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Koretoff v. Vilsack

June 17, 2009


The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge


Plaintiffs, California almond growers and grower-retailers, brought suit against the Secretary of the United States Department of Agriculture ("USDA") to challenge a USDA regulation requiring almond handlers to treat raw almonds in order to reduce the risk of Salmonella bacteria contamination.*fn1 In a Memorandum Opinion issued on March 9, 2009, the Court granted defendant's motion to dismiss. Koretoff v. Vilsack, 601 F. Supp. 2d 238 (D.D.C. 2009). Four grower-retailers have now moved, pursuant to Federal Rules of Civil Procedure 59(e) and 60(b)(3), for reconsideration and to alter or amend the Court's judgment, and plaintiff growers have moved, pursuant to Rule 59(e) only, for the same relief. For the reasons stated herein, the Court will deny both motions.


A Rule 59(e) motion may be granted if the court "finds that there is an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice." Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C.Cir. 1996) (per curiam) (citation and internal quotation marks omitted). Such motions "are disfavored and relief from judgment is granted only when the moving party establishes extraordinary circumstances." Niedermeier v. Office of Baucus, 153 F. Supp. 2d 23, 28 (D.D.C. 2001). "A Rule 59(e) motion is not a second opportunity to present argument upon which the Court has already ruled, nor is it a means to bring before the Court theories or arguments that could have been advanced earlier." W.C. & A.N. Miller Cos. v. United States, 173 F.R.D. 1, 3 (D.D.C. 1997), aff'd sub nom. Hicks v. United States, No. 99-5010, 1999 U.S. App. LEXIS 13376 (D.C. Cir. May 17, 1999).

Similarly, to prevail on a motion pursuant to Rule 60(b)(3), a plaintiff "must prove by clear and convincing evidence some sort of fraud, misrepresentation or other misconduct." Martin v. Howard Univ., No. 99-1175, 2006 U.S. Dist. LEXIS 72303, at *8 (D.D.C. Oct. 4, 2006) (citation omitted); see also Summers v. Howard Univ., 374 F.3d 1188, 1192 (D.C. Cir. 2004).

I. Grower-Retailer Plaintiffs

The four grower-retailer plaintiffs contend that the Court erroneously concluded that they were handlers and thus had to exhaust their administrative remedies. (See Grower-Retailers' Mot. for Recons. at 3, 5-6.) However, according to plaintiffs, their complaint alleges that "(1) The [Agricultural Marketing Agreement Act of 1937 ("AMAA")], at 7 U.S.C. § 608c(13), unequivocally proscribes regulation of any almond retailer in its retail capacity; and (2) the Almond Order, by 7 C.F.R. § 981.13, and interpretive rules in § 981.413, places severe limits -- by location, by sales venue, by method of sale, by customer, and by transaction volume -- on plaintiffs in their capacity as non-handler almond retailers."*fn2 (Id. at 2.)

As the Court recognized in its original opinion, the issue here concerns a dispute between plaintiffs and the USDA over the proper definition of various terms used in the AMAA. Plaintiffs complain of the agency's "expansive definition of handling" (Am. Compl. ¶ 91), which they claim violates the AMAA by including certain retail activities. Thus, the Court found that because the agency had labeled those who engage in such activities as "handlers" and thereby subjected them to the almond marketing order, "plaintiffs are clearly bringing this challenge in their capacity as handlers and must therefore first exhaust their administrative remedies." Koretoff, 601 F. Supp. 2d at 243 (citing United States v. Lamars Dairy, Inc., 500 F.2d 84, 85 (7th Cir. 1974) (exhaustion required where defendants claim to have been incorrectly classified as handlers)). Plaintiffs have not demonstrated any error in the Court's finding.

While plaintiffs take issue with the Court's statement that "[b]y their own admission, . . . plaintiffs are only subject to the marketing order because they fit within the order's definition of handler," Koretoff, 601 F. Supp. 2d at 243, the Court meant only that plaintiffs' own statements make clear that the gist of their complaint is a dispute over definitions contained in the almond marketing order and its implementing regulations. (See Am. Comp. ¶¶ 91 -93 (alleging that the USDA's "expansive definition of handling," in which the agency "purports to define and regulate the handling of all California almonds sold in commerce for human consumption, exempting only a grower's production of almonds sold by the producer (grower) at his retail farm stand," had "limited or precluded plaintiff producers (growers) from selling their production in retail sales" in violation of the AMAA and requesting a declaratory judgment to that effect); see also Declaration of Mark McAfee at ¶ 7 (acknowledging that "[w]ith the USDA [almond treatment] Rule in place, I cannot expand my retail operation without investing in the treatment of my almonds" and that the Almond Board had "threatened to cite me and fine me for violation of the regulation") (attached to Grower-Retailers' Mot. for Recons.).) Contrary to plaintiffs' assertion, the Court did not find that plaintiffs are handlers, but merely recognized that their falling within the USDA's definition of "handler" provides the basis for the agency's regulatory power over them.

That plaintiffs now contend that they have refrained from engaging in certain retail activities that the USDA has defined as handling does not change the outcome. The fact remains that should plaintiffs choose to engage in these activities, they would be subjected to the almond treatment regulation because the agency would define them as handlers, in which case they would be required to proceed initially before the agency. See Lamars Dairy, Inc., 500 F.2d at 85; United States v. Country Lad Foods, Inc., 327 F. Supp. 395 (N.D. Ga. 1971); United States v. Hinman Farms Prods., Inc., 156 F. Supp. 607, 610-11 (N.D.N.Y. 1957). Plaintiffs cannot avoid this exhaustion requirement by claiming that they are not handlers because they refuse to engage in agency-defined handling activities in order to avoid regulation.*fn3 To permit plaintiffs to skirt the exhaustion requirement in this way would "undermine the congressional preference for administrative remedies and provide a mechanism for disrupting administration of the congressional scheme." Block v. Community Nutrition Institute, 467 U.S. 340, 352 (1984).

Moreover, the Court rejects plaintiffs' claim that "the Secretary's contention that he can equate 'retailing' with 'handling'" "prematurely argues the legal merits of the case." (Grower-Retailers' Reply at 5.) In fact, it is plaintiffs who seek to have the Court, without the benefit of the USDA's expertise, decide whether the agency can draw the line between retail and handling activities as it has done. As the Supreme Court has recognized, "[t]he regulation of agricultural products is a complex, technical undertaking. Congress channelled disputes concerning marketing orders to the Secretary in the first instance because it believed that only he has the expertise necessary to illuminate and resolve questions about them." Community Nutrition, 467 U.S. at 347. Therefore, the Court remains convinced that plaintiffs must first present their claims to the agency.

II.Grower Plaintiffs

The almond grower plaintiffs move for reconsideration based on the following three alleged errors: (1) the conclusion that growers lack standing; (2) the conclusion that growers' claims are statutorily precluded; and (3) the conclusion that "the almond growers' interests are 'necessarily' or 'inexorably' the same as, or converged with, those of handler plaintiffs." (Growers' Mot. for Recons. at 1-2.)

In its prior opinion, this Court found, based on Community Nutrition, that judicial review of marketing orders must ordinarily be confined to suits by handlers and that growers' claims were "impliedly precluded" based on "inferences of intent drawn from the statutory scheme as a whole." See Koretoff, 601 F. Supp. 2d at 243-44 (quoting Community Nutrition, 467 U.S. 340 at 349). Nevertheless, the Court noted that the Supreme Court, in Stark v. Wickard, 321 U.S. 288 (1944), had recognized a narrow exception to the rule. While the Court described the holding in Stark in terms of standing rather than statutory preclusion, it nevertheless recognized that the decision turned on the fact that "producers were alleging injury to their 'definite personal rights' that were 'not possessed by the people generally'" and the fact that no other forum existed to challenge the Secretary's actions because handlers, who had no financial interest in the producer settlement fund at issue in Stark, could not question its use. Koretoff, 601 F. Supp. 2d at 244 (quoting Stark, 321 U.S. at 302). Applying these standards to grower plaintiffs ...

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