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MILK INDUS. FOUND. v. GLICKMAN

June 23, 1997

MILK INDUSTRY FOUNDATION, Plaintiff,
v.
DANIEL R. GLICKMAN, Secretary, United States Department of Agriculture, Defendant, NORTHEAST DAIRY COMPACT COMMISSION, Defendant-Intervenor



The opinion of the court was delivered by: FRIEDMAN

 Having denied plaintiff's motion for injunctive relief on December 11, 1996, the Court now turns to the parties' cross motions for summary judgment. The Court heard argument on May 21, 1997, and has considered the briefs and exhibits filed by the parties and the briefs submitted by amici from the New England region, from the Midwestern states and from the states of Louisiana, Georgia, Kentucky, Arkansas, South Carolina and West Virginia. In addition, the Court has reviewed the Secretary of Agriculture's Amplified Decision of March 20, 1997 and his Addendum of March 27, 1997, as well as the administrative record. The Court grants defendants' motions for summary judgment and denies plaintiff's motion for summary judgment.

 I. BACKGROUND

 The factual background of this case was thoroughly set out in the Court's Opinion of December 11, 1996. Milk Industry Foundation v. Glickman, 949 F. Supp. 882, 884-88 (D.D.C. 1996). The Court therefore will only briefly review the relevant facts here.

 In Section 147 of the Federal Agricultural Improvement and Reform Act of 1996 ("FAIRA"), Congress consented to the Northeast Dairy Compact entered into among the states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont, but subjected its consent to several conditions. The first condition was that the Secretary of Agriculture make a finding that the implementation of the Compact was a compelling public interest in the Compact region. After soliciting and receiving public comments, on August 28, 1996, the Secretary published a one-paragraph, two-sentence finding of a compelling public interest and authorized the Compact States to implement the Northeast Dairy Compact. The Milk Industry Foundation promptly filed a motion for preliminary injunction seeking to enjoin the implementation of the Compact. Plaintiff claimed that Section 147 of FAIRA was an unconstitutional delegation of legislative power and that the Secretary of Agriculture had exercised his delegated authority arbitrarily and capriciously in violation of the Administrative Procedure Act.

 The Court concluded that plaintiff was not likely to succeed on the merits of its nondelegation doctrine claim, but it found that plaintiff had a substantial likelihood of success on the merits of its APA claim. The Court concluded, however, that plaintiff could not show imminent, irreparable injury and therefore denied plaintiff's motion for preliminary injunction. It ordered expedited briefing for the parties to file cross motions for summary judgment.

 On February 3, 1997, the Court granted the Secretary's motion to stay proceedings so that he could review the entire administrative record and provide an amplified decision with respect to his finding of a compelling public interest. In granting the stay, the Court specifically directed the Secretary to fully consider the Court's criticism of his August 28, 1996 finding:

 
If the Secretary wants time now "to amplify" his decision, he must make sure that the entire administrative record, including the comments submitted, is thoroughly reviewed and analyzed and approached from a fresh perspective. It is not open to the Secretary under this Court's Opinion of December 11, 1996, to approach his task with a pre-conceived view that a compelling public interest exists. His job is not merely to cull out from the favorable comments reasons to support a pre-determined decision. His responsibility is to review the quality of the comments in the record and to decide whether his earlier finding is justified at all.

 Order of February 3, 1997 at 1-2.

 After reevaluating the administrative record, the Secretary issued a second decision on March 20, 1997, in which he again found a compelling public interest for the Compact in the New England region. In his March 20, 1997 Amplified Decision, the Secretary acknowledged that "the evidence in the record regarding the economic condition of dairy farmers in the Compact region is mixed." Decision of Secretary Dan Glickman on the Northeast Interstate Dairy Compact (March 20, 1997) ("Amplified Decision") at 1, Gov't Motion for Summary Judgment, Ex. A. The Secretary recognized that many comments supported implementation of the Compact as necessary to maintain a viable dairy industry and a healthy economy in the Compact region; that the dairy industry annually contributes $ 1.7 billion to the region's economy; that in Vermont the dairy industry represents 70 percent of the state's agricultural economy; that dairy farmers in the Compact region are going out of business; and that farm-gate milk prices in the Compact region average below what producers in many other regions receive. Id. at 1-2. On the other hand, the Secretary noted that those who submitted comments in opposition to the Compact argued that the decline in the number of dairy farmers in the Compact region has been less than the national average; that milk prices in the region are more favorable to dairy producers than prices in other regions of the country; that the Compact region has maintained its share of U.S. milk production; and that the Compact is not warranted by supply and demand or other economic factors. Id. at 2.

 The Secretary expressed again, as he had in the press statement that accompanied his August 28, 1996 Finding, several concerns with respect to the adverse effects the Compact could have on low-income families. Amplified Decision at 3. The Secretary also stated that if conditions indicated that a compelling public interest in the region no longer existed, he would revoke his authorization. Id. at 3-4. Secretary Glickman stressed the dynamic nature of agricultural policy and indicated that he could not make just one finding of a compelling public interest "based on a single snapshot in time." Id. at 4. He stated that "the Department strongly believes that the assessment of a compelling public interest in the Compact region may well change over time." Id. The Secretary reiterated his strong belief that "the authority to withdraw or revoke [his] authorization is an essential element of any decision which finds that a compelling interest exists" and maintained that, despite the Court's conclusion to the contrary, he did indeed have the authority to revoke his authorization to implement the Compact. Id.

 One reason the Secretary gave for his finding of a compelling public interest was that the Compact would likely result in higher milk prices and therefore, at least in the short-term, provide higher profitability for and, in turn decrease financial pressures on, small, family-sized dairy farms in New England. Amplified Decision at 2, 4. *fn1" The Secretary placed great emphasis upon the importance of taking "reasonable measures to preserve small family farms." Id. at 2. He stated: "I do not believe that . . . agricultural production should or must be dominated by large producers. America wants and still needs the family farm. This belief is obviously strongly held by the people of the Compact region." Id. The Secretary found that "small dairy farms are an essential part of the character and culture in the Compact region. These farms preserve open spaces, sculpt the landscape, and provide the land base for a wide diversity of recreational pursuits." Id. at 3. After reiterating his countervailing concern about the Compact's potential to increase the cost of milk for low income families, id. at 3, the Secretary concluded with a finding

 
that there is a compelling public interest in the Compact region and authorized implementation of the Northeast Interstate Dairy Compact. In authorizing the Compact's implementation, [the Secretary] concluded that the balance has been properly struck, given current conditions. The Compact is a short-term measure that, if implemented with common-sense and sensitivity to the needs of all affected persons and interests, can ...

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