One year ago, the U.S. Department of Agriculture released a proposed rule recommending the establishment of a Federal Milk Marketing Order (FMMO) for California. Written comments were accepted through May 15, 2017, and USDA said it would take time to consider all filings before issuing a final rule. Yesterday, USDA provided industry stakeholders with an updated timeline for the potential marketing order.
In a call with industry stakeholders, Stephen Vaden of USDA’s Office of General Counsel explained that two pending Supreme Court cases have 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 mitigate against such a delay, Agriculture Secretary Sonny Perdue has decided to pursue a “ratification option” where USDA will appoint a “judicial officer” to step into the pending California proceeding. Because this judicial officer is not an ALJ, any decisions made by this individual would not be affected by the pending Supreme Court cases.
Here’s the expected process, as outlined by Vaden:
- The judicial officer will be tasked with reviewing the entire hearing record in the California FMMO proceeding, including each of the exhibits that have been submitted.
- Following this review, the judicial officer will reach an independent judgment on the hearing record.
- If he or she ratifies the record as it currently stands, USDA would promulgate the final rule, and the producer voting process would be initiated. Under this scenario, Vaden said a California FMMO could be promulgated and potentially implemented as soon as November 2018.
- If the judicial officer has questions regarding the record, however, USDA would need to establish a process that allows affected stakeholders to respond to those questions. If this were to happen, promulgation and potential implementation could be delayed until February 2019.
A link to a recording of the call with Vaden and stakeholders is available here.
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.
Members with questions may contact Dave Carlin, IDFA senior vice president of legislative affairs and economic policy, at email@example.com.