Opinion ID: 757355
Heading Depth: 2
Heading Rank: 1

Heading: standard of review

Text: 25 Our review of the Secretary's decision to maintain the existing system of Class I differentials is governed by Chevron v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under the Chevron standard, the first inquiry is whether Congress has directly spoken to the precise question at issue, in which case we must give effect to the unambiguously expressed intent of Congress. Id. at 842-43, 104 S.Ct. 2778. If the statute does not provide specific guidance, we then consider whether the agency's answer is based on a permissible construction of the statute. Id. at 843, 104 S.Ct. 2778. 26
27 We hold that the AMAA has not spoken directly to the specific issue of when and how the Secretary should seek to amend the Class I differentials prescribed by Congress in § 608c(5). Section 608c(5)(A) provides that its differentials will remain unchanged unless modified by amendment to the order involved. However, it does not require the Secretary to propose or adopt any such amendment within any particular time. Moreover, the plain language of the statute weighs against the MMPA's assertion that [t]he 1985 Act only relieved the Secretary of the duty of monitoring the Class I prices for compliance with the § 608c(18) pricing mandates for the two years in which the Act explicitly prohibited modification, Appellees' Br. (in Nos. 97-4145, 97-4241) at 32, even accepting its contention that the 1985 amendments were implemented within an Act designed to permanently reduce surplus production of milk. Appellees' Br. (in Nos. 97-4220, 97-4224, 97-4226, 97-4331, 97-4334, 97-4361, 97-4362) at 22. 28 The crux of the MMPA's argument lies in § 608c(18) of the statute, but this reliance is misplaced. Section 608c(18) lays down requirements that the Secretary must meet before changing or amending marketing agreements or orders: prior to prescribing any term in any marketing agreement or order, or amendment thereto, ... or prior to modifying the price fixed in any such term. In that case--that is, when the Secretary wishes to amend an order--he must then: 29 ascertain the parity prices of [the milk]. The prices which it is declared to be the policy of Congress to establish in section 602 of this title [setting forth goals of statute] shall ... be adjusted to reflect the price of feeds, the available supplies of feeds, and other economic conditions which affect market supply and demand for milk or its products in the marketing area to which the contemplated marketing agreement, order, or amendment relates. Whenever the Secretary finds ... that the parity prices of such commodities are not reasonable in view of [these economic conditions], he shall fix such prices as he finds will reflect such factors, insure a sufficient quantity of pure and wholesome milk to meet current needs and further to assure a level of farm income adequate to maintain productive capacity sufficient to meet anticipated future needs, and be in the public interest. Thereafter, as the Secretary finds necessary on account of changed circumstances, he shall, after due notice and opportunity for hearing, make adjustments in such prices. 30 (Emphases added.) In this case, the Secretary has not found that the prices set by Congress are unreasonable, nor that changed circumstances make adjustments necessary. The statute leaves that decision to his discretion. 31 The MMPA also contends that other sections of the statute--specifically § 608c(3), § 608c(16)(A), and § 608c(17)--place a burden on the Secretary to continuously monitor the orders and their impact to ensure that they effectuate the stated purposes of the AMAA and comply with its substantive provisions. Appellees' Br. (in Nos. 97-4145, 97-4241) at 6-7. We find the contention overstated. Section 608c(3) requires the Secretary to give notice of and opportunity for hearing on a proposed order [w]henever [he] has reason to believe that the issuance of an order will tend to effectuate the declared policy of this chapter. (Emphasis added.) Section 608c(16)(A)(i) provides that the Secretary of Agriculture shall, whenever he finds that any order issued under this section ... obstructs or does not tend to effectuate the declared policy of this chapter, terminate or suspend the operation of such order.... (Emphasis added.) These provisions, like § 608c(18), are implicated only after the Secretary has decided that changes to the marketing orders are warranted, a situation this case does not present. Similarly, § 608c(17) requires only that the Secretary hold a hearing under specific conditions--if one-third or more of the producers as defined in a milk order apply in writing for a hearing on a proposed amendment of such order ... [and] if the proposed amendment is one that may legally be made to such order--that do not amount to an ongoing general duty of monitoring and adjustment. Ultimately, the only provision specific to milk price regulation that addresses the Secretary's duty to amend is § 608c(1): The Secretary of Agriculture shall, subject to the provisions of this section, issue, and from time to time amend, orders.... We cannot hold this statement to be a specific directive. 32 Nor does a specific duty of adjustment arise from the general precatory statements of policy in §§ 602(1) and (4), which require the Secretary to establish and maintain ... orderly marketing conditions effectuating the statute's goals of parity prices and orderly flow of market supply. These provisions are generally applicable to all the agricultural commodities covered by the AMAA, and cannot override the statutory scheme specifically devised for the regulation of milk, which has left the initiation of amendment to the Secretary's discretion. 33 We therefore hold that Congress has placed no specific conditions on the Secretary's power to maintain the status quo. Specifically, to apply § 608c(18) to the Secretary's decision not to pursue amendment--that is, to hold that the Secretary may not decline to change the differentials unless he finds that the differentials prescribed in the statute are still valid under current economic conditions--would reverse the statute's intended procedure for amendment. The burden, that is, is on those who advocate change to show that it is required; it is not on the Secretary to show that no change is necessary.
34 The Secretary's decision not to amend is therefore given controlling weight unless [it is] arbitrary, capricious, or manifestly contrary to the statute. Chevron v. Natural Resources Defense Council, Inc., 467 U.S. at 844, 104 S.Ct. 2778. See also 5 U.S.C. § 706 (1994). Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency. Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971). 35 In this case, several considerations add to the already considerable weight [that] should be accorded to an executive department's construction of a statutory scheme it is entrusted to administer, and the principle of deference to administrative interpretations. Chevron, 467 U.S. at 844, 104 S.Ct. 2778 (footnote omitted). First, the Supreme Court itself has noted the intricacy of the labyrinth of the federal milk marketing regulation provisions. Zuber v. Allen, 396 U.S. at 172, 90 S.Ct. 314. A court's deference to administrative expertise rises to zenith in connection with the intricate complex of regulation of milk marketing. Any court is chary lest its disarrangement of such a regulatory equilibrium reflect lack of judicial comprehension more than lack of executive authority. Blair v. Freeman, 370 F.2d 229, 232 (D.C.Cir.1966). 36 Second, Congress, not the Secretary, established the existing differentials, and we must presume them lawful and effective to reach the statute's goals. That the dairy provisions of the Agricultural Market Transition Act of 1996, 7 U.S.C.A. § 7253 (West Supp.1998), do not reject the differential system outright indicates that Congress continues to deem it an acceptable, if not necessarily the preferred, system. The 1996 statute requires the Secretary to amend and consolidate the milk marketing orders and specifically identifies as relevant issues (A) [t]he use of utilization rates and multiple basing points for the pricing of fluid milk [and] (B) [t]he use of uniform multiple component pricing when developing 1 or more basic formula prices for manufacturing milk. 7 U.S.C.A. § 7253(a)(3). Though it prohibits the Secretary from considering, or basing any decision on, the Class I differentials currently set by § 608c(5)(A), 7 U.S.C.A. § 7253(a)(4), the new statute does not preclude him from reinstituting transportation-based differentials more generally. We therefore believe that the current system should continue to be given especial deference as the product of legislative judgment. 37 Third, the burden in this case is upon the MMPA to show that a change was required, and not upon the Secretary to defend his decision to retain the status quo. We have held that the Secretary bears the burden of presenting substantial evidence when he seeks amendment of a milk order. Walmsley v. Block, 719 F.2d 1414 (8th Cir.1983). When another party, here the MMPA, is the proponent of amendment, it should bear the same burden. See also 5 U.S.C. § 556(d) (in formal rulemaking, [e]xcept as otherwise provided by statute, the proponent of a rule or order has the burden of proof). The inquiry therefore is not whether the Secretary established that the differentials should remain unchanged, but whether the MMPA established that they should not. The deference due the Secretary's decision is the greater for the MMPA's failure to follow through, before the District Court and on this appeal, with its initial proposal for change, leaving it in the weak position of attacking the present system without presenting an alternative. 38 Finally, case law suggests that agency inaction is presumptively unreviewable. An agency's decision not to take enforcement action should be presumed immune from judicial review.... Heckler v. Chaney, 470 U.S. 821, 832, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985). The general exception to reviewability provided by [5 U.S.C.] § 701(a)(2) for action 'committed to agency discretion' remains a narrow one, but within that exception are included agency refusals to institute investigative or enforcement proceedings, unless Congress has indicated otherwise. Id. at 838, 105 S.Ct. 1649. Though the untaken action in this case is amendment, and not enforcement, the principle remains that a decision to do nothing is entitled to more deference than a decision to act. 39