Pescosolido v. Block

765 F.2d 827

Opinions

WALLACE, Circuit Judge:

Carl Pescosolido, Marvin Wilson, and Oleah Wilson (the Growers) brought this action under the Agricultural Marketing Agreement Act of 1937 (the Act), 7 U.S.C. §§ 601-624, seeking to compel the Secretary of Agriculture (the Secretary) to terminate Federal Marketing Order No. 907, 7 C.F.R. Part 907 (1984) (Order 907), and also seeking declaratory relief and damages under the Act. Jurisdiction in the district court was alleged under the Mandamus Act, 28 U.S.C. § 1361, the Administrative Procedure Act, 5 U.S.C. § 702, and 28 U.S.C. § 1331. The district court held that the damages claim was barred by sovereign immunity; the Growers do not appeal that holding. The district court also found no jurisdiction under the Mandamus Act, and that the Growers lacked standing to bring these claims outside the administrative remedies prescribed by the Act, see 7 U.S.C. § 608c(15)(A). We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

I

The Growers are partners doing business under the names Canal Ranch, Madera 240 Ranch, and Panoche Ranch. They allege that they are in the business of producing navel oranges for commercial sale, and they seek to represent a class of similar producers in this suit against the Secretary seeking injunctive and declaratory relief. Their complaint alleges that Order 907, promulgated under the Act and which regulates the marketing of oranges in Arizona and parts of California, fails to achieve and maintain “parity” prices, as defined in 7 U.S.C. § 1301(a)(1), for navel orange producers. Under Order 907, the handling of navel oranges in the geographic area it covers is regulated by an Administrative Committee that determines, among other things, the percentage of the total crop that may be made available for commercial shipment by handlers. Producers of such oranges are thereby precluded from marketing all the navel oranges they grow.

The Act was passed in response to unstable marketing conditions during the Depression, with an objective of helping farmers obtain a fair value for their agricultural products. See, e.g., Zuber v. Allen, 396 U.S. 168, 174-76, 90 S.Ct. 314, 318-19, 24 L.Ed.2d 345 (1969). Shortly after its enactment, the Supreme Court upheld market regulation under the Act against constitutional challenges. See United States v. Rock Royal Co-operative, Inc., 307 U.S. 533, 59 S.Ct. 993, 83 L.Ed. 1446 (1939). Marketing orders such as the one in controversy here may be issued only after the Secretary complies with the Act’s detailed promulgation procedures. The Secretary must first give notice and an opportunity for a hearing upon any proposed order. See 7 U.S.C. § 608c(3). After a hearing, if the Secretary finds “that the issuance of such order ... will tend to effectuate the declared policy” of the Act, id. § 608c(4), he may submit the proposed order to producers for their approval. An order regarding citrus fruits does not generally become effective unless handlers of at least eighty percent (80%) of the oranges, and producers of two-thirds (66%%) of the oranges or two-thirds (66%%) of the producers approve of the Secretary’s determination. Id. § 608c(8).

The Growers assert that the central purpose of the Act is affirmatively to establish parity prices, citing 7 U.S.C. § 602(1), which states that one of its purposes is

to establish and maintain such orderly marketing conditions for agricultural commodities in interstate commerce as will establish, as the prices to farmers, parity prices as defined by section 1301(a)(1) of this title.

The Growers contend that over the past thirteen years, Order 907 has failed to obtain parity prices for them in all but two instances. As a result of this failure, the Growers claim that the Secretary has violated section 8e(16)(A) of the Act, 7 U.S.C. § 608c(16)(A), which provides that:

[t]he Secretary of Agriculture shall, whenever he finds that any order issued under this section, or any provision thereof, obstructs or does not tend to effectuate the declared policy of this chapter, terminate or suspend the operation of such order or such provision thereof.

In October 1980, handlers Sequoia Orange Company, Inc. and Exeter Orange Company, Inc., and the three partnerships owned by the Growers filed a petition with the Department of Agriculture (the Department) challenging the validity of Order 907, as provided by the administrative remedy provisions of 7 U.S.C. § 608c(15)(A). The Growers are also officers of Sequoia Orange Company, Inc. Section 608c(15)(A) provides for an initial hearing on a petition before the Secretary, who then must issue a ruling on the merits. Id. If the ruling is unfavorable, the petitioner may seek review of the Secretary’s ruling in the district court. Id. § 608e(15)(B). Because the remedy provisions of section 608c(15)(A) are only applicable to “handlers,” however, the three partnerships were subsequently dismissed from the administrative petition because they were “producers” under the Act. See id. § 608c(13)(B).

After the Department filed its motion to dismiss the administrative petition, the Growers brought this action in district court raising similar claims. They seek an order compelling the Secretary to terminate Order 907 and a declaration of their rights, alleging injury to their goodwill and competitive ability as the result of the continued enforcement of Order 907’s marketing restrictions on their produce. The Secretary then moved for dismissal. The motion was heard by a magistrate, who recommended dismissal of the damages claims, but denial of the motion with respect to injunctive relief. The district court rejected the latter recommendation and dismissed all claims. The district court held (1) that there was no mandamus jurisdiction, (2) that the Growers lacked standing, and (3) that the class the Growers sought to represent would have an adequate administrative remedy under 7 U.S.C. § 608c(16)(B), which provides for termination of a marketing order by a vote of a majority of affected producers.

II

We review the district court’s first holding, lack of mandamus jurisdiction under 28 U.S.C. § 1361, de novo. See United States v. McConney, 728 F.2d 1195, 1201 (9th Cir.) (en banc), cert. denied, — U.S. -, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984) (McConney). Mandamus jurisdiction exists only when there is “a duty owed to the plaintiff.” 28 U.S.C. § 1361. “[I]t is appropriate only when the plaintiff’s ‘claim is clear and certain and the duty of the officer is ministerial and so plainly prescribed as to be free from doubt.’ ” Nova Stylings, Inc. v. Ladd, 695 F.2d 1179, 1180 (9th Cir.1983), quoting Jarrett v. Resor, 426 F.2d 213, 216 (9th Cir.1970). Mandamus is not available to review discretionary acts, and “[t]he availability of an adequate alternative remedy will also preclude [such] review.” 695 F.2d at 1180. Mandamus is also generally unwarranted when the statute prescribes a specific method of review. Id. at 1180-81.

The Growers contend that 7 U.S.C. § 602(1) explicitly commands the Secretary to achieve parity prices, and that if any marketing order fails to achieve them, he must terminate the order under 7 U.S.C. § 608c(16)(A). Because parity prices have only been achieved in two instances over the past thirteen years, they argue that the Secretary should be compelled to terminate Order 907 and instead permit untrammeled competition in their markets.

It is clear that one of the central purposes of the Act is to establish and maintain parity prices for farmers. See, e.g., Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 138, 83 S.Ct. 1210, 1215, 10 L.Ed.2d 248 (1963). Unlike the fixed minimum prices which must be established for milk, however, see 1 U.S.C. § 608c(5)(A), the Secretary is not empowered to fix prices for any other commodities covered by the Act. Instead, he may only employ market controls, see id. § 608c(6), in an effort to “effectuate the declared policy of” the Act. Id. § 608c(4).

The Growers correctly point out that the parity price is easily determined by a statutory formula. See 7 U.S.C. § 1301. They concede, however, that the Secretary has discretion over the means used to attempt to achieve this goal. Indeed, the clear language of the Act, which permits the issuance of an order if the Secretary finds it “will tend to effectuate the declared policy” of the Act, see id. § 608c(4) (emphasis added), indicates that an order may be valid if it has a tendency to achieve the goal of parity prices. Thus, the statute reflects congressional understanding of the difficulty in achieving any fixed price merely through the use of marketing controls. Instead, “parity” is a goal toward which the Secretary must strive, rather than the process of setting an objective, fixed price. Although the Secretary is commanded by section 608c(16)(A) to terminate any order which “obstructs or does not tend to effectuate” the Act’s policy, this command only applies after the Secretary makes findings indicating such a failure.

The pivotal question therefore is whether mandamus may be invoked to compel the Secretary to make such findings. The Growers do not come to grips with this issue, but apparently urge that the district court should make its own findings and require termination of the order if necessary. But that alternative is not available to the Growers. In reviewing an order issued after the Secretary has made the appropriate findings, courts are not generally free to examine evidence outside the Secretary’s record. E.g., United States v. Mills, 315 F.2d 828, 836 (4th Cir.), cert. denied, 374 U.S. 832, 83 S.Ct. 1874, 10 L.Ed.2d 1054, 375 U.S. 819, 84 S.Ct. 57, 11 L.Ed.2d 54 (1963). It follows that de novo findings by a district court clearly would be inappropriate.

Mandamus in these circumstances would essentially permit the Growers to seek reopening of the proceedings they brought pursuant to the Act that have been finally concluded. Indeed, the Growers’ claim for mandamus is essentially a collateral attack on the order of dismissal and is an attempt to evade the statutory procedures. Permitting such an attack would allow future plaintiffs continually to protest the validity of an order even after the statutory procedures have been followed merely by claiming a change of circumstance.

If an order is so detrimental to producers’ interests, the statute already provides one adequate alternative remedy: a vote of a simple majority of the affected producers will terminate an order. See 7 U.S.C. § 608c(16)(B). This, we observe, is less than the two-thirds majority necessary to approve an order. See id. § 608c(8)(A), (B).

Ill

The Growers also seek a declaration of their rights under Order 907, attempting to find jurisdiction based upon the review provisions of the Administrative Procedure Act, 5 U.S.C. § 702. Although the district court held that the Growers lacked standing to pursue this claim, we must reexamine this issue in light of the Supreme Court’s recent decision in Block v. Community Nutrition Institute, — U.S.-, 104 S.Ct. 2450, 81 L.Ed.2d 270 (1984) (Community Nutrition). First, we must determine whether judicial review outside the statutory scheme of the Act is generally precluded for producers before examining the standing of these particular producers. See id., 104 S.Ct. at 2456-58. This is an issue of law reviewable de novo. McCon-ney, 728 F.2d at 1201.

As pointed out earlier, handlers are provided an administrative remedy to challenge market orders under 7 U.S.C. § 608c(15)(A). This is their exclusive method of redress. See United States v. Ruzic-ka, 329 U.S. 287, 292-95, 67 S.Ct. 207, 209-11, 91 L.Ed. 290 (1946). There is no comparable provision providing for review at the request of producers. Judicial review for producers, however, has nonetheless been permitted in certain limited instances. See, e.g., Stark v. Wickard, 321 U.S. 288, 64 S.Ct. 559, 88 L.Ed. 733 (1944) (Stark).

In Stark, producers challenged deductions established by the Secretary from the minimum price for milk to which the producers were entitled. The Court held that the deductions injured the producers’ “definite personal rights” created by the statute to the minimum price established by the Act, id. at 309, 64 S.Ct. at 570, thus giving them standing. Id. at 305-06, 64 S.Ct. at 568-69. The Court concluded that the statutory scheme implicitly authorized suits by producers in such circumstances. Id. at 309-10, 64 S.Ct. at 570-71.

In so holding, however, the Court observed that handlers, who had no financial interest in the deductions, would not have had standing to challenge the Secretary’s actions. Id. at 308, 64 S.Ct. at 570. Thus, unless the producers were permitted to seek such review, the Secretary’s actions could never be challenged. Judicial review at the request of producers “was therefore necessary to ensure achievement of the Act’s most fundamental objectives — to wit, the protection of the producers.” Community Nutrition, 104 S.Ct. at 2458. The Court in Stark emphasized, however, that such producer challenges would be permissible only when the Secretary allegedly acted outside his statutorily delegated powers. 321 U.S. at 307, 64 S.Ct. at 569. When the Secretary is acting within his delegated powers, the producers’ sole opportunities for protest are the hearing on the proposed order and the opportunity to vote on its approval. Id.

Community Nutrition is the Court’s most recent pronouncement on the scope of judicial review under the Act. The Court held that consumers were not entitled to bring challenges to market orders, favorably citing Rasmussen v. Hardin, 461 F.2d 595 (9th Cir.), cert. denied, 409 U.S. 933, 93 S.Ct. 229, 34 L.Ed.2d 188 (1972) (Rasmussen ). See 104 S.Ct. at 2454. The Court observed that the Act made no provision for consumer participation in the promulgation of marketing orders, see id. at 2455, unlike the elaborate provisions for producer and handler participation. The Court was concerned that permitting such challenges by consumers “would provide handlers with a convenient device for evading the statutory” administrative remedies. Id. See also Rasmussen, 461 F.2d at 599-600.

We believe that Community Nutrition can be interpreted generally to foreclose judicial review sought by anyone other than handlers: “we think it clear that Congress intended that judicial review of market orders issued under the Act ordinarily be confined to suits brought by handlers in accordance with 7 U.S.C. § 608c(15).” 104 S.Ct. at 2456 (emphasis added). Although the case did not involve a producer challenge, the Court did emphasize that the statutory scheme ordinarily presumes that handlers will ensure the Act’s objectives. See id. at 2458. The same concerns regarding potential evasion of the administrative remedies established by statute are applicable to producers as well as consumers. To be sure, the Court specifically observed “that Congress intended [for] only producers and handlers ... to ensure that the statutory objectives would be real ized.” Id. at 2455. Indeed, unlike consumers, producers are active participants in the promulgation of marketing orders. See id. But this alone fails to suggest any congressional intent to permit producer challenges outside the statutorily prescribed administrative remedy absent special circumstances. As we pointed out, Stark recognized that producers will ordinarily help ensure that the Act’s objectives are reached by participating in hearings and by exercising their right to approve or repeal market orders in an informed manner.

Only one circuit has refused to construe Stark’s holding narrowly, permitting general attacks on the merits of an order by producers. See Suntex Dairy v. Bergland, 591 F.2d 1063, 1067 (5th Cir.1979). That holding, however, preceded the Court's broad discussion in Community Nutrition disfavoring judicial review outside the statutory framework. We agree with those circuits which narrowly construe the exception in Stark to avoid evasion of the statute’s clear intent to preclude generally such actions. See Marchezak v. McKinley, 607 F.2d 37, 41 (3d Cir.1979) (denying producer review by distinguishing right established by statute in Stark); Benson v. Schofield, 236 F.2d 719, 723 (D.C.Cir.1956) (same), cert. denied, 352 U.S. 976, 77 S.Ct. 363, 1 L.Ed.2d 324 (1957); United Milk Producers v. Benson, 225 F.2d 527, 529 & n. 5 (D.C.Cir.1955) (same). See also Dairylea Cooperative, Inc. v. Butz, 504 F.2d 80, 83 (2d Cir.1974) (permitting suit by milk producers who claimed unlawful variation from right to uniform pricing dictated by the Act, analogous to Stark). The Stark exception is limited to situations in which producers claim that some “definite personal right” granted by the statute is being infringed by the Secretary acting outside the scope of his delegated authority, with no handler having standing to protest. Failure to so construe the statute would otherwise leave handlers in the disadvantaged position of being limited to their statutory remedy while producers are free to raise direct challenges in the district court. Such an ironic result cannot reasonably be attributed to any intentions on the part of Congress.

Turning to the case before us, the Act nowhere grants producers any “definite personal right” to parity prices for oranges like the minimum prices established for milk at issue in Stark. Nor have the Growers been denied any procedural rights to which they are entitled. See Consolidated-Tomoka Land Co. v. Butz, 498 F.2d 1208, 1210 (5th Cir.1974) (permitting producer suit solely challenging producer referendum procedures used to promulgate market order). The Stark exception, therefore, is inapplicable.

The only other plausible exception for permitting judicial review of a producer challenge is suggested by the Court's analysis in Community Nutrition. In denying judicial review by consumers, the Court reasoned that their interests are similar to those of the handlers who do have a right to review and, therefore, consumer interests will be protected by the handlers. See 104 S.Ct. at 2458. Thus, if the producers and handlers interests are substantially dissimilar, the producers arguably might have a right to judicial review. The issue was raised in this case because of the district court’s apparent belief that the producers and handlers stand in the same position. The Growers argue that because of the contractual relation between producers and handlers in which handlers compensation is set at a fixed amount for each carton of produce, handlers have less incentive to maximize production due to possible overtime costs. The Growers also assert that a lower percentage of marketable fruit is less onerous to handlers because a handler will be able to secure compensation for shipping fruit to juice plants while the producer would receive almost no return.

Assuming without deciding that the Court's reasoning provides a new exception to judicial review, we doubt that these asserted differences are the type of conflicts the Court had in mind. Despite functional differences between handlers and consumers, these differences did not persuade the Court to conclude that the handlers could not ensure achievement of the Act’s purposes and sufficiently protect the consumers. The Court stated:

Whether handlers would pass on to consumers any savings they might secure through a successful challenge to the market order provisions is irrelevant. Consumers’ interest in market orders is limited to lowering the prices charged to handlers in the hope that consumers will then reap some benefit at the retail level.

104 S.Ct. at 2458 n. 3. We are not satisfied that this record demonstrates a sufficient difference between the interests of handlers and producers to distinguish this case from the Court’s rejection of an alleged conflict between handlers and consumers in Community Nutrition. We conclude that “[hjandlers can therefore be expected to challenge unlawful agency action and to ensure that the statute’s objectives will not be frustrated.” Id. at 2458 (footnote omitted). Indeed, in contrast to consumers, the power granted to producers by the Act to protect their interests demonstrates a lessened need to rely on handlers. To the extent there is a conflict between handlers and producers, the voting rights of producers, giving them power to approve or repeal an order, ordinarily will protect producers from any injury resulting from such a conflict.

Because we conclude that the facts of this case demonstrate no Stark or other exception which would allow judicial review outside the statutory scheme of the Act, we need not pass upon the issue of whether the Growers have standing pursuant to such an exception.¹

AFFIRMED.

Footnotes

1

. The concurrence suggests that our holding barring judicial review by producers is broader than necessary because these producers in any event would lack standing to pursue these particular claims. It is not altogether clear that the producers do not have standing, but it is proper for us not to reach the issue. In Community Nutrition, the Court indicated that the appropriate analysis is to determine first whether judicial review of marketing orders is permitted before undertaking to examine whether the parties seeking such review have standing:

Since congressional preclusion of judicial review is in effect jurisdictional, we need not address the standing issues decided by the Court of Appeals in this case.

104 S.Ct. at 2458 n. 4.