B-142279, SEP. 26, 1962

B-142279, SEP. 26, 1962

TO MR. JOSEPH O. PARKER:

BY LETTER OF SEPTEMBER 7, 1962, YOU SUBMITTED A MEMORANDUM IN SUPPORT OF THE OCEAN SPRAY CRANBERRIES, INC., POSITION WITH RESPECT TO DENIAL OF ITS CLAIM COVERING 15,362.50 BARRELS OF CRANBERRIES BY THE DEPARTMENT OF AGRICULTURE UNDER CRANBERRY PAYMENT PROGRAM AMM181A.

THE CRANBERRY PAYMENT PROGRAM WAS INSTITUTED BY THE SECRETARY OF AGRICULTURE UNDER AUTHORITY OF SECTION 32, PUBLIC NO. 320, 74THCONGRESS, AS AMENDED, 7 U.S.C. 612C, TO REESTABLISH THE PURCHASING POWER OF CRANBERRY GROWERS WHO SUFFERED LOSSES BY REASON OF THE NON MARKETABILITY OF THE GREATER PORTION OF THEIR 1959 CROP AS A RESULT OF WIDESPREAD PUBLICITY GIVEN TO THE POSSIBLE CONTAMINATION OF AN UNKNOWN QUANTITY OF THE CROP. SECTION 32, AS AMENDED, PROVIDES, IN PERTINENT PART, THAT:

"* * * (THE SUMS APPROPRIATED) SHALL BE MAINTAINED IN A SEPARATE FUND AND SHALL BE USED BY THE SECRETARY OF AGRICULTURE * * * TO * * * (3) REESTABLISH FARMERS' PURCHASING POWER BY MAKING PAYMENTS IN CONNECTION WITH THE NORMAL PRODUCTION OF ANY AGRICULTURAL COMMODITY FOR DOMESTIC CONSUMPTION. DETERMINATIONS BY THE SECRETARY AS TO WHAT CONSTITUTES * * * NORMAL PRODUCTION FOR DOMESTIC CONSUMPTION SHALL BE FINAL.

"THE SUMS APPROPRIATED UNDER THIS SECTION SHALL BE EXPENDED FOR SUCH ONE OR MORE OF THE ABOVE-SPECIFIED PURPOSES, AND AT SUCH TIMES, IN SUCH MANNER, AND IN SUCH AMOUNTS AS THE SECRETARY OF AGRICULTURE FINDS WILL EFFECTUATE SUBSTANTIAL ACCOMPLISHMENT OF ANY ONE OR MORE OF THE PURPOSES OF THIS SECTION * * *.'

PURSUANT TO THE BROAD AUTHORITY CONFERRED BY THIS SECTION, THE

SECRETARY OF AGRICULTURE ANNOUNCED ON MAY 4, 1960, THAT HE WAS OFFERING TO MAKE PAYMENTS WITH RESPECT TO WHOLESOME AND MARKETABLE CRANBERRIES PRODUCED AND HARVESTED IN 1959 IN THE UNITED STATES AND DISPOSED OF BEFORE NOVEMBER 1, 1960, SUBJECT TO CERTAIN TERMS AND CONDITIONS. PARAGRAPH 517.481 OF THE PROGRAM TERMS AND CONDITIONS, RELATING TO FEDERAL CERTIFICATION AS TO BERRIES DESTROYED AND MATERIAL TO YOUR CLIENT'S CLAIM, PROVIDES THAT:

"SEC. 517.481 CERTIFICATE OF INSPECTOR.

"THE GROWER OR HIS REPRESENTATIVE SHALL BE RESPONSIBLE FOR OBTAINING FROM THE FRESH FRUIT AND VEGETABLE FEDERAL OR FEDERAL-STATE INSPECTION SERVICE SERVING HIS AREA AN INSPECTOR TO CERTIFY CONCERNING THE QUANTITY OF CRANBERRIES BEING DESTROYED AND TO CERTIFY THAT SUCH CRANBERRIES HAVE BEEN DESTROYED AS DEFINED IN SEC. 517.477 (D). THE GROWER OR HIS REPRESENTATIVE SHALL FURNISH SUCH SCALE TICKETS, WEIGHING FACILITIES, OR VOLUME MEASUREMENTS AS DETERMINED BY THE INSPECTOR TO BE NECESSARY FOR ASCERTAINING THE NET WEIGHT OF THE CRANBERRIES BEING DESTROYED. THE COST OF DETERMINING THE QUANTITY, CERTIFYING THAT DESTRUCTION HAS BEEN PERFORMED, AND ISSUING CERTIFICATES THEREOF SHALL BE BORNE BY THE UNITED STATES DEPARTMENT OF AGRICULTURE (HEREINAFTER REFERRED TO AS USDA). THE ORIGINAL OF THE APPROPRIATE CERTIFICATE/S) OF INSPECTOR, FORM FV-7 (FROZEN), OR CERTIFICATE/S) OF INSPECTOR, FORM FV-7-1 (NOT FROZEN), SHALL BE ATTACHED BY THE GROWER OR HIS REPRESENTATIVE TO THE INVOICE FOR ADVANCE PAYMENT, FORM FV-5, IN SUPPORT OF ANY QUANTITY SHOWN AS DISPOSED OF BY DESTRUCTION UNDER ITEM 4 (B) OF SUCH FORM, AND TO THE INVOICE FOR FINAL PAYMENT, FORM FV-6, IN SUPPORT OF ANY ADDITIONAL QUANTITY DISPOSED OF BY DESTRUCTION AND INCLUDED IN ANY SUCH QUANTITY SHOWN UNDER ITEM 4 (B) OF SUCH FORM.'

THE QUESTION YOU HAVE PRESENTED IS WHETHER, UNDER THE FOLLOWING CIRCUMSTANCES, THE QUOTED PARAGRAPH PRECLUDES RECOVERY UNDER THE PROGRAM FOR CRANBERRIES DESTROYED PRIOR TO MAY 4, 1960, WITHOUT FEDERAL SUPERVISION AND INSPECTION.

YOUR STATEMENT OF THE FACTS IN THE MATTER MAY BE SUMMARIZED AS FOLLOWS:

THE WEIGHTS AND QUANTITIES OF THE CRANBERRIES WERE DETERMINED AND RECORDED AFTER HARVEST AND REMAINED IN THE GROWERS' WAREHOUSE AS WAS THE CUSTOMARY PRACTICE AT THE BEGINNING OF A MARKETING SEASON. FOLLOWING THE ANNOUNCEMENT WHICH ELIMINATED THE MARKET FOR THESE BERRIES MANY CONFERENCES WERE HELD BETWEEN GOVERNMENT AND CRANBERRY INDUSTRY OFFICIALS TO EXPLORE POSSIBLE MEANS FOR RELIEVING THE SITUATION FACED BY THE INDUSTRY. AFTER THE DEPARTMENT OF AGRICULTURE OBTAINED AN OPINION FROM THIS OFFICE THAT SECTION 32 COULD PROPERLY BE RELIED UPON AS AUTHORITY FOR THE TYPE OF PROGRAM ULTIMATELY INSTITUTED, THE WHITE HOUSE ANNOUNCED THAT INDEMNITY PAYMENTS WOULD BE MADE TO CRANBERRY GROWERS WHO THROUGH NO FAULT OF THEIR OWN SUSTAINED LOSSES ON THEIR 1959 CROP. AT THE TIME OF THIS ANNOUNCEMENT THE GENERAL FORMAT OF THE PROGRAM HAD BEEN EXPLAINED INCLUDING THE NECESSITY FOR DESTROYING LARGE QUANTITIES OF BERRIES. INDEED, REPRESENTATIVES OF OCEAN SPRAY DISCUSSED WITH DEPARTMENT OF AGRICULTURE OFFICIALS THE NEED TO DESTROY THE CRANBERRIES IN QUESTION AS THEY WERE CLEARLY IN EXCESS OF MARKET REQUIREMENTS, THEIR CONTINUED STORAGE WAS A BURDEN, AND BECAUSE OF THEIR LOCATION A DIFFICULT PROBLEM WOULD BE CREATED IF THEY WERE NOT DISPOSED OF PROMPTLY. IN RELIANCE UPON THESE CONVERSATIONS AND UPON THE BELIEF THAT THE DEPARTMENT OF AGRICULTURE APPROVED, THE CRANBERRIES WERE DESTROYED PRIOR TO ANNOUNCEMENT OF THE PROGRAM DETAILS ON MAY 4, 1960.

YOUR LETTER, TOGETHER WITH AN ENCLOSED AFFIDAVIT, STRONGLY URGES THAT OFFICIALS OF THE DEPARTMENT OF AGRICULTURE GAVE FULL APPROVAL TO DESTRUCTION OF THE CRANBERRIES IN QUESTION PRIOR TO OFFICIAL ANNOUNCEMENT OF THE PROGRAM TERMS AND CONDITIONS. IN A LETTER TO YOU DATED JANUARY 22, 1962, DENYING YOUR CLIENT'S APPEAL OF THE DEPARTMENT'S ADVERSE DETERMINATION IN THE MATTER, THE ADMINISTRATOR OF THE AGRICULTURAL MARKETING SERVICE STATES, HOWEVER, THAT WHILE THE QUESTION OF DESTROYING CRANBERRIES, AMONG OTHER THINGS, WAS DISCUSSED DURING THESE CONSULTATIONS, INDUSTRY REPRESENTATIVES WERE CAUTIONED THAT NONE OF THE MATTERS DISCUSSED WERE TO BE CONSIDERED OFFICIAL UNTIL THE TERMS AND CONDITIONS OF THE PROGRAM WERE RELEASED BY AN AUTHORIZED REPRESENTATIVE OF THE SECRETARY OF AGRICULTURE.

FROM THIS LETTER AND OTHER INFORMATION WE HAVE OBTAINED FROM DEPARTMENT REPRESENTATIVES, IT IS APPARENT THAT THE DEPARTMENT AND YOUR CLIENT DIFFER AS TO THE FACTS RELATING TO WHETHER OR NOT THERE IS A SUBSTANTIAL BASIS UPON WHICH YOUR CLIENT MIGHT HAVE BEEN JUSTIFIED IN ASSUMING THAT DEPARTMENT OFFICIALS HAD INDICATED THEIR APPROVAL OF DESTRUCTION OF THE CRANBERRIES PRIOR TO OFFICIAL ANNOUNCEMENT OF THE PROGRAM TERMS. UNDER THE CIRCUMSTANCES WE MUST ACCEPT THE ADMINISTRATIVE AGENCY'S VERSION OF WHAT TOOK PLACE AT THE MEETINGS PRIOR TO MAY 4. HOWEVER, IT SHOULD BE ADDED THAT EVEN IF WE WERE TO CONCLUDE OCEAN SPRAY WAS JUSTIFIED IN ASSUMING THAT APPROVAL HAD BEEN GRANTED TO DESTROY THE CRANBERRIES INVOLVED, IT IS HIGHLY QUESTIONABLE WHETHER UNAUTHORIZED STATEMENTS BY DEPARTMENT REPRESENTATIVES UPON WHICH SUCH ASSUMPTION MIGHT HAVE BEEN BASED COULD BE RECOGNIZED WHERE THE SECRETARY OF AGRICULTURE, IN EXERCISING HIS AUTHORITY UNDER SECTION 32, PROMULGATED PROGRAM CONDITIONS AT VARIANCE WITH WHATEVER PRELIMINARY DISCUSSION TOOK PLACE.

THE REAL QUESTION, THEREFORE, CONCERNS THE INTERPRETATION TO BE PLACED UPON THE PROGRAM REQUIREMENT FOR FEDERAL CERTIFICATION, QUOTED ABOVE. YOU CONTEND THAT PARAGRAPH 517.481 MUST BE INTERPRETED AND APPLIED IN A MANNER TO EFFECTUATE THE PURPOSES AND OBJECTIVES OF THE CRANBERRY PAYMENT PROGRAM WHICH WAS TO REESTABLISH THE PURCHASING POWER OF CRANBERRY GROWERS. YOU STATE IT IS CLEAR FROM THE STATEMENT OF PURPOSE AND OTHER PROVISIONS OF THE PROGRAM THAT PAYMENTS WERE TO BE CALCULATED UPON 1959 CROP CRANBERRIES HARVESTED AND DISPOSED OF AND THAT, THEREFORE, PARAGRAPH 517.481 MUST BE INTERPRETED TO PERMIT CERTIFICATION OF BERRIES DESTROYED PRIOR TO MAY 4, 1960, UPON SUBMISSION OF ADEQUATE PROOF. ANY OTHER RESULT, YOU CONCLUDE, VIOLATES THE VERY PURPOSE FOR WHICH THE PROGRAM WAS INITIATED.

THE GOVERNMENT'S LIABILITY UNDER THE CRANBERRY PAYMENT PROGRAM LIES EXCLUSIVELY WITHIN THE FRAMEWORK OF THE CONDITIONS IMPOSED BY THE SECRETARY OF AGRICULTURE ACTING PURSUANT TO THE BROAD DISCRETIONARY POWER CONFERRED UPON HIM BY SECTION 32 OF PUBLIC NO. 320. THERE IS NOTHING IN THE PROGRAM TERMS AND CONDITIONS WHICH REQUIRES THE CONCLUSION THAT HE HAS AGREED TO MAKE PAYMENTS WITH RESPECT TO CRANBERRIES DESTROYED BEFORE MAY 4, 1960, WITHOUT FEDERAL SUPERVISION. PARAGRAPH 517.481 SPEAKS IN TERMS OF FEDERAL INSPECTION OF CRANBERRIES BEING DESTROYED, AND THIS IMPLICATION THAT ENTITLEMENT UNDER THE PROGRAM WAS TIED TO ARRANGEMENTS FOR FEDERAL INSPECTION IN ADVANCE OF ACTUAL DESTRUCTION IS BUTTRESSED BY THE FOLLOWING PARAGRAPH QUOTED FROM THE "IMPORTANT NOTICE TO PROSPECTIVE PARTICIPANTS" WHICH ACCOMPANIED THE DEPARTMENT'S RELEASE OF THE PROGRAM TERMS AND CONDITIONS:

"ANY CRANBERRY GROWER OR HIS REPRESENTATIVE WILL BE ELIGIBLE TO FILE FOR PAYMENTS WITH RESPECT TO WHOLESOME AND MARKETABLE CRANBERRIES PRODUCED AND HARVESTED IN 1959 IN THE UNITED STATES IF HE DISPOSES OF SUCH CRANBERRIES BEFORE NOVEMBER 1, 1960, AND COMPLIES WITH THE TERMS AND CONDITIONS OF THE PROGRAM. EVERY EFFORT SHOULD BE MADE TO SELL CRANBERRIES AND TO DESTROY AS FEW AS POSSIBLE. CERTIFICATION OF THE QUANTITY OF CRANBERRIES DESTROYED MUST BE OBTAINED FROM A FEDERAL OR FEDERAL-STATE INSPECTOR, AND THE GROWER OR HIS REPRESENTATIVES IS RESPONSIBLE FOR MAKING THE ARRANGEMENTS FOR THIS CERTIFICATION IN ADVANCE OF SUCH ACTION. THE INSPECTION OFFICES TO BE CONTACTED WHEN THE SERVICES OF AN INSPECTOR ARE DESIRED UNDER THIS PROGRAM AND THE AREAS SERVED BY EACH ARE LISTED ON THE BACK OF THIS NOTICE.'

IRRESPECTIVE OF THE EQUITY OF YOUR CLIENT'S POSITION, WE BELIEVE THE INTENT OF THE SECRETARY UNDER THE PROGRAM TERMS AND CONDITIONS IS CLEAR REGARDING THE MATTER OF FEDERAL INSPECTION. THE BEST THAT MIGHT BE SAID IN YOUR CLIENT'S FAVOR ON THIS POINT IS THAT THE PROGRAM IS AMBIGUOUS, IN WHICH CASE WE ARE NOT, IN ANY EVENT, JUSTIFIED IN QUESTIONING THE DEPARTMENT'S INTERPRETATION. SECTION 32 PROVIDES THAT THE FUNDS APPROPRIATED THEREBY SHALL BE EXPENDED "AT SUCH TIMES, IN SUCH MANNER, AND IN SUCH AMOUNTS AS THE SECRETARY OF AGRICULTURE FINDS WILL EFFECTUATE SUBSTANTIAL ACCOMPLISHMENT OF ANY ONE OR MORE OF THE PURPOSES OF THIS SECTION.' THE SECRETARY'S INSISTENCE, AS A CONDITION PRECEDENT TO PAYMENT UNDER THE CRANBERRY PAYMENT PROGRAM, UPON ARRANGEMENTS FOR FEDERAL INSPECTION IN ADVANCE OF DESTRUCTION OF CRANBERRIES OTHERWISE ELIGIBLE--- WHICH CONDITION BY ITS TERMS PRECLUDES CONSIDERATION OF CRANBERRIES DESTROYED BEFORE SUCH REQUIREMENT BECAME KNOWN--- IS NOT A MATTER WHICH THIS OFFICE WOULD BE AUTHORIZED TO QUESTION. THE QUOTED PORTION OF SECTION 32 CLEARLY LEAVES SUCH DETERMINATIONS TO THE VIRTUALLY COMPLETE DISCRETION OF THE SECRETARY.

ACCORDINGLY, YOU ARE ADVISED THAT YOUR APPEAL ON BEHALF OF OCEAN SPRAY CRANBERRIES, INC., FROM THE DEPARTMENT OF AGRICULTURE'S DETERMINATION IN THE SUBJECT CLAIM IS DENIED.