Secretary of Agriculture v. Central Roig Refining Co Porto Rican American Sugar Refinery v. Central Roig Refining Co Government of Puerto Rico v. Secretary of Agriculture

Citation70 S.Ct. 403,94 L.Ed. 381,338 U.S. 604
Decision Date06 February 1950
Docket Number30,32,Nos. 27,s. 27
PartiesSECRETARY OF AGRICULTURE v. CENTRAL ROIG REFINING CO. et al. PORTO RICAN AMERICAN SUGAR REFINERY, Inc. v. CENTRAL ROIG REFINING CO. et al. GOVERNMENT OF PUERTO RICO v. SECRETARY OF AGRICULTURE et al
CourtUnited States Supreme Court

Mr. Orlando J. Anton Santi, San Juan, P.R., for Porto Rican American Sugar Refinery, Inc. Frederic P. Lee, Washington, D.C., for Central Roig Refining Co. and Western Sugar Refining Co.

Messrs. Jose Treas-Monge, Asst. Atty. Gen., of Puerto Rico, Walton Hamilton, Washington, D.C., for the Government of Puerto Rico.

Mr. Neil Brooks, Washington, D.C., for Secretary of Agriculture.

Mr. Donald R. Richberg, Washington, D.C., for respondents American Sugar Refining Co., et al.

Mr. Justice FRANKFURTER delivered the opinion of the Court.

These three cases bring before us the validity of an order of the Secretary of Agriculture, issued by him on the basis of the Sugar Act of 1948. It is claimed that the Secretary disobeyed the requirements of that Act. If it be found that the Secretary brought himself within the Act, the power of Congress to give him the authority he exercised is challenged. By a series of enactments Congress addressed itself to what it found to be serious evils resulting from an uncontrolled sugar market. The central aim of this legislation was to rationalize the mischievous fluctuations of a free sugar market by the familiar device of a quota system. The Jones-Costigan Act of 1934, 48 Stat. 670, 7 U.S.C.A. §§ 608, 608a, 609—611, 613, 615—617, 620, the Sugar Act of 1937, 50 Stat. 903, and the Sugar Act of 1948, 61 Stat. 922, 7 U.S.C. (Supp. II, 1949), §§ 1100—1160, 7 U.S.C.A. §§ 1100—1160.

The volume of sugar moving to the continental United States market was controlled to secure a harmonious relation between supply and demand.1 To adapt means to the purpose of the sugar legislation, the Act of 1948 defines five domestic sugar-producing areas: two in the continental United States, and one each in Hawaii, Puerto Rico and the Virgin Islands. To each area is allotted an annual quota of sugar, specifying the maximum number of tons which may be marketed on the mainland from that area. § 202(a). A quota is likewise assigned to the Philippines. § 202(b). The balance of the needs of consumers in the continental United States, to be determined each year by the Secretary, § 201, is met by importation from foreign countries, predominantly from Cuba, of the requisite amount of sugar. § 202(c).

The quotas thus established apply to sugar in any form, raw or refined. In addition, § 207 of the Act establishes fixed limits on the tonnage of 'direct-consumption' or refined sugar2 which may be marketed annually on the mainland from the offshore areas as part of their total sugar quotas. But mainland refiners are not subject to quota limitations upon the marketing of refined sugar.

The Puerto Rican quota for 'direct-consumption' sugar is 126,033 tons. This figure had its genesis in the Jones-Costigan Act of 1934, which provided that the quota for each offshore area was to be the largest amount shipped to the mainland in any one of the three preceding years. 48 Stat. 670, 672—73. In the case of Puerto Rico this was computed by the Secretary at 126,033 tons. General Sugar Quota Regulations, Ser. 2, Rev. 1, p. 4, August 17, 1935. By the Sugar Acts of 1937 and 1948, Congress embedded this amount in legislation. All the details for the control of a commodity like sugar could not, of course, be legislatively predetermined. Administrative powers are an essential part of such a regulatory scheme. The powers conferred by § 205(a) upon the Secretary of Agriculture raise some of the serious issues in this litigation. By that section Congress authorized the Secretary to allot the refined sugar quota as well as the inclusive allowance of a particular area among those marketing the sugar on the mainland from that area.3 The section provides that 'Allotments shall be made in such manner and in such amounts as to provide a fair, efficient, and equitable distribution of such quota or proration thereof, by taking into consideration' three factors: (1) 'processings of sugar * * * to which proportionate shares * * * pertained';4 (2) past marketings; and (3) ability to market the amount allotted.

On January 21, 1948, the Secretary issued Puerto Rico Sugar Order No. 18, 13 Fed.Reg. 310, allotting the 1948 Puerto Rican refined sugar quota among the various refineries of the island. Having satisfied himself of the need for an allotment the Secretary, in conformity with the procedural requirements of § 205(a), apportioned the quota among the individual refiners, setting forth in appropriate findings the manner in which he applied the three statutory standards for allotment.

As to 'past marketings' he found that the proper measure was the average of the highest five years of marketings during the seven-year period of 19351941. While recognizing that ordinarily the most recent period of marketings furnished the appropriate data, he concluded that the period 1942 1947 was unrepresentative in that the war needs made those years abnormal and not a fair basis for purposes of the economic stabilization which was the aim of the 1948 Act. Shortages as to transportation, storage and materials, caused by the war, led to special government control. These circumstances resulted in hardships or advantages in varying degrees to different refiners, quite unrelated to a fair system of quotas for the post-war period.

Likewise as to 'the ability * * * to market,' the Secretary recognized that marketings during a recent period ordinarily furnished the best measure. But again he found that the derangements of the war years served to make that measure abnormal. He therefore concluded that a fairer guide to his judgment came from the highest marketings of any year during the 19351947 period, using, however, present plant capacity as a corrective.

The Secretary duly considered 'the processings of sugar' to which proportionate shares pertained, but concluded that this factor could not fairly be applied. This was so because it referred to processings of raw sugar from sugar cane, whereas the three largest Puerto Rican refining concerns restricted themselves to refining raw sugar after it had already been processed. He felt bound, therefore, to give no weight to this factor in the sum he finally struck, and gave equal weight to past marketings and ability to market.

Availing themselves of § 205(b), respondents, Central Roig Refining Company and Western Sugar Refining Company, two of the three largest refiners in Puerto Rico, appealed from the Secretary's order to the Court of Appeals for the District of Columbia. They charged the Secretary with disregard of the standards which Congress imposed by § 205(a) for his guidance in making allotment of quotas; they challenged the validity of the Act itself under the Due Process Clause of the Fifth Amendment. Porto Rican American Sugar Refinery, Inc., petitioner in No. 30, the largest of the Puerto Rican refiners, intervened to defend the Secretary's order against the statutory attack. The Government of Puerto Rico, petitioner in No. 32, intervened to urge the unconstitutionality of the statute, which the American Sugar Refining Company and other mainland refiners intervened to meet this attack. Being of opinion that the Secretary's order was not authorized by the Act, the Court of Appeals reversed it. 84 U.S.App.D.C. 161, 171 F.2d 1016. Since the order failed on statutory grounds, a majority of that court did not deem it proper to decide the constitutional question. Because of the obvious importance of the decision below in the administration of the Sugar Act we granted certiorari. 336 U.S. 959, 69 S.Ct. 889.

I. In making quota allotments the Secretary of Agriculture must of course keep scrupulously within the limits set by the Sugar Act of 1948. In devising the framework of control Congress fixed the flat quotas for the sugar-producing areas. Congress could not itself, as a practical matter, allot the area quotas among individual marketers. The details on which fair judgment must be based are too shifting and judgment upon them calls for too specialized understanding to make direct congressional determination feasible. Almost inescapably the function of allotting the area quotas among individual marketers becomes an administrative function entrusted to the member of the Cabinet charged with oversight of the agricultural economy of the nation. He could not be left at large and yet he could not be rigidly bounded. Either extreme would defeat the control system. They could be avoided only by laying down standards of such breadth as inevitably to give the Secretary leeway for his expert judgment. Its exercise presumes a judgment at once comprehensive and conscientious. Accordingly, Congress instructed the Secretary to make allotments 'in such manner and in such amounts as to provide a fair, efficient, and equitable distribution' of the quota.

In short, Congress gave the Secretary discretion commensurate with the legislative goal. Allocation of quotas to individual marketers was deemed an essential part of the regulatory scheme. The complexity of problems affecting raw and refined sugar in widely separated and economically disparate areas, accentuated by the instability of the differentiating factors, must have persuaded Congress of the need for continuous detailed administrative supervision.5 In any event, such is the plain purport of the legislation.

By way of guiding the Secretary in formulating a fair distribution of individual allotments, Congress directed him to exercise his discretion 'by taking into consideration' three factors: past marketings, ability to market, and processings to which proportionate shares pertained. Plainly these are not mechanical or self-defining standards. They in turn imply wide...

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