United States v. Ruzicka

• Decision Date: 16 December 1946
• Docket Number: No. 54,54
• Citation: 67 S.Ct. 207,91 L.Ed. 290,329 U.S. 287
• Parties: UNITED STATES v. RUZICKA et al
• Court: U.S. Supreme Court

329 U.S. 287

67 S.Ct. 207

91 L.Ed. 290

UNITED STATES

v RUZICKA et al.

No. 54.

Decided Dec. 16, 1946.

Argued Nov. 20, 21, 1946.

Mr.

George T. Washington, of Washington, D.C., Acting Sol. Gen., for petitioner.

Mr. William Parker Ward, of Chicago, Ill., for respondents.

Mr. Justice FRANKFURTER delivered the opinion of the Court.

We brought this case here, 327 U.S. 776, 66 S.Ct. 964, because it raises questions of importance in the administration of the Agricultural Marketing Agreement Act of 1937. 50 Stat. 246, 7 U.S.C.A. § 601 et seq., 7 U.S.C.A. § 601 et seq. The general scheme of the Act and its operation have been before us in a series of cases. United States v. Rock Royal Co-op., 307 U.S. 533, 59 S.Ct. 993, 83 L.Ed. 1446; United States v. Wrightwood Dairy Co., 315 U.S. 110, 62 S.Ct. 523, 86 L.Ed. 726; Stark v. Wickard, 321 U.S. 288, 64 S.Ct. 559, 88 L.Ed. 733. Our immediate concern is with the provisions of the Act that distribute enforcing authority between the courts and the Secretary of Agriculture. These become relevant to the enforcement of Milk Order No. 41, an 'Order Regulating the Handling of Milk in the Chicago, Illinois, Marketing Area', and more particularly the portion of that elaborate Order which defines the rights and obligations of 'handlers' of milk. Section 941.1(5). The Order was issued under the powers delegated to the Secretary of Agricultur to effectuate the purposes of the Act. Section 8c of the Act.

Order No. 41 classifies milk received into the Chicago area according to its uses. To milk in each of the four classes the market administrator assigns a uniform 'use value.' All handlers are required to report to the market administrator the quantity of milk purchased and put to its classified uses. On the basis of these reports the administrator, taking into account the total quantity of milk produced and the amount devoted to each classification, as well as the balance in the Producersettlement Fund, and making authorized adjustments, announces monthly a uniform minimum price to be paid by handlers to producers. Since a handler's receipts from the re-sale of milk, or the sale of milk products, vary with the amount of the milk distributed in each class, the uniform price paid by handlers will create inequities unless adjustment is made, based on the comparative use value of the milk distributed by a particular handler. The mechanism for adjustment is the Producersettlement Fund. Handlers are required to contribute to this Fund whenever the use value of the milk handled by them during the month is greater than the norm on which the uniform price is based. Conversely, handlers whose milk distribution is of low use value and whose fixed minimum costs are therefore out of line with their receipts, are recompensed from this Fund. Effective enforcement of such a marketing scheme rests on proper accounting, reliable reports and alert inspection. At best, however, errors are inevitable, which may call for payments by handlers into the Fund. The reliance of the industry upon that Fund makes prompt payments into it imperative.

An order for payment into the Fund and its resistance led to this litigation. The Ruzickas, handlers of milk, filed with the market administrator required reports and received from him a transcript of their account with the Fund for the period in controversy. Deficiencies were disclosed which the Ruzickas refused to pay, in disregard of § 941.8(e) and (g) of Order 41 requiring a handler to pay within five days 'the amount so billed'. Under § 8a(6) of the Agricultural Marketing Agreement Act this suit was begun in the Northern District of Illinois for enforcement. The Government prayed for a mandatory injunction commanding compliance with Order 41 by payment of the sums alleged to be due to the Fund. If it be relevant, it was not alleged that there was danger of irreparable loss because of insolvency of the Fund. By their answer the Ruzickas justified their failure to pay, chiefly on the ground that the demand was based upon faulty inspection of their accounts and improper tests of their milk and milk products. The District Court ruled that 'the defend- ants having failed to avail themselves of the administrative remedy provided by said Act, may not raise such issues of fact before this Court'. On the issue in the suit thus limited, the District Court granted the Government's motion for judgment on the pleadings. The Circuit Court of Appeals for the Seventh Circuit, one judge dissenting, reversed the District Court, ruling that the validity of the demand by the Secretary of Agriculture may be contested in an enforcement proceeding under § 8a(6). 152 F.2d 167.

Thus the question before us is whether a handler may resist a claim against him by the Secretary of Agriculture, made according to the procedure defined in the Act, without previously having sought to challenge the claim in a proceeding, also defined in the Act, before the Secretary of Agriculture. The answer is found on a fair reading of the Agricultural Marketing Agreement Act in the context of its purposes and of the scheme designed by Congress for their realization.

The sections of the statute directly relevant to our problem are set out in the margin.¹ Briefly, the district courts of the United States are 'vested with jurisdiction specifically to enforce' o ders issued pursuant to the Act. ² The Act authorizes a handler to challenge before the Secretary of Agriculture his order 'or any obligation imposed in connection therewith' as 'not in accordance with law', and to ask to have it modified or to be exempted from it. When the order is so challenged, the determination of the Secretary of Agriculture, after hearing, is final but only 'if in accordance with law'. Section 8c(15)(A). To test whether such ruling is 'in accordance with law' the handler may bring the Secretary's action for review before the appropriate district court. Section 8c(15)(B). But the very subsection, (15), which gives the handler access to the Secretary of Agriculture for administrative relief and opportunity for judicial review of his determination, provides that the pendency of the proceedings before the Secretary, or in the district court to review the Secretary's ruling, 'shall not impede, hinder, or delay the United States or the Secretary of Agriculture from obtaining relief' under § 8a(6). It is only when 'a final decree has been rendered in proceedings between the same parties, and covering the same subject matter, instituted pursuant to this subsection (15)' that proceedings brought for enforcement under § 8a(6) 'shall abate'. Section 8c(15)(B).

To be sure, Congress did not say in words that, in a proceeding under § 8a(6) to enforce an order, a handler may not question an obligation which flows from it. But meaning, though not explicitly stated in words, may be mbedded in a coherent scheme. And such we find to be the provisions taken in their entirety as a means for attaining the purposes of the Act while at the same time protecting adequately the interests of individual handlers.

The procedure devised by Congress explicitly gave to an aggrieved handler an appropriate opportunity for the correction of errors or abuses by the agency charged with the intricate business of milk control. In addition, if the Secretary fails to make amends called for by law the handler may challenge the legality of the Secretary's ruling in court. Handlers are thus assured opportunity to establish claims of grievances while steps for the protection of the industry as a whole may go forward. Sections 8a(6) and 8c(15) thus form a complementary procedural scheme. Contrariwise, it would make for disharmony to extrapolate from these provisions of the statute the right to consider independently, in a proceeding by the Government for the enforcement of the Secretary's order, questions for which Congress explicitly furnished the handler an expert forum for contest with ultimate review by a district court.

The situation before us indicates how disruptive it would be to allow issues that may properly come before a district court in a proceeding under § 8c(15) to be open for independent adjudication in a suit for enforcement under § 8a(6). After a presumably careful study by those technically equipped, a program was devised for the dairy farmers in one of the large areas of the country. The success of the operation of such Congressionally authorized milk control must depend on the efficiency of its administration. Promptness of compliance by those subject to the scheme is the presupposition of Order No. 41. Thus, definite monthly deadlines are fixed by the Order for every step in the program. In large measure, the success of this scheme revolves around a 'producers' fund which is solvent and to which all contribute in accordance with a formula equitably determined and of uniform applicability. Failure by handlers to meet their obligations promptly would threaten the whole scheme. Even temporary defaults by some handlers may work unfairness to others, encourage wider non-compliance, and engender those subtle forces of doubt and distruct which so readily dislocate delicate economic arrangements. To make the vitality of the whole arrangement depend on the contingencies and inevitable...