Milk Industry Foundation v. Glickman

• Decision Date: 20 January 1998
• Docket Number: No. 97-5163,97-5163
• Citation: 132 F.3d 1467
• Parties: MILK INDUSTRY FOUNDATION, Appellant, v. Daniel R. GLICKMAN, Secretary, United States Department of Agriculture and Northeast Dairy Compact Commission, Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1467

132 F.3d 1467

328 U.S.App.D.C. 121

MILK INDUSTRY FOUNDATION, Appellant, v. Daniel R. GLICKMAN, Secretary, United States Department of Agriculture and Northeast Dairy Compact Commission, Appellees.

No. 97-5163.

United States Court of Appeals District of Columbia Circuit.

Argued Nov. 20, 1997.

Decided Jan. 20, 1998.

Appeals from the United States District Court for the District of Columbia. (No. 96cv02027).

Steven J. Rosenbaum argued the cause for appellant, with whom Jonathon C. Drimmer and Jason A. Levine, Washington, DC, were on the briefs.

Douglas N. Letter, Appellate Litigation Counsel, U.S. Department of Justice, Washington, DC, argued the cause for appellee Daniel R. Glickman, Secretary, United States Department of Agriculture, with whom Frank W. Hunger, Assistant Attorney General, Washington, DC, Mary Lou Leary, U.S. Attorney, and Stephen W. Preston, Deputy Assistant Attorney General, U.S. Department of Justice, Washington, DC, were on the brief.

Clifford M. Sloan, Washington, DC, argued the cause for appellee Northeast Dairy Compact Commission, with whom Michael A. Rotker, Washington, DC, was on the brief.

Paul A. Strandberg, Assistant Attorney General, State of Minnesota, St. Paul, MN, was on the brief for amici curiae States of Minnesota, Wisconsin, and South Dakota.

Emily J. Gould, Assistant Attorney General, State of Vermont, was on the brief for amici curiae State of Connecticut, et al.

Eric Rome was on the brief for amici curiae Public Voice for Food and Health Policy, et al.

Roy J. Rodney, Jr., New Orleans, LA, and Endya E. Delpit were on the brief for amici curiae Commissioners of the Louisiana, Arkansas, Georgia, South Carolina and West Virginia Departments of Agriculture.

Before: EDWARDS, Chief Judge, HENDERSON, and ROGERS, Circuit Judges.

Opinion for the Court filed by Chief Judge EDWARDS.

Concurring opinion filed by Circuit Judge ROGERS with whom Circuit Judge HENDERSON concurs.

EDWARDS, Chief Judge:

In 1993, the six New England states--Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont ("Compact states")--agreed to form the Northeast Interstate Dairy Compact ("Compact") to enable them to raise the minimum milk prices that dairy processors must pay to dairy farmers in their region for milk processed and consumed in fluid form ("farm-gate prices"). The Constitution provides that "[n]o State shall, without the Consent of Congress, ... enter into any Agreement or Compact with another State...." U.S. CONST. art. I, § 10, cl. 3 ("compact consent clause"). Congress purported to consent to the Compact with the passage of the Federal Agricultural Improvement and Reform Act of 1996 ("FAIRA") § 147, 7 U.S.C. § 7256 (Supp.1996). Congress conditioned its consent on a finding of a "compelling public interest" by the Secretary of Agriculture ("Secretary").

Appellant, the Milk Industry Foundation, contends that Congress did not "consent" to the Compact but instead impermissibly delegated this constitutional responsibility to the Secretary. Appellant also claims that even assuming, arguendo, that the delegation was lawful, the Secretary exercised his delegated authority arbitrarily and capriciously in violation of the Administrative Procedure Act ("APA").

The congressional action here is not substantially different from countless pieces of contingent legislation enacted by Congress over the last few decades--including many that have been challenged and upheld by the courts. Appellant asserts that the instant delegation is somehow different because it involves an interstate compact. This claim is meritless. Furthermore, we have no doubt that, in instructing the Secretary to authorize the Compact only upon finding a "compelling public interest in the Compact region," Congress provided an "intelligible principle" to guide the Secretary's exercise of the delegated power. Accordingly, we hold that the delegation is constitutional.

We also reject Appellant's APA claim. Evaluating the Secretary's finding of a "compelling public interest" within the relevant context at issue, we find that he "examine[d] the relevant data and articulate[d] a satisfactory explanation for [his] action[,] including a rational connection between the facts found and the choice made." Thus his decision is not arbitrary and capricious under the APA. See Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2866, 77 L.Ed.2d 443 (1983) (internal quotations omitted).

I. BACKGROUND

A. The National Scheme for the Regulation of Milk Prices

Congress initiated the federal program for the regulation of farm-gate milk prices with the passage of the Agricultural Marketing Agreement Act of 1937 ("AMAA") § 2, 7 U.S.C. §§ 601-624, 671-674 (1994). The AMAA delegates the authority to set minimum milk prices nationwide to the Secretary, § 608c(18), while the states retain authority to establish milk prices above the federal price floor. See United Dairy Farmers Coop. Ass'n v. Milk Control Comm'n of Pennsylvania, 335 F.Supp. 1008, 1013-15 (M.D.Pa.) (three judge court), aff'd without opinion, 404 U.S. 930, 92 S.Ct. 280, 30 L.Ed.2d 244 (1971).

B. The Northeast Interstate Dairy Compact

In 1988, Vermont initiated an effort to regulate milk prices beyond its own state borders by forming an interstate compact with neighboring states. By 1993, all of the New England state legislatures had approved the formation of the Northeast Interstate Dairy Compact, and all of the states' governors had signed resolutions supporting it. See Milk Indus. Found. v. Glickman, 949 F.Supp. 882, 885 (D.D.C.1996) ("MIF I") (explaining history of Compact). A principal objective of the Compact is to preserve dairy farms in the Compact states. See Compact art. I, § 1, reprinted in Appendix to Brief for Appellee Northeast Dairy Compact Commission. The Compact states agreed to establish a Commission consisting of three to five representatives from each state, with at least one person from each state being a dairy farmer and another a consumer representative, to administer the Compact. Compact art. III, § 4.

The Compact grants the Commission authority to, among other things, establish an "over-order" farm-gate price, a price of up to $1.50 per gallon over the federal minimum price for milk used for fluid products. Compact art. IV, § 9. The Compact's voting requirements are designed to ensure that the Commission does not pass any over-order prices without the broad consensus of the Compact states, both dairy-producing and dairy-consuming states. See Compact art. III, § 5 (requiring at least two-thirds vote of the delegations present to establish or terminate an over-order price); id. ("The establishment of a regulated area which covers all or part of a participating state shall require also the affirmative vote of that state's delegation.").

C. Congress' Consent to the Compact

Congress consented to the Compact with the enactment of FAIRA § 147, 7 U.S.C. § 7256 (Supp.1996). See MIF I, 949 F.Supp. at 886-87 (detailing efforts to obtain congressional consent to the compact). Congress' consent to the Compact was made subject to a number of conditions and limitations, two of which are relevant here. First, Congress conditioned its consent on a finding by the Secretary that the implementation of the Compact is in the compelling public interest of the Compact region. § 7256. ("Based upon a finding by the Secretary of a compelling public interest in the Compact region, the Secretary may grant the States that have ratified the Northeast Interstate Dairy Compact ... the authority to implement the [ ] Compact."). Second, Congress limited the duration of its consent to the Compact, providing for its termination upon the Secretary's implementation of comprehensive reforms of the federal scheme for regulating milk prices mandated by FAIRA. See id. (providing that Congress' consent "shall terminate concurrent with the Secretary's implementation" of pending reforms to the federal milk-pricing scheme); see also 7 U.S.C. § 7253 (Supp.1996) (mandating the consolidation and reform of the federal milk-pricing scheme not later than April 4, 1999).

D. The Secretary's Findings and Appellant's Challenges to the Compact

On August 28, 1996, the Secretary published a two-sentence finding of a compelling public interest and authorized the Compact states to implement the Compact. 61 Fed.Reg. 44,290 (1996) ("Initial Finding"). Appellant promptly filed a motion in the District Court for the District of Columbia for a preliminary injunction to bar the implementation of the Compact, claiming that section 147 of FAIRA was an unconstitutional delegation of legislative power and that the Secretary had exercised his delegated authority arbitrarily and capriciously in violation of the APA.

Following the District Court's denial of Appellant's motion for a preliminary injunction, the Secretary moved to stay proceedings so that he could review the entire administrative record and provide an amplified decision justifying his finding of a compelling public interest. The District Court granted this motion, instructing the Secretary to hold open the possibility of reaching a contrary conclusion upon reexamination of the record. Milk Indus. Found. v. Glickman, 955 F.Supp. 8, 9 (D.D.C.1997).

The Secretary issued a second decision on March 28, 1997, again finding a compelling public interest in the Compact region warranting authorization of the Compact. 62 Fed.Reg. 14,879 (1997) ("Amplified Decision"). In reaching his decision, the Secretary emphasized the importance of taking "reasonable measures to preserve small family farms," noting that "America wants and still needs the family farm. This belief is obviously strongly held by the people of the Compact region." Id. at 14,879-80 (finding that "small dairy farms are an essential part of the character and culture in the Compact region"). The Secretary also noted that the Compact is a...