National Corn Growers Ass'n v. Bergland

471 F. Supp. 1199, 1979 U.S. Dist. LEXIS 12737
CourtDistrict Court, S.D. Iowa
DecidedApril 27, 1979
DocketCiv. No. 77-298-1
StatusPublished
Cited by3 cases

This text of 471 F. Supp. 1199 (National Corn Growers Ass'n v. Bergland) is published on Counsel Stack Legal Research, covering District Court, S.D. Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Corn Growers Ass'n v. Bergland, 471 F. Supp. 1199, 1979 U.S. Dist. LEXIS 12737 (S.D. Iowa 1979).

Opinion

MEMORANDUM OPINION AND ORDER

STUART, Chief Judge.

The Court has before it the parties’ cross-motions for partial summary judgment as to Count I of the complaint, filed on April 17, 1978 and August 22, 1978. The matter came on for hearing on November 20, 1978 at 3:00 p. m. with all parties represented by counsel. Upon the Court’s own motion and the acquiescence of the parties, it was determined that the issues raised in Count I would be deemed disposed of on the merits by the Court’s ruling herein, thereby allowing certain factual inferences to be drawn from the evidence and arguments presented which would otherwise preclude summary judgment at this time.

The instant lawsuit seeks declaratory and injunctive relief for defendants’ allegedly unlawful refusal to implement certain provisions of the Food and Agriculture Act of 1977, P.L. 95-113, [the Act], particularly that portion of the Act instituting sugar price supports, commonly known as the de la Garza amendment. [§ 902, 7 U.S.C. [1202]*1202§ 1446(f)].1 Count I of the complaint alleges that the direct subsidy payments made to sugar processors pursuant to an “interim” program promulgated under subsection (3) by the United States Department of Agriculture [USDA] and the Secretary of Agriculture [the Secretary], for sugar delivered after December 8, 1977 (30 days after the actual implementation date of the de la Garza amendment and its congressionally mandated price support loan/purchase program), violated the de la Garza amendment and were, therefore, illegal. More specifically, Count I challenges the legality of defendants’ conduct in delaying implementation of the required loan program and the issuance of a payment or direct subsidy program which effectively defeated the price support objectives of the de la Garza amendment.

The Food and Agriculture Act of 1977 was passed by Congress in September of 1977 and signed into law by the President on September 29, 1977, to become effective October 1st. Section 902 thereof expressly authorized the extension of price supports to the 1977 and 1978 crops of sugar cane and sugar beets via loans .or purchases from eligible processors.

There are three commonly utilized types of price support programs: (1) the loan program, (2) the purchase program, and (3) the payment or direct subsidy program. The first two types, which were expressly authorized by the de la Garza amendment, employ a market-enhancing technique whereby the government actually enters the market place as a potential purchaser of the commodity in question, thereby guaranteeing that the market price will not fall below the government’s stated price support floor.2

The payment or direct subsidy program, on the other hand, does not employ a market support price in the technical sense. Rather, it allows processors to sell their product on the open market at the going rate, thereafter subsidizing them for any difference between the competitive open market price and the established price support level. It, thus, has little or no tangible market-enhancing effect. Although plaintiffs are not eligible to receive any direct benefit from the de la Garza amendment in the form of a loan or purchase, as competitors of the sugar cane and sugar beet industry they are interested in the successful implementation of a market-enhancing program. See Order filed July 13, 1978, deny[1203]*1203ing defendants’ motion to dismiss or for summary judgment for mootness, lack of standing and/or failure to state a claim upon which relief can be granted, at 3-4.

Subsection (3) of the de la Garza amendment, authorizing the establishment of an interim program, was enacted as part of the overall legislation to insure fair and equitable treatment of all processors, including those whose crop years would preclude them from participation in the loan program. See Cong.Rec.S. 14571, September 9, 1977; Conf.Report 95-418, 9A U.S.Code Cong. & Admin.News, pp. 3226, 3996 (1977). The effect of subsection (3) has generated a substantial portion of the present controversy.

Ostensibly pursuant to the authorization contained in subsection (3), the Secretary instituted an interim direct subsidy program on October 7. See 42 Fed.Reg. 54556. It appears that work on the loan program was deferred while the USDA’s direct subsidy payment program was instituted. See Exhibit K, attached to plaintiff’s Motion for Summary Judgment on Count I, filed April 17, 1978, Memorandum of Robert R. Stansberry to Ray Fitzgerald, Administrator of the USDA’s Agricultural Stabilization and Conservation Service [ASCS], dated September 27, 1977. Hence the loan program and its accompanying regulations were not completed on October 1, 1977, the effective date of the Act.

On October 13, 1977, plaintiffs filed the complaint herein. On November 7, 1977, the regulations governing the direct subsidy payment program were amended in anticipation of implementation of the loan program. The loan program was, in fact, instituted on November 11, 1977, retroactive to November 8. See 42 Fed.Reg. 57948, 58734. The first loan extended under the de la Garza amendment was issued on December 12, 1977. The direct subsidy program was again amended on December 28, 1977 to broaden eligibility for the interim program. See 42 Fed.Reg. 64677.

With that background in mind, the Court now turns to the issues before it. The Court would note parenthetically that its current concern is. solely with the allegations contained in Count I. For purposes of this Order only, the Court will consider the subsidy program an authorized “other operation” under the Agricultural Act of 1949, 7 U.S.C. § 1421 et seq. Hence the Court will not be addressing the allegations contained in Counts II and III regarding the per se illegality of the subsidy program for failure to comply with the 1949 and 1977 Acts and/or the Administrative Procedure Act, 5 U.S.C. § 551 et seq.

Plaintiffs contend herein that defendants (1) failed to implement the loan program promptly in accordance with congressional directives and (2) continued the unlawful administration of the “interim” direct subsidy program after the loan program was belatedly instituted. Defendants argue conversely that (1) the loan program was implemented in a timely fashion; (2) the Secretary was expressly authorized to maintain the direct subsidy payment program for that portion of the 1977 crop marketed prior to the timely implementation of the de la Garza amendment; and (3) the subsidy program was superceded by the loan program as to 1977 and 1978 crops marketed after its implementation in accordance with the law. Of particular importance to both parties’ arguments is the definition afforded the key phrase “marketed prior to”, as will be discussed more fully infra.

I. Timely Implementation of de la Garza

Plaintiffs’ argument concerning the timely implementation of the de la Garza amendment is two-fold. First, plaintiffs contend that defendants wrongfully failed to formulate the required loan/purchase program and issue regulations prior to the effective date of the Act as requested by Congress. Second, they allege that defendants consciously delayed implementation for thirty-eight days after the October 1, 1977 effective date.

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471 F. Supp. 1199, 1979 U.S. Dist. LEXIS 12737, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-corn-growers-assn-v-bergland-iasd-1979.