The U.S. Department of Agriculture announced last week that it plans to issue a final rule recommending the establishment of a Federal Milk Marketing Order for California. The USDA judicial officer appointed in February to review the hearing records for the rulemaking proceedings has ratified all actions, allowing USDA to move forward on the final rule and then initiate the voting process for producers.
A two-thirds majority of dairy producers affected by the final rule must signal approval before USDA can announce a date to begin enforcing the new regulations. In a phone call with industry stakeholders last month, Stephen Vaden of USDA’s Office of General Counsel said ratification by the judicial officer would allow USDA to promulgate and potentially implement the FMMO as soon as November 2018.
Background
The California dairy industry is currently regulated under a state marketing order. The 2014 Farm Bill allowed for a California FMMO that recognizes certain state-specific aspects of the current order, if recommended by USDA and approved by California dairy producers.
In early 2015, USDA’s Agricultural Marketing Service received a formal request for a hearing to establish a FMMO in California from three dairy co-operatives: California Dairies, Inc.; Land O Lakes, Inc.; and Dairy Farmers of America, Inc. That September, USDA convened a hearing in Clovis, Calif., to consider the proposals, and it concluded nine weeks later in November.
USDA released a proposed rule in February 2017 that recommended the FMMO for California, and written comments were accepted through May 15, 2017. USDA said it would take time to consider all filings before issuing a final rule.
Last month, Vaden held a call with industry stakeholders explaining that two pending Supreme Court cases had raised legal questions regarding the status of all administrative law judges (ALJs), including the ALJ who presided over the California FMMO hearing. According to Vaden, if the Supreme Court were to hold that the appointments of ALJs do not comply with certain requirements set forth in the U.S. Constitution, the hearing record in the California FMMO proceeding would likely be vacated and the rulemaking process would need to start over. Under such a scenario, Vaden estimated that the earliest that a California FMMO could be promulgated and implemented would be late 2020 or early 2021.
Secretary Perdue Selects New Option
To avoid a delay, Agriculture Secretary Sonny Perdue decided to pursue a “ratification option” that allowed USDA to appoint a judicial officer to step into the pending California proceeding. Because this judicial officer is not an ALJ, the decisions made by this individual would not be affected by the pending Supreme Court cases.
On March 9, the judicial officer completed his review and ratified all actions of the ALJ who presided over the hearing, including instructions regarding corrections to exhibits, rulings on objections, rulings on the admission of evidence, rulings on the conduct of the hearing and rulings on requests for corrections to the transcript of the hearing. That ratification allows USDA to move forward with the California FMMO rulemaking proceeding.
Members with questions may contact Dave Carlin, IDFA senior vice president of legislative affairs and economic policy, at dcarlin@idfa.org.