Federal Appeals Court Upholds Dairy’s Right to Challenge Marketing Law Amendments
The D.C. Circuit Court of Appeals has determined that the owners of a dairy are not required to first exhaust administrative remedies before bringing a constitutional challenge to Agricultural Marketing Agreement Act amendments. Hettinga v. U.S., No. 07-5403 (D.C. Cir., decided April 3, 2009). The amendments codified certain rule changes that the Secretary of Agriculture made to a program that regulates payments from milk handlers (processors and distributors) to milk producers (farmers) and is intended to protect producers from price fluctuations.
The plaintiffs sought an injunction against enforcement of the secretary’s rule, and, while that proceeding was pending before a federal court in Texas, Congress amended the law. The plaintiffs then filed a complaint in a D.C. district court alleging that “the Amendments are unconstitutional as a bill of attainder and a denial of due process and equal protection because only the Hettingas are subject to them.” The district court dismissed the complaint for lack of subject matter jurisdiction, characterizing a challenge to the amendments’ validity as “essentially a challenge to [an] order by the Secretary,” and thus that plaintiffs were required to exhaust their administrative remedies before seeking relief in the courts.
The milk marketing law contains a mandatory administrative exhaustion requirement on milk handlers “seeking to challenge the provisions of a milk marketing order.” Because the plaintiffs were not challenging an order in the D.C. district court, the appeals court found that their constitutional challenges to the amendments were not subject to exhaustion as a jurisdictional matter.
The court also refused to find an exhaustion requirement as a prudential matter, observing, “it would make little sense to require exhaustion where an agency ‘lacks institutional competence to resolve the particular type of issue presented, such as the constitutionality of a statute’ or where ‘an agency may be competent to adjudicate the issue presented, but still lack[s] authority to grant the type of relief requested.’” The court remanded the claims for proceedings on their merits.
