Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-09-05286/USCOURTS-caDC-09-05286-0/pdf.json

Nature of Suit Code: 891
Nature of Suit: Agricultural Acts
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 22, 2010 Decided August 3, 2010 

No. 09-5286 

NICK KORETOFF, DOING BUSINESS AS NICK KORETOFF 

RANCHES, ET AL., 

APPELLANTS

v. 

TOM VILSACK, UNITED STATES SECRETARY OF AGRICULTURE, 

APPELLEE

Appeal from the United States District Court 

for the District of Columbia 

(No. 1:08-cv-01558-ESH) 

John H. Vetne argued the cause for appellants. With him 

on the briefs were Susan Silber and Kenneth Sigman. 

Michael P. Abate, Attorney, U.S. Department of Justice, 

argued the cause for appellee. With him on the brief were

Tony West, Assistant Attorney General, Channing D. Phillips, 

Acting United States Attorney, and Michael S. Raab, 

Attorney. 

Before: HENDERSON, GRIFFITH, and KAVANAUGH, 

Circuit Judges. 

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Opinion for the Court filed by Circuit Judge

KAVANAUGH, with whom Circuit Judge GRIFFITH joins. 

Opinion dissenting in part filed by Circuit Judge

HENDERSON. 

KAVANAUGH, Circuit Judge: A 2007 Department of 

Agriculture rule mandates that almonds produced in the 

United States be pasteurized or chemically treated to prevent 

salmonella outbreaks. That requirement largely eliminates the 

ability of California almond producers to sell raw almonds – 

and therefore harms those producers’ economic well-being. 

At the same time, because of what the California producers 

view as a statutory loophole, foreign almond producers are 

still able to sell raw almonds in the United States. Several 

California almond producers filed suit. They argue that the 

2007 rule is arbitrary and capricious under the Administrative 

Procedure Act, exceeds the agency’s statutory authority, and 

violates various APA procedural requirements. 

The Government responds not on the merits, but by 

contending that the California producers should not even be 

allowed into court to advance their claims. The Government 

does not deny that the producers suffered an injury-in-fact and 

have standing under Article III of the Constitution. Rather, 

according to the Government, the Agricultural Marketing 

Agreement Act of 1937 precludes almond producers from 

obtaining judicial review of the 2007 rule. We disagree with 

the Government. The AMAA does not expressly bar 

producers’ suits. And in light of the decisions of the Supreme 

Court and this Court, we conclude that the AMAA does not 

implicitly bar the producers’ claims. See Block v. Community 

Nutrition Institute, 467 U.S. 340 (1984); Stark v. Wickard, 

321 U.S. 288 (1944); Arkansas Dairy Cooperative 

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Association v. U.S. Department of Agriculture, 573 F.3d 815 

(D.C. Cir. 2009). We therefore reverse the contrary judgment 

of the District Court, which was issued before and thus 

without the benefit of our recent on-point decision in 

Arkansas Dairy. 

Three of the 10 California almond producers involved in 

this appeal are also retailers who sell their own almonds 

directly to consumers. Those three plaintiffs mount an 

additional legal challenge to separate Department of 

Agriculture regulations that restrict retail sales by such 

producers. We agree with the District Court that the AMAA 

does not preclude plaintiffs from raising such claims but does 

require plaintiffs to exhaust their administrative remedies with 

the Department of Agriculture before bringing the claims to 

court. We therefore affirm the District Court’s judgment as to 

those claims. 

I 

A 

This case is about the almond market. That market 

consists of growers (whom we will refer to as “producers”), 

handlers, retailers, and consumers of almonds. Producers 

grow the almonds and sell them to handlers. Handlers buy the 

almonds from the producers, process and package the 

almonds, and then sell them to retailers. Retailers sell 

almonds to consumers. Some producers also sell directly to 

consumers, bypassing the intermediaries. 

This case involves the Agricultural Marketing Agreement 

Act of 1937, a landmark piece of legislation that arose out of 

the farming catastrophe during the Great Depression. The 

AMAA authorizes the Secretary of Agriculture to promulgate 

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marketing orders that regulate the production and sale of 

agricultural commodities. 7 U.S.C. §§ 601-674. It seeks to 

“avoid unreasonable fluctuations in supplies and prices” of 

various farm commodities. Id. § 602(4). The AMAA is 

currently applied to about three dozen agricultural 

commodities, such as milk, avocados, oranges, and peanuts. 

Agricultural marketing orders may dictate the “total quantity” 

of a regulated commodity sold in a particular region, as well 

as the “grade, size, or quality thereof.” Id. § 608c(6)(A). 

Before promulgating a marketing order under the 

AMAA, the Secretary of Agriculture must consult with 

producers and handlers of the commodity in question. The 

AMAA requires that a marketing order receive the approval 

of two-thirds of producers in a region (measured by number 

of producers or volume). For some purposes, the AMAA also 

requires the approval of a majority of handlers (measured by 

volume). Id. § 608c(8)-(9). 

The AMAA expressly allows handlers to sue and obtain 

judicial review of marketing orders, but requires them first to 

exhaust specified administrative remedies. Id. at 

§ 608c(15)(A). The AMAA is silent about a right to sue or 

about exhaustion of administrative remedies for producers, 

retailers, or consumers. 

B 

In 1950, acting pursuant to the AMAA, the Secretary of 

Agriculture promulgated the California Almond Marketing 

Order, 7 C.F.R. pt. 981. The Almond Order has been 

amended often in the 60 years since. Among other things, the 

Order sets quality standards for commercially sold almonds 

and regulates the quantity of almonds that may be sold in a 

given year. 

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In the wake of two salmonella outbreaks in 2001 and 

2004, the Secretary in 2007 issued a new almond rule under 

the Almond Order. Almonds Grown in California; Outgoing 

Quality Control Requirements, 72 Fed. Reg. 15,021, 15,034 

(Mar. 30, 2007). This rule is now codified at 7 C.F.R. 

§ 981.442(b). 

The new rule required the use of one of several approved 

methods for reducing salmonella bacteria in almonds, all 

involving either pasteurization or chemical treatment of 

nearly all almonds sold. 7 C.F.R. § 981.442(b). 

C 

The current dispute arises primarily because the 2007 

rule had the effect of largely eliminating the domestic raw

almond market. The 10 plaintiffs still involved in the case 

are California almond producers who grew raw almonds for 

domestic U.S. consumption. Because the 2007 rule 

devastated the market for domestic raw almonds, those 

producers allege that they lost both their expected profits from 

the premium price paid for raw almonds and the return on 

investments they had made in production equipment. At the 

same time, the 2007 rule had no impact on foreign almond 

producers, who are not subject to Department of Agriculture 

regulation and are still permitted to import raw almonds into 

the United States. 

Three of the 10 producers are also retailers who sell 

almonds directly to consumers. These producer-retailers also 

challenged separate Department of Agriculture restrictions on 

how and where they could sell almonds at retail. Those 

restrictions date back to 1985. See 50 Fed. Reg. 30,264 (July 

25, 1985) (codified at 7 C.F.R. § 981.413). 

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 A group of California almond producers sued in U.S. 

District Court, arguing that various aspects of the Secretary’s 

2007 rule were arbitrary and capricious under the APA, 

exceeded statutory authority, and violated certain APA 

procedural requirements. The District Court dismissed 

plaintiffs’ suit. See Koretoff v. Vilsack, 601 F. Supp. 2d 238 

(D.D.C. 2009). It reasoned that the AMAA implicitly 

precludes producers from suing to challenge regulations 

issued under the AMAA. The Court ruled that the separate 

claims by the producer-retailers were not precluded but 

should be dismissed for failure to exhaust administrative 

remedies. See id. at 241-44. 

 Plaintiffs appeal on both issues. Our review of the legal 

questions is de novo. In resolving the question of AMAA 

preclusion, it bears mention that the District Court rendered 

its decision before Arkansas Dairy Cooperative Association v. 

U.S. Department of Agriculture, 573 F.3d 815 (D.C. Cir. 

2009), a recent opinion of this Court that helps chart our path 

here.

II 

A 

The Administrative Procedure Act establishes a cause of 

action for those “suffering legal wrong because of agency 

action, or adversely affected or aggrieved by agency action.” 

5 U.S.C. § 702; see Abbott Labs. v. Gardner, 387 U.S. 136, 

140 (1967). That statutory right to judicial review does not 

apply, however, when “statutes preclude judicial review.” 5 

U.S.C. § 701(a)(1). Whether a statute precludes judicial 

review of agency action, the Supreme Court has said, is a 

question of congressional intent, which is determined from 

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the statute’s “express language,” as well as “from the 

structure of the statutory scheme, its objectives, its legislative 

history, and the nature of the administrative action involved.” 

Block v. Community Nutrition Inst., 467 U.S. 340, 345 (1984); 

see also Free Enter. Fund v. Public Co. Accounting Oversight 

Bd., No. 08-861, slip op. at 8 (U.S. June 28, 2010); Thunder 

Basin Coal Co. v. Reich, 510 U.S. 200, 207 (1994). 

In assessing whether a plaintiff’s suit is precluded by 

statute, we must determine not only whether “Congress 

precluded all judicial review” of the agency action but also 

whether Congress “foreclosed review to the class to which the 

[plaintiff] belong[s].” Block, 467 U.S. at 345-46 (quoting 

Barlow v. Collins, 397 U.S. 159, 173 (1970) (Brennan, J., 

concurring in result and dissenting)). 

B 

The Supreme Court and this Court have applied those 

preclusion principles in three important cases arising under 

the Agricultural Marketing Agreement Act: Stark v. Wickard, 

321 U.S. 288 (1944); Block v. Community Nutrition Institute, 

467 U.S. 340 (1984); and Arkansas Dairy Cooperative 

Association v. U.S. Department of Agriculture, 573 F.3d 815 

(D.C. Cir. 2009). As we will explain, those cases together 

indicate that the AMAA does not preclude producer suits 

challenging rules and orders issued under the AMAA. 

In Stark v. Wickard, the Supreme Court held that milk 

producers could sue to challenge a milk marketing order. 321 

U.S. 288 (1944). The Court acknowledged that the AMAA 

granted “no direct judicial review” to producers. Id. at 307-

08. The Court noted, however, that producers had a 

“financial interest” in aspects of the marketing order. Id. at 

308. And the Court stated that it was “not to be lightly 

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assumed that the silence of the statute bars from the courts an 

otherwise justiciable issue.” Id. at 309. 

The Supreme Court decided Stark in 1944 – before the 

1946 passage of the Administrative Procedure Act. Pub. L. 

No. 79-404, 60 Stat. 237 (codified at 5 U.S.C. § 701 et seq.). 

The timing of the Stark decision only adds, however, to its 

precedential force. If anything, the subsequent enactment of 

the APA, which created a generic cause of action to challenge 

agency action, fortifies Stark’s open-the-courthouse-door-toproducers ruling. Indeed, passage of the APA largely 

resolved the main concern that had been articulated in Justice 

Frankfurter’s dissent in Stark – namely, that “creat[ing] a 

judicial remedy for producers when the statute gave none is to 

dislocate the Congressional scheme of enforcement.” 321 

U.S. at 317 (Frankfurter, J., dissenting). 

The Supreme Court next addressed AMAA preclusion 

some 40 years later in Block v. Community Nutrition Institute. 

There, the Court held that the AMAA precludes judicial 

review of challenges brought by consumers to marketing 

orders. Allowing suit by consumers would mean virtually 

every American could challenge every agricultural marketing 

order. As revealed at oral argument in the Block case, that 

hard-to-fathom result was of great concern to the Supreme 

Court and informed its assessment of Congress’s intent on 

whether such suits were precluded by the AMAA. See Tr. of 

Oral Arg. at 32, Block, 467 U.S. 340 (No. 83-458) (raising 

question whether all of the individual Justices could sue as 

consumers of milk). In its opinion addressing whether 

consumer suits were precluded, the Block Court explained 

that the AMAA “contemplates a cooperative venture among 

the Secretary, handlers, and producers.” 467 U.S. at 346. 

Consumers, by contrast, were assigned no active role in the 

regulatory scheme. Id. at 346-47. The Court determined that 

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the “structure of this Act indicates that Congress intended 

only producers and handlers, and not consumers, to ensure 

that the statutory objectives would be realized.” Id. at 347. 

The Court also noted that Congress had required handlers to 

exhaust administrative remedies before suing. Allowing 

consumers to bring suit without exhausting administrative 

remedies “would provide handlers with a convenient device 

for evading” that exhaustion requirement by either recruiting 

a consumer as a partner in litigation or, in the case of handlers 

who were also consumers, suing in their capacity as 

consumers. Id. at 348. The Court reasoned that Congress 

likely would not have intended to allow such easy 

circumvention of the exhaustion requirement, and thus likely 

did not intend for consumers to be able to challenge 

agricultural marketing orders in court. 

Importantly, in barring consumer suits, the Block Court 

expressly reaffirmed Stark’s holding with respect to producer 

suits. It found that “preclusion of consumer suits is perfectly 

consistent” with the Court’s “conclusion concerning producer 

challenges in Stark v. Wickard.” Id. at 352. In discussing 

Stark, the Block Court stated that “[j]udicial review of the 

producers’ complaint” in Stark was “necessary to ensure 

achievement of the Act’s most fundamental objectives – to 

wit, the protection of the producers of milk and milk 

products.” Id. The Block Court echoed then-Judge Scalia’s 

opinion in this Court, in which he had similarly concluded 

that consumers could not bring challenges to agricultural 

marketing agreements, even though producers could. Judge 

Scalia had reasoned that the “direct beneficiaries of milk 

marketing orders under the [AMAA] are milk producers. 

Even before adoption of the APA, the courts found a 

congressional intent to permit them to sue.” Community 

Nutrition Inst. v. Block, 698 F.2d 1239, 1257 (D.C. Cir. 1983) 

(Scalia, J., concurring in part and dissenting in part). 

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Notably, in distinguishing Stark, the Block Court largely 

followed the approach that the Government had advocated to 

the Court. The Government argued that “producers and 

consumers stand on very different ground” and have 

“generally antagonistic” interests. Gov’t Br. at 31, Block, 467 

U.S. 340 (No. 83-458). The Government added that “it would 

be anomalous to conclude that Congress meant to foreclose 

all producer challenges to the market order program; indeed, 

Congress appears to have contemplated producer suits . . . .” 

Id. at 31-32. At oral argument, the Government further stated 

that “this statute was passed expressly for the benefit of 

producers.” Tr. of Oral Arg. at 12, Block, 467 U.S. 340 (No. 

83-458). The Government’s counsel went so far as to suggest 

that barring producer suits might be unconstitutional: “One 

other difference, Justice White, between consumers and 

producers is that basically the market orders are governmentordered contracts between handlers and producers; and it 

would be quite unfair and perhaps even unconstitutional to 

say that one party to the contract, the handler, can sue, but the 

other party to the contract, whose personal proprietary rights 

are affected, can’t sue because Congress didn’t mention them. 

The same thing is not true of consumers.” Id. at 15.1

 

 As our Court has recently explained, Stark and Block

together indicate that producers can sue to challenge 

agricultural marketing orders, but consumers cannot. See 

 1

 Judge Henderson’s dissent highlights a sentence in Block

where the Court said that judicial review would “ordinarily be 

confined to suits brought by handlers.” Dissenting Op. at 1, 3 

(quoting Block, 467 U.S. at 348). But in Arkansas Dairy we 

analyzed that sentence from Block and explained that, in context, 

the Court was simply distinguishing handlers from consumers, and 

that a contrary reading would require us to ignore Stark. See 

Arkansas Dairy, 573 F.3d at 823-24. 

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Arkansas Dairy, 573 F.3d 815 (D.C. Cir. 2009). In Arkansas 

Dairy, we relied heavily on Stark in permitting milk 

producers to bring a challenge to a milk marketing order 

promulgated under the AMAA. We distinguished Block, 

reiterating that producers “occupy a different status under the 

AMAA from that of consumers.” Id. at 823. We said that the 

Block Court had “contrasted” the role of consumers in the 

statutory scheme “with the role of handlers and producers.” 

Id. at 822; see also id. at 834 (Griffith, J., dissenting in part 

and concurring in judgment in part) (“The majority reads 

Stark to require judicial review of all claims by producers.”). 

 The Government seems to suggest that the statutorily 

required approval of two-thirds of producers for a marketing 

order evinces a congressional intent to bar all producers’ suits. 

In light of Arkansas Dairy and the relevant Supreme Court 

precedents, the Government’s intimation is incorrect. As we 

explained in Arkansas Dairy, some minority of producers – 

by definition, up to one-third of all producers in a region – 

could vote against the promulgation of a marketing order but 

nonetheless would be unable to prevent the Secretary from 

promulgating the order. We therefore rejected the argument 

that the opportunity to participate precludes suit. In so ruling, 

we quoted Stark, which had stated: “a mere hearing or 

opportunity to vote cannot protect minority producers against 

unlawful exactions which might be voted upon them by 

majorities.” Id. at 825 (majority opinion) (quoting Stark, 321 

U.S. at 307). We added that Stark “evidences a focus on 

ensuring a judicial forum for producers who allege they are 

harmed by an illegal order, regardless of their right to vote on 

that order.” Id. at 826 n.5 (emphasis added).2

 2

 We note that the Government’s suggestion here is contrary to 

its argument to the Supreme Court in Block. In explaining why 

producer suits were allowed, the Government there stated that 

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To the extent legislative history is relevant here, the 

legislative debates during passage of the AMAA’s precursor 

also support our analysis in Arkansas Dairy. Representative 

Andresen of Minnesota, a member of the House Committee 

on Agriculture, pointed to judicial review as the remedy for 

the vindication of minority producer interests: “Mr. 

DONDERO. The point I make is whether or not the minority 

in that kind of a case would have any voice of protest in order 

to get them from under the agreement in which they did not 

care to join. Mr. ANDRESEN. Personally I think they would 

have the best kind of a day in court if they came before the 

court and presented their side of the question.” 79 CONG.

REC. 9479 (1935). 

 

 It also bears mention that the two-thirds of producers 

needed for approval of almond orders may be measured either 

by number of producers or by volume of almonds sold. 7 

U.S.C. § 608c(9)(B)(i)-(ii). It is thus easy to envision a 

scenario in which a few large almond producers approve a 

marketing order that disadvantages a relatively large group of 

small almond producers, either to run the latter out of 

business or simply because the two groups have divergent 

interests. That example further illustrates why Congress’s 

decision to require approval of two-thirds of producers does 

not indicate a congressional intent to bar all producers’ suits.3

 

“[n]ot every producer is always going to be happy,” acknowledging 

that this group would include “[a]ny one of the third who didn’t 

vote for it.” Tr. of Oral Arg. at 13, Block, 467 U.S. 340 (No. 83-

458). 

3

 In this case, moreover, producers did not vote on 

promulgation of 7 C.F.R. § 981.442(b)’s salmonella rule. Rather, 

that regulation was promulgated pursuant to the authority of the 

California Almond Board – with the approval of the Secretary – to 

establish “such minimum quality and inspection requirements . . . 

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 In sum, the precedents of the Supreme Court and this 

Court indicate that the AMAA does not preclude producer 

suits challenging rules and orders issued under the AMAA. 

As we also noted in Arkansas Dairy, moreover, our Court is 

not alone in reading Stark and Block to allow producers – but 

not consumers – to challenge such agency actions. Three of 

the four other circuits to consider the question have reached 

the same conclusion, finding that adopting the Government’s 

“radical interpretation” of Block as precluding producers’ 

suits “would effectively undermine the presumption in favor 

of judicial review that the Supreme Court has consistently 

reaffirmed.” Farmers Union Milk Marketing Coop. v. 

Yeutter, 930 F.2d 466, 474 (6th Cir. 1991) (Boggs, J.); see 

also Alto Dairy v. Veneman, 336 F.3d 560, 567-69 (7th Cir. 

2003); Minn. Milk Producers Ass’n v. Madigan, 956 F.2d 

816, 817-18 (8th Cir. 1992). Only the Ninth Circuit has 

reached a different conclusion, in a decision rendered 25 years 

ago over the disagreement of Judge Wiggins. See

Pescosolido v. Block, 765 F.2d 827, 831-32 (9th Cir. 1985). 

C 

 The Government tries to get around the precedents by 

contending that Stark, Block, and Arkansas Dairy dealt with 

milk, rather than almonds, and that the almond industry raises 

different issues. 

 

as will contribute to orderly marketing or be in the public interest” 

and to “establish rules and regulations necessary and incidental.” 7 

C.F.R. § 981.42(b); see Almonds Grown in California; Outgoing 

Quality Control Requirements and Request for Approval of New 

Information Collection, 71 Fed. Reg. 70,683, 70,687 (proposed 

Dec. 6, 2006). Because such rules are not amendments to the 

Order, no producer referendum was held before promulgation of the 

salmonella rule. 

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 The Government’s attempted distinction of the 

precedents goes as follows: In the almond industry, unlike in 

the milk industry, handlers’ interests are identical to 

producers’ interests. Therefore, according to the Government, 

almond handlers – who possess a statutory right to judicial 

review under the AMAA – can adequately represent the 

interests of almond producers in court. 

 

The Government’s argument finds no support in 

precedent and is flawed at a very basic conceptual level. The 

usual rule of administrative law is that an aggrieved party can 

sue to challenge agency action regardless of whether there 

might be some other aggrieved party who might raise the 

same challenge or seek the same relief. The Government’s 

argument – handlers can sue and that’s good enough for 

producers – is thus inconsistent with bedrock tenets of 

administrative law. We find no indication that Congress 

intended to depart from those principles when enacting the 

AMAA. See Stark, 321 U.S. at 308-10. It would be 

especially odd to rely on this kind of virtual or vicarious 

representation to bar producers from suing given that 

producers are the primary intended beneficiaries of the 

AMAA – a point noted by the Supreme Court in Block. 467 

U.S. at 352 (“[j]udicial review of the producers’ complaint [in 

Stark] was therefore necessary to ensure achievement of the 

Act’s most fundamental objectives – to wit, the protection of 

the producers of milk and milk products.”). This conclusion 

finds additional support in intervention cases, where we have 

stated that intervenors are not sufficiently protected by a mere 

congruence of interests with a party litigant. See Fund for 

Animals, Inc. v. Norton, 322 F.3d 728, 737 (D.C. Cir. 2003). 

We see no reason for a different result here. 

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In any event, the Government’s argument is also flawed 

on the facts. The Government makes too much of the 

distinction between the almond and milk industries. Even a 

cursory examination of the Almond Marketing Order shows 

how the interests of almond producers and handlers can 

diverge. The Almond Order requires, for example, that 

handlers maintain a certain quantity of almonds on hand as 

“reserves” at all times. See 7 C.F.R. §§ 981.46, 981.50. The 

required quantity is determined by regulation. Id. 

§ 981.49(e). Almond producers and almond handlers may 

have different preferences: Almond handlers may prefer a 

smaller reserve, to avoid the cost of purchasing reserve 

almonds, whereas almond producers might prefer a larger 

reserve in order to guarantee larger mandatory sales. 

Similarly, the Almond Marketing Order permits regulation of 

handlers’ labeling of almond containers. Id. § 981.43. 

Handlers may disfavor such restrictions as imposing 

additional burdens upon them. Producers, however, might be 

inclined to support such regulation in some circumstances: 

Precise, accurate labeling might encourage repeat orders by 

customers. The Almond Order also imposes quality control 

regulations on handlers. Id. § 981.42. As with labeling, it is 

easy to see how handlers might chafe under such regulations, 

while producers might appreciate any refinement of the final 

product sold that did not come at their direct expense. 

True, there will be some cases where the interests of 

almond producers and almond handlers overlap. But in 

others, they won’t. And the Government has provided us with 

no workable way to determine when interests diverge in such 

a manner as to draw the line in precluding suit. The 

Government’s theory – almond producers sometimes can sue 

and sometimes cannot – would produce a chaotic case-bycase determination of whether producers’ and handlers’ 

interests are aligned. This is a recipe for endless satellite 

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litigation. We declined to embark on such an endeavor in 

Arkansas Dairy, and we must do so again here. 

 

III 

Three of the 10 plaintiffs still involved in this case not 

only produce almonds, but also sell them directly to 

consumers. These producer-retailer plaintiffs argue that the 

AMAA does not authorize the Secretary of Agriculture to 

regulate retail sales. The statute and regulation together 

require these plaintiffs to exhaust their administrative 

remedies before bringing their claims to court. That is 

because the statute requires handlers to exhaust, and the 

regulations in turn define these producer-retailers as handlers 

because of where and how they sell almonds. 

Plaintiffs retort that the regulation classifying them as 

handlers – and triggering the exhaustion requirement – is 

inconsistent with the AMAA. In other words, plaintiffs argue 

that the regulation improperly requires them to exhaust 

administrative remedies. But this broad-based challenge to 

the agency’s exhaustion requirement is itself an argument that 

must be raised first to the agency. Cf. Myers v. Bethlehem 

Shipbuilding Corp., 303 U.S. 41, 49-51 (1938) (party may not 

challenge agency’s jurisdiction over it without exhausting 

administrative remedies); Greater Detroit Res. Recovery 

Auth. v. EPA, 916 F.2d 317, 323 (6th Cir. 1990) (exceptions 

to the exhaustion doctrine may not be “automatically invoked 

whenever a challenge to the scope of an agency’s authority is 

raised”) (quoting Shawnee Coal Co. v. Andrus, 661 F.2d 

1083, 1093 (6th Cir. 1981)); Deltona Corp. v. Alexander, 682 

F.2d 888, 893 (11th Cir. 1982) (“the agency ordinarily should 

be given the first opportunity to consider a challenge to its 

jurisdiction”). 

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We therefore agree with the District Court’s conclusion 

dismissing the claims of the three producer-retailer plaintiffs 

for failure to exhaust their administrative remedies with 

respect to their challenge to the Department’s retail 

restrictions. 

* * * 

 We reverse the judgment of the District Court with 

respect to the suit of the ten producers. Their claims can go 

forward. We affirm the District Court’s judgment dismissing 

the claims of the three producer-retailers; those claims must 

be raised first to the Department of Agriculture. 

So ordered. 

USCA Case #09-5286 Document #1258679 Filed: 08/03/2010 Page 17 of 24
KAREN LECRAFT HENDERSON, Circuit Judge, dissenting in

part:

The Agricultural Marketing Agreement Act (Act or AMAA),

7 U.S.C. §§ 601 et seq., authorizes the United States Secretary

of Agriculture (Secretary) to issue and amend agricultural

marketing orders applicable to handlers of various agricultural

commodities, including almonds. Id. § 608c(1)-(2). The Act

expressly requires the Secretary to submit a proposed order for

approval by the handlers and the producers—with the producers,

but not the handlers, wielding veto power should two-thirds of

them (by number or volume produced) fail to approve. Id.

§ 608c(8)-(9). While lacking a veto, the handlers can challenge

a marketing order before the Secretary and then in district court. 

Id. § 608c(15). The Act provides no express right of review to

any other party. In light of “this complex and delicate

administrative scheme,” the United States Supreme Court

“think[s] it clear that Congress intended that judicial review of

market orders issued under the Act ordinarily be confined to

suits brought by handlers in accordance with 7 U.S.C.

§ 608c(15).” Block v. Cmty. Nutrition Inst., 467 U.S. 340, 348

(1984)—with the single exception that a milk producer may

challenge in court an order that infringes its statutory right under

the Act to receive the guaranteed minimum milk price set by the

Secretary, see Stark v. Wickard, 321 U.S. 288 (1944). 

Nonetheless, the majority maintains that as a matter of course 

“producers” as well “can sue to challenge agricultural marketing

orders,” Maj. Op. at 10, including the appellant almond

producers. I throw my lot in with the Supreme Court. Almonds

do not belong on the same shelf with milk. 

As the district court observed, Stark carved out a “a narrow

exception” to the general rule, noted in Block, that ordinarily

only handlers (and not producers) may seek review of a

marketing order. Koretoff v. Vilsack, 601 F. Supp. 2d 238, 244

(D.D.C. 2009) (citing Stark, supra). In Stark, the Supreme

Court permitted a class of milk producers to challenge a

marketing order that required the “settlement fund”

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2

administrator to deduct from the fund’s pooled payments a fee

to be paid to milk producer co-operatives. The effect of the

deduction was to reduce the minimum “blend” price paid to the

milk producers from the fund.1 The Court concluded that,

although there was “no direct judicial review granted by [the

Act] for the[] proceedings,” the “authority for a judicial

examination of the validity of the Secretary’s action is found in

the existence of courts and the intent of Congress as deduced

from the statutes and precedents.” 321 U.S. at 307-08. In

particular, the Court determined that “[t]he statute and Order

create a right in the producer to avail himself of the protection

of a minimum price afforded by Governmental action”—a right

“mandatory in character and obviously capable of judicial

enforcement.” 321 U.S. at 303 (emphasis added). Noting that

“the challenged deduction reduces pro tanto the amount actually

received by the producers for their milk,” id. at 302, the Court

explained that “[i]t is because every dollar of deduction comes

from the producer that he may challenge the use of the fund,” id.

at 308.2

1

Under the milk marketing regime, the Secretary fixes different

minimum raw milk prices depending on the end-use to which a

handler puts it (e.g, fluid milk, cream, ice cream). The payments are

pooled in a settlement fund and, after certain administrative expenses

are deducted, an average “blend price” is calculated which is the price

each producer actually receives. See Edaleen Dairy, LLC v. Johanns,

467 F.3d 778, 779-80 (D.C. Cir. 2006). Thus, any deduction from the

fund (such as the co-operative payment in Stark) reduces the price

each producer is paid. 

2

The Court indicated that the availability of review for marketing

orders is limited:

It is suggested that such a ruling puts the agency at the

mercy of objectors, since any provisions of the Order may

be attacked as unauthorized by each producer. To this

objection there are adequate answers. The terms of the

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3

In Block, as noted supra, the Court made clear that judicial

review is “ordinarily . . . confined to suits brought by handlers

in accordance with 7 U.S.C. § 608c(15).” Block, 467 U.S. at

348. The Court acknowledged that under Stark, “dairy

producers could challenge certain administrative actions even

though the Act did not expressly provide them a right to judicial

review” but explained that the challenged deductions in Stark

“ ‘reduce[d] pro tanto the amount actually received by the

producers for their milk,’ ” thereby giving the producers

“standing to object to the administration of the settlement fund.”

Id. at 351 (quoting Stark, 321 U.S. at 302) (emphasis added)

(alteration in Block). “Though the producers’ standing could not

by itself ensure judicial review of the Secretary’s action at their

behest, the statutory scheme as a whole, the [Stark] Court

concluded, implicitly authorized producers’ suits concerning

settlement fund administration.” Id. (emphasis added) (internal

citation omitted). The Block court noted that in Stark the

handlers “ ‘[could not] question the use of the fund, because

handlers had no financial interest in the fund or its use’ ” and so,

unless the producers were granted judicial review, there was

“ ‘no forum’ in which this aspect of the Secretary’s actions

could or would be challenged.” Id. at 351-52 (quoting Stark,

321 U.S. at 309) (alteration added) (internal citation omitted).3

Order are largely matters of administrative discretion as to

which there is no justiciable right or are clearly authorized

by a valid act. United States v. Rock Royal Co-op., 307 U.S.

533 [(1939)]. Technical details of the milk business are left

to the Secretary and his aides.

321 U.S. at 310.

3

The majority asserts that considering whether the producers’ and

the handlers’ interests coincide in a particular case “would produce a

chaotic case-by-case determination.” Maj. Op. at 15. But case-bycase determinations are the hallmark of administrative and judicial

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4

In this Circuit’s decisions permitting producers to challenge

a marketing order, the injury to the producers was, as in Stark,

an impairment of their statutory right to full payment, through

the settlement fund, of the minimum price fixed by the Secretary

for milk products. In Blair v. Freeman, 370 F.2d 229 (D.C. Cir.

1966), we entertained a challenge to a price deduction in the

form of a travel distance variable based on the location of the

milk producer’s farm. We there concluded the appellant dairy

producers had “standing to present their claim that the nearby

differential provision exceeded the statutory power of the

Secretary.” Id. at 234. We explained: “Since this differential is

payable out of the equalization pool, the deduction reduces pro

tanto the amount actually received by producers for their milk.

The appellants thus have standing to invoke the protection of

equity to insure that their statutory right to minimum price

protection is not being improperly diminished.” Id. n.15 (citing

Stark, 321 U.S. at 290, 302-310).

Most recently, in Arkansas Dairy Cooperative Ass’n v.

United States Department of Agriculture, 573 F.3d 815 (D.C.

Cir. 2009), the court again permitted milk producers to

challenge reductions to the minimum price they received for

milk. In Arkansas Dairy, the milk producers challenged the

Secretary’s interim rule that increased the “make

allowance”—an amount which is intended to represent the costs

to the handlers of making the end dairy products from raw milk

and which is deducted from the end-use price before the blend

price is computed. Relying primarily on Stark, the court held

the milk producers could “bring suit under the APA to challenge

the Interim Rule, which directly affect[ed] their blend prices

adjudications and the Supreme Court advocated just such an inquiry

in Block. In this case the interests of untreated almond producers and

of untreated almond handlers—both of whom will lose the profits they

would otherwise earn from the sale of raw almonds—are indeed

aligned.

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5

through increased make allowances, even though the milk

marketing orders w[ould] not directly affect the producer

settlement fund.” 573 F.3d at 827. We explained: “The

producers are aggrieved, within the meaning of the APA, by the

alleged diminution of their personal rights secured under the

AMAA, the Interim Rule they challenge constitutes final agency

action, and they seek non-monetary injunctive relief.” Id. (citing

5 U.S.C. §§ 702, 704). The case paralleled Stark and Blair, the

majority wrote, because the challenged rule “deduct[ed] funds

from the value of milk before calculating the blend price

guaranteed to producers, thus reducing, ‘dollar for dollar,’ the

minimum price producers are guaranteed for their milk

products.’ ” Id. at 825.4

 

4

It was on this basis, in part, that Arkansas Dairy distinguished our

earlier decision in Benson v. Schofield, 236 F.2d 719 (D.C. Cir. 1956),

in which the court did find precluded a suit by Massachusetts dairy

producers challenging a proposed order expanding the “Greater

Boston Marketing Area” to subject milk from additional towns to its

minimum prices. Arkansas Dairy points out that “in Benson the court

was not addressing a diminution of producers’ statutorily-guaranteed

blend prices, as in Stark, Blair, and the instant case, but rather an order

that increased the boundaries of a marketing area to cover a greater

number of handlers, an action the court held did not infringe any

statutory right possessed by the producers because only handlers were

affected.” 573 F.3d at 827 (citing Benson, 236 F.2d at 723). The

Benson court in turn had distinguished Stark on a similar ground: 

[A]ppellees claim standing to vindicate a “legal wrong”

because of language to be found in Stark v. Wickard. But

there the Court pointed out: “It is because every dollar of

deduction comes from the producer that he may challenge the

use of the fund. The petitioners’ complaint is not that their

blended price is too low, but that the blended price has been

reduced by a misapplication of money deducted from the

producers’ minimum price.” We still come back to the

proposition, as the Stark case points out, that absent

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6

This case is nothing like Stark or its progeny. The

commodity at issue here is not milk—as in Stark, Blair and

Arkansas Dairy—but almonds. And the Act confers no

statutory right on a producer to receive any payment for its

almonds; nor does it empower the Secretary to fix their price, as

it does for milk. The Act expressly authorizes the Secretary to

regulate milk prices alone. See Pescosolido v. Block, 765 F.2d

827, 830 (9th Cir. 1985) (“Unlike the fixed minimum prices

which must be established for milk . . . , see 7 U.S.C.

§ 608c(5)(A), the Secretary is not empowered to fix prices for

any other commodities covered by the Act. Instead, he may only

employ market controls, see id. § 608c(6), in an effort to

‘effectuate the declared policy of’ the Act” (quoting 7 U.S.C.

§ 608c(4))) (emphasis in original). Milk is sui generis in this

respect as in so many others.5

 As Block observed, in Stark,

“[j]udicial review of the producers’ complaint was . . . necessary

to ensure achievement of the Act’s most fundamental

objectives—to wit, the protection of the producers of milk and

milk products.” 467 U.S. at 351 (emphasis added). Protecting

the market for raw almonds—by the appellants’ own admission

a “niche” market (albeit a “lucrative” one), Appellants’ Br.

10—presents no such compelling necessity.6

“justiciable individual rights,” (italics ours) the detriment

complained of is damnum absque injuria.

 236 F.2d at 723.

5

Milk is far more extensively regulated under the Act than the

other covered commodities. Compare 7 U.S.C. § 608c(5) with id

§ 608c(6). 

6

All of the extra-Circuit cases the majority cites to support its

position involved milk prices. See Maj. Op. at 13 (citing Farmers

Union Milk Marketing Coop. v. Yeutter, 930 F.2d 466, 474 (6th Cir.

1991); Alto Dairy v. Veneman, 336 F.3d 560, 567-69 (7th Cir. 2003);

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7

For the foregoing reasons, I respectfully dissent.7

Minn. Milk Producers Ass’n v. Madigan, 956 F.2d 816, 817-18 (8th

Cir. 1992)). The only extra-Circuit case the majority cites as contra

involved navel oranges. See id. (citing Pescosolido, 765 F.2d at

831-32.

7

I concur in the majority’s affirmance of the district court’s

dismissal of the three producer-retailers’ claims for failure to exhaust

administrative remedies.

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