Minn-Dak Farmers Co-Op. v. Espy

851 F. Supp. 1423, 1994 WL 190035
CourtDistrict Court, D. North Dakota
DecidedApril 21, 1994
DocketCiv. No. A3-93-116
StatusPublished
Cited by1 cases

This text of 851 F. Supp. 1423 (Minn-Dak Farmers Co-Op. v. Espy) is published on Counsel Stack Legal Research, covering District Court, D. North Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Minn-Dak Farmers Co-Op. v. Espy, 851 F. Supp. 1423, 1994 WL 190035 (D.N.D. 1994).

Opinion

851 F.Supp. 1423 (1994)

MINN-DAK FARMERS COOPERATIVE, American Crystal Sugar Co., Southern Minnesota Beet Sugar Cooperative, and Monitor Sugar Co., Plaintiffs,
v.
Michael ESPY, Secretary of Agriculture, Defendant,
Florida Sugar Cane League and Rio Grande Valley Sugar Growers, Inc., Defendant-Intervenors.

Civ. No. A3-93-116.

United States District Court, D. North Dakota, Southeastern Division.

April 21, 1994.

*1424 Bruce Hilding Carlson Lamb, McNair, Larson & Carlson, Ltd., Fargo, ND and Boyd Ratchye, Doherty, Rumble & Butler, St. Paul, MN, for plaintiffs.

Lynn E. Crooks, Asst. U.S. Atty., Fargo, ND and Thomas Millet, U.S. Dept. of Justice, Washington, DC, for defendant.

MEMORANDUM AND ORDER

WEBB, Chief Judge.

Before the court are plaintiffs Minn-Dak Farmers Cooperative, American Crystal Sugar Co., Southern Minnesota Beet Sugar Cooperative and Monitor Sugar Co.'s Motion for Leave to File a Supplemental Affidavit and Motion for Summary Judgment and defendant Michael Espy's Motion to Dismiss or for Summary Judgment, defendant-intervenors Florida Sugar Cane League and Rio Grande Valley Sugar Growers, Inc.'s Motion to Dismiss or for Summary Judgment. Oral argument on the motions was held on March 11, 1994. Plaintiffs were represented by Robert G. Hensley and Patrick S. Williams of Doherty, Rumble & Butler, St. Paul, Minnesota. Defendant was represented by David Schanzer, United States Department of Justice, Washington D.C., John Schneider, United States Attorney, Fargo, North Dakota and Lynn Crooks, Assistant United States Attorney, Fargo, North Dakota. Intervenor defendants were represented by Donald M. Barnes of Arnet, Fox, Kintner, Plotkin & Kahn, Washington, D.C., and Duane H. Ilvedson of Nilles, Hansen & Davies, Ltd., Fargo, North Dakota. Defendant's Motion for Summary Judgment is granted.

Background

The facts relevant to the court's analysis are as follows. Historically, the United States has been a large net importer of sugar.[1] Congress began a series of responses to this situation in the early 1980s. In 1981, Congress passed the Agriculture and Food Act of 1981 which provided a price support loan program to domestic sugar processors through the use of non-recourse loans from the Commodity Credit Corporation (CCC). That program now runs through the 1997 crop year. In 1982, the United States implemented an absolute quota which restricted the amount of sugar imported into the country. In 1985, approximately $55.2 million of sugar was forfeited to the CCC. In response, Congress shortly after enacted § 902 of the Food Security Act of 1985 which directs the President to use "all authorities available" to operate the sugar price support program "at no cost to the federal government." Food Security Act of 1985, Pub.L. 99-198 § 902(a), 99 Stat. 1354, 1443 (1985) (codified at 7 U.S.C. § 1446g, note.) In 1988, the Council of the General Agreement on Tariffs and Trade (GATT) found the absolute tariffs and duties imposed on sugar imports by the United States to be illegal. The President responded by converting the absolute quota into a tariff-rate quota which restricted the amount of sugar imported into this country through the use of tariffs and duties. This quota became the principle device used to support the domestic price of sugar, with the adverse consequence of lowering imports to just 1 million short tons, a level too low to supply domestic sugar cane refiners with a sufficient amount of sugar. Nearly half of the refining companies and refineries open for business in 1981 had closed by 1988. The domestic sugarcane industry is dependent on the survival of the sugar cane refiners. In response, in 1990, Congress passed 7 U.S.C. § 1359aa et seq. which requires the Secretary of Agriculture to make quarterly estimates of domestic sugar consumption, stocks and production and of imports. The purpose of the statute includes providing what is commonly referred to as a "through-put" of raw sugar to sugar cane refineries and refining companies, that is to ensure that these companies have available for processing a sufficient supply of raw sugar in order to remain economically viable. An additional purpose of the statute was to ensure a minimum market to foreign producers thereby satisfying GATT concerns. Under § 1359bb of that provision, the Secretary is authorized to impose marketing allotments on sugar beet and sugar cane processors if imports are estimated at less than 1.25 million short tons, raw value. (It is the Secretary's *1425 interpretation of this provision that is at issue in the instant case.) On May 11, 1993, the Secretary modified the Tariff Rate Quota by changing the amount of sugar that would qualify for the tariff-rate from 1.357 million short tons to 2.5 million short tons for a two-year period. This effectively set the import ceiling at the same level as the minimum amount which must be imported under 7 U.S.C. § 1359aa et seq., or the import floor. From June through September of 1993, the World Agricultural Supply/Demand Estimate (WASDE) report set import estimates at 1.25 million short tons.

Plaintiffs are four sugar beet processors, organized and located in the states of North Dakota, Minnesota and Michigan.[2] On June 30, 1993, citing the Agricultural Adjustment Act of 1938(AAA) 7 U.S.C. § 1359aa, et seq. as authority, the Secretary of Agriculture (Secretary) imposed marketing allotments on sugar beet and sugarcane processors. The Secretary's stated purpose was to elevate sugar prices and to avoid forfeitures of sugar to the CCC. The Secretary interpreted the language of 7 U.S.C. § 1359bb(a)(1) as authorizing discretion to estimate carryover stocks in such a way as to result in the avoidance of the forfeiture of sugar to the CCC. The Secretary admits to selecting an estimate of carryover stocks which would, when used in the formula for estimating imports set out in the statute,[3] result in a total estimate of sugar imports at less than 1.25 million short tons, the figure that triggers the imposition of marketing allotments. 7 U.S.C. § 1359cc. The Secretary estimated sugar imports at 1.249 million short tons for the year 1993. Plaintiffs allege the Secretary has misinterpreted the Allotment Statute, specifically 7 U.S.C. § 1359bb, by reading it as authority to manipulate the carryover stock estimates in order to trigger market allotments, and, thereby, avoid sugar forfeitures, when objective measures of sugar imports indicate those would be above the 1.25 million short ton trigger amount. Plaintiff's allege the Secretary's interpretation and subsequent action was arbitrary, capricious and an abuse of discretion, or otherwise not in accordance of the law. The plaintiffs request this court to review and set aside the Secretary's decision pursuant to 5 U.S.C. § 706(2)(A) and to interpret 7 U.S.C.

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851 F. Supp. 1423, 1994 WL 190035, Counsel Stack Legal Research, https://law.counselstack.com/opinion/minn-dak-farmers-co-op-v-espy-ndd-1994.