Dairy Producers v. Veneman

37 F. App'x 471
Court of Appeals for the Tenth Circuit·Decided June 13, 2002·No. No. 01-2091·Published

Opinion

ORDER AND JUDGMENT **

HENRY, Circuit Judge.

The Dairy Producers of New Mexico (“Dairy Producers”) is a trade association that represents dairy farmers in New Mexico and western Texas. Dairy Producers challenges the Secretary of Agriculture’s (the “Secretary”) adoption of certain regulations controlling the disbursement of $200 million in emergency assistance to dairy farmers. Dairy Producers maintains that the regulations promulgated by the Secretary pursuant to the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999 Pub. Law. No. 105-277, 112 Stat. 2681 (Oct. 21, 1998) (the “Agriculture Appropriations Act”) disproportionately favored small dairy farmers. Specifically, it contends that: (1) Section 1111 of the Act is an unconstitutional delegation of Congress’ power to an executive agency and (2) that the Secretary acted arbitrarily and capriciously in promulgating the regulations. In granting summary judgment to the Secretary, the district court, in a thorough and well-reasoned order, found that the Secretary’s adoption of the disputed regulations was a lawful exercise of delegated authority under the Agriculture Appropriations Act. We affirm the district court’s order.

I. BACKGROUND

In October 1998, responding to a sharp decline in milk prices that was causing a severe hardship in the dairy industry, Congress appropriated $200 million in the Agriculture Appropriations Act for Fiscal Year 1999 for the USDA “to provide assistance to dairy producers in a manner determined by the Secretary.” Pub L. No. 105-277, § 1111(d), 112 Stat. 2681 (Oct. 21, 1998).1 In May 1999, the Commodity [473] Credit Corporation (“CCC”), an agency of the United States Department of Agriculture, issued a final rule establishing the Dairy Market Loss Assistance Program (“DMLA”), which would be responsible for distributing the financial assistance to dairy producers. See Final Rule, 64 Fed. Reg. 24,933-24,936 (May 20, 2999), codified at 7 C.F.R. §§ 1430.501-1430.511. Pursuant to the DMLA, all dairy producers who marketed milk commercially in the last quarter of 1998 would be eligible for DMLA assistance, but their payments would be limited to the first 26,000 hundredweight (“cwt”) of milk produced in either 1997 or 1998. See 7 C.F.R. § 1430.506(a)(2).

Dairy Producers contends that by basing each applicant’s payment on a 26,000 cwt maximum, the Secretary’s regulations disproportionately favored small dairy farmers. Specifically, Dairy Producers raises two challenges to the Secretary’s disbursement of the DMLA payments. First, it argues that to infer authority in the Secretary to impose an eligibility limitation on DMLA payments would violate section I of Article I of the United States Constitution, which vests legislative power in the Congress, because the statutory language did not authorize any limitations and the Secretary cannot identify an “intelligible principle” in the statutory language to assist her in determining how it might be permissible to impose them. Second, Dairy Producers argues that the regulations violate the Administrative Procedures Act (“APA”), 5 U.S.C. §§ 701-706, because the eligibility limitation is arbitrary and capricious. See id. § 706(2)(A) (authorizing a reviewing court to set aside agency action that is arbitrary and capricious). We agree with the district court that § 1111 of the Agriculture Appropriations Act does not violate the Non Delegation Clause and that the Secretary’s regulations imposing the 26,000 cwt maximum are not arbitrary and capricious.

II. DISCUSSION

A. Non-Delegation Doctrine

1. Standard of Review

We review the Department’s implementation of the DMLA program de novo, but our review is constrained significantly by the APA. “The Secretary’s judgment that a particular regulation fits within [a] statutory constraint must be given considerable weight.” Ragsdale v. Wolverine World Wide, Inc., — U.S.—,—, 122 S.Ct. 1155, 1160, 152 L.Ed.2d 167 (2002). Under the APA, we can set aside agency action only if it fails to meet statutory, procedural or constitutional requirements or if the action is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A); Sac & Fox Nation v. Norton, 240 F.3d 1250, 1260 (10th Cir.2001) (citing 5 U.S.C. § 706(2)(A)-(D)), cert. denied, — U.S. —, 122 S.Ct. 807, 151 L.Ed.2d 693 (2002).

2. DMLA regulations

Section 1 of Article I of the United States Constitution provides that “[a]ll legislative powers herein shall be vested in a Congress of the United States.” U.S. Const, art. I, § 1, cl. 1. The non-delegation doctrine is based on the separation of [474] powers and provides “that Congress generally cannot delegate its legislative power to another Branch.” Mistretta v. United States, 488 U.S. 361, 372, 109 S.Ct. 647, 102 L.Ed.2d 714 (1989). “Congress may, however, seek the assistance of other branches of government provided that Congress legislates an intelligible principle to guide the performance of the delegated duty.” Khan v. Hart, 943 F.2d 1261, 1262 n. 3 (10th Cir.1991) (citing Mistretta).

Acknowledging that the DMLA statutes themselves may not violate the non-delegation doctrine, Dairy Producers nevertheless insists that the Secretary’s DMLA regulations are unconstitutional because “[t]here is no discerning intelligible principle” to assist the Secretary in determining whether to impose limits on how much assistance each dairy producer should receive, or what those limits should be. Aplt’s Br. at 43. We agree with the district court that this argument “is not well-founded.” Aplt’s App. at 53 (Dist. Ct. Memorandum Opinion and Order, filed Feb. 27, 2001).

As the district court noted, under the intelligible principle test:

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Related

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488 U.S. 361 (Supreme Court, 1989)
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Ragsdale v. Wolverine World Wide, Inc.
535 U.S. 81 (Supreme Court, 2002)
Sac & Fox Nation of Missouri v. Norton
240 F.3d 1250 (Tenth Circuit, 2001)
Rafi Dhakaa Khan v. Col. William L. Hart
943 F.2d 1261 (Tenth Circuit, 1991)
Don Olenhouse v. Commodity Credit Corporation
42 F.3d 1560 (Tenth Circuit, 1994)