Court Opinion

ID: 8910382
Source: CourtListenerOpinion
Date Created: 2022-11-27 02:44:59.828478+00
Date Added: 2024-06-11T17:08:28.667042
License: Public Domain

GIBBONS, Circuit Judge,
concurring.
I join in the court’s judgment reversing the order of the district court, but not in the majority opinion, which in my view serves only to add confusion to an already confused area of administrative law.
The plaintiff milk producers sought preenforcement judicial review of rulemaking by the Secretary of Agriculture under the Agricultural Marketing Agreement Act of 1937. 7 U.S.C. §§ 601-624 (1976) (the Act). They claim that the Secretary’s regulations exceeded his legal authority, and affected them by altering the terms upon which they did business with their customers, the milk handlers. Surely these milk producers are within the zone of interest which the Agricultural Marketing Agreement Act protects. Compare Suntex Dairy v. Bergland, 591 F.2d 1063, 1067 (5th Cir. 1979) (producers are within zone of interest of the Act) with Rasmussen v. Hardin, 461 F.2d 595, 599—600 (9th Cir.), cert. denied, 409 U.S. 933, 93 S.Ct. 229, 34 L.Ed.2d 188 (1972) (consumers are not within zone of interest of the Act). Certainly the allegation that a regulation mandates a change in the terms upon which these producers do business with their customers, the handlers, suffices to confer “standing,” whatever that ambiguous term means, to seek judicial review of the legality of the Secretary’s action. A mandated change in an existing legal relationship, or even in an existing competitive relationship, suffices to permit the person affected by the change to seek review of its legality. E. g., Investment Co. Inst. v. Camp, 401 U.S. 617, 620-21, 91 S.Ct. 1091, 28 L.Ed.2d 367 (1971); Arnold Tours, Inc. v. Camp, 400 U.S. 45, 46, 91 S.Ct. 158, 27 L.Ed.2d 179 (1970) (per curiam); Association of Data Processing Serv. Orgs., Inc. v. Camp, 397 U.S. 150, 152-56, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970).
The most confusing aspect of the majority’s opinion is the suggestion that “no case permits standing where the plaintiff fails to support the claim on the record after being afforded [the] opportunity to do so.” Majority Opinion 607 F.2d at 41. This confuses the preliminary inquiry as to whether a particular plaintiff will be given an opportunity to pursue a lawsuit with the question of the merits of his claim. If what the majority means is that having been given an opportunity to prove a claim for injunctive relief, the plaintiff failed to prove that claim, the decision should be predicated on the merits, rather than on a post-trial determination that he should not have been heard in the first place.
If the ordinary rules governing the injunctive remedy, including the need for a showing of irreparable harm, governed applications for injunctive relief against allegedly illegal administrative rulemaking, I would be inclined to agree that the plaintiffs have not shown the likelihood of imminent and irreparable injury, and thus would not be granted an injunction. In the context of this case, however, in which we review both a preliminary and a permanent injunction against an allegedly illegal rule, the appropriate test is impact, present or prospective, and illegality. The plaintiffs need not show that the operation of an illegal rule has already spilled their blood. Neither injunctive relief nor declaratory judgment, a remedy available under 28 U.S.C. § 2201 (1976), requires such a showing of immediate injury in the context of review of an allegedly illegal rule. See Abbott Laboratories v. Gardner, 387 U.S. 136, 152-54, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967) (requiring regulation aimed at petitioners, significant changes in business practices, exposure of petitioners to sanction).
Thus, although the majority is correct in pointing out that the plaintiffs have not shown any present economic harm from the operation of the rule, I would not reverse a judgment enjoining an illegal rule solely on that basis. Moreover, although the intervenor, Milk Marketing, Incorporated, contends that the lawsuit is contrived and that the plaintiffs are not the real parties in interest, the district court rejected their conten*43tion and the majority apparently does not dispute that ruling.
Turning to the merits, I vote to reverse because the district court erred in holding that the Secretary lacked authority to issue the challenged regulations.
Section 8c(5) of the Act provides in relevant part:
(5) In the case of milk and its products, orders issued pursuant to this section shall contain one or more of the following terms and conditions, and (except as provided in subsection (7) of this section) no others:
(A) . . . fixing, or providing a method for fixing . . . the time when payments shall be made, for milk purchased from producers or associations of producers. .
(E) Providing . . . (ii) for assurance of, and security for, the payment by handlers for milk purchased.
7 U.S.C. §§ 608e(5)(A), 608c(5)(E) (emphasis added). Section 8c(7)(D) provides:
(7) . . . orders shall contain one or more of the following terms and conditions:
(D) Incidental to, and not inconsistent with, the terms and conditions specified in subsections (5) and necessary to effectuate the other provisions of such order.
Id. § 608c(7)(D) (emphasis added). The challenged regulations change the time and method of payment to producers. The plaintiffs argue that the changes both conflict with and exceed the scope of the statute.
Section 8c(5) provides that orders, and by implication, regulations may contain only the provisions specified in subsections (A) through (G) or in subsection (7). See 7 U.S.C. § 608c(5) (“shall contain one or more of the following . . . and . no others”). The courts have construed this grant of authority narrowly. In the leading Supreme Court case of Zuber v. Allen, 396 U.S. 168, 90 S.Ct. 314, 24 L.Ed.2d 345 (1969), the Court noted that
[t]he statute before us does not contain a mandate phrased in broad and permissive terms. . . . The prefatory discussion in the House Report emphasizes . the congressional purpose to confine the boundaries of the Secretary’s delegated authority. In these circumstances an administrator does not have “broad dispensing power.”
Id. at 183, 90 S.Ct. at 323 (affirming injunction against enforcement of alleged location differentials under section 8c(5)(B)); see H.R.Rep.No. 1241, 74th Cong., 1st Sess. 7-8 (1935).
The legislative history relied on in Zuber reveals Congress’ intention to define narrowly the Secretary’s powers in light of the then-recent decision in A. L. A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570 (1935). The statute’s “and ... no others” language was included specifically for this narrowing purpose: “To eliminate questions of improper delegation of legislative authority raised by the decision in Schechter . the provisions . . . specify the terms which may be included in orders dealing with the enumerated commodities.” S.Rep.No. 1011, 74th Cong., 1st Sess. 8 (1935); see H.R.Rep.No. 1241, 74th Cong., 1st Sess. 7-8 (1935). In interpreting the scope of the Secretary’s authority under section 8c(5), the Supreme Court has consistently read the Act narrowly, in reliance upon the “and ... no others” limitation. In Brannan v. Stark, 342 U.S. 451, 72 S.Ct. 433, 96 L.Ed. 497 (1952), for example, the Court invalidated deductions from a Producer’s Settlement Fund for payments for services performed by cooperatives, reading 8c(5) narrowly. Id. at 456, 462-64, 72 S.Ct. 433 (payments not permitted by 8c(5) or 8c(7)(D)). In an earlier opinion, however, the Court, in upholding the constitutionality of the Act as amended, appeared to permit a broader reading of 8c(5). Cf. United States v. Rock Royal Coop., 307 U.S. 533, 546-47, 59 S.Ct. 993, 1000, 83 L.Ed. 1446 (1939) (§ 8c(5) orders may be promulgated when the Secretary “has reason to *44believe that ... an order will tend to effectuate the declared policy of the Act”).
Taking the most narrow reading of the Act, however, the challenged regulations are permitted under section 8c(5)(E)(ii). The purpose of the change in payment method was to alleviate the problem of chronic late payments to producers’ cooperatives. 43 Fed.Reg. 33, 656-57 (July 31, 1978). The Secretary’s findings and conclusions, after outlining the nature and extent of the problem, noted that “the purpose of the adopted producer payment method is to provide producers with greater assurances that they will be paid for their milk deliveries on a timely basis.” Id. at 33,658 (emphasis added). Moreover, the effect of the regulations is to encourage prompt payment, thus bringing them squarely within sections 8c(5)(E)(ii) and 8c(7)(D). Therefore, the regulations are permissible and the injunction should be lifted.
Section 8c(7)(D) also supports the Secretary’s action. A regulation that actually conflicts with a subsection of 8c(5) cannot be justified by the more general provisions of section 8c(7)(D). Lehigh Valley Coop. v. United States, 370 U.S. 76, 98, 82 S.Ct. 1168, 8 L.Ed.2d 345 (1962) (invalidating compensatory payments to pool members for non-pool milk sales in region). In the absence of a direct conflict, “considerable flexibility is provided by [section] 8c(7)(D), [but] it gives [an] opportunity only to include provisions auxiliary to those [specified in section 8c(5)]” United States v. Rock Royal Coop., 307 U.S. 533, 575-76, 59 S.Ct. 993, 1014, 83 L.Ed. 1446 (1939); see Blair v. Freeman, 125 U.S.App.D.C. 207, 213, 370 F.2d 229, 235 (D.C.Cir.1966) (location differentials invalid under § 8c(5) are not validated by § 8c(7)(D)). In order for the Secretary to “fix . . . the time” of payments under section 8c(5)(A) and to give assurances and security for such payments as authorized by subsection 8c(5)(E)(ii), he has issued the contested payment regulations. They do not conflict with the terms of either subsection of 8c(5), and therefore the payment method selected by the Secretary is authorized either directly by section 8c(5), or derivatively under section 8c(7)(D) which permits regulations as “incidental” and “necessary” to the effectuation of the commands of section 8c(5).
I agree, therefore, that the preliminary and permanent injunction must be reversed.