Sugar Cane Growers Cooperative Of Florida v. Veneman

289 F.3d 89 (D.C. Cir. 2002)


Ps are sugar cane growers, processors, refiners, and marketers. Other sugar producers are sugar beet farmers who tend to harvest significantly fewer acres per producer than sugar cane farmers. D supports sugar production through a program of non-recourse loans; if the market price of sugar drops below the forfeiture price, producers may forfeit their crops to D in satisfaction of these loans rather than try to repay in cash, which effectively guarantees a minimum price for harvested and processed sugar. Sugar prices have been low and D has accumulated more than 700,000 tons of sugar, for which it pays approximately $1.35 million per month in storage fees. D's supply exacerbates the problem of limited sugar storage, which is particularly troublesome for sugar beet farmers. The Food Security Act gives D authority to implement a PIK program for sugar, which it did for sugar beet farmers in August 2000. Sugar beet farmers submitted bids offering to destroy (or 'divert') a certain amount of their crops in return for sugar from USDA storage. A farmer's bid is his asking price for that amount of destruction; the price is expressed in terms of a percentage of the three-year average value of the crop yield for the acreage diverted. The average bid was approximately 84 percent and resulted in the distribution of about 277,000 tons of government sugar and the diversion of approximately 102,000 acres. Participants were prohibited from participating in future PIK programs if they increased their acreage planted with sugar beets over 2000 levels. D did not proceed by notice and comment, but there were no objections. Ps claim the 2000 PIK program unfairly provided participants with below-harvest-cost government sugar which gave them a competitive advantage and that the program depressed sugar prices below what could have been obtained without all the excess sugar. Sugar prices actually rose. The beet farmers not being stupid took out their lowest-yielding crops for the PIK program. Thus, for each acre D was paying more than what would have been produced from the diverted acres. D announced that it was implementing a PIK program for the 2001 sugar crop without using APA rulemaking. D set a 200,000-ton limit in order to encourage more competitive bidding and made both beet and cane sugar producers eligible. A statutory restriction limiting payments to $20,000 per producer effectively eliminated Ps' opportunity to participate because of their size. D also waived its 2000 PIK program restriction that in effect allowed beet producers to increase their crop sizes. D received more than 6,000 bids and accepted 4,655 bids, some as high as 87.9931 percent. P filed suit arguing that D did not comply with the APA because it promulgated a rule without notice-and-comment rulemaking. P claims the program gave participants a competitive advantage by providing them with below-harvest-cost sugar; second, it had a depressive effect on prices. The court held that Ps had not shown an injury-in-fact and had not established causation because they had not demonstrated that D would have decided against implementing the program following notice and comment. It held the 2001 PIK program was a rule subject to notice-and-comment procedures, but D's failure to comply with those procedures was harmless. P appealed.