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SOUTH LOUISIANA GRAIN SERVS. v. BERGLAND

January 31, 1978

SOUTH LOUISIANA GRAIN SERVICES, INC., et al., Plaintiffs,
v.
Bob BERGLAND, Secretary of Agriculture, et al., Defendants



The opinion of the court was delivered by: GREEN

Plaintiffs in this case have sued for injunctive and declaratory relief against implementation of certain sections of the United States Grain Standards Act of 1976, 7 U.S.C. §§ 71-87h. For the reasons given below, the Court denies the requested relief.

I.

 During 1973 and 1974, reports of irregular practices in the federal grain inspection system led to investigations by the Federal Bureau of Investigation, the Department of Agriculture, and various United States Attorneys' offices. In addition, Committees of both Houses of Congress undertook their own examinations of the system.

 In 1974, a federal grand jury investigation was initiated by the United States Attorney for the Eastern District of Louisiana, for the purpose of investigating alleged irregularities in connection with the inspection and weighing of grain in the New Orleans area. The publicity which attended the ensuing New Orleans grain scandals attracted widespread attention. On June 4, 1975, Senator Hubert H. Humphrey introduced legislation aimed at reform of the inspection and weighing system. On June 4, 1975, Senator Humphrey and Representative Thomas S. Foley, Chairman of the House Committee on Agriculture, wrote a letter to Comptroller General Elmer B. Staats stating, "The current grain inspection scandal is a matter that deserves the immediate attention of Congress. It threatens the credibility of the United States as the largest exporter of agricultural commodities in the world." The letter went on to request a "full and complete evaluation" of the marketing and inspection process for grain, with particular emphasis on the export trade.

 At the time of the dispatch of the letter, the Senate and House began hearings on the scandals and on proposals for reform of weighing and inspection services. On February 17, 1976, the GAO issued its report. The agency recommended "that Congress establish essentially a Federal grain inspection system." General Accounting Office, Report on Irregularities in the Marketing of Grain, 94th Cong., 2d Sess. (February 17, 1976) at 44. The Agency also recommended,

 
In phasing in a federally operated inspection system a high priority should be given to establishing Federal inspection services at all port elevators, since recent disclosures of extensive criminal abuses and other shortcomings in the inspection system have involved port elevators primarily. Also, prolonging or postponing the development of a reliable inspection system at such elevators could have a lasting effect on foreign sales. Id. at 43.

 Congress enacted the United States Grain Standards Act of 1976 on October 21, 1976. The law as enacted federalized the entire grain inspection and weighing system throughout the country. The law provided that at export locations, all inspection and weighing would be performed by federal employees except in those states declared eligible by the Secretary of Agriculture to be delegated authority to undertake these activities. With regard to services at inland ports, the law required a study of the system in order to provide information for use by Congress in evaluating the needs of the inspection and weighing systems at these points. 7 U.S.C. § 79, note.

 As written, the Act provided for phasing in the federalized services at the export locations over a two-year period. On December 1, 1977, plaintiffs in this case filed this action. On December 2, 1977, the Court denied their motion for a temporary restraining order enjoining defendants from federalizing plaintiffs' activities, which occurred hours after the hearing. The Court then scheduled oral argument for December 20 on plaintiffs' motion for a preliminary injunction. At the outset of the hearing, plaintiffs moved to style the proceedings as one involving a request for permanent injunctive and declaratory relief. The Court granted plaintiffs' request. After hearing argument from all parties, the Court denied plaintiffs the relief they had sought. This opinion and order concludes the matter.

 II.

 At the time of the oral argument on December 20, plaintiffs' business activities had been federalized and the request for injunctive relief was moot. In oral argument, plaintiffs' counsel indicated that the relief then sought was a declaratory judgment that the plaintiffs' business should be defederalized and that the government was "required to give us back our facilities upon our return of the money that they paid." (Transcript of December 20 hearing at 11.)

 Plaintiffs mount two legal challenges to the Grain Standards Act as it has applied to South Louisiana Grain Services as a corporation and to Mr. John A. Williamson, Jr., as its individual chief officer. Their primary contention is that the Act constitutes a Bill of Attainder in violation of Article I, Section 9, Clause 3 of the Constitution. Their secondary contention is that the Act violates plaintiffs' Fifth Amendment rights of substantive due process.

 A Bill of Attainder is "a law that legislatively determines guilt and inflicts punishment upon an identifiable individual without provision of the protections of a judicial trial." Nixon v. Administrator of General Services, 433 U.S. 425, 468, 97 S. Ct. 2777, 2803, 53 L. Ed. 2d 867, 907 (1977).

 The Courts are to employ three criteria in analyzing whether a legislative enactment is a Bill of Attainder. First, the Court must find that the legislative act "imposes . . . punishment traditionally judged to be prohibited by the Bill of Attainder Clause." Nixon, at 475, 97 S. Ct. at 2806, 53 L. Ed. 2d at 911. The Supreme Court's comments on this test are illuminating. In the Nixon case, the Court found that appellant had not been singled out for punitive reasons but "constituted a legitimate class of one." Id. at 472, 97 S. Ct. at 2805, 53 L. Ed. 2d at 909. This provided "a basis for Congress' decision ...


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