Federal Court of Appeals Solidifies Farmers for Agriculture

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The United States Court of Appeals for the District of Columbia Circuit has ruled that farmers may seek federal court intervention to ensure lawful marketing regulations. The opinion in Koretoff v. Vilsack held that provisions of the marketing order regulating almonds grown in California are subject to farmer challenge.

A group of almond growers sued the United States Department of Agriculture over regulatory changes mandating that almonds be steam-treated or chemically sterilized before the sale. These growers, who previously sold their almonds to raw food markets, found their market virtually eliminated. The growers argued that the regulations were unlawful, and asked for a federal court to declare them illegal.

USDA argued that Congress precluded farmers from having the ability to sue. In a tremendous victory for farmers whose crops are subject to marketing orders, the D.C. Circuit held that producers are not prevented from challenging orders and rules issued under the Agricultural Marketing Agreement Act of 1937 (“AMAA”). This decision comes just one year after a similar decision from the D.C. Circuit dealing with milk marketing orders in Arkansas Dairy Cooperative Association v. U.S.D.A.

The rules and regulations that the almond growers challenged were part of the almond marketing order, issued pursuant to the AMAA. In addition to almonds, USDA issues marketing orders for milk, oranges, raisins, avocados, pears, cherries, onions, tomatoes, walnuts, spearmint oil, and other crops. The marketing orders are intended to provide reliable, stable markets for producers (i.e. farmers) by regulating the activities of handlers (purchasers).

Because new marketing orders and changes to existing marketing orders almost always redefine economic winners and losers, there is a history of lawsuits challenging marketing order provisions. While the AMAA expressly allows handlers to sue over marketing orders after hearing before USDA, it does not explicitly permit or preclude lawsuits by producers.

The silence in the AMAA over the right to judicial review of marketing orders has a lengthy history, including no fewer than three Supreme Court opinions addressing the topic. The landmark case on the subject, Stark v. Wickard, was issued in 1946, and this recent decision from the D.C. Circuit is still defining the bounds of Stark’s holding this decision coupled with the D.C. Circuit’s opinion in Arkansas Dairy Cooperative v. U.S.D.A seem to establish a broad right for producers.

But it should be noted that a circuit split on the issue exists with the Ninth Circuit Court of Appeals’ decision in Pescosolido v. Block. Accordingly, the legal issue seems to be one well-suited for rehearing before the full D.C. Circuit Court and a possible appeal to the Supreme Court.

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