Michigan Canners and Freezers Association, Inc v. Agricultural Marketing and Bargaining Board

Citation81 L.Ed.2d 399,104 S.Ct. 2518,467 U.S. 461
Decision Date11 June 1984
Docket NumberNo. 82-1577,82-1577
PartiesMICHIGAN CANNERS AND FREEZERS ASSOCIATION, INC., et al. v. AGRICULTURAL MARKETING AND BARGAINING BOARD et al
CourtUnited States Supreme Court
Syllabus

The federal Agricultural Fair Practices Act of 1967 (AFPA) was enacted to enable individual farmers and other producers of agricultural commodities to join together voluntarily in cooperative associations in order to protect their marketing and bargaining position as against large and powerful agricultural processors. The AFPA makes it unlawful for "handlers"—defined to include both processors and producers' associations—to coerce any producer "in the exercise of his right to join . . . or to refrain from joining" a producers' association, 7 U.S.C. § 2303(a), or to coerce any producer to enter into or terminate a marketing contract with a producers' association or a contract with a handler, § 2303(c). The Michigan Agricultural Marketing and Bargaining Act (Michigan Act) includes the same prohibitions as the AFPA, but goes beyond it by establishing a state-administered system by which producers' associations are organized and certified as exclusive bargaining agents for all producers of a particular commodity. Under this system, if an association's membership constitutes more than 50% of the producers of a particular commodity and its members' production accounts for more than 50% of the commodity's total production, the association may be accredited as the exclusive bargaining agent for all producers of that commodity. Upon accreditation of the association, all producers of the commodity, regardless of whether they have chosen to become members of the association, must pay a service fee to the association and must abide by the contracts the association negotiates with processors. The Michigan Agricultural Cooperative Marketing Association (MACMA), a producers' association accredited under the Michigan Act, is the sole sales and bargaining representative for asparagus producers in the State. After the MACMA had negotiated contracts on behalf of Michigan asparagus growers to sell the asparagus crop for a certain year, appellant asparagus growers and association of asparagus processors, sued MACMA in state court seeking a declaratory judgment that the provisions of the Michigan Act requiring service fees and mandatory adherence to an association-negotiated contract are pre-empted by the AFPA. The Michigan Supreme Court rejected appellants' claim, holding that the AFPA prohibited only processor misconduct, whereas the challenged provisions of the Michigan Act regulated producers' activities.

Held: The challenged provisions of the Michigan Act are pre-empted by the AFPA. Pp. 469-478.

(a) This is a case where the basis for pre-emption is that Congress, while not displacing state regulation entirely, has preempted state law to the extent that it conflicts with federal law and "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 85 L.Ed. 581. Pp. 469-470.

(b) The AFPA's theme of voluntariness is carried through to the provisions defining the prohibited practices. By defining the term "handler" to include producers' associations as well as processors, the AFPA prohibits interference by the former to the same extent that it prohibits interference by the latter. Just as the AFPA forbids processors to interfere in a producer's decision to become or remain affiliated with an association, it also forbids a producers' association to interfere in that decision by coercing producers to belong to, or participate in a marketing contract with, the association. Pp. 470-471.

(c) Congress' intent to shield producers from coercion by both processors and producers' associations is confirmed by the AFPA's legislative history, which reveals that the question of the producer's free choice was a central focus of congressional attention during passage of the Act. Despite the fact that the Michigan Act and the AFPA share the goal of augmenting the producer's bargaining power, the Michigan Act conflicts with the AFPA by establishing "accredited" associations that wield the power to coerce producers to sell their products according to terms established by the association and to force producers to pay a service fee for the privilege. Pp. 471-477.

(d) The Michigan Act empowers producers' associations to do precisely what the AFPA forbids them to do. In effect, an association accredited under the Michigan Act may coerce a producer to enter into a marketing contract with a producers' association—a clear violation of § 2303(c). In addition, although the Michigan Act does not compel a producer to join an association, it binds him to the association's marketing contracts, forces him to pay fees to the association, and precludes him from marketing his goods himself, and thus, in practical effect, imposes on the producer the same incidents of association membership with which Congress was concerned in enacting § 2303(a). Pp. 477-478.

416 Mich. 706, 332 N.W.2d 134, reversed.

Joseph G. Scoville, Grand Rapids, Mich., for appellants.

John H. Garvey, Lexington, Ky., for the U.S. as amicus curiae, by special leave of Court.

James A. White, Lansing, Mich., for appellees.

Justice BRENNAN delivered the opinion of the Court.

A perceived need to help the American farmer in his economic relations with large and powerful agricultural processors has moved Congress and various States to enact laws designed to bolster the farmer's bargaining power when bringing his goods to market. This case involves two such laws: the federal Agricultural Fair Practices Act of 1967 and the State of Michigan's Agricultural Marketing and Bargaining Act (Michigan Act). The question presented is whether certain provisions of the Michigan Act, which accord agricultural cooperative associations exclusive bargaining authority for the sale of agricultural products, are pre-empted by the federal Act. The Supreme Court of Michigan held that the Michigan Act is not pre-empted. 416 Mich. 706, 332 N.W.2d 134 (1982). We noted probable jurisdiction, 464 U.S. 912, 104 S.Ct. 271, 78 L.Ed.2d 252 (1983), and now reverse.

I
A.

The federal Agricultural Fair Practices Act (AFPA), 82 Stat. 93, 7 U.S.C. § 2301 et seq., protects the right of farmers and other producers 1 of agricultural commodities to join cooperative associations through which to market their products.2 Responding to "the growing concentration of power in the hands of fewer and larger buyers [of agricultural products]," S.Rep. No. 474, 90th Cong., 1st Sess., 2-3 (1967), U.S.Code Cong. & Admin.News 1968, pp. 1867, 1869, Congress enacted the AFPA to rectify a perceived imbalance in bargaining position between producers and processors of such products. Although the Act's principal purpose is to protect individual producers from interference by processors when deciding whether to belong to a producers' association, the Act also protects the producer from coercion by associations of producers. The AFPA thus provides that it is unlawful for either a processor or a producers' association to engage in practices that interfere with a producer's freedom to choose whether to bring his products to market himself or to sell them through a producers' cooperative association. 7 U.S.C. § 2303. Specifically, § 2303(a) forbids "handlers"—- defined to include both processors and producers' associations 3 to "coerce any producer in the exercise of his right to join and belong to or to refrain from joining or belonging to an association of producers." Similarly, § 2303(c) forbids handlers to "coerce or intimidate any producer to enter into, maintain, breach, cancel, or terminate a membership agreement or marketing contract with an association of producers or a contract with a handler." 4

The Michigan Act, Mich.Comp.Laws § 290.701 et seq. (1984), also designed to facilitate collective action among producers, includes the same prohibitions as the federal Act. It goes beyond the federal statute, however, by extensively regulating the activities of producers' associations. Most importantly, the Michigan Act establishes a state-administered system by which producers' associations are organized and certified as exclusive bargaining agents for all producers of a particular commodity. §§ 290.703, 290.707. Under Michigan's system, if an association's membership constitutes more than 50% of the producers of a particular commodity, and its members' production accounts for more than 50% of the commodity's total production, the association may apply to the state Agricultural Marketing and Bargaining Board for accreditation as the exclusive bargaining agent for all producers of that particular commodity. § 290.707(c).5 When the Board accredits an association as the agent for the producers of a particular commodity, all producers of that commodity, regardless of whether they have chosen to become members of the association, must pay a service fee to the association and must abide by the terms of the contracts the association negotiates with processors. §§ 290.710(1), 290.713(1).6 Thus, the Michigan Act creates an "agency shop" arrangement among agricultural producers whenever there is majority support for such an arrangement among the producers of a particular commodity.

B

The Michigan Agricultural Cooperative Marketing Association, Inc. (MACMA), a producers' association accredited under the Michigan Act, is the sole sales and bargaining representative for asparagus producers in the State.7 In 1974, as permitted by the Michigan Act, MACMA negotiated contracts on behalf of Michigan asparagus growers to sell the 1974 asparagus crop. In response, appellants Dukesherer Farms and Ferris Pierson, asparagus growers that would be bound by the contract, along with the Michigan Canners & Freezers...

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