321 U.S. 288 (1944), 211, Stark v. Wickard

Docket Nº:No. 211
Citation:321 U.S. 288, 64 S.Ct. 559, 88 L.Ed. 733
Party Name:Stark v. Wickard
Case Date:February 28, 1944
Court:United States Supreme Court

Page 288

321 U.S. 288 (1944)

64 S.Ct. 559, 88 L.Ed. 733




No. 211

United States Supreme Court

Feb. 28, 1944

Argued January 14, 1944




1. Under the Agricultural Marketing Agreement Act of 1937, the Secretary of Agriculture promulgated an order regulating the marketing of milk in the Greater Boston area. The order provided for fixing minimum prices to be paid to producers, and the prescribed formula authorized a deduction for certain payments to cooperatives. Producers, claiming that the Secretary, by the provisions for payments to cooperatives, was unlawfully diverting funds which belonged to producers, brought suit in the federal district court to enjoin the Secretary from carrying out the challenged provisions of the order. Held, that the producers had standing to sue. Pp. 289, 305.

2. Although a judicial examination of the validity of the Secretary's action is not specifically authorized by the Act, authority therefor is found in the existence of courts and the intent of Congress as deduced from the statutes and precedents. P. 307.

3. Under Article III of the Constitution, Congress established courts to adjudicate cases and controversies as to claims of infringement of individual rights, whether by unlawful action of private persons or by the exertion of unauthorized administrative power. P. 310.

4. Whether the allegations of the complaint are sustainable is not considered; the Court determines only that the complainants are entitled to a judicial examination thereof. P. 311.

136 F.2d 786 reversed.

Certiorari, 320 U.S. 723, to review the affirmance of a judgment dismissing the complaint in a suit to enjoin the Secretary of Agriculture from carrying out provisions of an order under the Agricultural Marketing Agreement Act of 1937.

Page 289

REED, J., lead opinion

MR. JUSTICE REED delivered the opinion of the Court.

This class action was instituted in the United States District Court for the District of Columbia to procure an injunction prohibiting the respondent Secretary of Agriculture from carrying out certain provisions of his Order No. 4, effective August 1, 1941, dealing with the marketing of milk in the Greater Boston, Massachusetts, area. See Agricultural Marketing Agreement Act of 1937, 50 Stat. 246, 7 U.S.C. § 601 et seq., and Order 4, United States Department of Agriculture, Surplus Marketing Administration, Title 7, Code of Federal Regulations, Part 904. The district court dismissed the suit for failure to state a claim upon which relief can be granted, and its judgment was affirmed by the Court of Appeals for the District of Columbia, 136 F.2d 786. The respondent War Food Administrator was joined in this court upon a showing that he had been given powers concurrent with those of the Secretary. See Executive Order No. 9334, filed April 23, 1943, 8 F.R. 5423, 5425. We granted certiorari because of the importance of the question to the administration of this Act. 320 U.S. 723.

The petitioners are producers of milk, who assert that, by §§ 904.7(b)(5) and 904.9 of his Order, the Secretary is unlawfully diverting funds that belong to them. The courts below dismissed the action on the ground that the Act vests no legal cause of action in milk producers, and, since the decision below and the argument here were limited

Page 290

to that point, we shall confine our consideration to it.

The district court for the District of Columbia has a general equity jurisdiction authorizing it to hear the suit,1 but, in order to recover, the petitioners [64 S.Ct. 561] must go further and show that the act of the Secretary amounts to an interference with some legal right of theirs.2 If so, the familiar principle that executive officers may be restrained from threatened wrongs in the ordinary courts in the absence of some exclusive alternative remedy will enable the petitioners to maintain their suit; but if the complaint does not rest upon a claim of which courts take cognizance, then it was properly dismissed. The petitioners place their reliance upon such rights as may be expressly or impliedly created by the Agricultural Marketing Agreement Act of 1937 and the Order issued thereunder.

Although this Court has previously reviewed the provisions of that statute at length and upheld its constitutionality,3 some further reference to it is necessary to an understanding of the producer's interest in the funds dealt with by the Order.4

Page 291

[64 S.Ct. 562] The immediate object of the Act is to fix minimum prices for the sale of milk by producers to handlers. It does not forbid sales at prices above the minimum. It contains [64 S.Ct. 563]

Page 295

an appropriate declaration of policy,5 and it provides that the Secretary of Agriculture shall hold a hearing when he has reason to believe that a marketing order would tend to effectuate the purposes of the Act.6 If he finds that an order would be in accordance with the declared policy, he must then issue it.7 Sections 8c(5) and 8c(7) enumerate the provisions that the order may contain. Section 8c(5)(A) authorizes the Secretary to classify milk in accordance with the form or purpose of its use, and to fix minimum prices for each classification. These minima are the use value of the milk. This method of fixing prices was adopted because the [64 S.Ct. 564] economic value of milk depends upon the particular use made of it.8 It is apparent that serious inequities as among producers might arise if the prices each received depended upon the use the handler might happen to make of his milk; accordingly, Section 8c(5)(B) authorizes provision to be made for the payment to producers of a uniform price9 for the milk delivered irrespective of the use to which the milk is put by the individual handler. Section 8c(5)(C) authorizes the Secretary to set up the necessary machinery to accomplish these purposes.

Page 296

By Order No. 4,10 the Secretary of Agriculture did fix minimum prices for each class of milk, and required each

Page 297

handler in the Boston area to pay not less than [64 S.Ct. 565] those minima to producers, 7 C.F.R.1941 Supp., § 904.4, less

Page 298

specified deductions. §§ 904.7(b), 904.8. In addition, the order exercised the authority granted by the statute to

Page 299

require the use of a weighted average in reaching the uniform price to be paid producers, as described in the preceding paragraph. §§ 904.7, 904.8.

Page 300

[64 S.Ct. 566] Under the Order, the handler does not make final settlement with the producer until the blended price11 has been set, although he must make a part payment on or before the tenth of each month. § 904.8. But, within eight days after the end of each calendar month -- the so-called "delivery period," § 904.1(9) -- the handler must report his sales and deliveries, classified by use value, § 904,5, to a "market administrator." § 904.1(8). On the basis of these reports, the administrator computes the blended price and announces it on the twelfth day following the end of the delivery period. § 904.7(b). On the twenty-fifth day, the handlers are required to pay the balance due of the blended price so fixed to the producers. § 904.8(b).

Were no administrative deductions necessary, the blended price per hundredweight of milk could readily be determined by dividing the total value of the milk used in the marketing area at the minimum prices for each classification by the number of hundredweight of raw milk used in the area.12 However, the Order requires several adjustments for purposes admittedly authorized by statute, so that the determination of the blended price as actually made is drawn from the total use value less a sum which the administrator is direction to retain to meet various incidental adjustments.13 In practice, each handler

Page 301

discharges his obligation to the producers of whom he bought milk by making two payments: one payment, the blended price, is apportioned from the values at the minimum price for the respective classes less administrative deductions, and is made to the producer himself;14 the other payment is equal to these deductions and is made, in the language of the Order, "to the producer, through the market administrator," in order to enable the administrator to cover the differentials and deductions in question.15 It is the contention of the petitioners that, by § 904.7(b)(6)16 of the Order, the Secretary has directed the [64 S.Ct. 567] administrator to deduct a sum for the purpose of meeting payments to cooperatives as required by § 904.9, and that the Act does not authorize the Secretary to include in his order provision for payments of that kind or for deductions to meet them. Apparently this deduction for payments to cooperatives is the only deduction that is an unrecoverable charge against the producers. The other items deducted under § 904.7(b) are for a revolving fund or to meet differentials in price because of location, seasonal delivery, et cetera.

These producer petitioners allege that they have delivered milk to handlers in the "Greater Boston," Massachusetts, marketing area under the provisions of the Order. They state that they are not members of a cooperative association entitled under the Order to the contested payments and that, as producers, many of them voted against the challenged amendment on the producers' referendum under §§ 8c(9) and 8c(19) of the Act. These allegations

Page 302

are admitted by the defense upon which dismissal was based -- namely, that the petition fails to state a claim upon which relief could be granted. From the preceding summary of the theory and plan of the statutory regulation of minimum prices for milk affecting interstate commerce, it is clear that these petitioners have exercised the right granted them by the statute and Order to deliver their milk to "Greater Boston" handlers at the...

To continue reading