modification of the Order will be denied.

Initial Decision and Order at 15.

Respondents do not press their equal protection or due process arguments on appeal, and, in any event, I conclude that the ALJ was not in error in finding no merit in Respondents' equal protection and due process arguments. Moreover, the Supreme Court of the United States makes clear that arguments based upon competition are inapposite in the context of a marketing order, where marketing order committee members and handlers are engaged in what the Court describes as "collective action," as follows:

Congress enacted the Agricultural Marketing Agreement Act of 1937 (AMAA), ch. 296, 50 Stat. 246, as amended, 7 U.S.C. § 601 et seq., in order to establish and maintain orderly marketing conditions and fair prices for agricultural commodities. § 602(1). § 602(1). Marketing orders promulgated pursuant to the AMAA are a species of economic regulation that has displaced competition in a number of discrete markets; they are expressly exempted from the antitrust laws. § 608b. Collective action, rather than the aggregate consequences of independent competitive choices, characterizes these regulated markets. In order "to avoid unreasonable fluctuations in supplies and prices," §§ [sic] 602(4), these orders may include mechanisms that provide a uniform price to all producers in a particular market, that limit the quality and the quantity of the commodity that may be marketed, §§ 608c(6)(A), (7), that determine the grade and size of the commodity, § 608c(6)(A), and that make an orderly disposition of any surplus that might depress market prices, ibid. Pursuant to the policy of collective, rather than competitive marketing, the orders also authorize joint research and development projects, inspection procedures that ensure uniform quality, and even certain standardized packaging requirements. §§ 608c(6)(D), (H), (I). The expenses of administering such orders, including specific projects undertaken to serve the economic interests of the cooperating producers, are "paid from funds collected pursuant to the marketing order." §§ 608c(6)(I), 610(b)(2)(ii).

Marketing orders must be approved by either two-thirds of the affected producers or by producers who market at least two-thirds of the volume of the commodity. § 608c(9)(B). The AMAA restricts the marketing orders "to the smallest regional production areas...practicable."

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§ 608c(11)(b). The orders are implemented by committees composed of producers and handlers of the regulated commodity, appointed by the Secretary, who recommend rules to the Secretary governing marketing matters such as fruit size and maturity levels. 7 CFR §§ 916.23, 916.62, 917.25, 917.30 (1997). The committee also determines the annual rate of assessments to cover the expenses of administration, inspection services, research, and advertising and promotion. §§ 916.31(c), 917.35(f).

Glickman v. Wileman Bros. & Elliott, Inc., 117 S. Ct. 2130, 2134 (1997) (footnote omitted).

Respondents allege that USDA abused its discretion by not engaging in "required rulemaking," which abuse of discretion was based solely upon lack of a recommendation for changes from the SWPC (Respondents' Appeal at 15). In general support of this point, Respondents argue that the epitome of arbitrariness is USDA's refusal to engage in rulemaking to allow Multnomah County the same exemption as Morrow and Umatilla Counties; that even the SWPC exempted from inspections altogether one grower/producer (Echo Valley Farms) to ship selfinspected, minimum-graded product without an inspection service on site; that USDA's arbitrariness is "further epitomized" because the purposes of the AMAA would otherwise be advanced by allowing Respondents to use the very expensive hollow heart defect detection equipment in their Troutdale, Oregon, facility to prevent shipment of potatoes with latent defects not detectable by the required field inspection in Washington; that the Judicial Officer has the authority to order USDA to engage in rulemaking based upon the three cases cited; that the Secretary can, by informal rulemaking, place Multnomah County in the same exempt category as Umatilla and Morrow Counties; and the Secretary's refusal to engage in such rulemaking because the SWPC had not recommended it would be an "abrogation" of the Secretary's oversight rulemaking function to a "committee of competitors" (Respondents' Appeal at 15-16).

There is no merit to these arguments, and they are rejected. It is not an abuse of discretion for USDA not to engage in what Respondents call "required rulemaking," whether there is a recommendation from SWPC for changes in the Order, or no recommendation for changes from SWPC. The Secretary and the SWPC have scrupulously followed the AMAA, the Administrative Procedure Act, and the Order in determining the exempt counties. Respondents have provided no material evidence, support, or authority for this argument. It is not material evidence to argue that Multnomah County must be exempt merely because two other Oregon counties are exempt.

Respondents' argument based on Echo Valley Farms' exemption was correctly analyzed, distinguished from Respondents' situation, and rejected by the ALJ. Further, the ALJ explained that in 1987 an exemption similar to the exemption sought by Respondents was sought for Washington County, Oregon, and the request for a Washington County exemption was rejected by the SWPC for the same reasons as the reasons for rejecting Respondents' requested exemption. Moreover, the ALJ included the minutes of the February 23, 1994, SWPC meeting at which handlers Tomy Amsted and Kris Mehlenbacher are both referenced as having previously requested the same exemption as that sought by Respondents and as having been rejected by the SWPC (Initial Decision and Order at 8; CX 11 at 3-5).

There is no merit to Respondents' argument that USDA is arbitrary for not advancing the purposes of the AMAA by recognizing the superior latent defect detection (hollow heart) equipment available at Respondents' Troutdale, Multnomah County, Oregon, facility, which equipment is not available in the field in Washington. Respondents provide no nexus between this equipment and USDA's statutory responsibilities, and there is none. In fact, Respondents are mistaken that they are somehow prevented by USDA from using their equipment; Respondents are free to use latent defect equipment however they wish. But, Respondents are not free to ship potatoes out of Washington sans inspection to reach the equipment in non-exempt Multnomah County, Oregon, in violation of the Order.

Respondents cite three cases allegedly supporting Respondents' argument that the Judicial Officer has the authority to order USDA to engage in rulemaking. This argument is without merit for a number of reasons. As explained by the ALJ in the Initial Decision and Order, and affirmed in this Decision and Order, to be successful in a proceeding pursuant to 7 U.S.C. § 608c(15)(A), Respondents must show that the rulemaking record does not support the Secretary's decision; and that, therefore, the Secretary's decision is not in accordance with law. Respondents did not meet their burden of proof in this regard; thus, Respondents are not entitled to a remedy. Consequently, the ALJ was correct to dismiss the Petition. But, even if Respondents had met this burden, which they did not do, rulemaking is not a remedy available in a proceeding pursuant to 7 U.S.C. § 608c(15)(A). Moreover, contrary to Respondents' argument, the cases cited do not support Respondents' argument that the Judicial Officer can order the Secretary to engage in rulemaking. In Central Citrus, the Judicial Officer found that the early maturity allotments for navel oranges were unfairly apportioned by the Naval Orange Administrative Committee between District 1 and District 3, that the apportionment was not in

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accordance with law; and that, therefore, Petitioner is exempt from any obligation in the pertinent period. In re Central Citrus Co., 34 Agric. Dec. 1428, 1504 (1975). Although Petitioner sought, inter alia, amendment of the naval orange order, the Judicial Officer clearly did not order rulemaking, but, rather, states as follows:

The function of the Judicial Officer in a review proceeding instituted under § 8c(15)(A) of the Agricultural Marketing Agreement Act of 1937 is limited to ascertaining whether a marketing order or any provision thereof or any obligation imposed in connection therewith "is not in accordance with law" (7 U.S.C. 608c(15)(A)).

In re Central Citrus Co., 34 Agric. Dec. 1428, 1467 (1975).

Babcock Dairy is another case where the Judicial Officer found certain parts of an order not in accordance with law, but fashioned a decision which did not include ordering the Secretary to engage in rulemaking. In re The Babcock Dairy Co. of Ohio, 35 Agric. Dec. 431 (1976), remanded sub nom. American Dairy of Evansville, Inc. v. Bergland, 627 F.2d 1252 (D.C. Cir. 1980). In fact, the Judicial Officer retained jurisdiction in the proceeding to await "whatever corrective action is taken by the Secretary" (Id. at 446).

Finally, Respondents assert that the court in American Dairy of Evansville, Inc., directed the Secretary to engage in specific rulemaking relief pending more comprehensive rulemaking by the Secretary. However, the most that can be said here is that the court strongly recommended that the Secretary consider a type of action. But, the court merely held an existing provision invalid until a new provision could be adopted.

I conclude that none of the cases cited by Respondents stand for the proposition that the Judicial Officer may order the Secretary of Agriculture to engage in rulemaking. Moreover, I find that even if the Judicial Officer had such power, which is not the case, the facts of this proceeding would not support requiring a rulemaking proceeding.

Respondents argue that the Secretary's refusal to engage in rulemaking, because SWPC did not recommend it, is an "abrogation" of the Secretary's rulemaking function to a "committee of competitors." This argument is without merit. As explained by the Supreme Court of the United States in Wileman Bros., "[c]ollective action, rather than the aggregate consequences of independent competitive choices, characterizes these regulated markets" (Wileman Bros., supra, 117 S. Ct. at 2134). I find that Respondents' arguments describing SWPC members as "competitors" are inapposite, because SWPC members and Respondents are

engaged in what the Supreme Court of the United States characterizes as "collective action." Thus, Respondents' arguments based upon "competition" are rejected.

Respondents allege that the AMAA not only authorizes the Secretary under 7 U.S.C. § 608c(1) to amend marketing orders, but that the AMAA mandates under 7 U.S.C. § 608c(11)(C) that the Secretary "shall, so far as practicable," amend marketing orders to allow for differences in production and marketing of the same commodity produced and marketed in different production and marketing areas (Respondents' Appeal at 14-15). Respondents correctly describe these sections of the AMAA, but these sections of the AMAA do not help Respondents' cause in this proceeding, because these sections' requirements were properly fulfilled by the actions of the Secretary and the SWPC in this case. Also, Respondents state that 7 U.S.C. § 608c(17) of the AMAA "allows an amendment to a Marketing Order when it would effectuate the declared policies of the Act" (Respondents' Appeal at 15). Once again, Respondents' statements are accurate, but this section's requirements were properly fulfilled in this proceeding.

Finally, I reject Respondents' argument that the ALJ erred by concluding that the Secretary was justified in qualifying his original amendment, which allowed all Oregon sites to be considered for exemption, to later limiting the exemption to only those sites in Morrow and Umatilla Counties (Respondents' Appeal at 14). I infer that Respondents' point is that the Secretary's action in changing his mind is not in accordance with law. But, Respondents neither actually make this point nor does Respondents' stated allegation actually contain any supporting evidence. On the other hand, the ALJ discussed how the Secretary's qualification of his original amendment exempting all of Oregon was within the Secretary's authority, and the ALJ properly cited 7 U.S.C. § 608c(11)(B) as the authority for the Secretary's mandate that the Order's application "shall be limited" to the smallest practicable production and marketing areas (Initial Decision and Order at 14).

Respondents appeal, as excessive, the $12,425 in estimated inspection fee costs imposed by the ALJ, and argue that the ALJ imposed this amount for Respondents not having the potatoes inspected in Washington, or in Umatilla or Morrow Counties, Oregon, before the potatoes went to Multnomah County, Oregon; that Respondents did in fact have the potatoes inspected; that Respondents paid for inspections; that the ALJ found that "there was no damage to the Order" and Respondents gained no unfair profit by their actions; that the ALJ did not add additional penalties after finding that Respondents had in good faith sought the inspection exemption in the pertinent time period; that the minimum penalty allowed in this proceeding is $1 per truckload, or $355; and that the facts of this