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HERSHEY FOODS v. U.S. DEPT. OF AGRICULTURE

May 18, 2001

HERSHEY FOODS CORPORATION, PLAINTIFF,
V.
U.S. DEPARTMENT OF AGRICULTURE, DEFENDANT.



The opinion of the court was delivered by: Sullivan, District Judge.

MEMORANDUM OPINION & ORDER

I. Introduction

Plaintiff Hershey Food Corporation filed this action in August 1999, seeking judicial review of a regulation promulgated by defendant U.S. Department of Agriculture (USDA) that placed milk used to make chocolate milk into two different classes and fixed a price differential between the two classes. 64 Fed. Reg. 16026 (Apr. 2, 1999) (adopted in relevant part as Final Rule, 64 Fed. Reg. 47897-48021 (Sept. 1, 1999)). Plaintiffs original complaint alleged that this classification scheme violated the Federal Agricultural Improvement and Reform Act of 1996, Pub.L. No. 104127, and was arbitrary, capricious, and in violation of the Administrative Procedure Act (APA), 5 U.S.C. § 706.

Before the Court ruled on plaintiffs APA challenge, Congress passed, and the President signed, the Consolidated Appropriations Act, Pub.L. No. 106-113. Section 1000(a)(8) of the Appropriations Act provides that "H.R.3428 of the 106th Congress, as introduced on November 17, 1999" is "hereby enacted into law." H.R. 3428 provides that the final rule, as published at 64 Fed. Reg. 47897-48201 (Sept. 1, 1999), "shall take effect, and be implemented by the Secretary of Agriculture, on the first day of the month beginning at least 30 days after the date of enactment of this Act," namely, January 1, 2000. H.R.3428, § 1(b). On December 30, 1999, the Court held that the rule originally challenged by plaintiff had been enacted into law by the Appropriations Act.*fn1 Dec. 30, 1999 Order. The Court dismissed plaintiffs complaint without prejudice. Plaintiff then filed an amended complaint and added claims that section 1000(a)(8) of the Appropriations Act violates the Presentment Clause and the Due Process Clause of the U.S. Constitution.

Before the Court are defendant's motion to dismiss and plaintiffs motion for summary judgment.*fn2 An amicus brief was filed by the International Dairy Foods Association.

II. Standard of Review

The Court will not grant a motion to dismiss "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Kowal v. MCI Communications Corp., 16 F.3d 1271, 1276 (D.C.Cir. 1994). Accordingly, in evaluating defendant's motion to dismiss, the Court accepts as true all of the complaint's factual allegations. See. Doe v. United States Dep't of Justice, 753 F.2d 1092, 1102 (D.C.Cir. 1985). Plaintiff is entitled to "the benefit of all inferences that can be derived from the facts alleged." Kowal, 16 F.3d at 1276.

Summary judgment should be granted only if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). On a motion for summary judgment, the Court will construe the evidence and factual inferences arising therefrom in the light most favorable to the opposing party. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970).

III. Discussion

The Court has held that the rule originally challenged by plaintiff is now a statute. Plaintiff makes two challenges to this statute. First, plaintiff argues that the statute violates the Presentment Clause of the U.S. Constitution. Second, plaintiff argues that the statute violates the Due Process Clause of the U.S. Constitution.

A. Presentment Clause The Presentment Clause demands that before a bill becomes a law, it must pass both Houses of Congress and then be presented to, and signed by, the President. U.S. Const. Art. I, § 7. Plaintiff argues that in order to comply with the Presentment Clause, the entire text of a purported law must be voted on by both houses of Congress and presented to the President, and that in this case, the Consolidated Appropriations Act was not properly presented to the President. Plaintiff applies the following logic. The President did not have a suitable opportunity to consider whether to approve the enactment of the terms of the final rule, because the proposed law, as presented to the President, contained a cross-reference to a bill that contained a cross-reference to the final rule. This means that in order for the President to fulfill his constitutional duty to consider whether to approve the enactment of the bill, he would have had to locate and review both H.R.3428 and the final rule. This violates the Constitution, because the cross-reference undermines the President's opportunity to consider the legislation. Plaintiff also argues that inclusion of the full text would safeguard the public interest.

Defendant argues that the passage of the Appropriations Act did not run afoul of the Presentment Clause. Defendant correctly points out that the Appropriations Act actually passed both houses of Congress, was presented to the President, and was signed by the President in a timely manner. Defendant also correctly points out that the Presentment Clause, at least on its face, does not prohibit the use of incorporating text outside the four corners of a bill by cross-reference, either for purposes of passing a bill by Congress or for purposes of presenting a bill to the President. Defendant argues that for the Court to find otherwise would interfere with the constitutionally conferred discretion that Congress and the President enjoy in their lawmaking functions and would raise serious separation-of-powers concerns.

There is no case precedent addressing the precise issue of whether incorporating text through cross-reference violates the Presentment Clause. Defendant points to cases where the Supreme Court has suggested that the fundamental purpose of Presentment Clause is to provide an opportunity for the President to consider bills presented to him. See Edwards v. United States, 286 U.S. 482, 52 S.Ct. 627, 76 L.Ed. 1239 (1932); Wright v. United States, 302 U.S. 583, 58 S.Ct. 395, 82 L.Ed. 439 (1938). The plaintiff in Wright argued that the President had not effectively vetoed a bill because the Senate was in recess at the time of the return and that its officers, who were not at work during the time of the return, were not constitutionally authorized to accept the President's veto message. The Supreme Court held that to say that the President cannot return a bill when the house in which it originated is in recess, "is to ignore the plainest practical considerations and [implies] a requirement of an artificial formality to erect a barrier to the exercise of a constitutional right." Wright, 302 U.S. at 590, 58 S.Ct. 395. Thus, defendant argues that the appropriate question for the Court to address is whether the format of the Appropriations Act denied the President the opportunity to consider the contents of the cross-referenced bill. Defendant asserts that it did not.

Plaintiff principally relies on INS v. Chadha, 462 U.S. 919, 103 S.Ct. 2764, 77 L.Ed.2d 317 (1983), and Clinton v. New York, 524 U.S. 417, 118 S.Ct. 2091, 141 L.Ed.2d 393 (1998), to support its assertion that cross-referencing text within a bill is constitutionally impermissible. In Clinton, the Supreme Court reasoned that the Line Item Veto Act contravened the Presentment Clause because it permitted the President to create a law "whose text was not voted on by either House of Congress or presented to the President for signature." Clinton, 524 U.S. at 448, 118 S.Ct. 2091. Thus, plaintiff argues that since the actual text of the final rule was not voted on by Congress, or presented to the President, the Appropriations Act fails to comply with the Presentment Clause. Clinton did not address the constitutionally acceptable form of a bill or the issue of incorporation-by-reference. In this case, unlike in Clinton, both Houses of Congress passed, and the President signed, the identical text. The bill Congress passed, and the President signed, contained the exact same cross-reference, which leads one to the text of the final rule. In Clinton, the President had substantively changed the contents of the bill presented to him. The Court held that Congress may not give "the President the unilateral power to change the text of duly enacted statutes." Id. at 447, 118 S.Ct. 2091. In this case there was no ...


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