APPENDIX C

Excerpt from Respondent's Reply Brief, pp. 5-7.

[Not published herein.-Editor]

In re: WILEMAN BROS. and ELLIOTT, INC., and KASH, INC., a California Corp.

AMA Docket Nos. F&V 916-1, 917-3; 916-2, 917-2 (Wileman I).

In re: WILEMAN BROS. and ELLIOTT, INC., and KASH, INC.

AMA Docket Nos. F&V 916-3, 917-4 (Wileman II)

Order Granting Respondent's Motion to Consolidate and Denying Petitioners' Motion to Recuse filed April 6, 1990.

Final agency decision - Consolidation of actions.

The Judicial Officer granted respondent's Motion to Consolidate Wileman I and Wileman II, while directing Judge Baker (ALJ) to expeditiously issue a recommended decision in Wileman II, unless the Judicial Officer later decides to issue the recommended decision. The Judicial Officer denied petitioners' Motion to Recuse and/or Otherwise Disqualify the Judicial Officer. Under the Department's Rules of Practice and the Administrative Procedure Act, where an Administrative Law Judge has held a hearing, the Judicial Officer may issue the final decision for the agency, so long as a recommended decision is first issued either by the ALJ or by the Judicial Officer.

Gregory Cooper, for Respondent.

Thomas E. Campagne, Fresno, CA, for Petitioners.

Order issued by Donald A. Campbell, Judicial Officer.

On March 1, 1990, respondent filed a Motion to Consolidate Wileman I (AMA Docket Nos. F&V 916-1, 917-3, 916-2, 917-2) and Wileman II (AMA Docket Nos. F&V 916-3, 917-4), to act in place of Administrative Law Judge Dorothea A. Baker (ALJ) in Wileman II, to set an expedited briefing schedule, and to issue an expedited decision. Respondent states (Respondent's Motion to the Judicial Officer to Consolidate, etc., at 5-9):

Soon after the close of the Wileman I proceeding, Judge Baker, over the objections of respondent, issued a document entitled Rough Draft of Post Hearing Preliminary and Tentative Findings of Fact (Attachment 3 hereto). Petitioners widely distributed this document

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throughout the industry and the local media (Attachment 4 hereto) in an apparent attempt to ferment controversy within the industry. Quoting this document, United States District Judge Edward Dean Price refused to order petitioners to unconditionally pay their 1987 assessments to the marketing order committees and allowed such funds to be placed in an escrow account of petitioners' attorney (Attachment 5 hereto). While such funds apparently still remain in petitioners' counsels' escrow account (respondent has never received an accounting regarding these funds), the fact remains that the remaining order handlers have had to bear the brunt of meeting the financial obligations of the orders since 1987.

Petitioners have refused to unconditionally pay their 1988 and 1989 assessments and, during the course of the Wileman II proceeding, the Department of Justice filed another collection action under 7 U.S.C. 608(a)(6). Toward the close of the Wileman II proceeding, Judge Baker announced that she would again issue Preliminary Findings. Respondent protested vigorously and refused to participate in such action. Respondent pointed out that such Preliminary Findings, no matter how couched by the Judge as "tentative", were extremely prejudicial in that they were issued without any review at all of the three large boxes of exhibits, without any opportunity for a post-hearing briefing on the law by either party, and without the Judge having the opportunity to review the transcript. When the Judge analogized her Preliminary Findings to tentative decisions by the Judicial Officer, respondent replied that such tentative decisions were issued only after post-hearing briefing by the parties and a thorough review of the entire adjudicatory record. Respondent pointed out that there is no authority in the underlying statute or the applicable Rules of Practice for such Preliminary Findings. Furthermore, such Preliminary Findings are being considered and acted upon by the industry, the media, and even the District Court as an overwhelming indication of the nature of the Judge's eventual decision in the proceeding. Yet, respondent is left powerless to appeal such prejudicial Preliminary Findings until after a full round of briefing and the initial decision of the Judge. In Wileman I the period from the Preliminary Findings to the Decision of Judge Baker was over 14 months. Respondent promptly appealed, but briefing still has not been completed since petitioners have received 9 months in extensions of time to file briefs (without any agreement by,

or consultation with, the respondent). Meanwhile, petitioners' unpaid assessments mount. Judge Baker stated that, nonetheless, she will issue Preliminary Findings until ordered not to do so by the Judicial Officer. She then read about 30 minutes of Preliminary Findings into the record at the close of the Wileman II hearing.

Petitioners, who taped the Preliminary Findings in Wileman II, will undoubtedly use those findings in a similar manner and there is no reason to believe the District Court will react differently. As respondent noted to Judge Baker, the Supreme Court, when speaking about marketing orders, stated that:

Failure by handlers to meet their obligations promptly would threaten the whole scheme. Even temporary defaults by some handlers may work unfairness to others, encourage wider non-compliance, and engender those subtle forces of doubt and distrust which so readily dislocate delicate economic arrangements. [Emphasis added].

United States v. Ruzicka, 329 U.S. 287, 293 (1946). Yet, Judge Baker's Preliminary Findings have produced an environment where prompt 7 U.S.C. 608(a)(6) relief is being denied, and the ongoing delays in the 7 U.S.C. 608c(15)(A) process are exacerbating the situation. Aside from petitioners, whose unpaid assessments are not inconsiderable, there is evidence of wider non-compliance in the industry. At the Wileman II hearing, a spokesman for one of the largest handlers, Gerawan Co., Inc., testified that it would also not pay its assessments until its 7 U.S.C. 608c(15)(A) proceeding was completed.

... It would indeed be ironic if Judge Baker's conclusions about the maturity and advertising programs were ultimately found to be without merit as respondent contends, yet in the meantime the years of progress in those areas were completely undone, or the orders even terminated, because of the review process. Thus, the only practical solution in the interest of justice would be for the Judicial Officer to act in place of the Administrative Law Judge in deciding Wileman II pursuant to 7 C.F.R. 900.71. Then a consolidated decision for both proceedings could be issued by the Judicial Officer expeditiously. Briefs in both proceedings could be filed by petitioners by the end of

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March and by respondents by the end of April, with any reply briefs by mid-May.

In United States v. Ruzicka, 329 U.S. 287, 292-94 (1946) (emphasis added), relied on by respondent in the motion quoted above, the Court stated:

To be sure, Congress did not say in words that, in a proceeding under § 8(a)(6) to enforce an order, a handler may not question an obligation which flows from it. But meaning, though not explicitly stated in words, may be imbedded in a coherent scheme. And such we find to be the provisions taken in their entirety, as a means for attaining the purposes of the Act while at the same time protecting adequately the interests of individual handlers.

The procedure devised by Congress explicitly gave to an aggrieved handler an appropriate opportunity for the correction of errors or abuses by the agency charged with the intricate business of milk control. In addition, if the Secretary fails to make amends called for by law the handler may challenge the legality of the Secretary's ruling in court. Handlers are thus assured opportunity to establish claims of grievances while steps for the protection of the industry as a whole may go forward. Sections 8a(6) and 8c(15) thus form a complementary procedural scheme. Contrariwise, it would make for disharmony to extrapolate from these provisions of the statute the right to consider independently, in a proceeding by the Government for the enforcement of the Secretary's order, questions for which Congress explicitly furnished the handler an expert forum for contest with ultimate review by a district court.

The situation before us indicates how disruptive it would be to allow issues that may properly come before a district court in a proceeding under § 8c(15) to be open for independent adjudication in a suit for enforcement under § 8a(6). After a presumably careful study by those technically equipped, a program was devised for the dairy farmers in one of the large areas of the country. The success of the operation of such Congressionally authorized milk control must depend on the efficiency of its administration. Promptness of compliance by those subject to the scheme is the presupposition of Order No. 41. Thus, definite monthly deadlines are fixed by the Order for every step in the

program. In large measure, the success of this scheme revolves around a "producers" fund which is solvent and to which all contribute in accordance with a formula equitably determined and of uniform applicability. Failure by handlers to meet their obligations promptly would threaten the whole scheme. Even temporary defaults by some handlers may work unfairness to others, encourage wider non-compliance, and engender those subtle forces of doubt and distrust which so readily dislocate delicate economic arrangements. To make the vitality of the whole arrangement depend on the contingencies and inevitable delays of litigation, no matter how alertly pursued, is not a result to be attributed to Congress unless support for it is much more manifest than we here find. That Congress avoided such hazards for its policy is persuasively indicated by the procedure it devised for the careful administrative and judicial consideration of a handler's grievance. It thereby safe-guarded individual as well as collective interests. In the case before us, administrative proceedings were instituted before the Secretary of Agriculture and, apparently, are awaiting his action. Presumably the Secretary of Agriculture will give the respondents the rights to which Congress said they were entitled. If they are dissatisfied with his ruling, they may question it in a district court. The interests of the entire industry need not be disturbed in order to do justice to an individual case.3

3"During the period while any such petition is pending before the Secretary and until notice of the Secretary's ruling is given to the petitioner, the penalties imposed by the act for violation of an order cannot be imposed upon the petitioner if the court finds that the petition was filed in good faith and not for delay. The Secretary may, nevertheless, during this period proceed to obtain an injunction against the petitioner pursuant to section 8a(6) of the Agricultural Adjustment Act.... It is believed that these provisions establish an equitable and expeditious procedure for testing the validity of orders, without hampering the Government's power to enforce compliance with their terms." S. Rep. No. 1011, 74th Cong., 1st Sess., p. 14.

It is suggested that Congress did not authorize a district court to enforce an order not "in accordance with law." The short answer to