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Farms, Inc., 59 Agric. Dec. 21 (1997). Petitioner distributed fluid milk products to Ahava in each month during the period December 1995 through April 1997 (PX 4).

9. Petitioner's January 1991 application for designation as a producer-handler under former Milk Marketing Order No. 2 was the only application for designation as a producer-handler under former Milk Marketing Order No. 2 filed by Petitioner (Tr. 120-21).

10. The Market Administrator's determination that Petitioner was not a producer-handler was based on the types of former Milk Marketing Order No. 2 customers to which Petitioner distributed a portion of its fluid milk. products (Tr. 34-41).

11. Petitioner distributed fluid milk products to FPPTLC, a "subdealer," in each month during the period May 1997 through December 1999 (PX 4). 12. Petitioner distributed fluid milk products to D.B. Brown, Inc., a "subdealer," in each month during the period July 1997 through January 1998 (PX 4).

13. Petitioner distributed fluid milk products to no "subdealer" other than FPPTLC and D.B. Brown, Inc., during the period May 1997 through December 1999.

14. Petitioner distributed fluid milk products to Readington Farms, Whitehouse, New Jersey, a regulated pool plant, in each month during the period May 1997 through July 1997 (PX 4).

15. Petitioner distributed fluid milk products to Farmland Dairies, Wallington, New Jersey, a regulated pool plant, in each month during the periods May 1998 through December 1998, and February 1999 through December 1999 (PX 4).

16. FPPTLC obtained its fluid milk products solely from Petitioner (Tr. 89-90).

17. Subdealers to which Petitioner distributed fluid milk products during the period May 1997 through December 1999, could turn to other handlers for fluid milk products in periods of short production (Tr. 48-49, 97).

18. The distribution of Petitioner's fluid milk products by Petitioner's "subdealer" customers was adequate grounds for the Market Administrator to determine that Petitioner had not maintained complete and exclusive control over the distribution of its fluid milk products.

19. The Market Administrator's interpretation of complete and exclusive control over the distribution of fluid milk products had a rational basis and was applied consistently and not arbitrarily or capriciously.

Conclusions of Law

62 Agric. Dec. 406

1. Petitioner's January 1991 "Application for Designation as Producer-Handler" did not constitute an application for designation as a producer-handler for the period December 1995 through December 1999.

2. Petitioner is barred by issue preclusion from litigating its status under former Milk Marketing Order No. 2 during the period Petitioner distributed fluid milk products to Ahava, December 1995 through April 1997.

3. The Market Administrator's interpretation of complete and exclusive control over the distribution of fluid milk products was not contrary to law. Petitioner failed to exercise complete and exclusive control over the distribution of its fluid milk products during the period May 1997 through December 1999.

4. During the period May 1997 through December 1999, Petitioner did not meet the criteria set down by Judge Cahn in Kreider I for designation as a producer-handler under former Milk Marketing Order No. 2.

For the foregoing reasons, the following Order should be issued.

ORDER

1. Petitioner's Amended Petition is denied.

2. This Order shall become effective on the day after service on Petitioner.

RIGHT TO JUDICIAL REVIEW

Petitioner has the right to obtain review of this Order in any district court of the United States in which Petitioner is an inhabitant or has its principal place of business. A bill in equity for the purpose of review of this Order must be filed within 20 days from the date of entry of this Order. Service of process in any such proceeding may be had upon the Secretary of Agriculture by delivering a copy of the bill of complaint to the Secretary of Agriculture. 7 U.S.C. § 608c(15)(B). The date of entry of this Order is August 5, 2003.

440

AGRICULTURE MARKET TRANSITION ACT*

BARBARA BISHOP v. USDA.

No. 02-4184-SAC.

Filed August 14, 2003.

(Cite as: 283 F.Supp. 2d 1207).

-

AMTA CCC - NAD Scope of Review - Vagueness, constitutionality due to lack of · Discrimination, by agency officials Retaliation, by agency officials Penalty, payment reduction as Presumption of validity, agency's determination.

Farmer appealed administrative procedure of USDA, challenging reduction in payment under production flexibility contract (PFC) between farmer and government. The payment reduction had been made because of farmer's failure to control weeds on land withheld from production. Farmer appealed affirmance by Director of National Appeals Division of Department. The District Court held inter alia: that the issue of whether the regulation providing for reduction was void for vagueness was beyond scope of review; (2) the issue of whether Department discriminated against farmer in enforcement of regulation was beyond scope of review; (3) the reduction of payment by three times the actual cost of weed control was enforceable damages provision in the contract rather than unenforceable penalty.

United States District Court,

D. Kansas.

MEMORANDUM AND ORDER

CROW, Senior District Judge.

This case comes before the court on plaintiff's appeal from a decision of the Director of the National Appeals Division for the United States Department of Agriculture ("USDA"). Plaintiff contends that the USDA erred in reducing by $14,906.00 its annual payment to her, pursuant to contract, for certain conservation and land-use restrictions on her cropland.

'The Agriculture Market Transition Act and appeals therefrom are not within the jurisdiction of the JO and OALJ, however it is suggested that the court's analysis is persuasive and relevant in USDA administrative procedures that are the within the jurisdiction of the JO and OALJ. - Editor

62 Agric. Dec. 440

FACTS

The parties agree upon most of the facts which give rise to this case. Plaintiff is a 75 year-old widow who owns approximately 2/3 of the property which is the subject of this case. Her nephew owns the other 1/3 in a trust. Plaintiff executed a Production Flexibility Contract (PFC) with the USDA, through the Logan County Farm Service Office, Commodity Credit Corporation, on May 24, 1996. Under the terms of the PFC, the USDA agreed to make annual payments to the plaintiff, as producer, over the seven year term of the PFC (1996 through 2002), in exchange for plaintiff's agreement to, among other matters, protect the land from weeds and erosion in the event she chose not to plant a crop on the land. ®. at 751). Plaintiff understood that she was expected to control the weeds on PFC land. The contract includes a proviso in the event a producer fails to control weeds on contract acreage. It

states:

COC shall establish rates for calculating payment reductions if the maintenance requirements are not met. The rate shall represent the normal cost per acre in the county of the necessary action to correct the default ... If a maintenance default is determined according to this paragraph a payment reduction applies equal to the acres in default times COC established rate times 3.

®. at 564).

Plaintiff received a letter dated June 20, 1997, stating in pertinent part as follows:

One of the provisions of the [PFC] program is producers must
protect idled contract acres from wind and water erosion, and
weeds shall be controlled. Weed control generally means
preventing weed seed production.

A maintenance spot check conducted on June 17, 1997 revealed
that weeds were not being controlled on 557.4 acres of idle
contract acreage.

You have 15 calendar days to control the weeds in a manner
that will ensure that the seed will not spread to other acreage.
After 15 days, a Logan County Office representative will inspect
the acreage in question and, if the necessary action has not been
taken, PFC payments on this farm will be reduced.
®. at 389).

By the time plaintiff received this letter, she had already controlled the weeds on the land at issue. No reduction of plaintiff's payment under the PFC was made, thus plaintiff's payment for 1997 included payment for the 557 acres of land on which the weeds had gone to seed before such land was worked. In fact, the report of the farm service agent who conducted the drive-by inspection concluded in his report dated July 7, 1997, "Therefore, this farm is not in violation."

. at 301).

In 2001, plaintiff's equipment broke down, and the Logan County FSA again noted uncontrolled weeds on some of plaintiff's land subject to the PFC. On August 29, 2001, plaintiff was notified that her payment under the PFC program would be reduced by the amount of $11,448.00 for her failure to control weeds on 709.8 acres of her land'. Specifically, the letter stated:

Field maintenance spot-checks were completed on June 19, August 8, and August 14, 2001, on your land in Farm # 2557 with findings revealing that weeds were not being controlled on 709.8 idle contract (PFC) acres. Because these weeds are not being controlled on these idle PFC acres a violation has occurred

A review of your PFC file for Farm # 2557 showed that on June 20, 1997, you were issued your first maintenance default violation warning letter concerning weeds not being controlled on 557.4 idle contract acres and given (15) days to remedy this problem.

....

This letter is to notify you that a second violation has occurred whereby weeds are again not being controlled to prevent weed seed production the County Committee has determined that a payment reduction of $11,448 will be assessed against your share of Farm # 2557 for this subsequent violation. Furthermore, you will have (15) calendar days from the date of this letter to remedy this problem to avoid further payment reductions ...

®. at 369.)

The County Committee reached the figure of $11,448 as follows. In 2001, the normal cost in Logan County to maintain weeds was $7 per acre. That year, the PFC payments for the farm plaintiff owned part of totaled $34,343. Plaintiff received $22,987 for her 2/3 share. In determining that $11,448 was

At that time, plaintiff had a farm total of 2,513.4 PFC acres. R. at 334.

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