Brief for the Respondent in Opposition — Angel v. Butz

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CITATIONS

Cases:

American Fed’n of State, County and Municipal

Employees v. City of Cleveland, 484 F. 2d

Ns has ace anand gai minina iam aniiadsenmwain daa 10

Appalachian Power Co. v. Environmental Pro-

tection Agency, 477 F. 2d 495________-__-- 10

Bradley v. Weinberger, 483 I’. 2d 410_____---- 10

California Citizens Band Ass’n v. United States,

375 F. 2d 48, certiorari denied, 389 U.S. 844 8

Camp v. Pitts, 411 U.S. 1388.__---.--.------ 7,9

Chrysler Corp. v. Department of Transportation,

IR eg ae ke a eae eal aag 10

Citizens to Preserve Overton Park, Inc. v. Volpe,

I I i ee rok oo priate es data mmeth 7, 8, 9, 10

City of Chicago v. Federal Power Commission,

458 F. 2d 731, certiorari denied, 405 U.S.

ae ae re en na 8

D.C. Federation of Civic Associations v. Volpe,

459 F. 2d 1231, certiorari denied, 405 US.

REE ER CRE ote AEC roe wee 10, 11, 12

Delaware Citizens for Clean Air, Inc. v. Admin-

NG, I I I sia eran cv-tcentanowenin ace 8

Cases—Continued

Environmental Defense Fund, Inc. v. Corps of

Engineers, 470 F. 2d 289, certiorari denied,

> ae 10

Rodriguez v. Zimbelman, 317 F. Supp. 921 -__- 4

Salazar v. Hardin, 314 F. Supp. 1257--.-- ~~ _- 4

Save Our Ten Acres v. Kreger, 472 F.2d 463... 9

Scherr v. Volpe, 466 F. 2d 1027---.-----.-.-- 10

Schicke v. Romney, 474 F. 2d 309_---~------- 10, 11

Silva v. Lynn, 482 F. 2d 1282-------------- 10

United States v. Allegheny-Ludlum Steel Corp.,

I emma 7

United States v. Florida E. Coast Ry., 410

' nr a a cee amines ik 7

Statutes

Administrative Procedure Act

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Sugar Act of 1948, 61 Stat. 922, as amended,

BR a ae 2.3

Section 301(c)(1), 7 U.S.C. 1131(e)(1)-_- aes

Section 403, 7 U.S.C. 1153__._---------

Section 403(b), 7 U.S.C. 1153(b)_-----_-

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Miscellaneous:

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meme 4

117 Cong. Rec. 27525-27528 _ -......------- 6

36 Fed. Reg. 5903-5904. _._.......-------- 5)

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Hearings before the House Committee on

Agriculture on Extension of the Sugar Act,

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Gnu the Supreme Court of the United States

OctoseR TERM, 1973

No. 73-1351

Epvarpo ANGEL, ET AL., PETITIONERS

Vv.

Eart Butz, SECRETARY OF AGRICULTURE

OX PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 39-

40) is reported at 487 F. 2d 260. The opinions of the

district court (Pet. App. 21-29, 30-34) are unre-

ported.

JURISDICTION

The judgment of the court of appeals was entered

on November 13, 1973. A petition for rehearing was

denied on December 7, 1973 (Pet. App. 41). The peti-

tion for a writ of certiorari was filed on March 6,

1974. The jurisdiction of this Court is invoked under

28 U.S.C. 1254(1).

(1)

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2

QUESTION PRESENTED

Whether the court below properly sustained the

validity of minimum wage-rate regulations issued by

the Secretary of Agriculture pursuant to the Sugar

Act as not being arbitrary, capricious, or an abuse of

discretion.

STATUTES INVOLVED

Section 301(¢c)(1) of the Sugar Act of 1948, 7

U.S.C. 1131(c)(1), provides that the Secretary of

Agriculture is authorized to make sugar subsidy pay-

ments, subject to the condition:

That all persons employed on the farm in the

production, cultivation, or harvesting of sugar

beets or sugarcane with respect to which an

application for payment is made shall have been

paid in full for all such work, and shall have

been paid wages therefor at rates not less than

those that may be determined by the Secretary

to be fair and reasonable after investigation

and due notice and opportunity for public

hearing; and in making such determinations

the Secretary shall take into consideration the

standards therefor formerly established by him

under the Agricultural Adjustment Act, as

amended, and the differences in conditions

among various producing areas: Provided, how-

ever, That a payment which would be payable

except for the foregoing provisions of this sub-

paragraph may be made, as the Secretary may

determine, in such manner that the laborer will

receive an amount, insofar as such payment

will suffice, equal to the amount of the acerued

unpaid wages for such work, and that the pro-

ducer will receive the remainder, if any, of

such payment.

_—

Section 403 of the Sugar Act of 1948, 7 U.S.C.

1153, provides: .

(a) The Secretary is authorized to make

such orders or regulations, which shall have the

force and effect of law, as may be necessary to

carry out the powers vested in him by this

chapter. Any person knowingly violating any

order or regulation of the Secretary issued

pursuant to this chapter shall, upon conviction,

be punished by a fine of not more than $100

for each such violation.

(b) Each determination issued by the Secre-

tary in connection with quotas and deficits

under subchapter II of this chapter or pay-

ments under subchapter III of this chapter

shall be promptly published in the Federal

Register and shall be accompanied by a state-

ment of the bases and considerations upon

which such determination was made.

STATEMENT

The Sugar Act of 1948 (61 Stat. 922, as amended, 7

U.S.C. 1100, et seg.) provides that sugar producers

are eligible for the subsidies authorized by the Act

only if they pay their workers wages “at rates not

less than those that may be determined by the Secre-

tary [of Agriculture] to be fair and reasonable after

investigation and due notice and opportunity for pub-

lie hearing * * *.”? 7 U.S.C. 1131(¢)(1). In imple-

menting this provision, the Secretary conducts annual

public hearings in sugar beet and sugarcane producing

areas. See 7 C.F.R. 802.2. Following these hearings,

the Secretary issues wage-rate regulations for the

coming season (7 C.F.R. 862), together with a state-

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ment of bases and considerations upon which his de-

termination is based (e.g., 39 Fed. Reg. 4752), as

required by 7 U.S.C. 1153(b).

This action arises from the Secretary’s refusal to

adopt certain regulations proposed by petitioners at the

1969, 1970, and 1971 wage-rate hearings (Pet. +

7).! These proposals included such matters as chang-

ing the categories of piecework operations specified in

7 C.F.R. 862.10, guaranteeing a minimum hourly wage

rate as opposed to minimum rates per acre, and estab-

lishing a different grievance arbitration system. Also

included were the petitioners’ recommendations that

sugar beet producers lose part or all of their subsidies

if they knowingly employ illegal aliens, retaliate

against workers who file grievances, fail to secure

written contracts with workers, or fail to provide

free, sanitary housing, health insurance, and an inter-

state travel allowance to workers. On behalf of the

class of all sugar beet farm workers, petitioners con-

tend that the Secretary’s rejection of their proposals

was arbitrary, capricious, and an abuse of discretion.

They seek declaratory and injunctive relief invalidat-

ing the regulations (Pet. App. 37).

1 The Secretary adopted one of the proposals in 1970 (Pet. 5:

7 C.F.R. 862.10(b)), and two other proposals were adopted as

a result of litigation. Salazar v. Hardin, 314 F. Supp. 1257 (D.

Colo.) (7 C.F.R. 862.15): Rodriguez v. Zimbelman, 317 F.

Supp. 921 (D. Colo.) (7 C.F-.R. 862.13). In addition, each year

the Secretary has increased the minimum hourly and piecework

wage rates, so that the 1974 piecework rates (39 Fed. Reg.

4750) in some instances exceed those proposed by petitioners

in 1971 (Cf. Pet. App. 36). The remaining fourteen proposals.

however, have not been adopted by the Secretary (see Pet.

App. 61-63).

—_

5

The district court initially held that, contrary to the

ition set forth in the Secretary’s statement of bases

and considerations accompanying the 1971 wage-rate

regulations (36 Fed. Reg. 5903-5904), the Secretary

had the power under the Sugar Act to enact peti-

tioners’ proposals, including those relating to such

non-monetary matters as housing (Pet. App. 21-29).

Thereafter, the Secretary issued the 1972 regulations

and, in the accompanying statement, stated that, de-

spite the district court’s holding, he was “still of the

opinion that legal authority to issue such regulations

[proposed by petitioners] under the Sugar Act is

absent.” 37 Fed. Reg. 7581 (Pet. App. 56). Never-

theless, the Secretary considered petitioners’ proposals

on the merits, and rejected them as “impractical and

undesirable.” 37 Fed. Reg. 7581 (Pet. App. 59). Re-

viewing this statement, the district court then found

that the Secretary had not acted arbitrarily or capri-

ciously, and that the regulations had a rational basis

(Pet. App. 31-33). Accordingly, the court denied the pe-

titioners’ motion for summary judgment and granted

the Secretary’s motion for dismissal.

The court of appeals affirmed (Pet. App. 30-40).

Without deciding whether the Secretary is authorized

to regulate the non-monetary conditions of employ-

ment proposed by petitioners (Pet. App. 39), the court

of appeals concluded that the Secretary’s rejection of

those proposals as impractical and undesirable, in the

exercise of his rulemaking authority, was not arbi-

trary, capricious, or an abuse of discretion (Pet. App.

37-39). The court also held that, in issuing wage-rate

regulations, the Secretary is not limited to considering

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only the evidence presented at the public hearings

(Pet. App. 38) and that, in view of the Secretary's

contemporaneous explanation of the reasons for his

rejection of petitioners’ proposals, the record before

the court need not contain everything considered by

the Secretary in adopting the regulations (Det. App.

38-39). Finally, the court held that the Secretary’s re.

jection of petitioners’ proposals on the merits was not in-

validated by the fact that at the same time he reiter-

ated. his view that he had no authority to adopt then

(Pet. App. 39-40).’

ARGUMENT

The court of appeals correctly affirmed the district

court’s entry of judgment for the Secretary, and peti-

tioners’ challenge to the reasons for affirmance stated

in the opinion of the court of appeals does not present

any issue warranting review by this Court.

1. No question is presented here concerning the

statutory standard of judicial review applicable to

the Secretary’s action in promulgating wage-rate

regulations under the Sugar Act. As the Act does

not require that the Secretary base such regulations

“on the record” after a hearing, the rule-making pro-

? While this action was pending in the district court, peti-

tioners also sought to have some of their proposals imple-

mented by legislation. The Senate, however, rejected their

proposed amendments to the Sugar Act by vote of 59 to 4

(117 Cong. Rec. 27525-27528), and the House Committee on

Agriculture did not recommend enactment of the proposals. See

Hearings before the House Committee on Agriculture, on Exten-

sion of the Sugar Act, 92d Cong., Ist Sess., pp. 179, 185-188; H.

Rep. No. 92-245, 92d Cong., Ist Sess.

_—

7

ceedings were subject only to the less formal pro-

eedural requirements of 5 U.S.C. 553. United States

y, Allegheny-Ludlum Steel Corp., 406 U.S. 742, 756-

758; United States v. Florida E. Coast Ry., 410 U.S.

994, 234-238.° Accordingly, the Secretary’s action, as

petitioners concede (Pet. 10, 12), is not subject to

the “substantial evidence” or “de novo” review stand-

ards of the Administrative Procedure Aet, 5 U.S.C.

706(2)(E), (F). See Citizens to Preserve Overton

Park, Inc. v. Volpe, 401 U.S. 402, 413-415; Camp v.

Pitts, 411 U.S. 138, 140-142. As the court of appeals

therefore correctly held (Pet. App. 38), the Secre-

tary’s action was to be sustained in this case unless it

was shown by petitioners to be “‘arbitrary, capricious,

an abuse of discretion, or otherwise not in accordance

with law * * *.” 5 U.S.C. 706(2)(A). See Overton

Park, supra, 401 U.S. at 416; Camp v. Pitts, supra,

411 U.S, at 142.

2. Petitioners principally argue that the court of

appeals’ approach to the limited reviewing function

of a court under 5 U.S.C. 706(2)(A) conflicts with

this Court’s decision in Overton Park and the deci-

sions of other courts of appeals. Such conflict as

exists, however, is more superficial than substantial,

and does not require review by this Court.

A. Petitioners contend (Pet. 15-16) that Overton

Park required the courts below to invalidate the regu-

lation because the Secretary, in issuing it, may have

relied upon some unspecified information not con-

>No question is presented as to the Secretary’s compliance

with 5 U.S.C. 553.

Bieetiscmsovns Waal Al. Laie stevie

8

tained in the administrative record hefore the distrie¢

court. This contention overlooks significant distine.

tions between Overton Park and the instant case.

In Overton Park, the administrative action chal-

lenged was the application of a very specific statutory

standard to a particular set of facts; «.e., whether

there was any ‘‘feasible and prudent alternative” (23

U.S.C. 138; 49 U.S.C. 1653(f)) to construction of a

highway through certain park land. Here the chal-

lenged action consists of a general policy determina-

tion that minimum wage rates prescribed by the See.

retary are “fair and reasonable.” 7 U.S.C. 1131(¢)

(1). The latter action, unlike the former, involves a

legislative-type policy judgment not readily suscepti-

ble to evidentiary validation; in such cases courts

have held, in applying Overton Park, that all matters

relied upon by the agency need not be part of a

formal administrative record and need not be brought

before the court. F.9., Delaware Citizens for Clean

Air, Ine. vy. Administrator, 480 F. 2d 972, 976 (CA.

3); City of Chicago v. Federal Power Commission,

458 F. 2d 731, 745-747 (C.A.D.C.), certiorari denied,

405 U.S. 1074; California Citizens Band Ass’n \.

United States, 375 F. 2d 43, 54 (C.A. 9), certiorari de-

nied, 389 U.S. 844.

In addition, in Overton Park the record before this

Court contained no explanation by the Secretary of the

basis for his approval of the highway nor any evi-

dence of his consideration of the relevant factors

401 U.S. at 408, 420. Here, by contrast, the regula-

tions contain not only an explicit statement of their

bases but also an explanation of the Secretary’s rea-

sons for rejecting petitioners’ proposals (Pet. App.

51-60).

9

As this Court held in Camp v. Pitts, supra, a con-

temporaneous explanation of the “determinative rea-

son for the final action taken,” even if ‘“‘curt,” pro-

yides the basis by which the validity of the action

must be judged, 411 U.S. at 143. In such a case,

Overton Park, to the extent that it requires that gaps

in the administrative record be filled in the court pro-

ceedings, is inapplicable. 411 U.S. at 142-148.

In any event, here there was before the district

court a substantial record bearing on the Secretary’s

action, including a transcript of the 1971 public hear-

ings on the proposed regulations, supplemental briefs

and affidavits submitted by interested parties in con-

nection with that hearing, and the deposition of the

Department of Agriculture official responsible for

promulgating the regulations, In addition, the reec-

ord included a detailed specification of sources of

information (in addition to public hearings) consid-

ered by the Secretary in promulgating the substan-

tially similar sugar beet wage-rate regulations in prior

years."

Finally, it should be noted that in the district court

both sides moved for summary judgment, contending

that the validity of the Secretary’s action could prop-

erly be adjudicated with reference to the statement of

bases and considerations in the regulation and the

other matters in the record before the court.°

‘In view of the broad statutory standard of the Sugar Act and

the correspondingly wide scope of the Secretary's authority under

it, the court of appeals engaged in appropriately “thorough, prob-

ing, in-depth review” (Overton Park, supra, 401 U.S. at 415) of

his action.

‘Petitioners were not barred by any court ruling from seek-

ing discovery concerning matters considered by the Secretary

ae

—

B. Petitioners also contend that the decision beloy

conflicts with Overton Park and with the decision of

the District of Columbia Circuit in D.C. Federation of

Civic Associations Vv. Volpe, 459 F. 2d 1231 (C.A.D.C,),

certiorari denied, 405 U.S. 1030, in holding that the See.

retary’s consideration of “legally irrelevant and imper-

missible” factors (Pet. 17) did not invalidate his action,

The claimed conflict, however, is not in fact presented

in this case.

10

that were not part of the record before the court. An agency's

action “is entitled to a presumption of regularity” (Overto

Park, supra, 401 U.S. at 415), and, absent a statute to the

contrary (cf. 28 U.S.C, 2112), it is ordinarily the obligation of

one challenging the validity of agency action to obtain and

bring before the court evidence to overcome that presumption,

The cases cited by petitioners (Pet. 16, n. 2) as requiring that

the whole administrative record be provided to the court by

the agency are all distinguishable, in that the district courts

had blocked discovery efforts to obtain the matters relied

upon by the agency (Silva v. Lynn, 462 F. 2d les, Ls

(C.A. 1); Sehicke v. Romney, 474 F. 2d 809, 815-314, 3)

(C.A. 2)); a special statute required the agency to rely upon

only matters in the record or to present the record relied

upon to the reviewing court (Appalachian Power Co. v. Env

ronmental Protection Agency, 477 F. 2d 495, 505-507 (CLA. 4):

Chrysler Corp. v. Department of Transportation, 472 F. x

659, 668 (C.A. 6)); there was no administrative record befor

the court (Scherr v. Volpe, 466 F. 2d 1027, 1032 (C.A, 7):

Bradley v. Weinberger, 483 F. 2d 410, 414 (CLA. 1) ) : or they con-

tain only dicta, in that there was no suggestion that the agency

relied upon matters not before the court or that the adminis

trative record before the court was otherwise insuflicient for

determining the validity of the action taken. Environmental

Defense Fund, Inc. vy. Corps of Engineers, 470 F, 2d 289, 30)

(C.A. 8), certiorari denied, 412 U.S. 931; Save Our Ten Acre

v. Kreger, 472 F. 2d 463, 466 (C.A. 5); American Fed'n of

State, County, and Municipal Employees v. City of Clevelénd.

484 F. 2d 339, 384 (C.A. 6) ). Moreover, most of the cases did net

involve rule-making.

—e

Petitioners’ premise—that the Secretary’s action

was based on consideration of irrelevant factors—is

not supported by the record. The asserted irrelevaney

was not some form of extraneous political pressure, as

in D.C. Federation, but rather consists of the Secre-

tary’s restatement of his position that he lacked

statutory authority to accept particular regulations

proposed by petitioners (Pet. App. 56). However, the

Secretary stated that he had also considered the ad-

visability of the proposed regulations on their

merits—an assertion which stands uncontradicted on

the record in this case—and there is no basis for con-

cluding that the Secretary’s consideration of the

merits was affected by his view of the limits of his

authority.

Accordingly, the court of appeals’ discussion of this

issue was essentially dictum. Indeed, all the court said

was that, “if [the Secretary] * * * considered an al-

leged improper reason along with one that was proper,

that action in itself does not establish that the result

was arbitrary or capricious” (Pet. App. 40; emphasis

supplied). The court did not accept petitioners’ char-

acterization of the Secretary’s reference to doubts

about his legal authority as constituting consideration

of an “improper reason.” Cf. Schicke v. Romney, 474

F.2d 309, 318 (C.A. 2) ).°

11

*The Secretary's reference to his possible lack of authority

as an alternative ground for rejecting petitioners’ proposals was

analogous to the settled practice of courts and agencies to state

alternative and frequently unrelated grounds for their decisions,

such as finding a lack of jurisdiction and alternatively rejecting

a claim on the merits. In such circumstances, the existence or

correctness vel non of one ground typically does not itself im-

pair the validity of the alternative ground.

12

Finally, because this case involves the quasi-legisls.

tive action of rule-making, the validity of the Seer.

tary’s action would not necessarily have been affected

even if he had considered irrelevant factors that

might have tainted his action in applying a statutory

standard to a particular set of facts, as the court in

D.C. Federation recognized. 459 F. 2d at 1247.

CONCLUSION

For the foregoing reasons, the petition for a writ

of certiorari should be denied.

Respectfully submitted.

Rosert H. Bork,

Solicitor General.

Carta A. Hits,

Assistant Attorney General.

GeraLp P. Norton,

Assistant to the Solicitor General.

Rosert E. Kopp,

ANTHONY J. STEINMEYER,

Attorneys.

May 1974.

U.S. GOVERNMENT PRINTING OFFICE: 1974