Document: 396 U.S. 168 90 S.Ct. 314 24 L.Ed.2d 345 Frederick T. ZUBER et al., Petitioners,v.Russell ALLEN al. Clifford M. HARDIN, Secretary of Agriculture, Petitioner, v. Russell Nos. 25, 52. Argued Oct. 16, 1969. Decided Dec. 9, [Syllabus from pages 168-170 intentionally omitted] Daniel Friedman and Lawrence D. Hollman, Washington, D.C., for petitioners. Charles Patrick Ryan, respondents. Edwin H. Amidon, Jr., Boston, Mass., State Vermont, as amicus curiae. Mr. Justice HARLAN delivered the opinion Court. 1 This action was brought by respondent Vermont dairy farmers, 'country' milk producers, seeking a judgment invalidating contrary to Agricultural Marketing Agreement Act 1937, amended, 50 Stat. 246, 7 U.S.C. § 601 seq. (1964 ed. Supp. IV) so-called farm location differential provided order Agriculture.1 The effect that is require distributors pay producers situated at certain distances marketing areas, 'nearby' higher prices than are paid located greater such areas. District Court issued preliminary injunction on January 1967, against further payments respondents' motion summary transformed its decree into permanent June 15, 1967. Appeals Columbia Circuit affirmed. 131 U.S.App.D.C. 109, 402 F.2d 660 (1968). We granted certiorari resolve important issue statutory construction involved in this aspect administration federal regulation program. 394 958, 89 1302, 22 559 (1969). 2 * BACKGROUND 3 Once again must traverse labyrinth provisions.2 While previous decisions have outlined operation statute pertinent regulations, brief odyssey through economic regulatory background essential perspective focusing now before A. THE ECONOMICS OF MILK INDUSTRY 4 two distinctive phenomena industry basic two-price structure permits return same product, depending ultimate use, cyclical characteristic production. 5 Milk has essentially end uses: fluid staple daily consumer diet, an ingredient manufactured products butter cheese. used market traditionally commanded premium price, even though it no quality manufacture. cost differences account part discrepancy they do not explain entire gap. At time characterized periods seasonal overproduction. winter months low yield conversely summer fertile. In meet demand which relatively constant, sufficiently large herds be maintained supply needs. result oversupply more fruitful months. historical tendency prior distributors, 'handlers,' take advantage surplus obtain bargains during glut periods. can obtained distant sources handlers afford absorb transportation costs still outlying farmers whose traditional outlet manufacturing market.3 To maintain income increase production disequilibrium snowballs. 6 protect vicissitudes, early 1920's formed co-operatives. These cooperatives were effective eliminating self- defeating overproduction pooling refusing deal with except collective basis.4 During era relative stability nearby enjoyed their product. favorable apparently attributable reduced also farmer's historic position supplier.5 B. FIRST FEDERAL PROGRAM drop commodity depression years destroyed equilibrium utter chaos ensued. Congress, effort restore boost purchasing power enacted licensing provisions Adjustment Act, 48 31, 35. Under 8(3) Agriculture empowered 8 '(t)o licenses permitting processors, associations other engage handling, current interstate or foreign commerce, any agricultural product thereof, competing thereof. Such shall subject terms conditions, conflict existing Acts Congress regulations pursuant thereto, may necessary eliminate unfair practices charges prevent tend effectuation declared policy restoration normal conditions commodities financing suspend revoke license, after due notice opportunity hearing, violations *' 9 system base-rating plans unlike private arrangements adopted.6 Producers assigned bases fixed percent output would permitted sell Class I price milk.7 viability scheme jeopardized, however, judicial disapproving similarly broad delegation under National Industrial Recovery provisions, 195. A.L.A. Schechter Poultry Corp. United States, 295 495, 55 837, 79 L.Ed. 1570 (1935). With program resting quicksand, moved swiftly defect overbroad shore up void provisions. Section 1933 amended 1935 language been carried forward without significant change 8c present Act. 608c IV).8 C. PRESENT REGULATORY SCHEME 10 system, differs little substance shceme conceived 1937 regulating Boston market,9 provides uniform payable all handlers.10 Prices established II uses. total volume channeled each category multiplied appropriate coefficient results totaled then divided number pounds sold. represents average value sold area 'uniform' price. Were receive share equal basis profits assume equally disposting market. actual producer is, 'blended' computed adding subtracting special differentials order. See CFR 1001.64 deduction withheld benefit reduces those ineligible collect particular adjustment.11 provision contained 1001.72 provides: 11 'In making handler add applicable specified section. 12 '(a) respect received within places paragraph, 46 cents per hundredweight, unless addition gives determined §§ 1001.60, 1001.62, 1001.63 plant received. event there added rate will produce price.' 13 A 23¢ deliveries farms intermediate zones. 1001.72(b). 14 foregoing appear 1964 Massachusetts-Rhode Island Order, consolidated one region four sub-markets previously regulated separately 'New England' orders: 1951 adopted 1937; Springfield promulgated 1949; Southeastern New England 1958. Each included payment stated radius designated center. For example 40-mile House Boston; slightly lower 80-mile radius. central point computation differential; retained appeared orders. Farmers who entitled continue eligible shipments area, actually outside zone. STATUTORY 15 foundation provide only specifically enumerated adjustments. question Court, most simply, whether differentials, set forth above, permissible adjustment 8c(5)(B) general requirement uniformity price.12 16 past labeled 'location' defended inclusion his orders ground. justification argument now, pitched different key. Government abandoned but numerous theories advanced below, pressed vigorously Blair Freeman litigation (125 207, 370 229 (1966)), stresses 'volume, market, customarily applied order.' 17 proper resolution means self-evident, we persuaded 'market applied' contemplates plain thrust remove ruinous self-defeating competition among permit benefits according goods produced services rendered. Government's proposed reading bottomed, monopolistic cooperative pools, come perpetuate distortion freeze competitive prevailed 1920's. 18 Without government muscle crippling warfare months, neither nor country could monopoly-type accrue sales. Absent handlers, if anyone, stand 'fluid' monopoly. cannot project what case today free prevailed, might well anticipate producers' advantages negligible view reliable refrigeration. Thus play since leverage exercised Nearby seek best both worlds. Having achieved security comes regulation, umbrella monopoly never secure unregulated 19 reluctant attribute intent and, simply name administrative expertise, follow path marked statute. Indeed, signposts discerned legislative history very direction. strongly suggests differentials,' contemplated understood Report, discussing allowable adjustments characterizes over above costs, i.e., differential, delivery primary market.13 savings by-passing country-station processing handling city plant. 20 significance emerges upon study subsequent practice. original obscures providing place allowed additional 18¢ cwt. city-delivered transporting However, testimony Aplin Market Administrator erases doubt responsible administering fully meaning Committee's explanation differential.14 21 Subsequent combined station adjustment, properly location-transportation zone differential.15 us does contain mandate phrased permissive terms. spoken particularity negatives conclusion thinking considerations. prefatory discussion Report emphasizes congressional purpose confine boundaries Secretary's delegated authority.16 these circumstances administrator 'broad dispensing power.' Addison Holly Hill Fruit Products Co., 322 607, 617, 64 1215, 1221, 88 1488, 153 A.L.R. 1007 (1944). illumined character 'volume,' 'grade quality,' 'location,' 'production,'17 compensate reward service handler.18 23 committee report indicating intended carry approach following precedent 1920's, stressed dissent opinion. language, argued, reinforces continuity connotations 'customarily blunted specific treat equally. Legislative silence poor beacon discerning route. here light illumines roads. If had notoriety distribution attributed them dissent, given blessing carving out another exception requirement. avoid infirmity details comprehensive scheme, simple matter include list payments, least allude draftsmen. It clear conferring untrammeled discretion authorizing him proceed vacuum. evil condemned courts amendments sought eradicate.19 perverse drafters, ambiguity old Act,20 careless listing exceptions selecting illustrations words ultimately derive content.21 25 consider our conclusions way undermined colloquy floor between Senator Copeland Murphy emphasis. considered understanding Congressmen drafting studying legislation. Floor debates reflect individual Congressmen. extensive thoughtful debate detract instance. There indication, precisely dialogue. exchange inconclusive meaning.22 acquiesced Copeland's implied criticism region. When pursued inquiry, asking recognized taxes lands, merely recited suggested 'adopt practice business,' conspicuously lacking affirmative statement covered costs. impressive especially Murphy's earlier agreement '(t)he equalization producing near cities farmer produces milk, say, 40 miles away community,' business Report. III. SCOPE MARKET DIFFERENTIAL 26 need restricted sole illustration illustration, taken conjunction limited compensation rendering service.23 challenged fall category.24 27 Nor payments. record recognition favored inducement approve (J.A. 23725.) sense said gain economically virtue elimination potential competitor. factor mentioned findings accompanying order, emphasized 1963 hearings support indeed scant. That entry nearbys bring unwanted competition, irrelevant jeopardize stability. think analysis court below correct: here, should directly marketwide pool. U.S.App.D.C., 114, F.2d, 665. 28 petitioner concede so readily absence justifications find substantial record. allusion evenness justify exclusive farmers. qualify eligible. Some amici petitioners lands reason retaining differential. are, admittedly, production, concern reliably cheapest Kessel, Economic Effects Federal Regulation Markets, J.Law & Econ. 51 (1967). slow inefficient allocation resources. Cf. West Ohio Gas Co. Public Utilities Comm'n, 294 63, 72, 316, 321, 761 argue keep business, reveal acted quit evidence demonstrating necessity producers. where efficient available nominal concern. unspoken consideration 1937.26 29 Since made effect, primarily absorbed Further representations respondents correct—and record—it appears , suspension 23¢, receiving differential.27 IV PRIOR DECISIONS 30 Our holding represent departure Court's precedents. No ever explicitly approved Reliance States Rock Royal Co-op., 307 533, 59 993, 83 1446 (1939), misplaced. refusal invalidate counties named York context initiated refused obey regulations. decision did repudiate finding 'discriminatory producers.' Id., 567, S.Ct., 1009, 1010. narrow reach Stark Wickard, 321 288, 559, 733, (1944), noted held standing 'to object settlement fund,' id., 308, 570, affected handlers. went reject Royal's contention placed customers disadvantage. 31 attention drawn First Circuit's Green Valley Creamery, Inc. 108 342 (1939). As Royal, supra, parties raise invalidity extent holding, disapprove it. V SIGNIFICANCE DEPARTMENTAL CONSTRUCTION 32 announced accord great weight departmental own enabling legislation, contemporaneous construction, see Udall Tallman, 380 1, 85 792, 801, 616 (1965); Power Reactor Development International Union Elec., etc., 367 396, 408, 81 1529, 1535, 924 (1961); input interpretational equation. Its impact carries when administrators participated known views Committee hearings. supra; American Trucking Assns., 310 534, 539, 60 1059, 1061 1062, 84 1345 (1940). circumstances, absent indication differed department, favor enhances purposes policies underlying Light SEC, 329 90, 112—114, 67 133, 145—146, 91 103 (1946). 33 not, abdicate responsibility construe employed Congress. Those props serve disputable here. suggestion findings, explained, how contributes broad, competition. suggest either 1937. And encompass obviously failed communicate drafters report. evident re-enactment routine review issues explored detail draftsmen wrote reports.28 34 true Trade Commission computations 1936 differential.29 But stark figures, appendix explication, hardly 'notoriety' found persuasive U.S., 18, 802. impressed fact interpretation 'been public discussion.' 17, Even despite active involvement reviewing connection leases, ratification supra. put flesh citing re-enactment, 249,30 report, H.R.Rep. No. 468, 75th Cong., 1st Sess., (1937), states purports ratify, legalize, confirm statute.31 VI RELEVANCE PRODUCER APPROVAL 35 Petitioners concerned required 8c(9)(B)(i) (ii) Act.32 adumbrated, run follows: approval subjects, generously interpreted. legitimize authorized statute, us, considerations already discussed. Secretary, initiating orders.33 VII PROPRIETY SUMMARY JUDGMENT 36 Although press point, reverse trial merits alternatively instructions remand consideration. 37 department formal instances develop facts underpin action. remedy gaps record, arguments counsel substitute agency's failure make give reasons. inappropriate request Government. Counsel Department new theory sustaining SEC Chenery Corp., 318 80, 92, 63 454, 461, 87 626 (1943). 38 Unlike 1488 definition content scheme. engrafting term, function should, first instance, left body. moreover, expressly severance invalid. 1001.96. VIII DISPOSITION ESCROW FUND 39 Petitioner farmers' last line retreat escrow monies accruing granting injunction. struck equitable balance awarding petitioners, collected final fair solution, disturb. Freeman, 125 (1966), bottomed shaky premise. Lest losing encouraged prolong frivolous appeals reap windfall, deserve fruits victory date trial. 41 Affirmed. 42 CHIEF JUSTICE MARSHALL took cases. 43 BLACK, whom WHITE joins, dissenting. 44 cause Agriculture's close farther valid IV). majority concludes sustained 'compensation service,' ante, 188, holds payment, affirming fund 1967 amount $8,000,000 distributed selling instead Boston. drastic sale years. My convinces me beyond wrong direct expressed predecessors. my regulate accordance developed intend groups past. hold valid. 45 understand go back regulation. correctly points out, economics often led destructive chaos. therefore protection basis. All agree, conclusively shows, centers away. resulted many factors, including proportion purposes, possibility compete customers, smaller variation produced, costs—such land values—incurred farming cities.1 long remained generally stable, succeeded protecting dangers excessive Then like Americans, unable stable self-regulation. reacted situation passing (A.A.A.), powers economy licensing. 8(3), Very few standards describing problems industry. license effectively Boston.2 bills introduced amend A.A.A.3 February March year.4 May 1570, 97 947, 195, unconstitutional, because agency adequate guidelines. committees considering immediately cast considerable validity A.A.A. reported completely bill detailed descriptions employ.5 passed concerning industry, case.6 reports abundantly 'eliminate questions improper authority raised *.'7 cut limit rather invalidation resulting constitutionally sufficient standards. History quite concerned, about limiting excessively aggressive overcoming limitations imposed frustrating laws unconstitutional. Pursuant which, issuing he relied historical, factors justified 224) effectiveness jeopardized decisions,8 law, 246. reenacted substantially form 'expressly ratified, legalized, confirmed.' 249. Proceeding reinstated nearer city, until time. picture mind, easier answer legal authorizes establish allows adjust *.' 608c(5)(B), cl. (a) ed., IV).9 argues sums differential.' settled term 'market.' However makes designed allow leeway Houses 'follow methods enactment section Act.'10 supports statement. Copeland, former commissioner health City man acquainted England, asked Murphy, manager bill, initial indicated so, inquiry further, stating considered, business.'11 reply indicates permissible, practice—as were. diminishes importance saying men, committee, anyone realities Senate knows remarks Senators reflecting itself. employ whatever practices, consistent achieve 47 Applying becomes 'differential applied.' always reflected fact. Reinstatement passage continued practice, based realities, paying Had feature easy say absolutely nothing demonstrates desire alter enjoyed. buttressed actions healthy controversy strong continuing 360—599.) Yet 1965, 1187, unauthorized eliminated Similarly continually reviewed it, recent being 1964. 346, 349.) view, 1933, 1935, authorize altered authorization years, agree ostensibly process interpretation. 49 seems imply. speaks clearly statements reports, 'illumine(s) roads,' 185. perceive striking majority's finds decisions. 9993, broadside attack rejected challenge. One arrangement,' applied. 8c(5)(A) identical supporting 8c(5)(B), latter case. attempts distinguish noting suit difficult difference makes. sues, decides hould remain litigants change.12 dismissal irrelevant. '(f)urthermore' lacked standing. 346. classified dictum holding. remains 8c(5)(B). Ibid. 52 disagrees portion service.' Ante, 188. interpretation, disregard respectfully submit supported whole relevant expressions history. created 53 service' whatsoever None described defined 'economic refer intended. possible analyst fit coherent pattern services, desired touchstone so. choose done intervening Moreover, express history, allowing incorporate customary itself.13 54 correct, why lead affirmed Until know defense necessarily mean unavailable. Indeed again, accompanied composed lawyers, experts—finds acceptable. present, lawful time, seem yet incanted magic words. harm vacate cases study, pending controversy. justification, postpone day accumulating funds, $8,000,000, distributed. If, hand, able show service, unnecessarily accumulated millions legally them. 56 conviction act unlimited abandon historically requires 'will effectuate (the Act) 608c(4). forth, 602, orderly parity latest promulgation 349—357) Act.' Fed.Reg. 12236. disturbed, invalidated, shown entirety. Universal Camera NLRB, 340 474, 71 456, 95 456 (1951). substantiality evidence, insubstantial, evidence. 57 reaching conclusion, remembered things. First, second, factual one, real really deny existence legality Appeals, existed, accepted illegal. 118, 663—665, 669. An independent confirms thus conclude 58 second finding, mixed policy. 233 247, 257—302, 305—330, 360—651), repeatedly furthers aside showing relied, adequately supported. Nothing better policies. decide. What interpreting Over ago decided needed governmental assistance stabilizing income, stabilization accomplished minimal industry's practices. him. consistently desirable sound changed 1968, committed alone. wise selected will. 'windfall.' 197. itself creates windfall siphoned pockets bestowed Christmas informed who, faithful bonus. am perform dissent. govern 1002.1 (1969), Part opinion, 178, infra. originally only. Zuber unsuccessfully leave intervene rendered appeal. Leave devoted good energy disputing constitutes litigation. various times referred compiled Northern York, Cranston 290 F.Supp. 785 Respondents objected, formally materials below. pause none decisive us. references too dispute. See, e.g., Lehigh Cooperative 76, 82 1168, (1962); Brannan Stark, 451, 72 433, 96 497 (1952); 733 (1944); (1939); P Hood Sons 588, 1019, 1478 plagued problem. Judge Frank's lament, Queensboro Farm Prods. 137 969 (C.A.2d Cir. 1943); 207 ,370 (1966); Creamery (C.A.1st 1939). transported natural state bulky highly perishable commodity. shipment rigid sanitary requirements plants distributing Administration 1933—Feb. 1934, p. 154, disparity (fluid milk) (other uses) milk. demand, logical suppliers urban J. Cassels, Study Fluid (1937). amounted arrangement wherein participating bargain collectively threaten withhold purchase minimum percentage requirements. Essential course wide membership insure alternative source racalcitrant division members cooperative. Frequently plan whereby claim remaining rate. Apparently anticipated participation result, role systems n. 3, 56—70; Black, Dairy Industry AAA 49—51 Because proximity enabled deliver small retailers. competitors. supr, 159—161; G. Barnhart, Licenses Order Regulating Handling Greater Massachusetts, Area, Nov. 1933—June 1946 (unpublished dissertation file Harvard University). License 6, 96. (5) 'Milk products; products, (except subsection (7) section) others: '(A) Classifying used, fixing, method use classification pay, made, purchased (1) volume, (2) grade purchased, (3) locations handlers: '(B) Providing: '(i) delivering them: Provided, covering only, three-fourths representative period engaged period, period; hereunder separate apart disapproval section; '(ii) delivered, irrespective uses delivered; 'subject, case, (b) (c) (d) equitably apportion handler, marketings adjusted sales classifications, year.' 1331, $3.19 $3.01 delivery, handler's area. Article VIII, 4(1) calculate reference 1958 cost-of-living index. calculation 1001.62 Differentials three modes proceeding He 'use' category, 8c(5)(A); pools co-operatives handler; pool use. Also 1001.62. Delivery course, advantageous compensated service. saves saving cost. Conversely, depositing handlers' districts negative adjustment. 8c(5)(B)(ii) 'irrespective delivered.' contend differ- ential disguised suppliers' Jersey invalidated linked supplied skepticism doubts reinforced explicit undercompensates encourages buy 51, 64—65 Here, receives put. tied sales, although limits 46¢ whichever higher, accept that, strict logic, suppliers, inconsistent irrespective-of-end-use 'The vary markets qualified usually distance whereas secondary markets.' 1241, 74th excerpts hearing Joint Appendix 258—259: 'Section differentials. Now, arrived blended f.o.b. allowances deducted. Paragraph (of 4) deducted carlot freight zone, forty hundredweight. stations dealers hundredweight charge, containers ship plants, having cent deduction, cents. allowance five pass station.' (Emphasis added.) 620. 'To relating enumerate applicable, prescribe procedure followed issuing, enforcing, terminating orders, specify dealing commodities.' H.R.Rep., 8. 465, 440, (1952). maintaining lean strictly speaking, looking supplier. Viewed context, nonregulated forced constant. operations several inconvenience caused closing requiring handled plant, producer, compensating keeping going performing market.' supplied.) 9—10. reducing nonmember premise dissenters proposition amendments, insofar relate agreements implement spell freedom act. unfortunately, serious misconstruction. rise obstacles enforcement seriously endangered successful operation.' 7. verdict quiescent invoked baptize gloss otherwise impermissible. reconsidered constructions passively abided Congressional inaction frequently betokens unawareness, preoccupation, paralysis. 'It treacherous alone adoption controlling rule law.' Girouard 328 61, 69, 66 826, 830, 1084 greatest year-by-year supervision, tax, watchdog revising less deference wake unsuccessful offending amendment. Where, addressed problem, unpersuaded tantamount acquiescence, let Cong.Rec. 11139 11140. 'Mr. COPELAND. communities up-State surrounding care demand; therefore, points? community. MURPHY. embraced true. Let mind is. deficiency demand. greatly depressed, determine bear effecting divide conditions. Taxes values property much city. cost, page 12, 13, qualification: "Such order—' 'They adopt business— "(2) handlers." absorbing farmer, example, incur preferred opposed station. nevertheless viewed 65—66 After criticizing undercompensation far-away zones subsidy resources, author draws comparison lamenting, 'However weak fail depict infinitely stronger differentials.' Connecticut 'A group nine associations, principally Three presently pooled. Another association increased *. '* (F)arm inception pricing relationships markets. somewhat values, normally attached principal consumption compared areas milkshed. 'While removal received, unstable disruptive warrant deletion testimony, increases logically returns significantly 349 351). dispute issue, devoid relies solely producer's 74—75 (1962). Committee, 75. J.A. 455 reporting October 21, 1958, Frank 1943), reenactment. event, assumption gave 'careful re-enactment,', 977, citation indicate 'any (40) delivers $3.30 quantity $3,30 excess base producer.' Art. 1(2). provided: 'Nothing construed agreement, to, of, with, executed, issued, approved, amendment agreements, licenses, acts hereby petitioners' argument. superseded approach. obscured 29, 21¢ incorporated 4(2), depended Further, typical boilerplate re-enactments, breaks continuity. 119, 670. 8c(9) 608c(9) become determines: issuance practical advancing interests policy, favored: By two-thirds engaged, therein, Lower have, some rely 'public interest.' Compare Citizens Allegan County FPC, 134 229, 414 1125 Marine Space Enclosures, FMC, 420 577 scope, any, principles. implies, 181, 'distortion.' directed issue. poorly equipped surely economists advise task fixing judgments. complicated similar cooperatives. 4, 173—174. 113—114, 660, 664—665. H.R. 5585, S. 1807, Sess. Hearing 5585 Sess.; Hearings 1807 Forestry, 8492, forward, virtually change, S.Rep. 1011, 8; Butler, 297 312, 80 477, 102 914 (1936), tax invalid, district E.g., David Buttrick 655 (D.C.Mass.1936), rev'd, Cir.), cert denied, 302 737, 140, 570 A.A.A., re-enacted change. applies text complete portions 8, 176-177. 9; 9. schemes variety 10, 177. 1965 plans, 173-174. 608c(5) (B), (d), full 22, 186-187. imply, 191-192, decide argued profits, footnote, 184, implies novel (1952), invalid catchall '(i)ncidental sections) 608c(7)(D); Brannan, 457—458, 436—437. regardless decision, 'necessary provisions' certainly defend grounds.

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