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California almond producers claim that the Secretary of Agriculture — attempting to prevent the spread of salmonella — exceeded his authority in requiring California almonds sold domestically to be treated with heat or chemicals.
They should have raised that objection before the rule became final.
Last week, the D.C. Circuit Court of Appeals ruled that the almond farmers waived those claims by failing to raise them during the rulemaking process.
Under the Agricultural Marketing Agreement Act of 1937 (AMAA), the Secretary of Agriculture may issue marketing orders binding "handlers" of commodities such as almonds. (While "producers" grow commodities, commodity handlers are "processors ... and others engaged in the handling" of commodities.)
Marketing orders may provide "terms and conditions ... limiting, or providing methods for the limitation of, the total quantity of any such commodity or product, or of any grade, size, or quality thereof." For a marketing order to become effective, the handlers responsible for at least half the volume of the commodity in the covered area must approve it. The Secretary, however, may impose a marketing order without handler consent if, among other things, he finds that the order is "the only practical means of advancing the interests of the producers."
California almond handlers are subject to the California Almond Marketing Order, which provides for almond quality control and allows the Secretary to approve almond quality and inspection requirements in the public interest. After two salmonella outbreaks were linked to almonds grown in California, the Secretary proposed a rule requiring handlers to treat almonds sold domestically with heat or chemicals. Every California almond producer was mailed a brochure that explained the proposed rule and encouraged producers to "take part in the public process."
After receiving comments and modifying the proposal somewhat to address issues raised, the Secretary adopted the treatment rule as a "quality control" requirement under the Almond Order.
Several almond producers challenged the treatment rule under the Administrative Procedure Act. The producers claimed that the treatment rule exceeded the Secretary's authority under both the AMAA and the Almond Order.
While the appellate court found that the producers waived their claims by not objecting during the rulemaking process, it noted, "Nothing in this opinion affects the producers' ability to raise their statutory arguments if -- and when -- the Secretary applies the rule.
The almond producers lost this round, but they can go nuts with appeals as soon as the Department of Agriculture enforces the rule.