2 Yes SF ieee © 883 U.S. 569 (1966) occ Seen sone 15, 26 -. Richards v. United States ermeinpy dC ccragteay da 960-8. 1 (SOI) tpt, 28 Social Board v. Nierstko oe ee BOT US, B58 (19K) oecsecseseceseseseessesenee See sill United States v. American Trucking Asi’ns. at Ze 310 US. 534 (1940), sstegsisonssnnencene POTTER 2 enn! ee Re United States v. Oregon ae, pee cate + 866, U.S, 648" (1961) oreo S escitteccas conic -——Agricufbural Act of 1964 00... ree Food and’ Agricultural Act of 1962 .. Sp taeiaihis in cushacndic: 3 | Food and — Ack Of 1006 25.06.25 Ei hecenger 5,14 SS SCA: Grain Standard Regulations (for wines 3 ene (TCR, §$26.101-129 ee eccscicsees bbeiarcsss,, aT Processor Wheat’ Marketing Certificate Regulations... BE at abcicechdd ae ee * 7CFR: Ser Mee Hes # a, ene ener 8 eS a A, NESSES aa aeer omnes. * ees 8 Ce ei 9 §777.11(a) EE AS Be ROR 2, 4, passim I ie ie a cae 9, 17, 27 gL RRS SEES Te cad ERT CO en Te Ry 13 I ik ie i ie cl en 7 TSX Eee ane ees PAS RAE Ce aera eee 5 ws _ A RP UR ONE ARE RE OW SO I IN RR NF } : : eA, week ee a, | Hearings on H. J. Rei. 234 Before the Senate Cost “ mittee on Appropridtions, 89th Cong., Ist.Sess, ae pi. 29 (Jamuary 25; 1965) 2... ecccccceecseseecsssseeerseesemseeen 12,21 2 House Report No. 631, 80th Cong,, 1st Sess, eae ANSI MODS neon seat A 108 Cong. Rec. 1377-78 (June 21, ee) ee i 22, 108 Cong. Rec. 17228 (Aug. 21, 1962) ......... eg ee ct 40 Cong. Rec.:7175 (April 7, WOO ie SS. ae 1964 US. ‘Code Cong. & Adm. News 2142.at 2154. Patines 2 o* | ‘In thie” si " Supreme Court of the:Un ited States * —. *_:.}OCTOBER TERM, 1966 - + Ta, Mommson Mase Course, | ef ; ‘en, | : st Onma L. Pema axo Conon Cam Coonan 3 Pee | | : ES Respondents. * Petitioner, a a alee eect Searmenc of has payne for. the District of Conner Cinvadt 7 ¢, ) ‘Wie Morison Milling, Company, Petitionse, prays that "a writ of certiorari issue ‘o review the judgment of. the ‘United States Court of Appeals for the District of Columtbia _ Sheet mare Ae aie het oc ta, 1966. _ Opinions ‘Below Nes : ce sae _ ‘The. opinion of the Spee oe appeals (Agipendis: B, ve . Pp. B1-10) is not yet officially reported. The memorandum opinion of the district court is printed at R, 98-99. ae a onal con nt wa Eee fn esto sop nine sdditional copies of which have been filed with this Court * wnder Rule ante? and (4). cd hi a ‘, ee et eign aaah ga Me | ~ Jurisdiction. eo 3 Sor - ~The joalguient ‘of the court of appeals. was ae on . | ry July 18,. 1966 (App. B, p. B-11).. The jurisdiction of this. ‘Court is invoked under B USC. §1254(1). | as ge aD Question Presented | ce eee, engaged i in the processing of wheat info human fee 4c Sood prodicts are’ “required, prior to cuasbbting or removing 4 such food product for sale or consumption, to-purchase from hae Wa '* Government so-called domestic marketing certificates ‘ quivalent to, the number of bushels of wheat contained in ‘such, product. re US.C.A. §1379d (b) ,* §13798. _ Regulations issued by the Seoretary of Agriculture (“Sec- . ; retary”), however, compel, wheat processors to acquire such marketing certificates “equivalent to the number of bushels 3 of wheat used in processing the food products”, 7 C.F.R. ° ‘$777.11 (a); ahd thus impose marketing. certificate. liability’ not only upon the “wheat contained in” the finished foed . products to be sold and consumed, but also upon (i) foreign _, substances and unsuitable wheat kernels separated from the usable. wheat “before processitig, (ii): moisture which : - evaporates from the wheat during Storage and processing, ¢ (iii) wheat logt in handling, storage and processing, and (i) 5 gome 27-28% of the wheat subjected to processing which is separated purposely by processing and dispoged of as waste . OF for animal feed or other, non-food use. hae The question presented is whether’ such regulations are invalid ‘because they-$% inconsistent with the controlling statute and because they are arbitrary, hearers ae ae Peg without naticnal tiki. . after cited simply “7 US.C.A: §. a Se , Pa ae . ae ° é “ es ‘, : “ ‘ : SE } =. . . s we 2 = ee er ae ee $ “i ‘ elie Nee Bo RE fe s ’ : a sean Sere, eee ge. oe fae os mitt MOA Sint: Statutes ‘and Regulations Involved —— ° . The statutes and regulations’ involved in this case aye’ - lengthy and are, therefore, set forth iff Appendix A, infra, > ery | iy fuer oe a _- The particular statutory. provisions which are most criti- cal, however; are, first, 7 U.S.C.Av-§1379¢(b). which provides - that as to the 1964 and the 1965 wheat crop marketing - ° z 2 a a . ‘ p : i “During any marketing year for which a wheat mar-- , '. keting allocation program is in effect, (i) all persons engaged in the processing of wheat into food products. ‘Shall, prior to marketing any such food product or re- . moving such food product for salg or consumption, ac- quire domestic marketing certificates equivalent to the ° ; number of bushels of wheat contained in such product *The Agricultural Act of 1938, 50 Stat. 31, 7 U.S.C.A. §1281, a3 > amended by the Food icultural: Act of 1962, 76 Stat: 605, Dee 44 ed.) and as further - amended by the Agricultural Act of 1964, 78 Stat. 173, 7.U.S.C.A. "ees eee ). 2) a Soe _ Wheat ing Certificate ulatii 7 C.FE.R. §§7TT DAT (1900 ao ero. © the provisions which were applicable to the 1964 and 1965 eco, years are set forth in A die , infra, pp. A1-18, and are bereits. . Sees soe Similarly, the 1966 edition of 7 C.F.R. §§777:2-.17 contains regulations applicable to the 1965 crop: year. Appendix A, infra, - . * pp. A 19-33, sets forth the regulations which were applicable to the ° 1964 crop - Insofar as is here material, the regulations were ~ & substantially the same for both years. ft og July 3 of Ob dated ee ee 80 of ter eek -designated year une f ensuing year. 7 U.S.C.A. §1301(5), (7) (1964 ed). tee : —_ + 4 . 3 and (ii) all persons exporting wheat shall, prior to such export, acquire export marketing certificates equivalent aaiataacaldaagta * * *” (Emphasis added), ee b _ and, secondly, 7 U.S.C.A. $1379f which provides that as to this marketing certificate liability of wheat processors based — upon “wheat contained in” such food products which have been processed and which are ready to be sold and consumed: which shall b6 used to determine the amount of wheat contained in any food product. “The conversion, factor _ for any such food product shall be determined upon the - basis of the weight of wheat used in the manufacture. _ of such product.” (Emphasis added.) = See ie: turer : ‘nig rue critical is 7 C.F.R. $777.11 (a), which provides that: | «food processors shall acquire certificates and sur- -° yender certificates to CCC as provided’ in paragraphs (b) and (c). of this section and in the manner specified » in § 777.10. The number of certificates acquired.by the “food processor and surrendered to CCC shall be equiva- lent to the number of bushels of wheat used in processing ® the food products for which certificates must be acquired» - and surrendered. Such quantity of wheat shall be deter- - _ mined and reported to CCC as provided in §§ 777.12 to 777-14 on the basis of the weight of wheat used in-proc- essing the food products or by application of conversion factors to the weight of food products obtainéd in the _ @processing operation.” (Emphasis added.) - - 5 2 aed Statement ae . This controvergy involves the Liability of whicat processors ) : for so-called “marketing ‘certificates” under the provisions ~ 3 of the wheat subsidy and support program operative for the . a hy ene years: of 1964 and 1965.° : ' & : po Ry 7 : Prior to the commencement of this program (on July 1, _ 1964) , wheat growers who complied with their acreage - ne) re) ¢ sie 2d Hho vesis ens inin ttrinaeeusiaaeamn timed sues -with the exception: that: domestic marketing certificates” . were priced at T5¥ and export cortifioates, at 30: 7 CFR. : §777.108 (1966 ed.). : A portion of the cots ofthis program of subsidizing and a supporting wheat growers was taxed against processors 2. of wheat. 7 U.S.C.A. § 1379d(b) exacts revenue from persons vas ie engaged in processing wheat into human food products by re- quiring such processors, prior to marketing any such food product for sale or consumption, to “ acquire domestic market- Me ing - certificates equivalent to the number of bushels of wheat - contained in such product.” Confirming this, 7 U.S.C.A.’ § 1379f specifically provides, in mandatory terms, that the Secretary “shall establish” conversion factors ... that - such conversion factors . “shall be used” to’ determine “the amount of wheat contained _in-any food product” ’ (ie, the | "processors certificate liability under §1379d(b)) .. . and that such factors. ‘shall be’ determined” upon the’ basis of the weight of wheat-used in the manufacture of such food prodaek, : ee ~ ; v" dae lod this. flan language of § 1379d(b) and § 13798, the Setar med ogee pli cei tw oF | quire. domestic marketing certificates “equivalent to ° mumber of bushels of- wheat used in’ pr irs oo food products.” 7 .C.F.R. §777.11(a). The admitted, and = - i ae tet See gine ane eng amounts for the “marketing certificate ademas ®. 27, a 94 at fn. a | ¢ 8 - intended result of this deviation from the statutory language _was to subject processors. to the marketing . certificate li- - ability not ‘just for the wheat actually “contained in” the ¢ ; completely processed food products ready for sale and con- © sumption, but also for the four items here’ in issue, to-wit: _ + (i) cleanings and screenings: foreign substances (e.g., rocks, sticks, etal scraps, etc.) and unsuitable wheat (eg, damaged and shriveled kernels) mingled with the = "raw matter’ acquired, but separated from the usable —-_ wheat before processing (R. 18-23, 41-42); (ii) shrinkage: moisture contained in the wheat when acquired, but*lost by evaporation both during storage .\ “and in processing (R. 18-25) ; \ @iiy wastage: wheat that is spilled or that clings to .. bins or is‘otherwise lost in storage, in handling or in processing (R. 22-24) ; and pee, : (iv) _millfeeds: the some 27-28%" of the usable wheat kernels subjected to provessing which is separated pur- ae: posely in the course of processing operations,"* disposed — = "The reference in the opinion below (App. B, p. B-4) to the figure of “18 percent” is, apparently, a typographical error; the isputed tage is some 27-28% (R. 23-25, 39). *In the of wheat. into flour, the bran (outer kernel of the wheat), the wheat “middlings” or “shorts” (coarser portions of the within the kernel) and the germ (sprouting section ofthe kernel) are first separated from the fine portion ©: the of which the flour is. to be made (R. 23-24). The maturing agents, vitamins, bromates, phosphates, salt, water, © etc., may be added for various reasons (R. 24). Thus; by virtue of the separation of the millfeeds, the food ‘product (flour) which ‘results from the. processing ions contains only (except for 3 - 9 _of as waste or for animal feed or other non-food use, and : thus is not part of or “contained in” the finished food products resulting from the’ processing (R. 23-25, 39). These regulations thus substantially increase the liability .. of wheat processors. for marketing certificates beyond the plain language of §1379d(b) and §1379f. For instance, the Secretary contended in the trial court that this suit seeks to recover, on behalf of the somé ‘500 companies in the wheat processing industry in this country, some $94.5 million se for the year 1964 alone (R. 39). A similar or perhaps even ‘greater sum would be involved for the year 1965 (when the . a one eee eee 6 - 2. — PR onc ates ror ae amount charged the processors for each domestic marketing . certificate they were required to “purchase” from the.CCC _is the same as the face amount of the marketing certificate te . payments thade to growers (ie., 70¢ per bushel in 1964, 75¢ per bushel in 1965). 7 C.F.R. §§ 728.108, 777.4(a) (1966 ed.). However, from the framework of-the program, it is mani- ‘ festly evident that—contrary to the misconceptions urged by the Secretary and.accepted by both lower courts—this sanie- . ness of the face amount of the certificates “sold” to proces- " sors and ‘ ‘issued” to growers did not mean that wheat proces- fe: sors were to'be.required to purchase a 70¢ certificate for each : 70¢ 70¢ certificate issued to growers. In: particular: __* Just as in the case of certificate payments to growers, no mar- Goce imply required “issued” 2! wheat . Seotliy “tow oe the Boom » | monthly ‘ process- _ p ae monthly “payme ye Emig liability in conjunction wit such reports (R. 27, 94 at fn. 1). 7 CFR. a i ac fe . 10 - ° . (i) 70¢ certificate payments were not made for _. each bushel of wheat which the growers harvested and sold a to processors. Instead, such certificate payments to growers | were based—not upon actual: harvest and sales—but upon an _ advance éstimate (scaled down,on a national basis) of the anticipated yield. from his acreage allotment, an estimate _ made long prior -to harvest." Furthermore, growers received 70¢ domestic certificate ‘payritents only upon less than one- pie half of this éstimated yield (and 25¢ export certificates on "an equal portion and only the $1.30 average loan rate on the balance) . 47). J _ (ii) Contrariwise, the niin certificate. liability : -is ‘hesed upon actuality, not estimates, to-wit: the amount na . of wheat in fact “contained in” the finished food products i which the processor is “marketing * * * or removing for — * gale or " consumption.” 7 US.C.A. 88 13794(b), 13798. '. (iii) Moreover, the processor must pay _ certificate levy even though, the wheat ‘ ‘contained in” his’ finished. food a products was not even subject to the marketing certificate - program andeven though no grower received certificate pay- Te ments for such wheat" . . either because it was purchased © = fee i tia wi ebb to ethan willy Tee dacs allot ment . . . or from a ‘grower who refused to devote his diverted acreage to approved conservation uses ... . or from ose re certificates are thus based upon an advance. i ggpen Foe ve actual ° the grower receives ro te pe is is low or i$ even. ii poo nae hy of wheat by nina. are heavy or. light. 7, USCA. §§1379b, c. ' 11 - Saks scien ainda a pre-164 dia’ or Heo on Saieetae outeile ot the United States (R. 46-47). 7 TUS.C.A. $§ 1379, d. | (iv) Because of the iii it is obvious that under the invalid regulations here in issue there will be an . extraordinary net profit realized each year from the domestic soe marketing: certificate ‘program. To illustrate, in 1964 a grower . wuld receive 25¢ export marketing certificates on 45% __ of his estimated yield (scaled down on a national basis), — 10¢ doniestic marketing certificates-on another 45% of his estimated yield, and no marketing certificates at ‘all on the -Temaining 10% of this estimated yield and on that portion j of his actual harvest which exceeded. 90% of his estimated yield. Yet, a processor who acquires all of the wheat harvested -by this grower is forced by the Secretary’s regulations to pay 70¢ for domestic. marketing certificates on each and every bushel. Thus, - ‘a very sizable net profit will result if the | - domestic. marketing certificate levy is imposed. upon the bushels of raw material purchased by the processors and not —in accordance with the clear and unambiguous language of §1379d(b)—only upon the wheat actually “contained in” the. finiahed, 30th. iwoducth, Indbed, thot decces “eaheden ; by the CCC in 1965 in support of a. request for a general Supplemental appropriation showed that for the 1964. crop pee ts ease erent aig lta certificate payments either becquse they did not com ey with their otments or because they did not ir acreage to approved conservation, uses, U.S.D.A. Press Release No. . 1755-64, May 27, 1964, as Exhibit C to Affidayit of Cyril V. Smith, Jr., filed png ine | 8, 1965 (R. 1) and contained a _ the CCC realized from the ‘saint certificate j program profit of $75.2 million. Hearings on H. J. Res. 234 Be- ‘ol the. Senate Comniittee on ‘Appropriations, 89th Cong. sy I. Ast Sess., p. 29 (Jan. 25, 1965). (v) Finally, the ‘amount of : certificate payments - made to growers is not limited to (or in. any manner condi-" tioned upon) the amount of revenue obtainéd by the CCC from the marketing certificate liability levied upon the wheat * processors. To the contrary, the CCC may use the revenue thus obtained from the processors for any purpose and is not a limited to using it only to make certificate payments to the | maxes 15 USCA. 88 713a-10, a-11, b, f (1963, — ; 3. ‘ ~The present action was filed by six wheat processors (ine cluding Petitioner The. Morrisgn. Milling Company). (R. 5) , _- individually and as a class action-6n behalt-of the some 500 companies in the wheat processing industry’in the United : " States (R. 6)—seeking a declaration that the regulations: — " were invalid (i) because they were inconsistent with the ~~ controlling statutory. provisions, ‘including §13794 (b) and - -§ 13798; and, alternatively (ii) .because they. were arbitrary : .” discriminatory and without rational basis (R. 7-11). | Jurisdiction of the féderal district court was invoked be- -‘causé the cause of action arises under:a law. relating to commerce, i.e., the Agricultural Adjustment Act of 1938, as” - amended in 1962 and 1964, and involves an amount in con- troversy in excess of $10,000, 28-US.C. 88 1331, 1337 . is against the CCC, 15 U.S.C. § 714b . . “ang is an appeal a3 ” eons a | from final agency ac : 0 foe whic there i no other sdecuate : _ remedy**;.5 U.S.C. § 1009(c). Some 39 additional processors subsequently requested, and were granted; leave to intervene (R. 81-92). : ey ae Secs ‘The case came before the ‘trial court on cross midtions for sae ‘summary judginent (R. 14, 36). The trial court: upheld the aoe. _-validity of the regulations (R. 98-99), and the court of ap- ram as he ea Bot PP ick / Neti : ? coe Ee Me f Hl Bul fhe tebe 4 A 14] fs vit ; | | E HE i aH a ut ul © . dollars for each year jn controversy (R. 39.) This question | ._ is, moreover, of continuing vital concern to wheat PTOCESSOTS 9, EE est eety CRC ap “ oe Reasons for Granting the Writ | This case presents a question of statutory con- , Struction which is of critical importance to the entire wheat | "* processing industry in the United's ates: the liability of the - some 500 wheat processors. for “d tic marketing certifi- “ie .“ cates” under* the wheat subsidy and support program. for the 1964: ck 1965 crop years. Involved are extraordinarily eed i amounts of’ money— ‘estimated by the Government itself to totaksome $95 million , *—and the sums of money in dispute will continue to pyramid, . —under the subsequent wheat > subsidy program" ieee _ extended the:marketing certificate liability of processors, in precisely the same operative statutBty language here at issue, for the wheat crop’ years } 1966 through 1969. And, the. resolution of this question have immediate public im-. portance sbeyond: the parties to’ litigation. and even _ + beyond 500 wheat processors directly affected. This being a question of first i impression, there i is, no square conflict: of decisions. However, without action by this Court, “the opinion below will erode and subvert standard principles — of statutory construction because (1) it distorts the ordinary, | ps cn ly agi once sgh apeaap ation ~. ~ § 1379d(b). and § 1379f... (2) despite the fact that such plain, ordinary meaning of ‘the words ‘used does not reeult, in abgurd consequences or thwart the purposes of the statutes 4 COR REL ee et ee ee rect Si} 6s cna 8 79 Stat. 1202, TUSCA. _§91331-40 d4§13790 -j (1964 ed. and Supp. 1965). od 15 a (3) the ‘sais and ‘npdianiiies leridilive: material relied upon or (4) the supposed administrative con- | struction of statutes by. the Secretary. Alternatively, (5). the : fiohs are invalid because they are arbitrary, discriminatory and without rational. basis. ; Under these crcumatances, review by this Court jaro ; Ss | quired. / : eS, qb _ As this Court has “often said, ‘the words of statutes— , ‘including revenue acts—should be interpreted where possible _ in their ordinary, everyday senses’. Crane v. Commissioner, aid 831 US. 1, 6” Malat v. Riddell, 383 U.S. 569. (1966). . The “ordinary, everyday” meaning of the language of . §1379d(b). is evident. In specific, clear and’ nontechnical _ terms, it requires processors of wheat food produicts, ‘ ‘prior.to - marketing any such food product *, . ‘© hoe asle'or cine: “tion” to acquire domestic marketing certificates he aston ore : ‘to the number of buighels of wheat contained in such product Uateutih atresia a nies Wy ic cited hanes: . “prior to marketing any such food product ** * for sale or a _, vonsumption,” the processor is gubjected to certificate linbil- ’ ity. only upon that (heat which is in fact “contained in” the | finished food product ready to be sold and consumed—and _» hot upon the tafal amount of raw material which he acquires for amen such food products. 4 ‘ & ' g: ee | That the use of such language was deliberate, not in- ~ advertent, is confirmed by its repetition in § 1379f and its _ juxtaposition there with the very terminology into. which ee eer ees Ci ee atia uae aus dileams Wes cone ot Oe . & any’ food product shall. be determined upon the’: basis of the weight of wheat used in the manufacture of such product.” (Emphasis added.) . " Again, the “ordinary, éveryday” meaning of this language is evident. A conversion factor is used to determine an un- known from a known. § 1379, in the first sentence, specifies that the conversion factor shall “be used to determine the amount of wheat contained i in any food product.” "That, then, contained in any food product. The conversion factor for ae is the. unknown. The second sentence states that the factor ° for any food product .shall be. based onthe “weight of _ ‘wheat -used in the manufacture of such prod ” That is the known, to which the‘factor is to be applied in order to determine the unknown—i.e., the “amount of wheat con- - tained in” the food product. Language could not be clearer. & Nevertheleis, the Secretary has ignored these spetific and manadatory directions. He has not established eonversion factors as required by § 1379f. Wheat processors are not - provided with or permitted to use any conversion factor in order to determine, from the weight of wheat used in the processing of their food product, what wheat i is in fact “con- a 17- tained in” such product.* Indeed to the contrary, the only conversion factors that the Secretary has established are factors to be applied to the finished food product inorder to of determine the weight of wheat used in its manufacture or | Pett 7 CER. §§ 777.13-.14, Appendices II and IIl.. This ig flatly contradictory to the plain language of § 19796. _ And, this topsy-turvy interpretation simply cannot be justi- | fied by'the court of appeals’ Summary comment that in light : of ‘ ‘evidence * ¥ * that this statute was enacted against the background of conversion factors devised in accordanice with the Secretary’s approach * ° * the phrasing of § 1379f may - be reasonably read as the Government contends.” (App. B, p. B6, fn. 1). ‘bins inl ils “eeclonaal 'in the record is a representation fhade in thé affidavit of Amnold A. Garthoff that there were - : “traditional” conversion factors used by the Departnfent of Agriculture (R. 69). So there were—but, as the Garthoff affi- * Removal of foreign matter and unsuitable wheat, wastage -and evaporation of, mnoisture reduces the weight of the raw material soueed st processing. In addition, some 27-28% of the cleaned ‘and usable . wheat subjected | to processing is rémoved as wastes io oiemee for or ponwheat Brel mill and and screenings—what wheat : is “contained in” the food ee oo. ‘davit” nett dene: R 67), ssa wines tn ermmindtbien itty the Department’s flour export subsidy program. And, in fact, the . conversion factor (not cited in the affidavit) for wheat flour in the Department’s regulations dealing with this program is stated as “1.000”. 7 C.F.R. § 1483.222 (1966 ed.). That, of - course; is quite different from the conversion factor.for flour given in the Secretary’s regulations here in dispute, to-wit: ; ©2983", 7 CFR. §: 777.14 (c). As is evident, there are many conversion factors employed for many purposes, There” is, in‘ short, no “accepted” conversion factor table to which § 1379f was referring: and there is certainly no evidence which would support a summary judgment that it was re- senting to the Comneesia Sacto tel tas Boeeytney hed -aaee | in the flour export program. . 1s Mia taad auld teeenaia belli enn tee of Dig Secor Ss mrmenietaty. eres $30 fo tt hie mo ee po] R seen te tet to dieeuaee the ieee Go hoe used in the manufacture of any food product. The con- version factor for any such food product shall. be deter- ee ee ee food product.” "This Court has rejected similar attempts of statutory emas- culation, holding that where a “statute admits a reasonable * The representation in the Garthoff affidavit (R. 68-69) that the . "*_ wheats processors “didn not question” and were in :“ : ith the position of the Department of Agriculture regarding con version factors under §1379% ig far removed from the. truth. ‘The one Ot pine Mine sae Ga sepratess processors ed the t, from the beginning to the present date. This io Metaled 7 in the- affidavits of Carl R. Pilz (R: 15-17) and Frederick P. Furth (R. 29-35) and in: the Complaint (R. 10-11). & . 19 | | ¢ Construction which gives effect to all ‘of its provisions ++ . we will not adopt a strained reading which renders one: part: a mere redundancy.” Jarecki v. G. D. Searle & Co. , 367 U.S. | 308, 307-08 (1961). es ‘Scaaaipliy ar Uniquestionably the courts, - in interpreting a statute, “have some ‘scope for adopting a restricted rather than a _ literal or usual meaning of its words where acceptance of that - _ Meaning would lead to absurd results * * * or would thwart. , the obvious. purpose of the statute.’ Helvering v. Hammel, _—° 811 US. 504 * * * But it is otherwise ‘where no such con-— | " sequences would follow and where * ° * it appears to be - consonant with the purposes.of the Act ¢ 9 099 Commission- \ eru. Brown, 380 U.S. 563, 571 (1965). ae The two courts below concluded, as the Secretary main- , : - tains, ‘that the interpretation of the plain language of § : 13794 (b) and § 1379f in its ordinary, usual sense would de =~; feat the purpose of the 1964-65 wheat subsidy and-support = * program to maintair the average “income level” of wheat ip growers at $2.00 per bushel (the pre-1964 level) by compelling - processors to finance the 70¢ difference between the reduced - ee | | - CCC average loan rate of $1.30 per bushel and the $2.00 per : bushel desired (R. 39, 73-75, 97; App. B, pp. B23, 6). ‘This is, without doubt, totally fallacious. First, the fact ce q _ is obvious that the intended average income of $2.00 per’ ; rn Abe htt, oa Sgn) initio fra: RUPE ERA EATS > 20 tae cee the $1.90 idan rate plus the 70/ domestic tharketing levy imposed upon the processors. Wheat growers received such a 70¢ certificates on less than one-half of their estimated har- eee vest (in 1964, 45%). ‘Thus,,in order to defermine thé “in- “Fa mes __.......gome level” of wheat growers, it is necessary ‘toconsiderand a average all of the four types of price supports and payments afforded the growers under thig complex: program—CCC "average loan rate of $1.30 per bushel.on all wheat actually . harvested, wheat acreage diversion payments of 20% of such loan rate for acreage diverted up to 15 acres, 70¢ domestic marketing certificates on 45% of the estimated yield from : the acreage allotment, and 25¢ export: certificates on another 45% of such estimated yield. Secondly, the income realized by wheat growers under this, program would not be-reduced one whit if the processors’ liability for matketing ’ ‘certificates is, as it should be under eas the plain’ language of § 1379d(b) and § 1379f, limited to the “wheat contained in” the finished food products. None of the four types of support afforded to growers will be adverse-_ ‘ly affected in any manner by the outcome of this appeal. ' In particular, the 70¢ domestic certificate payments made to growers are based—not upon’ actual harvests and sales of wheat—but upon an advance. estimate of the anticipated = yield from their acreage allotments, an estimate made long prior to harvest. Thus, the amount of the 70¢ certificate - Pee ast OR AN, RTE EET en | 21 iii, aia a aia is _ certiBoates ‘which ;the, grocesnies, ane ‘vetquited to: purchase increases or decreases.” | And, as to the purpose of the’ program in imposing a portion of the wheat subsidy costs upon the. processors, that is precisely what is at issue in the present case. Any “boot- _ ‘strap” argument that the purpose, of the Act was to impose liability upon the. processors for all of the raw material ac- oo . quired for processing—and that, therefore, this purpose would be defeated unless the Secretary’s invalid regulations ~ are approved—is obviously unsupportable. As this Court has repeatedly. noted, “There. is, of course, no more persuasive evidence of the purpose of a statute than the words by which the legislature undertook to give expression to its wishes.” United States.v. American Trucking Ass’ns ., 310 U.S. 534, 543 (1940) ; Richards v. United States, 369 U.S. 1, 9 (1962). 7 tte oe a P fe | | Nor is there any “legislative history” which would justify _ the emasculation of the ordinary, usual meaning of the clear and specific language of § 1379d(b) and § 13798: The legislative material is devoid of any recorded instance _in which Congress addressed itself to the question of whether the domestic marketing certificate levy was to be based upon ‘the total weight of the raw, unprocessed material—or, asthe chosen statutory words plainly indicate, only upon the “wheat contained in” the finished food products ready for sale and consumption.” This being: 80, it-must be assumed that the legislative intent is expressed by the ordinary | meaning of - the were “used. Richards v.- United. atcee 369 US. 1, 9 _ (1962). le Gtliciags stick bie “egislative history” ; "Telied upon by the lower courts (and urged by the Secretary) ad 4 = ‘The opinion below also refers to the , a i . on: the 1964 amendments to the program pe Ade. are inconclusive and unpersuasive because they are directed. 0: Shee rontion, 20% tn She single question here in contro versy. To illustrate: Ke \ (i) The opinion below places primary reliance upon isolated exchanges or statements occurring”during con- gressional debates, ‘or out-of sentences from commit- tee- reports, to the effect that the 1964-65 subsidy. program would not increase the price of wheat from its then price _ of $200-per bushel-fteomes the ediced COC average sup- Re ESO “ Most nearly in point on this specific issue are the. : ieee ee oe reported in 108 Cone. 1377-78. (June 21, 1962) and 108 Cong. Rec. 17228 (Aug. 21, of the (Secs ey sipport the 20 poipeieegenermep aadioml erence to this 1 U.S. Code at 2154, will show | tte comet of - and “16”, in the report) which have nothing i Cabre . 2 at issue in this — of Lo , _ port lve would be $1.90 andhe processor would be paying : the 70¢ marketing certificate levy on each bushel of wheat “4 that he “purchased” or “processed” (App. B, pp. B6-7). a - (ii) But these. exchanges and statements were not 3 | | PBS Socks bys: oh 1379d(b) and § 13798, “despite their plain language to the contrary, imposed the - marketing ate liability upon the raw wheat “used in ~ . _ processing”, To contrary, they merely reflected the over- _ Fiding congern in Congress as twhether the new marketing es, certificate program would cause an increase in’ the price of | bread. - : “wheat used in propessitig” within the ordinary, usual mean- _ ing of that language. Malat v. eg eee pk os saa “Yet, the regulations purposely impose "the marketing ety ‘tficate Liability ypon cleanings and’ screenings, shinkage and o Tt i issué—millf eeds, the 27-28% of the :. wash whoa subjected to mang A iS merpesty ecard 4. » as” 1 \_ age, wastage) do represerit a substantial monetary claim in. them- ere ee DN Eris ane . : a) ae & ? a, . wastage, 7 CFR. §§ 777.13--14, Midis a0 and = in #0 doing result in patently absurd consequences and dis- : _ eriminations, among which are the following: ig es afprocessor who is able to purchase high-grade: ; | o. ‘wheat (with more usable wheat and a lower content NS a . Of foreign and unsuitable matter and moisture) very ° BS et eae illogically pays a lesser tax than does his unfortunate © «competitor who is able te: purchase only lower quality © “wheat (R. 18-23; Grain Stanfis ee $ 26.127) ; . == - who has cleaning and drying facilities (R. 19-20) is - not taxed upon all such foreign and unsuitable material - and moisture loss, while his unfortunate competitor is. "hag aha of’ abour, “arhitsty’ ad decbbahuatney results occasioned by the regulations are eliminated if the 7 _ _ Bis deetbon eaeganes of T0705 (by en WU TOE Ae tien Piers, SC , aieny, wer nee, toe oe _Conelusion *& a he Sept sie i on | tiorari should be, granted. . : r is a oS “Waa, D. Neary, ers | aan — Se 2300 Republic National Bank ae cy. Building, . Cer re. ee ae Dallas, Texas 75201, Mat aera es . Attorney for Petitioner. i Of Counsel: .. ee i Jekry L,. BuCHMEYER, SMa jo THOMPSON, KNIGHT, ons & BULLION, — Seen Dallas, : S btiaaigony: “o a | : ie 2 ° 28 : a ne : Secsl f Series ° -CountyorDattas - = -——’ | _ Grave or Texas. do tke Ns __.- Brrore Mg, the undersigned Notary Public in and for Dallas County, Texas, on this day personally appeared . Jerry L. Buchmeyer, who being by me duly’sworn upon oath 1, Jerry L. Buchmeyer, am not a member of the bar of Supreme Court of the United States; but I am a duly licensed and practicing attorney and a member of the State Bar of Texas and have been one of the attorneys of record for peti- : I further state upon oath that upon the 18th day of Octo- ber, 1966, I served the foregoing Pefition for a Writ of. - Certiorari to the United States Court of Appeals for the District of Columbia Circuit, by mailing copies of such — Petition, properly addressed, with air mail postage prepaid, | (i) the counsel for Respondents Orville L. Freeman. and Commodity Credit Corpération in the court of ap- - peals below, to wit:.J. William Doolittle (Acting Asst. _" Atty. Gen.), David G. Bress (U.S. Atty.) and Carb Eardley (Atty.), Appellate Section, Civil Division, Room: 3706,’ U.S. Department of Justice, Washington | 6 DC: and. “- ; ' | . Soy = _ (ii) the Solicitor General of the United States, U. S. Fer Department: of Justice, Washington 25, :D. C. Serreerreee 2, Aux, SIPPUTESe eee oe noo a, : YL. BUCHMEYER _- SwoRN TO AND SUBSCRIBED before me by the said Jerry L. _ Buchmeyer this the 13th, day of October, 1966. - —» Cee esereseeergsrecereesesesssersrweseeeeee : eeereewee -. Notary Public in and for | Dallas County, Texas _ Francene Hill — gry ce oS " APPENDICES 4 gt Appendix A (Statutes and Regulations Involved) “ $a 1.: Statutes— Wheat Support Program under the . ° 1962 and 1964 Amendments to the Agri- | , cultural Adjustment Act of 1938, 7 . ‘U.S.C.A: §§ 1331-40 and §8§ 1379a-j : (1964 ed. and Supp. 1965) .......... an: 74 2. Regulations — Processor Wheat Marketing a 7 a gue agape aaa aed , a Siebel seine ba nae aad “aan A-19 Appendix B. (Opinion and Judgment Below) 1. Opinion Below Sbecuicdpioeapeeen ited, eden «B-1 2. Judgment Below eae pare B-ll ; s mae, ad , ‘ ‘| : - : ° = ‘ wi ) \ : fe > Pe . ry id ee , Yr yet ee ’ * 9 che oh +4 he SP Oa 4PM ate ¢ PEPAG oe Peas Rea ty 2 ties (Coe Oe eh, Coe Sr We + Bis SST OO RW aR ADT Sle Ff he ee 4 RENN . RNS SORES TAS SIR OLE PEELS AER ES I SSR AIC RC a i Oe Nee ‘ sate ¢ Sec. Ad 1. Statutes—Wheat Support Program nities the 1962 and 1964 Amendments to the Agricultural vAd- _ justment Act of 1938, .7 U.S.C.A. §§ 1331-40 and §§ 1379a-j (1964 ed. and Supp. 1965) THE -AGRICULTURAL ADJUSTMENT ACT OF 1938 GENERAL PROVISIONS — 1281. Short title. _ 1282, Declaration of policy. -—” Ss eo er - SUBCHAPTER IL—LOANS, PARITY PAYMENTS, ~ ‘CONSUMER SAFEGUARDS, MARKETING “~~ QUOTAS, AND MARKETING : CERTIFICATES _-- A. Dermnrmion, Loans, Parrry Pa , AND CoNSUMER ‘SAFEGUARDS 1301. Definitions. ) | (a) Generel definitions. . | _(b) Definitions applicable to one or more com-. -(c). Use of Federal statistics. (d)° Raxisaices of shocke-of cixtain commodities, 3 1301a. References to parity prices, etc., malas gugnicesa January 3 1950. 1308. Parity payments. 7 . “1804, Consumer safeguards, Ao a * * ¢ * aos _ Part I1I—Marketing Quotas—Wheat $1331. Legislative finding of effects on interstate and _. foreign commerce and necessity of regulation $1332.. National marketing quotd—Proclamation; dura- tion of program . it aa : (a) Whenever prior to April 15 in any calendar year the ~ Secretary determines that the total supply of wheat in the’ marketing year beginning in the next succeeding calendar year will, in the absence of a marketing quota program, - likely be excessive; the Secretary shall proclaim that a national marketing quota for wheat shall be in effect for such marketing year and for either the following marketing year or the following two. marketing years, if the Secretary. determines and declares in such proclamation that a two- or three-year marketing quota program ‘is necessaty to _ “© (b) If a national marketing: quota for wheat has been i for any marketing year, the Secretary shall _ proclaimed cretal determine and proclaim the amount of the national market- ing quota for such marketing year not earlier than January 1 or later than April 15 of the calendar year preceding the year. in which such marketing year begins. The amount of __. the national marketing quota’ for wheat for any marketing year shall bean amount of wheat which the Secretary esti- . mates (i) will be utilized during such marketing year for, . human consumption in the United States as food, food prod- ucts, and beverages, composed wholly or partly of wheat, (ii) will be utilized during such marketing year in the United States for seed, (iii) will be exported either in the form of . “wheat or products thereof, and {iv) as the average amount which was utilized as livestock (including poultry): feed in” the marketing years beginning in 1959 and 1960; less (A) an amount of wheat equal to the estimated imports of wheat into the United States during, such marketing year and, Py : o A-3 (B) if the stoci-of wheat owned bi the Commodity Credit Corporation are-determined by the Secretary to be excessive, an amount of wheat determined by the Secretary to be a ‘desirable reduction in such marketing year in such stocks to achieve the policy of the chapter: Provided, That if the . Secretary determines that the total stocks of wheat in the | Nation are insufficient to assure an adequate carryover. for . the next succeeding marketing year, the national marketirig quota otherwise-determined shall be increased by the amount the Secretary determines to be necessary to assure an ade- quate carryover: And provided further, That the national marketing quota for wheat for any marketing year shall be not less than one billion bushels. _ National emergencies or material increase in demand; investigation; increase or termination | (c) If, after the proclamation of a national marketing | quota for wheat for any marketing year, the Secretary has reason to believe that, because of a national emergency or because of a material increase in the demand for wheat, the - national marketing quota should be terminated or the amount thereof increased, he shall cause an immediate investigation — to be made to determine whether such action is necessary. ; ee Oe ee er a ee wedne as toe wheat. If, on the basis of such investigation, the Secre- tary finds that such action is necessary, ‘he shall immediately proclaim such finding and the amount of any such increase found by him to be necessary and thereupon such national - marketing quota shall be so increased or terminated. In case - any national marketing quota is‘increased under this’ sub- section, the Secretary shall provide for such increase by increasing acreage allotments established under this part by a uniform percentage. Feb. 16, 1938, c. 30, Title III, § 332, . 52 Stat. 53; Aug. 28, 1954, c. 1041, Title III, § 307, 68 Stat.. 903; Sept. 27, 1962, Pub. L. 87—708, Title 1 ,.§ 311, ge Stat. 619. yg § 1333. National acreage allotment | Winssistiis Gin'diniiald i daa eatnadel tadsudane ube Vac ee . & AA. a3 i e * at the same time shall proclaim a national acreage allotment i for the crop of wheat planted for harvest in the calendar year in which such marketing year begins. The amount of the national acreage -allotment.for any-crop of wheat shall be the number of acres which the Secretary determines on the . basis of expected yields and expected underplantings of farm acreage allotments ‘will,together with (1) the expected production on the increases in acreage allotments for farms based upon small-farms base acreages pursuant to section 1835 of this title, and (2) the expected production on in- creased acreages resulting from the small-farm exemption — pursuant to section 1335 of this title, make available a supply . of wheat equal to the national marketing quota for wheat . for such marketing year. Feb. 16, 1938, c. 30, "Title III, § 333, 52 Stat: 58; June 20, 1938, c. 518, 52 Stat. 775; July 26, 1939, c. 377, 53. Stat. 1125; July 3, 1948, c. 827, Title II, § 207(b), | 62 Stat. 1257; Sept. 27, 1962, Pub. L. 51-6, Title Il, § 312, 76 Stat. 620. ee t § 1334. Apportionment of national eareien ‘allotment (a) Apportionment among States; overplanted allot- ments; special acreage reserve (b)° ectuimuziie enone open overplanted allot- ments 4 (c) “daubdiinieia among farms; orritiated ailot- is ments; reductions; notice : (d) copper co 7 Mae Sea , : ‘kia cunaua Wes lees dblbvoredl th the Searclecy ox stored . Se Pee Pe - ment of penalty (e): Increase in acreage allotments and marketing quotas for class Il durum wheat «. (f) Voluntary surrender of acreage allotment g) Plantings in excess of allotments or where no ent is established es | ) Omitted \ a AS a ; je : (i) haariees fn ‘acreage allotments for any kind of. wheat in short supply; storagé reduction and land-use | provisions inapplicable to ‘such wheat . | | ‘(j) Inerease in California. acreage allotments and .marketing quotas for 1958 through 1963 crops of durum — wheat; land-use provisions inapplicable to such wheat © (k)) Transfer of farm wheat acreage allotments in case of natural disasters ; FR ite a SARS 2 ‘§ 1334a. Summer fallow crop rotation}, adjustment of - “a acreage allotment ce bat \ ° -. $1384b, Designation of Sjates outside commercial wheat + § 1335. Small-farm ‘exemption; émall-farm base acreage; _ election; acreage. allotment; land-use provisions; " price support; wheat marketing certificates | § 1336. Referendum si § 1337. Repealed. § 1338. Transfer of quotas "$1339. Land, use—Diverted acreage; producers eligible for -certificates; conservations uses; amount; an- nual identity; grazing Le eee eee (a) (1) As a condition of eligibility for wheat market- _ ing certificates with respect to any farm, the producers’ on such farm shall be required to divert from the production of - wheat to an approved conservation use an acreage of crop- - land on the farm equal to the number of acres determined _ by multiplying the farm acreage allotment by the diversion factor, and to participate in any program formulated under subsection (b) to the extent prescribed~by the Secretary. - : Such diversion factor shall be determined by dividing: the number of acres by which the national acreage allotment is Ab reduced below fifty-five million. acres by the number of actes * in the national acreage allotment. os eae ayment program for 1964 and 1965 crops; terms and ‘ conditions; amounts; additional diverted acreage; con- servation and soil-conserving uses; adjustments; - knowledge of exceeding acreage allotment; acreage allotinent not exceeded by delivery to Secretary of farm marketing excess or storage in accordance with regulations to avoid or postpone payment of penalty — or by farms exempt from marketing quota; new farms ineligible for payments; sharing and medium of pay- , mulate and carry out .a program with respect to. 1964 and 1965 crops of | wheat: under which, subject to such terms and conditions as he determines are desirable to effectuate the purposes of * this section, payments may be made in amounts not in excess of 50 per centum of the estimated basic county support rate _ for wheat not accompanied by marketing certificates on the normal production of the: a¢reage diverted taking into ac- _count the income objectives of the chapter, determined by the Secretary to be fair and reasonable with respect to acre- age diverted pursuant’ to subsection (a) of: this section. Any producer who complies with his 1964 farm acreage allot- ment for wheat and with the other requirements of ‘the program shall be eligible to receive payments under the pro- . _ gram for the 1964 crop of wheat: The Secretary may permit producers on any farm to divert from the production of . wheat an acreage, in addition to the acreage diverted pur- > , Suant to subsection (a) of this section, equal to 20: per cen- tum of the farm acreage allotment for wheat: Provided, That the producers on any farm may, at their election, di- - vert such acreage in addition to the acreage diverted pur- suant to subsection (a) of ‘this section, as will bring ‘the. total acreage diverted ort the farm to fifteen acres. Such _. program: shall require’ (1) that the diverted acreage shall be devoted to conservation uses approved by the Secretary; (2) that the total acreage of cropland on the farm devoted ’ i. otal. land but excluding the acreage diverted as provided . above, shall be not less than the total average acreage of cropland , _ devoted to soil-conserving uses including summer fallow and jidle land on the farm during’ a representative period, as de- termined by the Secretary, adjusted to. the extent tHe Sec- retary determines appropriate for (i) abnormal weather con- - ditions or other factors affecting production, (ii) »established _’ crop-rotation practices on the farm, (iii) participation in other Federal Farm programs, (iv) unusually high percent- - Meee ten thks poealh af eetaltichian 4 tee and ounilalic _ soil-conserving acreage for the farm; and (3) that the pro- ducer shall not knowingly exceed. (i) any farm acreage allot- ment in effect for any commodity produced on the farm, and (ii) except. as the Secretary may by regulations prescribe, s with the farm acreage allotments on any other farm for any - crop im which the producer has a share: Provided, That no producer shall be deemed to have exceeded a farm acreage allotment for wheat if the entire amount of the farm market- ° = ing excess is delivered to the Secretary or stored in’ accord- ance with applicable regulations to avoid or postpone pay- . . ment of the penalty: And provided further, That no producer shall be deemed to have exceeded a farm acreage allotment for any crop of wheat if the farm is exempt from the farm quota for such crop under. section 1335 of this title. The producers on a new farm shall not be eligible for payments among producers on the farm on a fair and equi- - eee ee es (c) Adjustment of payments: (d). Advance payments (e) Diverted acreage ‘ial as cai of certain — crops; rate of payments; imitation on rates price support _ pe unavailable for onan weeps (f) Additional terms and conditions ee IE beers te: The Secretary is authorized to ae a such reg- ak. Eee) ‘ © 32 °* ulations ‘as may be avczees to carry out, the provisions of -. \ ee “i sen ae i oh el My : - Commodity Credit Cikginention’ funds and appropriations = ERY . ’., for payments and: administrative expenses +o) ) The Commodity Credit Corporation is authorized to i: af tele its capital funds and other’assets for the purpose of | ae | — SR BS ttn en eh a Peso er ce i Shoriend to. be paca such pa chat as aiarsg neces- © ah aa oa ath Beige cacy gn gra ager Reson rm ge“ “ ‘.- 16, 1988, c.30, Title ITT, §339, as added Sept. 27, 1962, Pubs ‘ = iced ie | L.-87-708, Title ITE, $318, ‘76 Stat. 622, as amended Apr. 11, Pye y hy e 1964; Pub. L. 88-297, Title II, $202 .(7)—(9), 78: Stat. 179, Ook a : Am AS32e.. iar programs; Fa faith pirforinanons aa eple § isa0, eaee diversion ae, redline 4 in Sr ede State, county and synced ee ia has? 5 ments for wheat | ee ea a Gs ae “418996. Feed grains- Sheeweldin’ ‘progtains. ie "1964 and om Ee eee ‘subsequent years; feed grain acreage considered _ GAN Dt tes oe _ wheat acreage and whet Sereage’congilered fred - Pie, Ae ne Haga. Seppicceent seistiline! Ti nog to wheat mar- =a, tl aa ae ee keting quotes paaricting penalty for rice; crop — ; : - + , * é sen BM 82-9 * Are a « of ot ove page - : eee , *o- Swe eX. it- -. ASE ° , » bad -£ 8 6° @.: Pe A ——_ ¥ “ - ° ’ . ile ; ne emi ae ie a bP s. * ‘a ree . WHEAT MARKETING ALLOCATION Faces mean Ney 3a i: ae AS Wein dn obablin te beiey o:has foil fo t'el to r ae Ne, =; | great export, a t: anmcee — and. ‘its produc- Aes. te | fixe ; e Af i amie es & . % : ae . : x ‘é # Ae ; a ode f ean : 4 bs . q . . Skies “y=? ’ . oy . ‘ ae 7 e- ‘ e . yy" ae = game ‘oS ° Cy a * é a ° a . 4 wd . ‘ ch ident viieeenlenunaie AS a SE EE : . * ‘ = "os va " DE a — A-9 » tion for domestic consumption and ‘for export is necessary to the maintenance of a sound national economy and to the - general welfare. The movement of wheat from producer ‘to . consumer, in the form of. the commodity or any of the | products thereof, is preponderantly in interstate and foreign commerce. Unreasonably low prices of ‘wheat to producers impair their purchasing power for nonagricultural products and place them ih a position of serious disparity with other’: - industrial” groups. The conditions affecting the production ‘of wheat are such that. without Federal assistance, producers" - cannot effectively prevent disastrously low. prices for wheat. .. It is necessary, in order to assist. wheat: producers in obtain- - ing fair prices, to regulate the :price of wheat uséd for do- ~ . mestic food, and for exports.in the manner provided in sec- -tiohs 1379a—1879j of this title. Feb. 16, 1988, c. 30, Title . oll, § 379a, as added Sept. 27, 1962, Pub. L. 87—7038, Title - ° TI, § 324(2), 76 Stat. 626. a) | _ § 1379b. "Wheat marketing allocation for 1964.and 1965; _ + 5 “gmount; national allocation percentage: © -__— ae. wheat’ marketing. allocation. program as provided in sec- - -. tions 1379a-1379j of this title shall be in effect for the mar- > keting yedrs for the 1964 and 1965 crops. Whenever a wheat _ marketing allocation program is in effect for any -markéting | ..° year the Secretary shall determine (1) the wheat marketing allocation for such year which shall be the amount of wheat. ie he estimates will be used during such year for food products - . for ‘consumption in the. United States’and that\portion of. * the amount of wheat which he estimates will be exported in ae » La : ‘e , ° ee eee eee (2) Wheat processed in bond * * *- rie (3) Custom or toll Processing Av the Department of Agriculture OPER Le (4) Processing by educational ‘nstiititions or. pram pert et § 777.5 Registration of processors. ., (a) Time of registration. Any person who processes wheat, | ither into a food product or non-food: product, except a “sons for purposes of student raining, ‘experimentation, re- ee ~ search, analysis or [29 F.R. 6272, May 13, 1964, as amended at 29 FR. 7984, | . , June 2, 1864, 29 FR. 11668, Aug. 14, 1964; ES. el. | ‘Sept. 30, 1964] | a, person who processes wheat solely for use on the farm where = grown or an individual who processes wheat in his own home for family yse in‘his home, shall register with the Director ¥ (see paragraph (1), § later. date as may be approved by the Director in wtiting. . - Any such person who begins processing operations sub- sequent to May 20, 1964, ‘ who is not registered, shall register not later than the an he comanences operatjons, - the Director and who 771.3)—by-making -\by paragraph -(b) ‘of this section by May. 30, 1964, or such ae mag his operations, such as by opening or closing plants, - r beginning te_process food products, ‘subsequent to the. - date of hie régisieation, notice-of ‘such-change to irs the Director not later than Sos sdigeh pan these ee * (b) Method of registration yh oe Sue bushel on certain wheat produced and stored in ~~ — the wheat processed, such quantity may be reduced by the — weight of any additional ingredient included in the weight - of. the food products which was introduced during the course - of processing. “Additional ingredient” for purposes of this paragraph.means: Ae (1) Any. flour and other food. products including’ clears and malted wheat flour, which were produced prior to July — to 1964, or fot which certificates have previously been ac- . S quired and surrendered to CCC by the processor or.for which -ortificates are required to be acquired ‘and surrendered ‘to See ee er eee (c) eh aiaaiials seine For purposes of ti Pn, the : wheat equivalent of each food product named column A. ”\ shall be the number of bushels prescribed as the 5 caendon Teh ft Sock potas fa colenen Bh NG wa : dhs PeotBS : : rete ast oe eecaae Bushels : pret yas Pr: aa. sat + (conversion factor) Whole Due —_ or ens Sout ; irk Wael Sie, A _-Flour (inchiding® clears) derived from conventiorial ua milling practices which are generally accepted . in the milling industry in the United States as: Tepresenting a'72 percent extraction operation’ sialon 2.283 £ t flour . i eS a ae Sa piincbhcerecionee me: AOI se TTT CAR ee eee? - Farina © SLibuicabpidacdbincdis mee bsvabtonsiaviiteytheest cinteaniisenteameigiouse Sisnidieded 2.283 Bulgur._ ........ ep Bae ELS Pesce cera et AR WM SC ae 1.916 Rolled wheat ....02.00.00c..0000c0000 ree eet a ees G 1.800 Cracked wheat . (wheat grits), “ground shail “ae «SAMMI IRIN A tse erandent nat sev centorpriocitcsonsonensbosvbees 1.700 iets laut Sud B-Gaeuction iajeinmsily A0 nee percent heavy bran and 50 percent’ flour)? .:.............. 1310 -- " Heavy bran, wm, tbe B (deimection approninataly £7 - percent’heavy bran and 32 percent flour)*’.............. , 1.640 -, Whole wheat cereal; including fines (e depart proximately 80. prevent cereal and - oe ’ fines)? Py, SRS Atk ae 21) I Se Re OL .. 2.09 . Wheat-bits ooreal, incuding fines (extraction ap- a proximately, 68 percent cereal and a7. perce SMM Sade ceria outerones tees onsbectenien ie et hati than ee 2.44 ere. “hess pede pe be ge extinétion approximately 59 percent cracked wheat and 27 ~ percent fimes)? 0.0.0.0... poh “SSO tae CNL EIST 2.80 ‘applicable to'a 72 patank operation. -_- . When certificates are acquired for these products based on the. conversion f. tors specified, certificates will be deeméd to have been: . coquived te Gis Sieg Seine Ss comuction Gaseeeh * ey - a dl coud - Aa ‘factor for any additional food product or flour of other rated of extraction. § . .? (2) ‘king petacn Wid ‘leben to gallos Ge the wea e ment of>a conversion factor for foad products other than | .. flour shell submit to the Administratdr: (i) The name and a détailed deScription of the food prod- suet, alld a oe i) The conversion factor which is considered to’be ap-. .? (Such factor is to be based ypon the quantity of eters t, prior to deaning, that is required to produce 100 . pounds of the particular. food product), and acti Sey _ (ii) “Bvidence to substantiate Ye recommended conver- : (8) Any person who wishes to petitin for the establish- foo \ ment of a conversion factor for flour of other rates of extrac- ° ‘tion shall submit to the Administrator the rate extrac-. ~ tion for which he desires the establishment of a conversion. . Spots. 1028 9. seamen fn eines: Oak Ne. wap Ant x 5 vv '- such rate of extraction. sa -(e) Preparation. of the report. esianthtien for the prep- - . aration of Forms a ented wonton beer IIT. of this part. ak [29 FR. 7987, June 2, 1964; 29° F.R, 11644, how. 14, 1964, 29 F.R..17087,, Dec. 15, 1964] - ; § 777.15 Records. ie ® aud et Food peoceseots shell esteblish and niaintain tor exch jeoc- . essing plant or approved combiriation of plants accurate rec- | , ords and documents which are necessary (a) to determine . the. total quantity of wheat processed into food products - »¢ based: upon the weight of wheat used in processing food ok ee ee — A-32 upon the application of conversion factors to the weight ~~ of food products: obtained in the processing operation as § 777.14 and Appendix III, whichever is appli- cable and b)-to support all reports thereof made to.the Kan- sas City Commodity Office. A food processor shall. establish o -- ahd maintain accurate records of all sales of food products + and removals of food products for sale and consumption from the processing plant unless he-elects to have all wheat proc- - - essed during-each reporting period considered as ‘having been sold or removed for sale or consumption during such — reporting period. The food processor’s. failure to maintain . such gecords shall constitute his election to have wheat | - processed during each reporting period considered as having been sold or removed for or consumption during such re- porting period. Represefitatives of the U. S. Department of Agriculture may examine the foregoing records and docu-: ments and the stocks of wheat and food products in storage ‘ or in the processing plant at any time during normal business ° Le ee Ee eee ee a: period of three years. [20 FR 7967, June, 1964) § 777.16 Gaelite: losses. ‘QC shell moke.a refund to the food processor or allow him a credit against the amount payable for certificates' to the extent of the value of certificates acquired and surrendered - to CCC on any food products which the food processor estab- .: - lishes to the satisfaction of the Administrator was destroyed _ or rendered unmarketable for use as a food product as a ee SS ee ee ; moval for sale or consumption. - (29 FR..7987, June 24, 1964] ; 5 777. 17 ee | in dispute. . Thet -of a payment to: CCC for certificates, or the * surrender Of certificates to CCC by a food processor, or the - making of an undertaking by the processor pursuant to §777. . a ee ee So 3 : jgalight otherwise have to eisert 0. daita inthe event of a. _ dispute as to the number of certificates, if any; required to ya nailed sad! aldecead te Es te Ot ce ke ~refunds or credits against the cost of certificates to. which pela onncingacicnios eanaaabs ra sliesatieaal ." [29°F.R, 7987, June 24, 1964] , APPENDIX. II—PROCESSOR WHEAT MARKETING = i CERTIFICATE REGULATIONS . INSTRUCTIONS FOR THE PREPARATION OF THE PROCESSING — ‘ReporT—WEIGHT oF WHEAT Basis * * aK “® wi | 2. [29 F.R. 7987, June 24, 1964; 29 FR. 10495, July 29, 1964] . APPENDIX III—PROCESSOR WHEAT MARKETING —_ .. «CERTIFICATE REGULATIONS - "INSTRUCTIONS FOR THE PREPARATION OF THE Processinc > REeportT—COoNvERsION Factor Basis * *.# * ’* [29 FR. 7988, June 2A, 1964) a8 EEE aa lllt— ae &, a et A So ee _ Ay aiciy vhest er ox ahs FERRERS PAPI I GINGER CALLE GEREN tae el Ra * Dae A pI ARES ith Pita ia wk Oia yr Nhat s 3 ai es 5 Rs 2 aig ae eB sae de eect e i soit SUT ee RASA N Sieh iG ie Le g ag B-1 ee 1. Opinion Below | — Muited States Gouri of Appeals ‘FOR THE DISTRICT OF COLUMBIA CIRCUIT . Mo Fs os Se THE Morrison MILLING ComPany, et al., APPELLANTS - so We Orvittz L. Freeman, et al., APPELLEES — *. No. 19,795 ee anit PoE be Nationa Biscurr Conaasnt: and o THE cease! Oars CoMPANY, APPELLANTS, Vv. — Orvirre L. FREEMAN and | . Coimonrry CREDIT CoxPoration, ‘APPELLEES . s Appesis from the United States ee > , for the District of Columbia | Decided July 18, 1966 Mr. Jerry L, Buchmeyer for The Morrison Milling Com-. pany, and certain other appellants in No. 19,794. tae @ B-2 ee i * Mr. Brice M. Clagett, witli: ‘whican Meio. Howard. C. Westwood and Cyril V. Smith, Jr., were on the brief,’ for General Mills Inc, and certain other appellants in No. “19,794, and appellants in No. 19,795. re Pes -— Mr. Carl Eardley, Attorney, Departrient -of pg “with _ whom Messrs. J. Willias * of Justice, and David'G. ress, United States Attorney, were on the brief, for appellees. Messrs. Alan S.:Rosenthal and ° ' entered appearances for apéllees. . a Before BazELon, Chit Jute; Danas and McGowan, me Circuit Judges." protey Circuit Judge: iia sei tet ins WAS trict Court involve an attack by a number of wheat proc- essors upon regulations issued and observed by the. Sec- - retaty of Agriculture under the Agricultural Act of 1964. 78, Stat. 177, as amended, 7 U:S.C. §§ 1301 et seg. The reg- _/alations ‘are asserted to be in direct conflict with the statute _ and, in any event, arbitrary. and capricious. These claims _ were unavailing in the District Court which, on cross-motions -for summary judgment, granted that relief to appellees. The issues raised before us relate solely to the merits; and, for — a a we affirm the District ; sT Has “ ~ ies aclidaiiae ta pamela tks iii te Cle ‘gress in the method of providing financial support for the _ Kn wha ome Immediately prior to July 1, 1964— the effective date of the ‘statute here in issue—the grower could:count on $2.00 per bushel. This was available in the form of (1) a price support loan of $1.82 and. (2) a Com- ' modity Credit Corporation payment of 18¢. Under the new | scheme, the loan level was reduced to $1.30, and a system of marketing certificates was set up. That scheme provided for an estimate by the Secretary of the national marketing quote of wheat. This included, among other things otimnates of | Richard S. Salzman, Attorneys, hears of J =. -£ the amount pNaear in the einer ee of food products _ for human consumption in the United States and of the ' amount to be exported. When the market quota was de- termined, the, Secretary estimated the acreage ‘required to an produce it. Certificates of two kinds—domestic and export—_ iad were then issued to growers, who met the acreage allotment ‘The critical language ss Seg cite eatin the : liability ‘of processors for the certificates is the following, " TUS.C. § 1379d: (b) During any marketing’ year for which a wheat minttostilie allocation program is in effect, (i)' all per- Sons engaged’ in the processing of ‘wheat into. food products: shall, prior to marketing any such food product: or removing such.food product for sale or » acquire domestic marketing certificates equivalent: to the niamber of bushels of wheat in. such product _ and (i) all persons exporting t shall,"prior to such “abet; attain alae con tian omc Bee tye ironic ee p "Under an express grant daombere in the Act, § 137% Be disposition " prescribe “regulations governing the acquisition, _ or handling of marketing certificates,” the Secretary issued this regulation, 7 C.F.R. § 777.11 (1965): Time and manner of gequiring and surrendering certificates. (a) ‘General. Food processors shall acquire _certifi- - cates and surrender certificates to CCC as provided in paragraphs (b) and (c) of this section and in the man- ner specified in § 777.10. The number of certificates - ee : federal power relied upon is: the ‘Clausé. The bill was sé net handled in either chamber asa tax; and the,.revenue raised ¢ is for the achievement of 9 regulatory arid-not to coptribute to the funds of the . Even if considered ‘as a tax- ing measure, it is unlikely that Cong would fix a 50¢ rate to ,support a 70¢ outlay. . =. . : 3 Evert without this explicit evidence of Congressional pur- pose, we would, of course, be slow to reject the Secretary's | © ng? a c wit abot io bead i ved, sd the pr centage of dockage in the sample is deducted whole. - ; It is not pretended that | test picks up all foreign © . ai tae cig of ceccuacieg- Gok peuaiing ae Oe ance for processing loss would-be neither arbitrary nor capri- cious, Appellants, presumably because of their view of the gtatute, Larsen lump the two types of moisture loss to- | _-gether in their argument that the allowance is inadequate, . - - and have made’ no attempt to differentiate between\the two , ~ kinds of losses. Thus, the Secretary’s contention as to normal shrinkage losses during storagé is largely unchallenged, be- _ - cause appellants are proceeding on a different set. of assump- . -_ tions—assumptions which we have rejected in our treatment a statutory construction argument: In any event; the ‘does not enablg us to say with confidence that the © . . " Socretary’s allowance by regulation of 0.6 peroent for moisture. ” Joss is unreasonable:* wach Goverment aida ewerts that thi allowance, wae, xd | ‘after consultatjen with industry spokesmen who advised that it it was adequate tsoflct any invisible low occurring during stor= 28 ‘- (Footnote continued on _— page) 4 With velgioce ‘to’ wastage: Ran aE ere the record that the tions do not require marketing .. certificates in respect of t which, because of some flaw in processing, fails to become a food product removed from — the plant or marketed as such. And insofar as-this claim rests upon the amount of ‘wheat lost in handling and storage, this loss does not appear to be either of such 4 magnitude or — = go licking #i velationship to tho peoceming of the wheat as _ to compel holding: the regulations arbitrary. — : The judgment of the District Court is. | ai ee its ° | : | ~ Ay : Tiicsiistha wikiciill Asis ndtinaesotien) . in the usual course of -operations.” An affidavit for appellants, oe no limit.on moisture — B-11 2. Judgment. Below UNITED STATES COURT OF APPEALS For ae District of Calemniite Circuit eee ery September Term, 1965 : No. 19,794. THE Morrison MILLING CoMPANY, . a 2 3 Skis nie f United States Court '- . ein a Onvaiiz L. FRmeMAn, ot pl, Huot July 16" . Fa oe 2 ‘Appellees. ‘ e -¢e .. Ne 19,795 ° She Be Civil 352-65 - NATIONAL Biscurr CoMPANY and - ‘THE QUAKER Oats CoMPANY, _ fe toe ene — Appellants, . OrvILLE L. FREEMAN and © CommMonpiTy CREDIT CORPORATION, 3 eS Appellees. hosadi from the United States District Court * for. the. District of Columbia : Before: : Bazelon, Chit Judge, and Danaher and McGowan, : | .é Circuit Judges. " | : : a .* JUDGMENT | These cases came on to be heard on the record on \, fom the United States Distiot Court for the Distt of Columbia-and were argued by counsel. ON CONSIDERATION WHEREOF, it is ‘ened and. + Coa tie Nee et, 8 6 ate oi aehfrke Court appealed from in these cases & affirmed. _ Dated: July 18, 1966. a ae Circuit Judge McGowan. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385603_0137%3A1. Public record. Not legal advice.