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Auvil Fruit Company, Hoverhawk, Inc., and Lyons & Son, Inc. (hereinafter Petitioners), instituted this proceeding under section 8c(15)(A) of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. § 608c(15)(A)) (hereinafter AMAA); the federal marketing order regulating the handling of Sweet Cherries Grown in Designated Counties in Washington (7 C.F.R. pt. 923) (hereinafter Cherry Order); and the Rules of Practice Governing Proceedings on Petitions To Modify or To Be Exempted From Marketing Orders (7 C.F.R. $8 900.50-.71) (hereinafter Rules of Practice), by filing a § 15 Petition To Modify Cherry Marketing Order No. 923 Dated June 16, 1994; Notice of Appeal; Request for Hearing or in the Alternative for "Continuance Referendum" on May 9, 1995. Petitioners' May 9, 1995, Petition consists of 2 pages numbered "8 -1-" and "8-5." and Affidavits of Robert L. Parlette, Grady Auvil, and Hal Lyons. In response to Chief Administrative Law Judge Victor W. Palmer's letter dated June 13, 1995, informing Petitioners that their Petition did not appear to be complete, Petitioners filed a second Petition consisting of 5 pages numbered "8 -1-" through "8-5-" and Affidavits of Robert L. Parlette, Grady Auvil, and Hal Lyons on June 29, 1995 (hereinafter Petition).

Petitioners allege that they are handlers of Rainier cherries and challenge provisions of the Cherry Order which prohibit the sale and shipment in interstate commerce of Rainier cherries smaller than 11 row (Petition at 2). Petitioners contend that the provisions of the Cherry Order which prohibit the sale and shipment of Rainier cherries smaller than 11 row: (1) constitute an inverse condemnation of their property; (2) constitute an unequal and discriminatory application of the law; (3) were adopted in an arbitrary and capricious manner; (4) are not based on any objective, scientific standard that is related to quality or edibility of Rainier cherries; and (5) were promulgated to shrink supply, in an attempt to improperly, and in contravention of guidelines of the United States Department of Agriculture, increase the price of Rainier cherries to consumers in interstate markets (Petition at 4).

Petitioners request that the Secretary of Agriculture declare null and void that portion of the Cherry Order which restricts the right of growers and handlers from dealing in, and packing and shipping Rainier cherries from the State of Washington of a size smaller than 11 row, or that the Secretary of Agriculture direct that a

'The term "row" refers to the diameter of a cherry. Historically, cherries were placed in a box in rows. The more cherries in a row, the smaller the cherry. The fewer cherries in a row the larger the cherry. A 10 72 row cherry is 1" in diameter, an 11 row cherry is 61/64" in diameter, an 11 / row cherry is 57/64" in diameter, and a 12 row cherry is 54164" in diameter (7 C.F.R. S 923.322(e)).

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56 Agric. Dec. 1045

continuance referendum on the Cherry Order be conducted (Petition at 4-5).

On June 8, 1995, the Administrator of the Agricultural Marketing Service, United States Department of Agriculture (hereinafter Respondent), filed an Answer denying the material allegations in the Petition and asserting that the Petition fails to state a claim upon which relief can be granted and that the Cherry Order, as interpreted by Respondent and the Washington Cherry Marketing Committee, is in accordance with law and thus binding on Petitioners."

On October 10, 1995, Petitioners filed a Hearing Brief, and on November 1 and 2, 1995, Administrative Law Judge Dorothea A. Baker (hereinafter ALJ) presided over a hearing in Wenatchee, Washington. Robert L. Parlette, Esquire, of Davis, Ameil, Dorsey, Kight & Parlette, Wenatchee, Washington, represented Petitioners. Sharlene A. Deskins, Esquire, of the Office of the General Counsel, Washington, D.C., represented Respondent.

On December 12, 1995, Petitioners filed Petitioners' Proposed Findings of Fact and Conclusions of Law and Petitioners' Post-Hearing Brief. On December 21, 1995, Petitioners filed Affidavit of Eric Strutzel describing the operation of Petitioner Hoverhawk, Inc. On January 22, 1996, Respondent filed Proposed Findings of Fact and Conclusions of Law, and on February 15, 1996, Petitioners filed Petitioners' Reply Brief.

On February 20, 1996, the ALJ issued an Order for Additional Briefing regarding whether Petitioner Hoverhawk, Inc., and Petitioner Lyons & Son, Inc., are handlers and have standing to institute a proceeding under section 8c(15)(A) of the AMAA (7 U.S.C. $ 608c(15)(A)). On March 11, 1996, Respondent filed Response to Order for Additional Briefing and Motion to Exclude Petitioner's [sic] Post Hearing Submission (hereinafter Respondent's Response to Order for Additional Briefing), and on March 13, 1996, Petitioners filed Response to Order for Additional Briefing.

On April 19, 1996, the ALJ filed an Initial Decision and Order dismissing the Petition. On May 29, 1996, Petitioners Hoverhawk, Inc., and Lyons & Son, Inc., filed a Notice of Appeal and Petitioners' Motion for Extension of Time" with the Judicial Officer to whom the Secretary of Agriculture has delegated authority to act as final deciding officer in the Department's adjudicatory proceedings subject to

"Apparently Respondent had access to the Petition filed June 29, 1995, prior to Petitioners' filing, because Respondent's Answer, filed June 8, 1995, addresses the Petition.

***Petitioner Auvil Fruit Company did not appeal.

5 U.S.C. 88 556 and 557 (7 C.F.R. § 2.35).*** By Informal Order of May 30, 1996, the Judicial Officer granted an extension of time for filing Petitioners' appeal petition to July 31, 1996. On July 30, 1996, Petitioners Hoverhawk, Inc., and Lyons & Son, Inc., filed Petitioners' Appellate Brief. On October 4, 1996, Respondent filed Respondent's Opposition to the Petitioners' Appeal Petition; Respondent's Appeal Petition and Brief in Support Thereof. On October 31, 1996, Petitioners Hoverhawk, Inc., and Lyons & Son, Inc., filed Petitioners' Response to Respondent's Brief, and on November 1, 1996, the proceeding was referred to the Judicial Officer for decision.

Based upon careful consideration of the record in this proceeding, I find that the ALJ is correct in dismissing the Petition. Petitioner Auvil Fruit Company, the sole, undisputed handler among the three Petitioners, did not appeal the ALJ's denial on the merits of the relief sought. The two non-handler Petitioners, Hoverhawk, Inc., and Lyons & Son, Inc., appeal both the ALJ's decision that they lack standing because they are not handlers, and the ALJ's denial on the merits of the relief sought in the Petition. Ordinarily, when a petitioner lacks standing to file a petition in accordance with section 8c(15)(A) of the AMAA (7 U.S.C. $ 608c(15XA)) for the reason that the petitioner is not a handler, there would be no decision on the merits of that non-handler's petition; the petition would just be dismissed. Any discussion of the merits in such a proceeding would be solely hypothetical. However, the ALJ's Initial Decision and Order on the merits for handler Auvil Fruit Company would be equally applicable to the other Petitioners, should a reviewing court find that they are handlers, because they argue the identical points on appeal to the Judicial Officer, as were argued, sub judice. Consequently, the ALJ's Initial Decision and Order on the merits of the Petition is modified and incorporated in this Decision and Order for the benefit of a reviewing court.

Therefore, the ALJ's Initial Decision and Order is affirmed and adopted as the final Decision and Order, with deletions shown by dots, changes or additions shown by brackets, and trivial changes not specified. Additional conclusions by the Judicial Officer follow the ALJ's conclusions.

ADMINISTRATIVE LAW JUDGE'S INITIAL DECISION

(AS MODIFIED)

****The position of Judicial Officer was established pursuant to the Act of April 4, 1940 (7 U.S.C. $$ 450c-450g); section 4(a) of Reorganization Plan No. 2 of 1953, 18 Fed. Reg. 3219, 3221 (1953), reprinted in 5 U.S.C. app. § 4(a) at 1491 (1994); and section 212(a)(1) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 8 6912(a)(1)).

56 Agric. Dec. 1045

The AMAA authorizes only handlers subject to marketing orders to [file Petitions to obtain administrative review. See 7 U.S.C. § 608c(15)(A). This fact(or) was (one of several] cited by the Supreme Court (of the United States) in its conclusion that consumers are foreclosed by the (AMAA) from obtaining reviews of marketing orders. Block v. Community Nutrition Inst., 467 U.S. 340 (1984).

In reaching this conclusion, the Supreme Court reviewed the statutory scheme and found that it:

makes equally clear Congress' intention to limit the classes entitled to participate in the development of market orders. The Act contemplates a cooperative venture among the Secretary, handlers, and producers the principal purposes of which are to raise the price of agricultural products and to establish an orderly system for marketing them. Handlers and producers—but not consumers—are entitled to participate in the adoption and retention of market orders. ... Nowhere in the Act, however, is there an express provision for participation by consumers in any proceeding. In a complex scheme of this type, the omission of such a provision is sufficient reason to believe that Congress intended to foreclose consumer participation in the regulatory process.

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467 U.S. at 3461-47] (citations omitted).

(Respondent's) Response ... to Order for Additional Briefing alleges ... that the court erred to rely on evidence not in the record; ... that "the court relied on evidence not presented at the hearing"; that the court "apparently accepts ... [the Affidavit of Eric Strutzel] as explaining the operation of Hoverhawk, Inc., to such a degree that the Respondent must respond with this brief"; and that the "court erred by allowing the inclusion of a post-hearing submission," which places Respondent at a distinct and unfair disadvantage [(Respondent's Response to Order for Additional Briefing at 7-8)].

I do not believe that I erred in any of [these] matters. To begin with, the affidavit referred to by [Respondent) as having been sent to the [ALJ] by Petitioners' counsel was, in fact, (received by] the Acting Hearing Clerk on December (21), 1995, for filing with the case, with courtesy copies to [Respondent's counsel, Sharlene A.) Deskins, and the [ALJ]. Secondly, as noted by the (ALJ) in the Order for Additional Briefing, the affidavit "was not admitted into evidence in this case" noting the objections of Respondent, and further:

Whether or not such affidavit is admissible, it adds nothing of material importance to the facts already established at the oral hearing, namely the method of paying the assessments with respect to the cherries.

[Order for Additional Briefing at 5.]

The (ALJ) has not admitted the (Affidavit of Eric] Strutzel into evidence and is not going to do so. It shall remain a part of the record as an offer of proof, which the Judicial Officer may admit or not.[*****]

Third, the record evidence received at the oral hearing, in the presence of (Respondent's] counsel, describes the operations of Hoverhawk, Inc., and Lyons & Son, Inc. Mr. Lyons, the owner and President of Lyons & Son, Inc., described his operations in detail, including the following testimony:

(BY MR. PARLETTE)

Q. And, so, the people who actually pick the cherries also pack them in a box?

(BY MR. LYONS]

A. Yeah. They -- yeah. That's right. And in fact, before the marketing order came, why, they picked Number 1 and Number 2, and we'd go in, and we'd pick them, and they'd pick them in a liner, and then when they'd get the poundage that they needed, they just pick this container -- this liner out and just place it in the field, and then we would take it over and put it on orchard trailers, and then inspect for grade and for size at that time, and weight.

Q.

And then you would mark the box with certain gross size?

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( *Admissibility of the Affidavit of Eric Strutzel is moot, since Respondent's appellate pleadings neither raise it as an issue, nor list it as an exception in Respondent's request for affirmance of the ALJ's Initial Decision and Order.)

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