The opinion of the court was delivered by: MUNSON
On October 29, 1982, the plaintiff, Edward Mulroy, commenced this action seeking to temporarily, preliminarily and permanently enjoin the defendant, John R. Block, from collecting funds pursuant to the Omnibus Budget Reconciliation Act of 1982, Pub. L. No. 97-253, Section 101, 96 Stat. 763 (Sept. 8, 1982 (amending the Agricultural Act of 1949, as amended by the Agriculture and Food Acts of 1981, 7 U.S.C. Section 1446)). Presently before the Court are cross motions for summary judgment.
Edward Mulroy is a dairy farmer in Marcellus, New York. He owns a farm, 100 cows, a processing plant and delivery trucks. With these, he produces and sells milk directly to consumers within an eight mile radius of the plant. The class of persons who do business in a manner similar to that of the plaintiff is known as producer-handler of milk. Approximately one percent of the milk in the United States is produced in a similar manner. Mulroy does not sell milk at the wholesale level nor does he sell or purchase milk or milk products from any other dealer, cooperative or the Commodity Credit Corporation.
John Block is responsible for administering the federal milk price support program and the federal milk marketing order system. The federal milk price support program is carried out through the Commodity Credit Corporation (CCC), a governmental corporate entity within the United States Department of Agriculture.
In order to ensure American consumers of adequate milk supplies, the CCC has a standing offer to purchase unlimited quantities of milk products at prices set by Congress. 7 U.S.C.A. § 1446(c) (Supp. 1982). Since the mid-1970's, the minimum level price support mandated by Congress has increased. Consequently, producers have been encouraged to expand milk production, even in excess of commercial market demand. In the past two marketing years, the CCC has purchased approximately 10% of all milk produced in the United States. In fiscal year 1982, the CCC spent about 2.3 billion dollars to purchase dairy products under the price support program. As of November 12, 1982, the CCC had uncommitted inventories of approximately 407 million pounds of butter, 792 million pounds of cheese and 1.2 billion pounds of nonfat dry milk. The annual storage costs are approximately 50 million dollars. Affidavit of Everett G. Rank, Executive Vice President CCC, at P6, December 10, 1982.
In an attempt to restore a balance between milk production and commercial demand for dairy products, to reduce the waste of resources committed to producing surplus dairy products and to reduce the huge expenditures of taxpayer's money to purchase surplus products, Congress has enacted certain amendments to the milk price support system as part of the Omnibus Budget Reconciliation Act of 1982. 7 U.S.C.A. § 1446(d)(2) & (3) (Supp. 1982).
The dairy provisions of that Act provide:
Effective for the period beginning October 1, 1982, and ending September 30, 1985, the Secretary may provide for a deduction of 50 cents per hundredweight from the proceeds of sale of all milk marketed commercially by producers to be remitted to the Commodity Credit Corporation to offset a portion of the cost of the milk price support program. Authority for requiring such deductions shall not apply for any fiscal year for which the Secretary estimates that net price support purchases of milk or the production of milk would be less than 5 billion pounds milk equivalent. If at any time during a fiscal year the Secretary would estimate that such net price support purchases during that fiscal year would be less than 5 billion pounds, the authority for requiring such deduction shall not apply for the balance of the year.
U.S.C.A. § 1446(d)(2) (Supp. 1982).
In addition, the statute provides:
Effective for the period beginning April 1, 1983 and ending September 30, 1985, the Secretary may provide for a deduction of 50 cents per hundredweight, in addition to the deduction referred to in paragraph (2), from the proceeds of sale of all milk marketed commercially by producers to be remitted to the Corporation. The deduction authorized by this subparagraph shall be implemented only if the Secretary establishes a program whereby the funds resulting from such deductions would be refunded in the manner provided in this paragraph to producers who reduce their commercial marketings from such marketings during the base period. . . . The Secretary may make such adjustments in individual bases under this subparagraph as the Secretary determines necessary to correct for abnormal factors affecting production and to reflect such other factors as the Secretary determines should be considered in determining a fair and equitable base.
7 U.S.C.A. § 1446(d)(3)(A) (Supp. 1982).
Section 1446(d)(3)(B) of Title 7 provides for the refund of the second fifty cents upon certain conditions:
Refunds under this paragraph shall be based on reductions in commercial marketings as specified by the Secretary, but the Secretary may not require as a condition for making a refund of the entire amount collected from a producer that the producer reduce marketings in excess of a reduction equivalent to the ratio that the total amount of surplus milk production, as estimated by the Secretary for the fiscal year, bears to the total milk production estimated for such period. The Secretary may provide for refunds to be made of amounts collected from producers on a pro rata basis taking into consideration the reduction in commercial marketings by the producer from the commercial marketings during the base period.
On September 22, 1982, the Secretary projected that for the fiscal year beginning October 1, 1982, the net price support purchases of milk would be 12.6 billion pounds and consequently, determined to impose the initial 50 cent assessment effective December 1, 1982. This decision to assess was published as a "notice of determination" on September 24, 1982, in 47 Federal Register at 42128.
Also on that date, the Secretary noticed and invited comment on a related "proposed rule." 47 Fed. Reg. 42112 (Sept. 24, 1982). The "proposed rule" dealt exclusively with the procedure by which the Secretary would collect the already determined assessment. In other words, the proposed rule assumed the assessment and invited comment merely as to the procedure by which the assessment would be collected. 47 Fed. Reg. 42112 (Sept. 24, 1982).
On November 30, 1982, the "final rule" setting forth the administrative procedures that would be used to implement the deduction was published. 47 Fed. Reg. 53831 (Nov. 30, 1982). In accordance with this mandate, the first deductions were to be made in December, 1982. On December 21, 1982, however, the Hon. Matthew J. Perry, United States District Judge for the District of South Carolina entered an order temporarily restraining the defendant from collecting the assessment. Thereafter, on January 10, 1983, Judge Perry preliminarily enjoined the defendant from doing the same. The basis of the injunction was a determination by Judge Perry that the regulation imposing the assessment was violative of the Administrative Procedure Act.
Following the entry of Judge Perry's order, the Secretary published a new "notice of proposed determination" inviting public comment regarding the assessment. 48 Fed. Reg. 3764 (Jan. 27, 1983). On March 17, 1983, the Secretary published a final "notice of determination" concluding that the 50 cent per hundredweight assessment would be collected beginning April 16, 1983. 48 Fed. Reg. 11253 (March 17, 1983).
Mulroy now challenges the statute and regulation on both procedural and substantive grounds. Specifically, he alleges:
1) The dairy provisions of the Act unconstitutionally delegate taxing power to the Secretary of Agriculture;
2) The dairy provisions of the Act do not set forth sufficient standards to guide the Secretary in making a determination of whether or not to impose either deduction or refund;
3) The dairy provisions of the Act unlawfully delegate power to non-federal employees at 7 ...