services to permit an additional or fifth sale each in the Danville and Winston-Salem markets. Hearings on these applications were held beginning May 24, 1961 in the two cities.
7. On June 2, 1961 plaintiffs, the Danville Tobacco Association and The Winston-Salem Warehouse Association, filed a petition for the repeal of those provisions of the regulations which provide that a determination on an application for inspection and price support services for an additional sale shall be based on evidence that the applicant sale will function as a bona fide auction sale and has firm commitments from an adequate set of buyers that they will participate in the sale if inspection and price support services are provided. It was also proposed to delete the definition of 'adequate set of buyers' and the provision of the regulations placing the burden of proof upon the applicant to show by documentary evidence or testimony of buying organizations which buying organizations are committed to participate in the sale.
8. Notice of proposed rule-making in connection with the foregoing petition for repeal of the above-described regulations was published in the Federal Register on July 25, 1961 (26 F.R. 6625) in accordance with Section 4 of the Administrative Procedure Act (5 U.S.C. § 1003). Pursuant to the notice, some 180 written submissions of data, views, and arguments were filed with the Hearing Clerk of the Department of Agriculture. One hundred and seventy-three of these submissions opposed the repeal proposal.
9. On September 7, 1961, the Secretary issued a decision denying the application for additional market services. The Secretary found that the tobacco inspection and price support services on each of the applicant markets were reasonable and adequate. The Secretary also determined that the need for additional sale and additional services was not shown for either applicant market.
10. On September 7, 1961, the Secretary issued a decision denying the petition for repeal and concluding that repeal of or deletion of these regulations would not be in the best interest of the tobacco growers, the industry, or the public.
11. The parties plaintiff other than Danville Tobacco Association and the Winston-Salem Association did not participate as petitioners in the petition for repeal or as applicants in the application for additional services.
12. Following the denial of their petition for repeal of the aforesaid regulations, plaintiff warehouse associations, together with other individual warehousemen, filed this present action for declaratory judgment and injunctive relief under the Federal Declaratory Judgments Act (28 U.S.C. § 2201) and Section 10 of the Administrative Procedure Act.
Conclusions of Law
1. The Court has jurisdiction over the subject matter of this action.
2. The Plaintiffs have exhausted their administrative remedies.
3. The administrative findings of the Secretary of Agriculture, dated September 7, 1961, denying the application for additional market services, are supported by substantial evidence.
4. The regulations issued by the defendant on July 2, 1958, by virtue of the authority contained in The Tobacco Inspection Act and the Commodity Credit Corporation Charter Act, were properly and lawfully issued and within the scope of his authority in all respects. The regulations here challenged are valid and constitute a proper and rational exercise of the rule-making power conferred upon the Secretary by The Tobacco Inspection Act.
5. The decision by the Secretary of Agriculture of September 7, 1961 denying the petition for repeal is reasonable and supported by the record. The administrative record indicates that the Secretary has acted lawfully and within the scope of the powers conferred upon him under The Tobacco Inspection Act.
6. The proceedings under which the petition for repeal was held were regular and orderly, and consistent with the requirements of the Administrative Procedure Act.
7. Plaintiffs have failed to sustain their burden of proof of demonstrating procedural irregularities in the rule-making proceeding initiated by the petition filed on June 2, 1961.
8. Plaintiffs have failed to sustain their burden of showing that the regulations promulgated by the Secretary are arbitrary and capricious.
9. Defendant is entitled to judgment.
Counsel for defendant will present an appropriate order.
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