Zuber v. Allen, 396 U.S. 168 (1969)

U.S. Supreme Court ZUBER v. ALLEN, 396 U.S. 168 (1969) 396 U.S. 168

ZUBER ET AL. v. ALLEN ET AL. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT No. 25. Argued October 16, 1969 Decided December 9, 1969*

[Footnote *] Together with No. 52, Hardin, Secretary of Agriculture v. Allen et al., also on certiorari to the same court.

[Page 396 U.S. 168, 171]

of the Secretary of Agriculture.[Footnote 1] The effect of that order is to require milk distributors to pay to milk producers situated at certain distances from milk marketing areas, "nearby" farmers, higher prices than are paid to producers located at greater distances from such areas. The District Court issued a preliminary injunction on January 16, 1967, against further payments and on respondents' motion for summary judgment transformed its decree into a permanent injunction on June 15, 1967. The Court of Appeals for the District of Columbia Circuit affirmed. 131 U.S. App. D.C. 109, 402 F.2d 660 (1968). We granted certiorari to resolve the important issue of statutory construction involved in this aspect of the administration of the federal milk regulation program. 394 U.S. 958 (1969).

[Page 396 U.S. 168, 172]

I BACKGROUND

Once again this Court must traverse the labyrinth of the federal milk marketing regulation provisions.[Footnote 2] While previous decisions have outlined the operation of the statute and the pertinent regulations, a brief odyssey through the economic and regulatory background is essential perspective for focusing the issue now before the Court.

[Page 396 U.S. 168, 173]

conversely the summer months are fertile. In order to meet fluid demand which is relatively constant, sufficiently large herds must be maintained to supply winter needs. The result is oversupply in the more fruitful months. The historical tendency prior to regulation was for milk distributors, "handlers," to take advantage of this surplus to obtain bargains during glut periods. Milk can be obtained from distant sources and handlers can afford to absorb transportation costs and still pay more to outlying farmers whose traditional outlet is the manufacturing market.[Footnote 3] To maintain income farmers increase production and the disequilibrium snowballs.

To protect against market vicissitudes, farmers in the early 1920's formed cooperatives. These cooperatives were effective in eliminating the self-defeating overproduction by pooling the milk supply and refusing to deal with handlers except on a collective basis.[Footnote 4] During

[Page 396 U.S. 168, 174]

the 1920's era of relative market stability the nearby farmers enjoyed premium prices for their product. These favorable prices were apparently attributable to reduced transportation costs and also the nearby farmer's historic position as a fluid supplier.[Footnote 5]

B. THE FIRST FEDERAL PROGRAM

The drop in commodity prices during the depression years destroyed the equilibrium of the 1920's and utter chaos ensued. Congress, in an effort to restore order to the market and boost the purchasing power of farmers, enacted the licensing provisions of the Agricultural Adjustment Act, 48 Stat. 31, 35. Under 8 (3) the Secretary of Agriculture was empowered

"[t]o issue licenses permitting processors, associations of producers, and others to engage in the handling, in the current of interstate or foreign commerce, of any agricultural commodity or product thereof, or any competing commodity or product thereof. Such licenses shall be subject to such terms and conditions, not in conflict with existing Acts of

[Page 396 U.S. 168, 175]

Congress or regulations pursuant thereto, as may be necessary to eliminate unfair practices or charges that prevent or tend to prevent the effectuation of the declared policy and the restoration of normal economic conditions in the marketing of such commodities or products and the financing thereof. The Secretary of Agriculture may suspend or revoke any such license, after due notice and opportunity for hearing, for violations of the terms or conditions thereof. . . ."

Under the licensing system base-rating plans not unlike the private arrangements that obtained in the 1920's were adopted.[Footnote 6] Producers were assigned bases which fixed the percent of their output that they would be permitted to sell at the Class I price that was paid for fluid milk.[Footnote 7] The viability of the licensing scheme was jeopardized, however, by judicial decisions disapproving a similarly broad delegation of power under the National Industrial Recovery Act provisions, 48 Stat. 195. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935). With its agricultural marketing program resting on quicksand, Congress moved swiftly to eliminate the defect of overbroad delegation and to shore up the void in the agricultural marketing provisions. Section 8 (3) of the 1933 Act was amended in 1935 and the pertinent language has been carried forward without significant

[Page 396 U.S. 168, 176]

change into 8c of the present Act. Agricultural Marketing Agreement Act of 1937, 50 Stat. 246, as amended, 7 U.S.C. 608c (1964 ed. and Supp. IV).[Footnote 8]

[Page 396 U.S. 168, 177]

C. THE PRESENT REGULATORY SCHEME

The present system, which differs little in substance from the scheme conceived in 1937 for regulating the Boston market,[Footnote 9] provides for a uniform market price payable to all producers by all handlers.[Footnote 10] Prices are established for Class I and Class II uses. The total volume of milk channeled into the market in each category is multiplied by the appropriate coefficient price and the two results are totaled and then divided by the total number of pounds sold. The result represents the average value of milk sold in the marketing area and is the basic "uniform" price. Were all producers to receive this price they would share on an equal basis

[Page 396 U.S. 168, 178]

the profits of Class I marketing and assume equally the costs of disposing of the economic surplus in the Class II market. The actual price to the producer is, however, the "blended" price which is computed by adding and subtracting certain special differentials provided for by statute and order. See 7 CFR 1001.64 (1969). The deduction for differential payments withheld for the benefit of nearby producers reduces the uniform "blended" price to those producers ineligible to collect this particular adjustment.[Footnote 11] The provision is contained in 1001.72 of the order and provides:

[Page 396 U.S. 168, 179]

regulated separately under the so-called four "New England" orders: the 1951 Boston order which carried forward the order adopted for the Boston area in 1937; the Springfield order promulgated in 1949; and the Southeastern New England order of 1958. Each order included a provision for a nearby differential payment to farmers within a stated radius of a designated market center. For example the differential under the Boston order was payable to farmers located within a 40-mile radius of the State House in Boston; a slightly lower differential was paid to farmers within an 80-mile radius. Under the 1964 order there is no central point for the computation of the radius for payment of the differential; the Secretary has retained the differential provisions as they appeared in the previous four orders. Farmers who would have been entitled to the differential under any one of the previous four marketing regulations continue to receive those payments under the present order. These nearby farmers are eligible for the differential on any shipments within the New England marketing area, even though their milk may actually be used outside the radius of their particular nearby zone. II THE STATUTORY SCHEME

The foundation of the statutory scheme is to provide uniform prices to all producers in the marketing area, subject only to specifically enumerated adjustments. The question before the Court, stated most simply, is whether payment of farm location differentials, set forth above, is a permissible adjustment under 8c (5) (B) to the general requirement of uniformity of price.[Footnote 12]

[Page 396 U.S. 168, 182]

characterizes the market differential as a payment over and above the transportation costs, i. e., a location differential, for delivery to the primary market.[Footnote 13] Thus farmers would share with handlers the savings from bypassing country-station processing and handling the milk only at the city plant.

The significance of the legislative history emerges upon study of the subsequent administrative practice. The original Boston order obscures the market differential payment by providing in place of a labeled adjustment a two-price structure which allowed an additional 18› per cwt. for city-delivered milk over and above the costs of transporting the milk from the country plant. However, the testimony of Mr. Aplin for the Market Administrator erases any doubt that those responsible for administering the Act fully understood the meaning of the Committee's explanation of market differential.[Footnote 14]

[Page 396 U.S. 168, 183]

Subsequent orders have combined the country station handling adjustment, properly the market differential, and the location-transportation differential into the so-called zone differential.[Footnote 15]

The statute before us does not contain a mandate phrased in broad and permissive terms. Congress has spoken with particularity and provided specifically enumerated differentials, which negatives the conclusion that it was thinking only in terms of historical considerations. The prefatory discussion in the House Report emphasizes the congressional purpose to confine the boundaries of the Secretary's delegated authority.[Footnote 16] In these circumstances an administrator does not have "broad dispensing power." See Addison v. Holly Hill Co., 322 U.S. 607, 617 (1944). The congressional purpose is further illumined by the character of the other statutory differentials for "volume,"

[Page 396 U.S. 168, 184]

"grade or quality," "location," and "production,"[Footnote 17] all of which compensate or reward the producer for providing an economic service of benefit to the handler.[Footnote 18]

[Page 396 U.S. 168, 185]

by any specific language indicating a legislative purpose to treat all farmers equally.

Legislative silence is a poor beacon to follow in discerning the proper statutory route. For here the light illumines two different roads. If nearby payments had the notoriety and significance in the milk distribution industry attributed to them by the dissent, Congress could have given its blessing by carving out another specific exception to the uniform price requirement. In an Act whose very purpose was to avoid the infirmity of overbroad delegation and to set forth with particularity the details for a comprehensive regulatory scheme, it would have been a simple matter to include in a list of enumerated differentials, "nearby" payments, or at least allude to them in the report of the draftsmen. It is clear that Congress was not conferring untrammeled discretion on the Secretary and authorizing him to proceed in a vacuum. This was the very evil condemned by the courts that the 1935 amendments sought to eradicate.[Footnote 19] It would be perverse to assume that congressional drafters, in eliminating ambiguity from the old Act,[Footnote 20] were careless in listing their exceptions and selecting the illustrations from the committee report from which their words would ultimately derive content.[Footnote 21]

[Page 396 U.S. 168, 186]

We consider our conclusions in no way undermined by the colloquy on the floor between Senator Copeland and Senator Murphy upon which the dissent places such emphasis. A committee report represents the considered and collective understanding of those Congressmen involved in drafting and studying proposed legislation. Floor debates reflect at best the understanding of individual Congressmen. It would take extensive and thoughtful debate to detract from the plain thrust of a committee report in this instance. There is no indication, however, that the question of nearby differentials and the meaning of "market . . . differentials customarily applied" were precisely considered in the floor dialogue. The exchange is not only brief but also inconclusive as to meaning.[Footnote 22] Indeed, Senator Murphy apparently acquiesced

[Page 396 U.S. 168, 187]

in Senator Copeland's implied criticism of the statute for providing uniform prices for distant and nearby producers within the marketing region. When Senator Copeland pursued his inquiry, asking whether the Act recognized the higher cost for taxes on nearby lands, Senator Murphy merely recited the differential provisions of the Act and suggested that they "adopt the present practice of business," but conspicuously lacking is an affirmative statement that any specific differential covered these costs. This is not impressive legislative history especially in light of Senator Murphy's earlier agreement with Senator Copeland's statement that "[t]he provisions of the equalization . . . provide that a producer who is producing his milk on farms near to cities would receive the same price for his product as a farmer who produces his milk, say, 40 or 50 miles away from the same community," and the specific business illustrations of the House Report.

[Page 396 U.S. 168, 188]

III SCOPE OF MARKET DIFFERENTIAL

While market differentials customarily applied need not be restricted to the sole illustration in the House Report, that illustration, taken in conjunction with the discussion of all the statutory differentials, suggests that the permissible adjustments are limited to compensation for rendering an economic service.[Footnote 23] The challenged nearby differentials do not fall into this category.[Footnote 24]

Nor has the Secretary advanced any economic justification for these differential payments. It is plain from the administrative record that the nearby differential was included in the original Boston order as a recognition of the favored position of nearby producers in the fluid market and as an inducement to nearby farmers to approve the Secretary's order. (J. A. 237.[Footnote 25]) The only sense

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available this may be of nominal concern. At most this may have been an unspoken consideration in 1937.[Footnote 26]

Since the Secretary made no findings to that effect, the Court need not consider whether they would justify payment of the nearby differential in view of the legislative history indicating that the statute contemplates adjustments primarily for economic costs to handlers that are absorbed or reduced by the producers. Further if the representations of respondents are correct - and they are not without support in the record - it appears that the elimination of the 40-mile zone nearby differential payments of 46›, even with the suspension of the intermediate differential payments of 23›, would result in a higher uniform price to those farmers now receiving the 23› differential.[Footnote 27] IV PRIOR DECISIONS

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See American Power & Light Co. v. SEC, 329 U.S. 90, 112-114 (1946).

The Court may not, however, abdicate its ultimate responsibility to construe the language employed by Congress. Those props that serve to support a disputable administrative construction are absent here. There is no suggestion in the findings, nor have the parties explained, how the present differential contributes to the broad, general purpose of eliminating crippling competition. Nor in the present case has the Court's attention been drawn to any hearings that suggest that Congress acted with the particular administrative construction before it in either 1935 or 1937. And if those administrators who participated in drafting the 1935 Act understood market differentials to encompass the farm location differential, they obviously failed to communicate their understanding to the drafters of the committee report. It is also evident that the 1937 re-enactment of the 1935 amendments was routine and did not follow a comprehensive review of the issues that had been explored in detail by the 1935 draftsmen who wrote the committee reports.[Footnote 28]

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nearby differential.[Footnote 29] But the stark figures, set forth in the appendix to the report without explication, can hardly be said to have given the administrative construction the "notoriety" that this Court found persuasive in Udall v. Tallman, 380 U.S., at 18. In Udall the Court was impressed by the fact that the Secretary's interpretation had "been a matter of public record and discussion." Id., at 17. Even despite active congressional involvement in reviewing certain administrative action in connection with particular leases, the Court noted that it would not attribute ratification to Congress. Udall v. Tallman, supra. Nor can petitioners put flesh on this argument by citing 4 of the 1937 re-enactment, 50 Stat. 249,[Footnote 30] and the committee report, H. R. Rep. No. 468, 75th Cong., 1st Sess., 4 (1937), which merely states in the language of the Act that 4 purports to ratify, legalize, and confirm all action taken pursuant to the agreement and order provisions under the 1935 statute.[Footnote 31]

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VI RELEVANCE OF PRODUCER APPROVAL

Petitioners allude to the fact that the orders in question have been specifically approved by the farmers concerned as required by 8c (9) (B) (i) and (ii) of the Act.[Footnote 32] While the contention is adumbrated, the argument appears to run as follows: since provision is made for approval of orders by the regulated subjects, the Secretary's discretion should be generously interpreted.

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If provision for such approval could ever legitimize a regulation not authorized by statute, the provision has no significance in the case before us, in light of the considerations already discussed. It is the Secretary, not the farmers, who is responsible for administering the statute and initiating orders.[Footnote 33] VII PROPRIETY OF SUMMARY JUDGMENT

[Page 396 U.S. 168, 180]

is merely a disguised payment for the nearby suppliers' greater share of fluid milk sales. Such was apparently the case in the New Jersey order invalidated by the Court of Appeals in Blair v. Freeman, supra, where the payment of the differential was explicitly linked to the percentage of nearby milk actually supplied to the fluid market. We share respondents' skepticism and our doubts are reinforced by the explicit connection of differential payments with the share of fluid milk supplied in the 1936 Boston order. Further cause for skepticism is found in the present zone differential structure which undercompensates the handlers for transportation from outlying districts and thus encourages them to buy from nearby farmers. See Kessel, Economic Effects of Federal Regulation of Milk Markets, 10 J. Law & Econ. 51, 64-65 (1967). Here, however, unlike the situation in Blair v. Freeman, supra, the producer receives the differential irrespective of the use to which his milk is ultimately put. Since the nearby differential in the present order is not directly tied to the percentage of fluid milk sales, although the order limits differential payments to 46› or the Class I price, whichever is higher, we accept the Government's contention that, as a matter of strict logic, the payment of differentials based on the historical position of nearby producers as fluid suppliers, is not inconsistent with the irrespective-of-end-use requirement.

Footnote 13 "The market differential is a differential which is given to the producer to compensate him for delivering his milk to a city market instead of to a country plant. These differentials vary with the markets and cannot be qualified as a `location' differential, because of the fact that location is usually determined on the distance from a primary market whereas market differentials are usually paid in secondary markets." H. R. Rep. No. 1241, 74th Cong., 1st Sess., 10 (1935).

Footnote 14 The relevant excerpts from the hearing are included in the Joint Appendix and appear at 258-259: "Section 4 . . . provides for location differentials. . . . Now, the price which is arrived at from the calculation of the pool is a blended price for all milk f. o. b. the market with country station allowances deducted. Now, Paragraph 1 [of 4] here provides that there shall be deducted from that blended price in the case of milk delivered to a plant more than 40 miles from the State House an amount equal to the carlot freight rate from that plant to Boston, so that that deduction would be different for each freight zone, and the price would be smaller by the amount of difference in freight from each zone as we go out from the market. Now, Paragraph 2 [of 4] provides that in the case of milk delivered from a producer

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farm location differential areas, proposed that farm location differentials be eliminated under the New England orders. Three other cooperative associations proposed that a producer whose farm is located within New England and who is presently eligible to receive a farm location differential . . . under any New England order be eligible to receive the same differential irrespective of the New England order under which his milk is pooled. Another cooperative association proposed that the farm location differentials be increased . . . . . . . . . ". . . [F]arm location differentials have been in effect under the several New England orders since the inception of the orders. The differentials were adopted to reflect in the pricing structure of the orders historical price relationships by location which prevailed in these markets. It was found that customarily somewhat higher values, above those which normally reflected transportation costs, attached to milk produced near the principal consumption centers as compared to the market value of milk produced in the more distant areas of the milkshed. "While considerable testimony in support of removal of the provisions was received, it was not established that the farm location differential provisions are resulting in unstable or disruptive marketing conditions which warrant their deletion from the orders at this time. Although certain marketing problems in the nearby and intermediate market areas were referred to in the testimony, these problems are not the result of production increases on farms in these areas which logically might be attributable to the higher returns to producers in these areas. Such increases have not been significantly different from those on farms not eligible for the farm location differentials." (J. A. 349-351). There is no reason to dispute the Secretary's finding that the differentials have no disruptive effect on the market. The issue, however, is whether the provisions are authorized by statute. The Secretary's order is devoid of any economic justification and relies solely on the historical factor of the nearby producer's favorable share of the fluid use market. See also Report to the Secretary of Agriculture by the Federal Milk Order Study Committee 74-75 (1962).

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This interpretation is not based on a theory of legislative silence as the majority seems to imply. To me the legislative history speaks clearly in saying that Congress intended the Secretary to regulate the industry in accordance with prior practices, and the statutory language, statements in committee reports, and floor debates do not "illumine two different roads," ante, at 185. I see only one path that is marked by the legislative record, and the only silence I perceive is the striking absence of any statements in the statute or the legislative history that support the majority's interpretation.

My conclusion that the location differential is authorized by the Act finds support in other judicial decisions. In United States v. Rock Royal Co-op., 307 U.S. 533 (1939), certain milk handlers made a broadside attack on the New York order issued under the 1937 Act. This Court rejected that challenge. One part of the argument was that the nearby differential provision of that order was invalid. This Court noted that "[t]he Act authorizes such an arrangement," citing the provision for market differentials customarily applied. Id., at 567. Although that provision was promulgated under 8c (5) (A) of the Act, the identical language supporting that conclusion is found in 8c (5) (B), and it is that latter section which is involved in the present case. The majority attempts to distinguish that case by noting that it was a suit brought by the Government against handlers, but it is difficult to see what difference that makes. It does not matter who sues, if the Court decides an issue of statutory interpretation that decision should remain the same even if the litigants change.12

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The nearby differential of the Boston order involved here was also approved by the First Circuit in Green Valley Creamery v. United States, 108 F.2d 342 (1939). The majority's dismissal of that case on the conclusion the handlers did not have standing to raise this issue is irrelevant. The First Circuit there found the differential valid and then stated that "[f]urthermore" the handlers lacked standing. Id., at 346. It does not matter to me whether the decision on the validity of the location differential is classified as dictum or a holding. The point remains that the First Circuit considered these payments and found them expressly provided for by the language of 8c (5) (B). Ibid.

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no reason to know that he had to justify the provisions of this order as "compensation for rendering an economic service," and his failure to have provided such a defense does not necessarily mean it is unavailable. Indeed the Court apparently would approve this same provision were the Secretary to issue it again, but only if it were then accompanied by an economic study that this Court - composed of lawyers, not economic or agricultural experts - finds acceptable. If such a justification is present, the differential is in fact lawful at this time, and it would not seem to matter that the Secretary has not yet incanted the proper magic words.

I do not see what harm would follow if this Court were simply to vacate the judgment below, remand the cases to the Secretary for appropriate study, and continue to place the payments in the special fund pending ultimate resolution of the controversy. If the Secretary cannot make the proper economic justification, the only result would be to postpone the day when the accumulating funds, which now amount to over $8,000,000, would be distributed. If, on the other hand, he is able to show that these payments compensate for an economic service, then the Court would not have unnecessarily given the accumulated millions to farmers who are not legally entitled to receive them.

My conviction that the Act was designed to permit the Secretary to include adjustments that reflected the prior practice of the milk industry does not mean that he can act with unlimited abandon and approve a payment simply because historically it was provided for prior to federal regulation. The statute requires that the Secretary issue orders which "will tend to effectuate the declared policy of [the Act] . . . ." 7 U.S.C. 608c (4). Those policies are specifically set forth, 7 U.S.C. 602, and in general provide that orders should establish and maintain orderly marketing conditions

[Page 396 U.S. 168, 211]

this Court and the Court of Appeals in this litigation effectively substitute their will for the will of Congress and their views of economics and wise administration for those of the Secretary whom Congress selected to carry out its will. The Court indicates that its decision will avoid a "windfall." Ante, at 197. In fact the Court itself creates a windfall of over $8,000,000 which is siphoned out of the pockets of farmers close to Boston and bestowed like a Christmas present on those farther away. This the Court does contrary to the informed judgment of the Secretary who, faithful to the Act, has declared for years that distant farmers are not eligible for such a bonus. I am unable to agree that this is a proper function for the Court to perform and I therefore dissent.

[Footnote 1] The majority implies, ante, at 181, that this higher price in the 1920's was an economic "distortion." There has been no such finding by the Secretary or any of the courts below, nor was any evidence taken that was directed at this issue. This Court is poorly equipped to pass judgment on the economic validity or invalidity of this higher price, surely not as well equipped as the Secretary and the economists who advise him. It is the Secretary, not this Court, to whom Congress has delegated the task of fixing the prices producers will be paid for their milk and of making the underlying economic judgments.

[Footnote 2] This license adopted a somewhat complicated base-rating plan similar to that used by the milk cooperatives. See n. 4, ante, at 173-174. There is general agreement among the parties that these licenses effectively resulted in higher milk prices to nearby farmers, and the Court of Appeals recognized this fact. 131 U.S. App. D.C. 109, 113-114, 402 F.2d 660, 664-665.

[Footnote 3] H. R. 5585, S. 1807, 74th Cong., 1st Sess.

[Footnote 4] Hearing on H. R. 5585 before the House Committee on Agriculture, 74th Cong., 1st Sess.; Hearings on S. 1807 before the Senate Committee on Agriculture and Forestry, 74th Cong., 1st Sess.

[Footnote 5] H. R. 8492, 74th Cong., 1st Sess.

[Footnote 6] These provisions of the 1935 amendments have been carried forward, virtually without change, into the present statute.

[Footnote 7] S. Rep. No. 1011, 74th Cong., 1st Sess., 8; H. R. Rep. No. 1241, 74th Cong., 1st Sess., 8.

[Footnote 8] In United States v. Butler, 297 U.S. 1 (1936), this Court declared the processing tax provisions of the A. A. A. invalid, and some district courts then held that the entire Act was invalid. E. g., United States v. David Buttrick Co., 15 F. Supp. 655 (D.C. Mass. 1936), rev'd, 91 F.2d 66 (C. A. 1st Cir.), cert. denied, 302 U.S. 737 (1937).

[Footnote 9] This language was first enacted in the 1935 amendments to the A. A. A., but was re-enacted in the 1937 Agricultural Marketing Agreement Act without change. There is no relevant legislative history for the 1937 Act, but the parties all agree that the history of the 1935 amendments also applies to the 1937 Act. The discussion of legislative history in the text is based on the 1935 legislative record. The complete text of the relevant portions of the present statute is set forth in n. 8, ante, at 176-177.

[Footnote 10] S. Rep. No. 1011, 74th Cong., 1st Sess., 9; H. R. Rep. No. 1241, 74th Cong., 1st Sess., 9. This basic purpose is reflected in the fact that Congress provided the Secretary with three different schemes of regulation, each of which followed a variety of regulations used by the milk cooperatives. See n. 10, ante, at 177. In 1965 Congress followed this same basic purpose when it amended the Act to make explicit the Secretary's power to employ base-rating plans, described in n. 4, ante, at 173-174. See 79 Stat. 1187, U.S.C. 608c (5) (B), cl. (d) (1964 ed., Supp. IV).

[Footnote 11] The full discussion is set out in n. 22, ante, at 186-187.

[Footnote 12] The majority also seems to imply, ante, at 191-192, that Rock Royal did not decide this issue since the handlers did not have standing to raise it. It seems to me that the Court there did decide that the handlers, who argued that the nearby differential reduced their own profits, could raise this issue.

[Footnote 13] In a footnote, n. 18, ante, at 184, the majority implies that there is support for this novel interpretation in our prior decision in Brannan v. Stark, 342 U.S. 451 (1952), which held invalid a provision in the Boston milk order that distributed certain sums to producer cooperatives. That case specifically held that such payments were not authorized by the catchall provision in the Act permitting provisions in milk orders "[i]ncidental to, and not inconsistent with, the terms and conditions specified in [other sections] and necessary to effectuate the other provisions of such order." 7 U.S.C. 608c (7) (D); Brannan, at 457-458. It is true that the majority there did decide that the challenged payments did not represent compensation for an economic benefit received by all producers, but regardless of the validity of that decision, it is irrelevant to the decision in this case. It may be that payments that are sought to be justified solely on the basis of the "necessary provisions" section require independent economic justification, but that certainly does not mean that where the Secretary relies on a specific adjustment set forth in the Act, as he does here, he must also defend it on economic grounds.

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