After announcing a delay last week in establishing a federal milk marketing order for California, USDA on Tuesday told stakeholders it is moving forward with an option that would only delay the process one to four months.
Stephen Vaden, a lawyer with USDA’s office of the general counsel, explained in a conference call why USDA put the process on hold and the options the agency considered for getting things back on track.
USDA paused the FMMO proceedings awaiting a Supreme Court decision in two court cases, which could call into question the appointment of administrative law judges in federal agencies — including the one presiding over the FMMO proceedings.
The two cases, Lucia v. Securities and Exchange Commission and Bandimere v. Securities and Exchange Commission, are questioning whether the appointments of administrative law judges comply with the appointments clause in the Constitution.
The petitioners allege the appointments violate the clause because they are not properly appointed and may not be easily removed, he said.
The Department of Justice has reached the conclusion the petitioners are correct. The Supreme Court will render its opinion no later than June 30, he said.
Even though the litigation doesn’t directly involve USDA, the issue that will be decided does impact USDA and the California FMMO, he said.
“Because an administrative law judge presided over the California milk marketing order, the decision in the cases currently before the Supreme Court could implicate the federal milk marketing order here,” he said.
If the court were to decide DOJ is correct, the order if finalized would be vulnerable to legal challenge and highly likely to be vacated by the court, he said.
“All the many years of work put into promulgating this milk marketing order would be lost. Those are quite high stakes,” he said.
Vaden said he doesn’t blame producers for wanting to move ahead on the chance the court would decide differently, but that’s a 50-50 shot. If that bet were lost, the process would be back to square one, he said.
If the process had to start from scratch, that would set potential implementation of the order back three years, he said.
A better option is to appoint a new hearing officer — a judicial officer who is not subject to challenge under the appointments clause — to fully review the record of the 40 days of hearings that have taken place.
That officer could ratify the record as is and USDA would put out a final decision for a producer vote. If the officer has question or wants to change something, additional time would be needed for industry feedback.
If USDA does nothing, finalizes the order and the bet on the court’s ruling is correct, the soonest the order could be implemented would be October.
If it takes the safer route and appoints a new officer who ratifies the record, the order could be implemented by November. If the officer needs feedback, the order could be implemented by February 2019.
The ratification option, which USDA is taking, would only delay implementation one to four months and would make the order more likely to survive a legal challenge, he said.