Brannan v. Stark

• Decision Date: 09 November 1950
• Docket Number: 10366.,No. 10365,10365
• Parties: BRANNAN, Secretary of Agriculture, v. STARK et al. DAIRYMEN'S LEAGUE CO-OPERATIVE ASS'N, Inc., v. STARK et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

87 US App. DC 388, 185 F.2d 871 (1950)

BRANNAN, Secretary of Agriculture, v. STARK et al. DAIRYMEN'S LEAGUE CO-OPERATIVE ASS'N, Inc., v. STARK et al.

Nos. 10365, 10366.

United States Court of Appeals District of Columbia Circuit.

Argued March 28, 1950.

Decided November 9, 1950.

Mr. Neil Brooks, Sp. Asst. to the Atty. Gen., with whom Mr. J. Stephen Doyle, Jr., Sp. Asst. to the Atty. Gen., was on the brief, for appellant in No. 10365. Mr. George Morris Fay, U. S. Atty., Washington, D. C., also entered an appearance for appellant in No. 10365.

Mr. William E. Leahy, Washington, D. C., with whom Mr. William J. Hughes, Jr., Washington, D. C., was on the brief, for appellant in No. 10366.

Mr. Edward B. Hanify, of the Bar of the Supreme Court of Massachusetts, Boston, Mass., pro hac vice, by special leave of the Court, with whom Messrs. Harry Polikoff, New York City, Edgar J. Goodrich and Lipman Redman, Washington, D. C., were on the brief, for appellees.

Messrs. Marion R. Garstang, Kansas City, Mo., and Harry Scharnikow, Washington, D. C., filed a brief for New England Milk Producers' Ass'n and others as amici curiae, urging reversal.

Before EDGERTON, CLARK and KIMBROUGH STONE,^* Circuit Judges.

STONE, Circuit Judge.

This is an action by several milk producers (not members of milk cooperative associations) against the Secretary of Agriculture to enjoin enforcement of parts of his Order No. 4 as amended, 7 C.F.R. p. 35, 1949 ed.; 7 U.S.C.A. § 601 et seq., governing milk marketing in the Boston area. These parts of the Order provided for certain payments to milk cooperative associations from the marketing pool established by the Order. The Dairymen's League Co-operative Association, Inc. (a milk cooperative in the New York area) intervened as a defendant because similar provisions were in an Order governing that area (7 C.F.R. p. 90, 1949 ed.).

Defendant and intervener filed motions for summary judgment which was denied. There were amendments to the petition and to answers of defendant and of intervener. Evidence was introduced in the hearing, without a jury, on a permanent order.

The trial court made findings of fact, stated conclusions of law, and entered judgment permanently enjoining enforcement of the challenged provisions of the Order (Stark v. Brannan, D.C.Cir., 82 F. Supp. 614). The Secretary and the intervener brought these separate appeals. The New England Milk Producers' Association and eleven other milk cooperatives (all of which are cooperative associations marketing milk in the Boston area and qualified to receive these payments under Order No. 4) have filed a brief in this court as amici curiae in support of the appeals.

Before the issues as to the validity of these portions of the Order can be reached, it is necessary to dispose of an issue as to the right of plaintiffs to maintain the action. This issue contains two challenges: (1) it is not a proper class suit; and (2) it is champertous.

The claim that this is not properly a class suit is readily determined in so far as necessary here. The petition alleges that the plaintiffs bring the action "for themselves and for the benefit of all other persons similarly situated" (italics added). So far as final disposition of this case is concerned, it is of no moment whether this is properly a class action or not. This is true because the individual plaintiffs have personal claims justifying judicial consideration (Stark v. Wickard, 321 U.S. 288, 303, 305, 64 S.Ct. 559, 88 L.Ed. 733). A companion attack, by the intervener, alleges that, since the commencement of this action, "one or more of the plaintiffs" has ceased to produce milk or has become a member of the cooperative or voted in favor of such payments to cooperatives. If these allegations be true, it does not affect the standing of the other plaintiffs to maintain the suit.

The charge of champerty rests upon charges in an amendment to the answer of the intervener to the effect that the plaintiffs are mere nominal parties in an action brought "by and for the benefit of certain handlers of milk," who have no legal standing, and who are financing the litigation. That certain proprietary milk handlers might have financial or business interests affected by this action and that they are not in legal position to present such in court is clear from Stark v. Wickard, 321 U.S. 288, 64 S.Ct. 559, 88 L.Ed. 733. Also, this record is plain that, at least, some of the present plaintiffs are sincerely interested in maintaining their supposed rights as set out in their pleadings. Again, this record leaves little doubt that although the plaintiffs are contributing seemingly as much as they can, the bulk of the expenses of this action is being furnished by these handlers. However, this situation does not constitute champerty (139 A.L.R. 635 n. and see citations in footnotes 88-91). And even if there were — there is no proof of such — a champertous arrangement between plaintiff and these handlers, that would be no defense to plaintiffs' rights in this action (Burnes v. Scott, 117 U.S. 582, 589, 6 S.Ct. 865, 29 L. Ed. 991). The further argument that the court abused its discretion in entertaining the action is not convincing. The pressure is on the stated position of a trivial private interest opposed to public benefit. We cannot recognize that situation as here present. These in limine matters determined, we come to the substantial issues in this controversy.

The broad issue is whether the Secretary exceeded his statutory powers by including in the marketing order this provision for payment to cooperatives. The statute is the Agriculture Marketing Agreement Act of 1937 (7 U.S.C.A. § 601 et seq.). While other provisions of the Act bear upon this issue, the crux of the controversy is in subsections 8c(5) and (7) (7 U.S.C.A. § 608c (5) and (7)).¹

As conclusions of law, the trial court stated that these provisions of the Order were not authorized by Section 8c(5) of the Act; that they were not authorized by Section 8c(7) (D) of the Act; and that they were "not incidental to and consistent with the terms and conditions specified in" Section 8c(5) and (7) of the Act and were "not necessary to effectuate the other provisions of" the Order — all of which qualities being required by the Act.

Appellant contends (1) that statutory authority for these payments to cooperatives is found in Section 8c(7) (D) of the Act; and (2) that the scope of judicial review is limited to whether substantial evidence (in the hearing before the Secretary on which he based the Order) supports this action of the Secretary.

The intervener contends that such authority is found (1) in the specific provision of 8c(7) (D), and (2) in general provisions in the Act relating to the general purpose and intent of Congress, being Sections 1, 2, 8c(18) and 10(b) (1).²

The Amici Curiae find such authority in 8c(7) (D).

Appellees challenge the contentions as to the scope of judicial review (stating that the basic issue is whether the payments under the terms and conditions of the Order are authorized by the Act "regardless of whether the payments are treated as related to the services specified in the Order, or are related to the other and different services now relied on by the Appellant") and that the Act permits these parts of the Order.

From these concentrated statements of the positions of the parties and of the Amici Curiae, there appear only two basic issues. The first is the scope of judicial review. The second is whether subsection 8c(7) (D) construed with 8c(5) of the Act authorizes these provisions of the Order.³

Scope of Review

Appellant states this issue as follows. "The scope of judicial review is limited to the inquiry as to whether substantial evidence in the Hearing Record, on which the Secretary's Order is based, supports the Secretary's action. There being no question that substantial evidence supports the Secretary's findings that the Order provisions for payments to co-operatives are incidental and necessary under Section 8c (7) (D) of the Act, and not inconsistent with Section 8c(5), and inasmuch as the appellees failed to place the entire Hearing Record before the court, the appellees' attack upon the provisions of the Order must fail."

Slightly to narrow this issue, the matter of the claimed failure to "place the entire hearing record" before the trial court will have attention. The trial court found: "Slight procedural changes have been made in them Orders. On August 1, 1947, the rates of the payments were revised. The Secretary's original finding has never been amplified or amended." This is sustained by the only evidence, which is "there have been a few minor changes in the cooperative payment provisions." While ultimate action by the Secretary is not equivalent to the hearing records upon which the action is based, this record is clear that both the results of and the records of those later hearings were not regarded as important by either party at the trial. We shall so view them on this appeal.

Appellant cites cases⁴ to support his argument that "as to questions of law involving the specific application of a broad statutory term, in a proceeding in which the agency administering the statute must determine it initially, the reviewing Court's function is limited, and the agency's determination, if not prohibited by the statute, is to be accepted if it is supported by substantial evidence." This argument does not solve the exact issue here. The issue is whether the requirement of payment to the cooperatives for the services, which the Secretary deemed rendered by them to this marketing plan, is "prohibited" — beyond the authority delegated to him by the Act. For the purposes of this litigation, it may be conceded that there was substantial evidence that these services were rendered. His determination that the requirement of payment for such services is within his authority under the Act is an application of the...