Opposition Brief — Fullenkamp v. Johanns

—

(

tract, including a transition payment, and because ap-

plying the cap to transition payments “ensures that the

cap has a meaningful role in the statute.” Jd. at 13a-14a.

ARGUMENT

The court of appeals’ decision is correct and does not

conflict with the decision of any other court of appeals.

Indeed, no other court of appeals has had an occasion to

construe the particular statutory provision at issue here,

which concerns one-time retrospective payments under

a program in which even ongoing monthly payments are

now scheduled to terminate on September 30, 2005. In

addition, the Secretary's interpretation of the statute is

not only reasonable, but is the interpretation required

by its text and structure and is, in any event, the most

natural reading of the statute. Further review by this

Court is therefore not warranted.

1. As the Secretary argued in the court of appeals

(Pet. App. 8a-9a), the conclusion that transition pay-

ments are subject to the statutory cap is not only a per-

missible interpretation of the statute, but also the one

required by its plain text.

Subsection (b), entitled “Payments,” directs the Sec-

retary to offer to enter into contracts with dairy farm-

ers, under which those farmers “receive payments on

eligible production.” See 7 U.S.C. 7982(b). Ensuing

subsections provide for two types of such payments: pe-

riodic, monthly payments coimmencing with the month

in which the contract was entered into through Septem-

ber 30, 2005, see 7 U.S.C. 7982(e) and (g)(1), and a lump-

sum retroactive (“transition”) payment for the period

from December 1, 2001, through the month proceeding

the month in which the contract was entered into, see 7

U.S.C. 7982(h). Subsection (c), entitled “Amount,” es-

8

tablishes a single formula for calculating the pavments

“under this section,” which includes subsection (h) and

its provision for transition payments. 7 U.S.C. 7982(c).

Indeed, subsection (h) itself provides that transition

payments are to be made “in accordance with the for-

mula specified in subsection (¢).” 7 U.S.C. 7982(h). Sub-

section (c), in turn, provides that the “payment quantity”

to be used in calculating the amount of payments is

the quantity “established under subsection (d).”

7 U.S.C. 7982(¢)(1). Paragraph (2) of subsection (d) con-

tains the cap on the payment quantity. It provides that

the “payment quantity” for all producers on a single

dairy farm “during the months of the applicable fiscal

year for which the producers receive payments under

subsection (b) of this section shall not exceed 2,400,000

pounds.” 7 U.S.C. 7982(d)(2). Because this cap is ex-

pressly incorporated by reference in subsection (c), and

because subsection (h) expressly provides that transition

payments are to be made in accordance with the formula

in subsection (c), the cap is applicable to transition pay-

ment by the plain language of the statute.

Petitioners contend (Pet. 5) that the reference in 7

U.S.C. 7982(d)\(2) to “payments under subsection (b)”

limits the cap to periodic monthly payments made after

the contract is entered into, and excludes the lump-sum

retroactive payment for the transition period. But peti-

tioners point to nothing in the Act to support that con-

tention. They assert only that the reference to pay-

ments under subsection (b) “implies” that there are pay-

ments that are not uncer that subsection. That is not so.

As explained above, subsection (b) provides for the Sec-

retary to offer contracts to dairy farmers under which

those farmers will receive payments on eligible produc-

9

tion, and it does not draw any distinction between peri-

odic monthly payments and retroactive lump-sum pay-

ments. Moreover, subsection (h) in fact confirms that

the contract is the basis for making the lump-sum tran-

sition payment, because it applies only to farmers who

“enter into a contract under this section.” 7 U.S.C.

7982(h). Thus, the negative implication petitioners seek

to draw from the reference to “subsection (b)” in 7

U.S.C. 7982(d)(2) is without merit and cannot in any

event overcome the express terms of the statute.

If there were any lingering doubt, subsection (g) fur-

ther supports the Secretary’s interpretation. Subsection

(g), which is entitled “Duration of contract,” provides

that “[e]xcept as provided in * * * subsection (h),” any

contract entered into “under this section” shall cover

eligible production from the first month of the contract

through September 30, 2005. The quoted introductory

phrase makes clear that, for purposes of making the

lump-sum transition payment, the period prior to the

con.ract month is covered by the contract. That provi-

sio clearly rests on the proposition that payments un-

der subsection (h) are payments under the contract, and

thus covered by subsection (b) as well. See 7 U.S.C.

7982(g). If Congress had instead intended to limit appli-

cability of the cap to periodic monthly payments, it

would have applied the cap to “payments under subsec-

tion (e),” which pertains specifically to monthly pay-

ments, rather than to “payments under subsection (b),”

which refers to payments under the contracts generally.”

Contrary to the petitioners’ assertion and the suggestion of the

court of appeals, the Secretary's interpretation does not render the

reference to “subsection (b)” in subsection (d)(2) superfluous. See Pet.

6-7; Pet. App. 10a. Rather, the reference to the operative portion of

10

For the foregoing reasons, the plain text of Section 7982

subjects transition payments to the statutory cap. At

the very least, that is the most natural reading of the

statute.

2. Even if it is assumed, arguendo, that the statutory

text does not compel the Secretary's conclusion, the

court of appeals correctly sustained the Secretary's reg-

ulations as a reasonable interpretation of the statute.

As the court explained (Pet. App. 13a), the statutory

language is at least amenable to the Secretary's con-

struction: because transition payments under subsec- |

tion 7982(h) result only upon entering into a contract

under subsection 7982(b), they reasonably can be consid-

ered “payments under subsection (b)” subject to the

production cap in subsection 7982(d)(2). In addition, as

the court of appeals also found, the Secretary's con-

struction ensures that the statutory cap on production

will have meaningful effect. Under petitioners’ pre-

ferred construction, any dairy farmer could evade the

cap by delaying entering into a contract until immedi-

ately prior to the program's expiration, at which point it

could then seek a retroactive transition payment without

regard to the statutory cap. The result would be a dis-

bursement equivalent to the sum of the prospective

monthly payments if there were no statutory cap at all.

The Secretary's construction forecloses circumvention

of the program in this manner and ensures that the cap,

which Congress expressly wrote into the statute, serves

Section 7982 provides without qualification for “payments” (not merely

monthly payments) to a person who enters into a contract with the

Secretary. The fact that Coogress referred to that particular subsec-

tion, rather than to Section 7982 as a whole, renders the reference more

precise, not superfluous.

11

a meaningful purpose. It is thus a reasonable interpre-

tation of the statute requiring judicial deference.

3. Petitioners do not challenge the court of appeals’

conclusion that the Secretary’s interpretation of the

statute is a reasonable one. Rather, they contend that

the court of appeals misapplied Chevron in even reach-

ing that point of the analysis. Petitioners’ contentions

are without merit and provide no basis for further re-

view.

In Chevron, this Court established a two-step frame-

work through which a court should review an agency’s

construction of a statute it administers. The first step

requires the reviewing court to determine whether Con-

gress has directly spoken to the question at issue. If the

legislative intent is clear, that is the end of the matter,

“for the court, as well as the agency, must give effect to

the unambiguously expressed intent of Congress.”

Chevron, 467 U.S. at 842-848. If, however, “the statute

is silent or ambiguous with respect to the specific issue,”

the court must uphold the agency’s action as long as it is

based on a permissible construction of the statute. /d.

at 843.

In this case, the court of appeals first found that nei-

ther the text of the statute nor its history, structure, or

purpose evinced a clear congressional intent as to the

precise question presented: whether transition pay-

ments are subject to the production cap. See Pet. App.

9a, 10a. The court then considered whether the Secre-

tary’s interpretation was reasonable, and deemed it

“eminently” so. /d. at 13a.

a. Petitioners contend that the court of appeals de-

parted from step one of Chevron by rejecting an inter-

pretation required by the unambiguous text of the stat-

12

ute. See Pet. 12-13. This argument mischaracterizes

the decision below. Contrary to petitioners’ assertion,

the court of appeals found textual infirmities in both par-

ties’ proposed interpretations of the statute. The court

noted that although in its view the Secretary's interpre-

tation rendered one phrase superfluous,’ petitioners’

proposed interpretation is not compelled by the text of

the statute, because it is irreconcilable with statutory

text stating that all contract payments are subject to the

Statutory cap and that transition payments are available

only to farmers with whom the Secretary contracts. Pet.

App. 9a-10a.

The court thus did not, as petitioners argue, reject

the plain language of the statute. Instead, having identi-

fied problems with each party's reading of the statutory

text, it found that the statute is ambiguous. The court of

appeals’ searching and thorough inquiry into the plain

language of the statute is entirely consistent with step

one of Chevron and other decisions of this Court. In-

deed, the court of appeals complied fully with the direc-

tives of the only case petitioners cite in support of their

contention that the court erred in its textual analysis.

As petitioners note, Barnhart v. Sigmon Coal Co., 534

U.S. 438 (2002), instructs a reviewing court to “begin

with the language of the statute.” ceasing its inquiry if

“the statutory language is unambiguous.” Pet. 12 (quot-

ing Sigmon Coal Co., 534 U.S. at 450). The court of ap-

peals first turned to the language of the statute, found

ambiguity in the text, and accordingly continued, rather

As explained above, the court of appeals was wrong in believing

that the reference to “subsection (b)" is superfluous under the Sec-

retary s interpretation. See p. 9 n.2, supra.

13

than ceased, its analysis, thus properly conforming to

the very precedent to which petitioners appeal.

b. Petitioners also contend that the court of appeals

erred under Chevron in its consideration of the legisla-

tive history, structure, and purpose of the statute. Pet.

13. This Court has stressed that when the words of a

statute are unambiguous, judicial inquiry is complete.

Connecticut Nat'l Bank v. Germain ex rel. O'Sullivan’s

Fuel Oil Co., 503 U.S, 249, 253-254 (1992). The Court,

however, has not foreclosed resort under Chevron to

other traditional tools of statutory construction when

the text of the statute does wot, on its face, conclusively

vield a clear meaning. Indeed, the Court considered

legislative history in Chevron itself. See 467 U.S. at 851-

853, 862. Furthermore, the Court has in subsequent

invocations of Chevron consulted legislative history and

other traditional tools of statutory construction in in-

stances where the statutory text was not dispositive.

See, ¢.g., General Dynamics Land Sys., Ine. v. Cline,

540 U.S. 581, 600 (2004); FDA v. Brown & Williamson

Tobacco Corp., 529 U.S. 120, 133, 142-143 (2000); Babbitt

v. Sweet Home Chapter of Communities, 515 U.S. 687,

704-708 (1995); Pauley v. BethEnergy Mines, Ine., 501

U.S. 680, 697-698 (1991); Pension Benefit Guar. Corp. v.

LTV Corp., 496 U.S. 633, 648-650 (1990); Japan Whaling

Ass'n v. American Cetacean Soc'y, 478 U.S. 221, 233-240

(1986).

Here, the court of appeals first determined that the

text of the statute is unclear and only then considered

legislative history and other tools of statutory construc-

tion. Its approach was thus fully consistent with the

decisions of this Court.

14

c. Contrary to petitioners’ contention (Pet. 9), there

is no significant disagreement among the courts of ap-

peals concerning the role legislative history may play in

Cherron analysis. The courts of appeals generally rec-

ognize that courts cannot ordinarily employ legislative

history under Cherron to support a departure from an

interpretation that the plain language of the statute

would otherwise compel. See, e.g., Succar v. Ashcroft,

394 F.3d 8, 31 (1st Cir. 2005) (“[W |here the plain text of

the statute is unmistakably clear on its face, there is no

need to discuss legislative history.”); Uuited Transp.

Union v. Surface Transp. Bd., 183 F.3d 606, 613 (7th

Cir. 1999) (unambiguous statutory text is controlling at

step one of Chevron, without regard to legislative his-

tory); Legal Euvtl. Assistance Found., lnc. v. EPA, 118

F.3d 1467, 1475 (11th Cir. 1997) (same).

In addition, the courts of appeals generally agree

that consideration of legislative history may be appro-

priate at step one of Chevron when a statute’s text does

not conclusively yield a clear meaning. Indeed, many of

the opinions petitioners cite support that very principle.

See, e.g., Sucear, 394 F.3d at 31 (permitting legislative

history to be considered at step one of Cherron “where

appropriate to discern and/or confirm legislative in-

tent”); Coke v. Long Island Care at Home, Ltd., 376

F.3d 118, 127 (2d Cir. 2004) (reviewing legislative his-

tory at step one of Cherron where the statutory issue

concerned the meaning of “a vague term with no obvious

plain meaning”); Director, OWCP Programs v. Sun

Ship, Ine., 150 F.3d 288, 291 (3d Cir. 1998) (authorizing

legislative history review in Chevron inquiry if statutory

text is ambiguous); Dominion Res., luc. v. United

States, 219 F.3d 359, 565 (4th Cir. 2000) (in Cherron in-

15

quiry, legislative history is “the first tool of statutory

construction a court utilizes to determine congressional

intent when statutory language is unclear”); Bolen v.

Dengel, 340 F.3d 300, 308 (5th Cir. 2003) (legislative

history employed when construing legislative intent in

first step), cert. denied, 541 U.S. 959 (2004); Ragsdale v.

Wolverine Worldwide, Inc., 218 F.3d 933, 936 (8th Cir.

2000) (Chevron step one permits examination of legisla-

tive history when statutory language is ambiguous),

aff’d, 535 U.S. 81 (2002); American Rivers v. FERC, 187

F.3d 1007, 1016 (9th Cir. 1999) (legislative history con-

sidered at step one of Cherron where “statutory lan-

guage evinces no specific congressional directive”), opin-

ion amended in part, 201 F.3d 1186 (9th Cir. 2000);

Seneca-Cayuga Tribe v. National Indian Gaming

Comm'n, 327 F.3d 1019, 1042 (10th Cir. 2003) (applying

legislative history at step one where text did not indicate

clear meaning), cert. denied, Ashcroft v. Seneca-Caynga

Tribe, 540 U.S. 1218 (2004); Davis v. Southern Energy

Homes, Inc., 305-F.3d 1268, 1278 (11th Cir. 2002) (look-

ing to both text and legislative history to determine in-

tent at step one), cert. denied, 5388 U.S. 945 (2003);

American Bankers Ass’n v. National Credit Union

Admin., 271 F.3d 262, 271 (D.C. Cir. 2001) (legislative

history examined at step one of Chevron where court

was “|fJaced with two plausible interpretations” of the

statutory text).'

’ The Seventh Circuit has stated in dictum in a footnote that “(tlhe

first step of Cherron focuses on the text of the statute, leaving legis-

lative history for the second step.” United States v. Dierckman, 201

F.3d 915, 923 n.12 (2000). In support of that aside, the Dierchman

court quoted Bankers Life & Casualty Co. v. United States, 142 F.3d

973 (7th Cir.), cert. denied, 525 U.S. 961 (1998), in which the court

remarked that although the Seventh Circuit “has examined legislative

16

The decision below is consistent with those decisions

of other courts of appeals. The court of appeals, after

“{flocusing on the statutory language,” determined that

Congress's intent “is not stated clearly in the language

of the statute.” Pet. App. 10a. Only then did the court

consider whether it could resolve this textual ambiguity

by examining the legislative history, structure, and pur-

pose of the statute. /d. at 10a-13a. Moreover, because

the court below found that none of those other tools of

statutory construction established a clear congressional

intent on the statutory question at issue, the question

whether a reviewing court may resort to legislative his-

tory at step one of the Chevron analysis had no bearing

on the outcome of this case. The court of appeals pro-

ceeded to the second step of Chevron, just as it would

have if it had not first considered the statute's legisla-

tive history, structure, and purpose and found them

unilluminating. And at step two, the court found the Sec-

retary’s interpretation to be “eminently reasonable,” a

history during the first step of Cherron, we now seem to lean toward

reserving consideration of legislative history * * * until the second

Chevron step.” Id. at 983 (emphasis added and citation omitted).

Petitioners also assert (Pet. 11) that the decision below is inconsistent

with the Eight Circuit's decision in United States v. Sabri, 326 F.8d 937

(2003), aff'd, 541 U.S. 600 (2004). Sabri is completely inapposite. The

Fighth Circuit there cautioned against using legislative history to

justify a departure from unambiguous statutory text. /d. at 943. The

instant case, however, concerns the use of legislative history where the

court has determined that the statutory text, standing alone, is unclear.

Moreover, Sabri concerned judicial interpretation of a criminal statute,

not judicial review of an agency's decision under Cheerom. In the

context of a Cherron inquiry, the Eighth Circuit has sanctioned the use

of legislative history at step one to discern congressional intent. See

Ragsdale, supra,

li

determination petitioners do not dispute. Thus, not only

do petitioners fail to present any circuit conflict or sig-

nificant legal issue concerning the particular statute at

issue here. They also fail to raise any concrete issue

under Chevron that is of significance to this case or that

would warrant this Court's review in any event.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

Paunt D. CLEMENT

Solicitor General

PETER D. KEISLER

Assistant Attorney General

BARBARA C. BIDDLE

JEFFREY CLAIR

Attorneys

JULY 2005

Supreme Court, U.S.

F

ILED

JUL 12 285

CS OFFICE OF THE CLERK

No. 04-1361

Sn the

Supreme Court of the Anited States

MICHAEL FULLENKAMP, et al.,

Petitioners,

¥.

MIKE JONANNS, in his capacity as Secretary of

the United States Department of Agriculture,

Respondent.

On Petition for a Writ of Certiorari to the United

States Court of Appeals for the Sixth Circuit

BRIEF OF THE DAIRY PRODUCERS OF NEW

MEXICO AS AMICUS CURIAE IN SUPPORT

OF PETITION FOR WRIT OF CERTIORARI

MARK DANGERFIELD

Counsel for the

Dairy Producers of New Mexico

GALLAGHER & KENNEDY, P.A.

2575 East CAMELBACK ROAD

Puoenix, AZ 85016-9225

(602) 530-8500

Becker Gallagher Legal Publishing, Inc. 800.890.5001

i

QUESTION PRESENTED

The Sixth Circuit accepted an agency’s interpretation of

a Statute that rendered part of the statute superfluous, even

though the Petitioners’ alternative reading gave meaning to all

the words, and even though the Petitioners were “able to

explain how their position fits into the overall structure of the

statute and furthers the statute’s purpose.” Is the Sixth

Circuit’s approach appropriate under a Chevron step one

analysis?

il

TABLE OF CONTENTS

CASEGSE IES FP ROENEEE: os k CGN ba ese ne ess i

SIG Ge ATE ie cs as he ee pee il

SAR Se RU ee a a ili

INTEREST OF AMICUS CURIAE ............. 1

SUMMARY OF ARGUMENT ..........1..... 1

REASONS FOR GRANTING CERTIORARI ....... 2

I. THE COURT SHOULD GRANT CERTIORARI IN

ORDER TO GIVE EXPLICIT GUIDANCE

REGARDING COMPETING TEXTUAL

INTERPRETATIONS OF A STATUTE UNDER

STEP ONE OF THE CHEVRON ANALYSIS .... 4

H. THE SIXTH CIRCUIT'S APPROACH UNDER

STEP ONE OF THE CHEVRON ANALYSIS ALSO

CONFLICTS WITH THE TENTH CIRCUIT .... 8

CORR ARISHIN 3 ess Py Pres arr ry eee Pie eee 10

ill

TABLE OF AUTHORITIES

Cases

Beck v. Prupis,

529 U.S. 494, 120 S.Ct. 1608,

BUS ee ee CO Se eee wes es am 7

BedRoc Ltd., LLC v. United States,

541 U.S. 176, 124 S.Ct. 1587,

Se a A REE ie iG soe es EC ere 7

Chevron U.S.A. Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837, 104 S.Ct. 2778,

5G we i. | ener ere ee ewer ar passim

Clark v. Martinez,

SS: SAS SAA. 16,

BO A ee Oe Ce cee twas 7,8

Connecticut Nat. Bank v. Germain,

503 U.S. 249,112 S. Ct. 1146,

See Gi Se ee Pe Ee os a ee ee oe 7

Ctr. For Legal Advocacy v. Hammons,

Fae a Ae CIC. BOSE oe ES 9

Fullenkamp v. Veneman,

383 F.3d 478 (6th Cir. 2004) ........ 5. 2a ace

Household Credit Servs. v. Pfennig,

541 U.S. 232, 124 S.Ct. 1741,

Roe Sa ee ee CO se ce se EE ieee 3

iV

Robinson v. Shell Oil Co..,

519 U.S. 337, 117 S.Ct. 843,

= ) 2h). 3)

St. Charles Inv. Co. v. Commissioner,

232 F.30 773 Citi ir. 2002)... . 2... .

United States v. Richards,

583 F.2d 491 (10th Cir. 1978).........

United States v. Ron Pair Enterprises, Inc.,

489 U.S. 235, 109 S.Ct. 1026

ER PhS a

Statutes

ee oo a hc Sek es

ee ee ED i kk cee

ee OE oo ee

ee. © Pe go ee a oe i we ee

ee ek ec sce eae

Oiher Authorities

Farm Security and Rural Investment Act of 2002

Pub. L. No. 107-171, 116 Stat. 134 (2002)

Rules

perenne © outt eee 37.9... ts.

meme (out ee 37.6 ww we wee

os 6-6 wt é «@

6b >e.74 > BCL

a oe Oe ee ee

« 6 6 & 4a

>

ae ie ee Te en

Ca ee ee

l

INTEREST OF AMICUS CURIAE!

The Dairy Producers of New Mexico (“DPNM7”) is a

grassroots agriculture association for New Mexico and West

Texas dairy producers. The DPNM is an advocate for dairy

producers and acts as a governmental liaison for the dairy

producers on the local, state, and national levels.

New Mexico has approximately 190 dairies. New Mexico

has been ranked seventh in the nation for milk production.

The average New Mexico dairy produced 33,681,655 pounds

of milk during 2004, worth an estimated 5.4 million dollars.

SUMMARY OF ARGUMENT

Amicus DPNM endorses the Petitioners’ reason for

granting certiorari, i.¢., that the Sixth Circuit’s Chevron step

one analysis illustrates a conflict with decisions of this Court

and other circuits regarding the method of statutory

construction. The DPNM submits this Amicus brief to

underscore two points:

First, the Court should grant certiorari to make clear that,

when an interpretation of a statute exists that gives meaning

' Pursuant to Supreme Court Rule 37.6, Amicus states that no

counsel for any party authored this brief in whole or in part, and

that no entity other than Amicus made a monetary contribution to

the preparation or submission of this brief. The parties have

consented to the filing of this brief. Letters evidencing such

consent have been filed with the Office of the Clerk of this Court.

See Sup. Ct. R. 37.3.

2

to all the words, a court may not adopt an agency

interpretation rendering part of the statute superfluous.

Second, the Sixth Circuit’s use of legislative history under

step one of the Chevron analysis conflicts with the Tenth

Circuit, in addition to the circuits discussed in the Petitioners’

brief.

REASONS FOR GRANTING CERTIORARI

The Sixth Circuit expressly concluded that the agency’s

interpretation of the statute at issue in this case “does render

the phrase ‘subsection (b)’ superfluous.” Fullenkamp v.

Veneman, 383 F.3d 478, 483 (6" Cir. 2004). The Sixth

Circuit nonetheless blessed that interpretation, and rejected

the Petitioners’ countervailing interpretation which gave

meaning to the statute in its entirety. The Sixth Circuit did

so, even though it also concluded that the Petitioners were

“able to explain how their position fits into the overall

structure of the statute and furthers the statute’s purpose.” /d.

That was plain error, and this Court should grant certiorari to

instruct all the circuits on the point.

This case is governed by the familiar analytical framework

set forth in Chevron U.S.A. Inc. v. Natural Resources

Defense Council, Inc., 467 U.S. 837, 842, 81 L.Ed.2d 694,

104 S.Ct. 2778 (1984). When reviewing an agency’s

interpretation of a statute it administers under the Chevron

analysis, a court engages in the following two-step inquiry:

(1) if “Congress has directly spoken to the precise question at

issue,” then the courts and agency “must give effect to the

unambiguously expressed intent of Congress,” or (2) if

Congress has “explicitly left a gap for the agency to fill,” the

agency’s regulation is “given controlling weight unless [it is]

arbitrary, capricious, or manifestly contrary to the statute.”

3

Household Credit Servs. v. Pfennig, 541 U.S. 232, 239, 158

L.Ed.2d 450, 459, 124 S.Ct. 1741, 1747 (2004) (quoting

Chevron, 467 U.S. at 842-844) (internal citations omitted).

Although Chevron sets forth the general approach, the issues

in this case focus on much needed clarification of the

analytical framework for a step one analysis.

Petitioners’ writ deals with an income support program for

dairy farmers set forth in the Farm Security and Rural

Investment Act of 2002, Pub. L. No. 107-171, 116 Stat. 134

(2002). The program provides for federal payments to milk

producers when a price index falls below a certain level.

Two types of payments are established under the program:

First, monthly payments under subsection (b) that begin when

a dairy farm enters into a contract with the Secretary of

Agriculture, but are subject to an annual cap under subsection

(d)(2). Second - “In addition to any payment that is

otherwise available under this section” - a lump-sum

transition payment under subsection (h) for production

between December 2001 and the month the dairy farm enters

into the contract with the Secretary of Agriculture. While

subsection (d)(2) expressly limits the milk production on

which the monthly payments may be received, subsection (h)

imposes no cap on the one-time, lump-sum, transition

payment — unless one construes this second type of payment

as one also made “under subsection (b).” See Fullenkamp v.

Veneman, 383 F.3d 478, 479 (6" Cir. 2004).

The main question in this case is therefore whether these

lump-sum transition payments are “payments under subsection

(b).” Petitioners assert that they are not. The only way to

construe the matter otherwise is for the court to read the

phrase “subsection (b)” right out of the statute, and the Sixth

Circuit did just that.

4

I. THE COURT SHOULD GRANT CERTIORARI IN

ORDER TO GIVE EXPLICIT GUIDANCE

REGARDING COMPETING TEXTUAL

INTERPRETATIONS OF A STATUTE UNDER STEP

ONE OF THE CHEVRON ANALYSIS.

When dealing with statutory construction, a court begins

by “determining whether the language at issue has a plain and

unambiguous meaning with regard to the particular dispute in

the case.” Robinson v. Shell Oil Co., 519 U.S. 337, 340, 136

L.Ed.2d 808, 117 S.Ct. 843 (1997), citing United States vy.

Ron Pair Enterprises, Inc., 489 U.S. 235, 240, 103 L.Ed.2d

290, 109 S.Ct. 1026 (1989). The plain language of the

statutory provision dealing with a transition payment states:

In addition to any payment that is otherwise available

under this section, if the producers on a dairy farm

enter into a contract under this section, the Secretary

shall make a payment in accordance with the formula

specified in subsection (c) on the quantity of eligible

production of the producer marketed during the period

beginning on December |, 2001, and ending on the

last day of the month preceding the month the

producers on the dairy farm entered into the contract.

7 U.S.C. § 7982(h) (emphasis added). Thus, a transition is

calculated in accordance with the “formula specified in

subsection (c).”

Turning to subsection (c), the plain language states in

relevant part that “[pJayments to a producer under this section

shall be calculated by multiplying...the payment quantity for

the producer during the applicable month established under

subsection (d)....” 7 U.S.C. § 7982(c)(1) (emphasis added).

The “payment quantity” is described in subsection (d) as

5

follows: “Subject to paragraph (2), the payment quantity for

a producer during the applicable month under this section

shall be equal to the quantity of eligible production marketed

by the producer during the month.” 7 U.S.C. § 7982(d)(1)

(emphasis added).

The parties part ways on the issue of whether the

limitation on payment quantity described in subsection (d)(2)

applies to a transition payment. Subsection (d)(2) sets out the

following limitation on the quantity of produced milk eligible

for payment:

The payment quantity for all producers on a single

dairy operation during the months of the applicable

fiscal year for which the producers receive payments

under subsection (b) shall not exceed 2,400,000

pounds.

7 U.S.C. § 7982(d)(2) (emphasis added). In turn, subsection

(b) mandates that “{t]he Secretary shall offer to enter into

contracts with producers on a dairy farm located in a

participating State under which the producers receive

payments on eligible production.” 7 U.S.C. § 7982(b)

(emphasis added).

Petitioners assert that the single lump-sum transition

payment allowed under section (h) does not constitute

“payments” referenced under subsection (b). Fullenkamp,

383 F.3d at 482. Therefore, the limitation on the payment

quantity set forth in subsection (d)(2) does not apply to a

transition payment. Instead, the limitation only applies to the

monthly payments after the time the dairy producer enters into

a contract with the Secretary.

6

Meanwhile, Respondent argues that a transition payment

is “payments under subsection (b).” Jd. 383 F.3d at 482.

Respondent bases this argument on the notion that “dairy

farmers receive transitional payments only if they sign

contracts, as authorized in subsection (b).” /d. Therefore,

Respondent argues that subsection (b) is a reference to the

“contracts in general,” and the limitation on payment quantity

described in subsection (d) at paragraph (2) applies to

transition payments. See /d. at 482-483.

When the Sixth Circuit tackled this maze of statutory

references, it explicitly concluded that Respondent’s statutory

interpretation of the plain language rendered words

superfluous. In that court’s words:

As the defendant points out, transition payments are

received only if the dairy farmers enter into contracts

and, therefore, such payments can be seen to be

payments under subsection (b). At the same time, as

noted by the plaintiffs, this interpretation does render

the phrase "subsection (b)" superfluous.

Id. at 483 (emphasis added). Despite the recognized flaw in

Respondent’s statutory construction, the Sixth Circuit decided

to proceed with a full Chevron analysis, and it ultimately

rejected Petitioner’s textual interpretation that gave effect to

all of the words.

The Court should take this opportunity to give explicit

guidance regarding competing textual interpretations of a

statute under step one of the Chevron analysis. When two

competing textual interpretations are at issue and only one

gives effect to all the words in a statute, the Court should

require the acceptance of that interpretation that gives effect

to all the words. No further analysis would be needed or

7

would be warranted under step one of the Chevron analysis.

At a minimum, such a rule should hold sway when, as here,

the proffered interpretation “fits into the overall structure of

the statute and further the statute’s purpose.” Fullenkamp,

383 F.3d at 483.

The foundation for such a rule rests on the notion that a

statute must be read so as to not render words superfluous.

“The preeminent canon of statutory interpretation requires us

to ‘presume that [the] legislature says in a statute what it

means and means in a statute what it says there.’” BedRoc

Ltd., LLC v. United States, 541 U.S. 176, 183, 158 L.Ed.2d

338, 345, 124 S.Ct. 1587, 1593 (2004) (quoting Connecticut

Nat. Bank v. Germain, 503 U.S. 249, 253-254, 112 S. Ct.

1146, 117 L. Ed. 2d 391 (1992)). From this principle flows

a “longstanding canon of statutory construction that terms in

a statute should not be construed so as to render any provision

of that statute meaningless or superfluous.” Beck v. Prupis,

529 U.S. 494, 506, 120 S.Ct. 1608, 1617, 146 L.Ed.2d 561,

572 (2002). “Thus, our inquiry begins with the statutory text,

and ends there as well if the text ts unambiguous.” BedRoc,

541 U.S. at 183, 124 S.Ct. at 1593, 158 L.Ed.2d at 345.

With these canons of statutory construction in mind, when

confronted with two competing statutory interpretations of the

text, the implicit directive has been to accept the one that

produces an unambiguous result and gives effect to all of the

words. The Court should now make such a directive explicit

and prevent unnecessary further analysis under Chevron§.

Ending the Chevron analysis at this juncture comports with

other statutory construction cases decided by this Court

For example, in Clark v. Martinez, this Court was faced

with applying the “canon of constitutional avoidance in

statutory interpretation.” /d., U.S. _, 125S.Ct. 716, 724