Women Involved in Farm Economics v. U.S. Dept. of Agriculture

• Decision Date: 02 June 1989
• Docket Number: No. 88-5192,88-5192
• Citation: 876 F.2d 994
• Parties: , 57 USLW 2725 WOMEN INVOLVED IN FARM ECONOMICS v. UNITED STATES DEPARTMENT OF AGRICULTURE, et al., Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 994

876 F.2d 994

278 U.S.App.D.C. 116, 57 USLW 2725

WOMEN INVOLVED IN FARM ECONOMICS v. UNITED STATES DEPARTMENT OF AGRICULTURE, et al., Appellants.

No. 88-5192.

United States Court of Appeals, District of Columbia Circuit.

Argued Feb. 7, 1989.

Decided June 2, 1989.

Appeal from the United States District Court for the District of Columbia (Civil Action No. 87-01752).

John Facciola, Asst. U.S. Atty., with whom Jay B. Stephens, U.S. Atty., John D. Bates, R. Craig Lawrence and Michael J. Ryan, Asst. U.S. Attys., Washington, D.C., were on the brief, for appellants.

Mitchell F. Dolin, with whom J. Michael Hemmer, Washington, D.C., was on the brief, for appellee.

Before RUTH BADER GINSBURG, SILBERMAN and BUCKLEY, Circuit Judges.

Opinion for the Court filed by Circuit Judge SILBERMAN.

SILBERMAN, Circuit Judge:

Nearly two decades ago, Congress enacted a per-person limitation on certain payments made to producers under the Agricultural Adjustment Act of 1938 and the Agricultural Act of 1949, as amended, 7 U.S.C. Secs. 1281-1469 (1982 & Supp. V 1987). See Agricultural Act of 1970, Sec. 101(1), 84 Stat. 1358, 1358 (1970). In the original payment limitation bill and in subsequent reenactments, Congress delegated to the Secretary of Agriculture the task of promulgating regulations defining the term "person." See, e.g., id. Sec. 101(4), 84 Stat. at 1359; 7 U.S.C. Sec. 1308(5) (Supp. V 1987). Those regulations, following closely on the heels of the 1970 Act, provided, inter alia, that husbands and wives would be treated as one person for purposes of the payment limitation. 35 Fed.Reg. 19,339, 19,340 (1970). This irrebuttable "husband-wife rule" governed farm support payments through the 1988 crop year. See 7 C.F.R. Sec. 795.11 (1988) (version of regulation in effect for 1988 crop year).

Women Involved in Farm Economics ("WIFE"), representing a "national membership of women involved in farming and agriculture," filed this action challenging the husband-wife rule as violative of both the Administrative Procedure Act and the Fifth Amendment. The district court found merit in both objections, and entered an order permanently enjoining the Agriculture Department from enforcing the husband-wife regulation. WIFE v. Dep't of Agriculture, 682 F.Supp. 599, 608 (D.D.C.1988). We reverse.

I.

Through a variety of complex economic incentives--price and income supports and acreage controls among them--Congress has attempted to stabilize crop production, commodity prices, and farm income in a market that Congress believed would be subject to volatile swings in supply and price if left unregulated. In 1970, reacting to harsh public criticism of the large sums of money received by farmers through agricultural support programs, Congress reauthorized these mechanisms but, for the first time, imposed a per-person limitation on payments from certain farm support programs. See Agricultural Act of 1970, Sec. 101(1), 84 Stat. at 1358. Originally pegged at $55,000, id., the payment limitation has fluctuated in the course of periodic congressional reviews of farm support programs; the payment limitation in effect when this case was brought--governing payments for the 1988 crop year--stood at $50,000. See 7 U.S.C. Sec. 1308(1) (Supp. V 1987). ¹

The 1970 statute, as noted, required the Secretary to "issue regulations defining the term 'person' and [also to prescribe] such rules as he determine[d] necessary to assure a fair and reasonable application of [the payment] limitation." Agricultural Act of 1970, Sec. 101(4), 84 Stat. at 1359; see 7 U.S.C. Sec. 1308(5) (Supp. V 1987). A scant three weeks after receiving this mandate the Secretary issued regulations implementing the Act generally and defining the term "person" for purposes of administering the payment cap. See 35 Fed.Reg. 19,339 (1970). The regulations provided that

the term "person" shall mean an individual, joint stock company, corporation, association, trust, estate, or other legal entity. In order to be considered a separate person for the purpose of the payment limitation, in addition to the other conditions of this part, the individual or other legal entity must

(a) Have a separate and distinct interest in the land or crop involved,

(b) Exercise separate responsibility for such interest, and

(c) Be responsible for the cost of farming related to such interest from a fund or account separate from that of any other individual or entity.

35 Fed.Reg. at 19,340; see 7 C.F.R. Sec. 795.3(b) (1988). Individual partners forming a partnership or joint venture, or a corporation and its separate stockholders, could therefore qualify for treatment as separate persons provided they satisfied the separate interest and responsibility criteria specified in the regulation. See id. But the regulation deemed a husband and wife to be one person regardless of their separate interests and responsibilities. See 35 Fed.Reg. at 19,340; 7 C.F.R. Sec. 795.11 (1988). As a corollary, related regulations provided that any minor children in the marital household would not ordinarily be able to qualify as separate persons. See 35 Fed.Reg. at 19,340; 7 C.F.R. Sec. 795.12 (1988). ² These regulations remained in effect without material alteration through the institution of this lawsuit. See 7 C.F.R. Secs. 795.3, 795.11, 795.12 (1988). In late 1987, Congress codified the husband-wife rule in most of its applications, but directed that the Secretary of Agriculture modify the rule to provide that

[for] any married couple consisting of spouses who, prior to their marriage, were separately engaged in unrelated farming operations, each spouse shall be treated as a separate person with respect to the farming operation brought into the marriage by such spouse so long as such operation remains as a separate farming operation, for the purposes of the application of the limitations under this section.

Pub.L. 100-203, Sec. 1303(a)(2), 101 Stat. 1330, 1330-16 (1987). The regulations stemming from Congress' 1987 amendments, which have since been published by the Secretary, see 53 Fed.Reg. 29,552, 29,576 (1988) (to be codified at 7 C.F.R. Sec. 1497.19), were not challenged in this case.

WIFE brought this action challenging the original regulation on administrative law, equal protection, and due process grounds. The district court granted WIFE's motion for summary judgment, holding that the regulation was irrational and thus unconstitutional. Although the court acknowledged that strict scrutiny was inappropriate because the regulation did not "directly and substantially interfere[ ]" with the fundamental right to marry, 682 F.Supp. at 601 (quoting Zablocki v. Redhail, 434 U.S. 374, 387, 98 S.Ct. 673, 681, 54 L.Ed.2d 618 (1978)), the court nevertheless believed the regulation unrelated to any legitimate governmental interest considered by Congress when it enacted the farm support programs. Congress' interests in establishing a limitation on payments to farmers, according to the court, were limited to encouraging maximum participation in agricultural stabilization efforts and "to insur[ing] that the crop subsidy program [was] fairly and reasonably applied." Id. at 604. The court thought the regulation fundamentally at odds with these legitimate concerns because it both discouraged participation and resulted in an unfair allocation of crop subsidies.

The Government's argument that the economic efficiencies of the marital household justified the regulation was rejected by the court with the observation that "the Secretary has seen fit to not make such stereo-typical assumptions with regard to other economically dependent entities" by allowing members of partnerships and the like to qualify separately. Id. at 605. The court also rebuffed the government's explanation that the regulation prevented married couples from evading the payment limitation, or at least enabled the Secretary to avoid the administrative burden of distinguishing between legitimate and illegitimate claims by married persons seeking separate payments. The Secretary offered no reason for singling out married couples as potential sources of evasion, nor did he offer, according to the court, an adequate explanation as to why the program's eligibility criteria--used for ordinary partnerships--could not be employed to analyze claims filed by married farmers. Id. Finally, the district judge seemed persuaded that wealthy farm couples could circumvent the husband-wife rule by creating corporations that would qualify as independent "persons" under the regulations, foisting "the burden of the rule[ ] on those farmers least financially capable of maintaining their farms without it." Id. at 606. This, said the court, was precisely the indicium of irrationality the Supreme Court found troubling when it struck down the food stamp program's restrictive definition of "household" in Department of Agriculture v. Moreno, 413 U.S. 528, 538, 93 S.Ct. 2821, 2827, 37 L.Ed.2d 782 (1973). See WIFE, 682 F.Supp. at 606.

The district court's view of Congress' purpose in enacting the 1970 payment limitation led it to conclude the Secretary's rule was inconsistent with the statute as well, despite the fact that the rule survived nearly 20 years without congressional protest. Congress directed a "fair and reasonable" interpretation of the term "person" "to encourage participation in the farm crop subsidy program," id. at 607 (emphasis added), and because the husband-wife rule discouraged participation, the district court determined the regulation to be based on an impermissible construction of the statute. ³

II.

A.

We look first to appellee's claim that the regulation is not authorized by the statute. See, e.g., Jean v. Nelson, 472 U.S. 846, 857, 105 S.Ct. 2992, 2998, 86 L.Ed.2d 664 (1985) (federal courts are obliged "to avoid constitutional adjudication except where necessary"). That question, of course, turns on whether the Secretary's definition of person--which includes...