With one judge dissenting, the D.C. Circuit Court of Appeals has determined that federal law does not bar domestic almond producers from challenging a rule that requires them to pasteurize or chemically treat their product to prevent Salmonella outbreaks. Koretoff v. Vilsack, No. 09-5286 (D.C. Cir., decided August 3, 2010). While the court allowed those who grow almonds to continue pursuing their challenge to the 2007 rule, it dismissed the claims of companies that package and sell the almonds to consumers, finding that, as “handlers,” they must first exhaust their administrative remedies before turning to the courts to resolve their dispute.
The U.S. Department of Agriculture secretary promulgated the challenged rule under the authority of the Agricultural Marketing Agreement Act of 1937 (AMAA). California almond producers and retailers claim that the rule is arbitrary and capri-cious because it devastated the domestic raw almond market while leaving foreign producers, who are not subject to the regulation, free to continue importing and selling raw almonds. The district court dismissed the claims, finding that the AMAA precludes producers from obtaining judicial review. Its ruling was rendered before the D.C. Circuit Court of Appeals issued an opinion holding that milk producers may challenge agricultural marketing orders promulgated under the AMAA, while consumers may not. The appeals court applied that case to the almond producers’ claims and remanded for further proceedings.
According to the dissenting judge, the AMAA expressly allows “handlers” to chal-lenge in court an agricultural marketing order after pursuing administrative review while remaining silent about any other party’s right of review. Such orders must be submitted for approval by handlers and producers and can be vetoed by two-thirds of the producers only. The dissenting judge opined that this veto power represented a “delicate balance” and should be construed as congressional intent “that judicial review of market orders issued under the Act ordinarily be confined to suits brought by handlers. . . .” The dissent also pointed to significant differences between the regulation of milk and almonds under federal law to demonstrate why the court’s prior ruling in a milk pricing case was inapplicable to the almond growers’ claims.