Leaf Tobacco Exporters Ass'n v. Block

749 F.2d 1106
CourtCourt of Appeals for the Fourth Circuit
DecidedDecember 5, 1984
DocketNo. 83-2145
StatusPublished
Cited by16 cases

This text of 749 F.2d 1106 (Leaf Tobacco Exporters Ass'n v. Block) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Leaf Tobacco Exporters Ass'n v. Block, 749 F.2d 1106 (4th Cir. 1984).

Opinion

WILKINSON, Circuit Judge:

The Leaf Tobacco Exporters Association, Inc. and its forty-seven member companies challenge here the decision of the Secretary of Agriculture to permit a growers’ cooperative to sell its tobacco directly to foreign purchasers. The District Court for the Eastern District of North Carolina dismissed the exporters’ claims for want of standing. Because Congress intended the price support program to assist tobacco farmers, we agree with the District Court that the exporters' claims do not fall within the zone of interests created by the relevant statutes. Thus we affirm the District Court’s dismissal of this lawsuit.

I

The Secretary of Agriculture annually sets a support price for flue-cured tobacco.1 When growers attempt to sell their crops, either in private deals or in auction markets, the Secretary’s price provides a floor below which the farmers need not negotiate. Instead, they may consign to the Flue-Cured Tobacco Stabilization Corporation (“the Cooperative”) the portion of their crop that cannot command the Secretary’s price. The Cooperative pays for the tobac[1109]*1109co at the support rate, processes it, stores it, and tries to sell it.

The Cooperative’s payments to the producers are funded by loans to the Cooperative from the Commodity Credit Corporation (“CCC”), an agency of the Department of Agriculture (“USDA”).2 These loans, accounted separately for each crop year, cover the expenses of processing and storage in addition to the cost of support price payments. The crops held by the Cooperative serve as collateral for the loans, a security interest that the CCC protects by reserving the right to disapprove any Cooperative sale of the tobacco stock under loan. Working together in this way, the Cooperative and the CCC hope to sell the consigned tobacco at prices sufficient to repay the CCC loans and to provide a profit to the Cooperative.

Until recently, realization of that goal would result in distribution of the Cooperative profit to its members. The Cooperative’s failure to earn complete repayment funds, on the other hand, would result in a loss to be absorbed by the CCC: the CCC could sell the collateral for its own account after the loan had matured, but it otherwise had no recourse against either the Cooperative or the individual farmers. That system has been changed by the No Net Cost Tobacco Program Act, adopted by Congress in 1982 to limit federal tobacco expenditures to administrative costs.3 The No Net Cost Program, which applies to the 1982 crop and all later crops, provides that shortfalls in loan repayments must be satisfied by the Cooperative and that surpluses must be devoted to a fund insuring payment on outstanding loans. The Coop-

erative meets these new obligations by withholding from the support price payments to producers who consign their tobacco crops.

4 II

The CCC, as noted above, reserves in its loan contract with the Cooperative the authority to veto any proposed sale of price-supported tobacco. In exercise of that authority, the CCC has long prohibited the Cooperative from selling its crop directly to foreign purchasers. The Cooperative could export its tobacco only through a foreign customer represented in the United States or through a commodity broker who purchased tobacco and re-sold it abroad. This restriction was not written in statute, regulation, or contract; it was simply the policy of the CCC in approving or disapproving sales. According to CCC officials, the purpose of the policy was to avoid an expensive and perhaps futile Cooperative attempt to compete with dealers for direct foreign sales, an effort likely to antagonize the Cooperative’s exporting customers. The CCC preferred to rely on the exporters’ expertise and efforts to sell the loan stock tobacco.

That policy changed on 30 November 1981, when the Department of Agriculture announced in a press release that the CCC would henceforth permit the Cooperative to sell directly to foreign buyers. Referring to the new No Net Cost Tobacco Program and to the current Cooperative debt to the CCC, the statement suggested that direct sales might reduce Cooperative losses by creating an additional market.4

[1110]*1110The Leaf Tobacco Exporters Association and its forty-seven member companies, now appellants in this case, objected vigorously to the November 30 press release. The tobacco dealers each claimed to have participated in the export market, and they each claimed to have invested in that market in reliance on the previous rules of the CCC. With the change of policy, they feared that their participation and their investment were threatened by a new competitor, the Cooperative, a competitor that was uniquely advantaged because it was financed by CCC loans with attractive government interest rates.5 The exporters argued that the Secretary of Agriculture had violated the Administrative Procedure Act by failing to notify concerned parties of the contemplated change, by failing to receive comments on the proposal, and by failing to publish the basis and purpose of his action. They further argued that the Secretary, in addition to his procedural noncompliance, had violated the statutes that govern the federal tobacco program — the CCC Charter Act and the 1949 Agriculture Adjustment Act — by ignoring in his decision a factor that he was required to consider: the interests of the tobacco dealers. According to the exporters, this departure from the mandatory criteria made the Secretary’s decision arbitrary, capricious, and an abuse of the discretion that he enjoys in administering the tobacco program.

The dealers pressed these arguments in a meeting with the USDA General Counsel, in a letter to the Secretary, and in a lawsuit filed in District Court. On this appeal, we do not resolve the merits of the dealers’ claims. We affirm dismissal of their suit because we conclude that the exporters do not have standing to complain in federal court about the method or the wisdom of the Secretary’s decision.

Ill

The question of a plaintiff’s standing to sue is one that we approach with caution. The doctrine of standing is axiomatic in its complexity; judges and scholars have agreed that the concept is “among the most amorphous in the entire domain of public law.” Flast v. Cohen, 392 U.S. 83, 99, 88 S.Ct. 1942, 1952, 20 L.Ed.2d 947 (1968) (quoting Professor Paul A. Freund). This is especially true of the “zone of interest” principle first articulated by the Supreme Court in Association of Data Processing Service Organizations v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970). From its inception, the “zone test” has suffered academic criticism.6 Lower federal courts have drawn imperfect guidance from the Data Processing doctrine: some courts have ignored the test, others have opposed it, and several have construed it in different ways. See Control Data Corp. v. Baldridge, 655 F.2d 283, 293-94 (D.C.Cir.1981), cert. denied, 454 U.S. 881, 102 S.Ct. 363, 70 L.Ed.2d 190 (1981) (citing cases).

The Supreme Court, finding little occasion for further application of the test, has not yet responded to this criticism.

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Leaf Tobacco Exporters Association, Inc. v. John Block
749 F.2d 1106 (Fourth Circuit, 1984)

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749 F.2d 1106, Counsel Stack Legal Research, https://law.counselstack.com/opinion/leaf-tobacco-exporters-assn-v-block-ca4-1984.