FORMATION OF AGRICULTURAL COMMODITY COMMISSIONS

AGO 1984 No. 26 - Nov 2 1984

Attorney General Ken Eikenberry

OFFICES AND OFFICERS ‑- STATE ‑- DEPARTMENT OF AGRICULTURE ‑- AGRICULTURE ‑- FORMATION OF AGRICULTURAL COMMODITY COMMISSIONS

For the purposes of creating an agricultural commodity commission under a new marketing order or agreement, the provisions of the 1961 agricultural enabling act (chapter 15.65 RCW) have not superseded the provisions of the 1955 enabling act (chapter 15.66 RCW); therefore, a commodity commission may be created under a new order under either the 1961 or the 1955 act in accordance with the procedures set forth, respectively, therein as further outlined in this opinion.

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November 2, 1984

Honorable Eugene A. Prince
State Representative, 9th District
Box 69
Thornton, Washington 99176

Cite as: AGO 1984 No. 26

Dear Sir:

By letter previously acknowledged you requested the opinion of this office on several questions relating to the formation of commodity commissions under Washington's 1961 and 1955 Agricultural Enabling Acts, chapter 15.65 RCW and chapter 15.66 RCW. Specifically, you asked:

"1. For the purposes of creating a new commodity commission under a new marketing order or agreement, have the provisions of the 1961 agricultural enabling act (Chapter 15.65 RCW) superseded the provisions of the 1955 enabling act (Chapter 15.66 RCW)? That is, may a new commission be created under a new order under either the 1961 act or the 1955 act or must the procedures of the 1961 act as amended now be used?

"2. If a referendum is conducted to determine the approval or rejection of a marketing order to create a new commodity commission:

"a) What portion of the number of all affected producers must return referendum ballots for the referendum to be considered valid? What portion of the volume of the commodity produced must these producers represent?

[[Orig. Op. Page 2]]

"b) What portion of the number of affected producers, representing what portion of the volume of the commodity produced, must favor the marketing order for the order to be approved? Do these portions or percentages apply to the total number of the producers of the commodity and to the total volume of the commodity produced in the state, or do they apply to the number of producers who return referendum ballots and to the volume of the commodity produced by these responding producers?

"c) What are the responsibilities of the Department of Agriculture for identifying the persons who must be notified of the referendum and for determining the number of persons who must favor such a marketing order and the volume of the commodity that they must produce for the order to be approved? To what extent is a final decision of the Department regarding these determinations subject to review?"

We answer your questions as set forth in our analysis.

ANALYSIS

Question (1):

By its enactment of chapter 191, Laws of 1955, the legislature provided for the formation of agricultural commissions. That legislation is now codified in chapter 15.66 RCW. Then, in 1961, the legislature enacted another law also providing for the formation of such commodity commissions,i.e., chapter 256, Laws of 1961, now codified as chapter 15.65 RCW. Your first question is whether a new commodity commission may be created under either the 1961 Act or the 1955 Act or, instead, if the provisions of only the 1961 Act, as thereafter amended, may be used.

Section 65 of the 1961 Act, now codified as RCW 15.65.900, reads as follows:

"This chapter shall not repeal, amend or modify chapter 15.66 RCW, or any other law, providing for the marketing of agricultural commodities and/or providing for marketing agreements or orders for such agricultural commodities, which shall be in existence on the date this act becomes effective."

[[Orig. Op. Page 3]]

Based upon this express provision we conclude that both the 1955 Act and 1961 Act are still operable and that either may be used for the creation of a new commodity commission.1/

Question (2)(a):

Your second question, repeated for ease of reference, initially asks:

"If a referendum is conducted to determine the approval or rejection of a marketing order to create a new commodity commission:

Because of our answer to your first question, above, it is necessary to respond to this question (as well as the other subparts of your second question) in the alternative, depending [[Orig. Op. Page 4]] upon whether it is the 1955 Act or the 1961 Act which is being utilized in the particular case.

1955 Act. If the 1955 Act is being used the pertinent statute is RCW 15.66.090 which provides, in material part, as follows:

"After the issuance by the director of the final decision approving the issuance, amendment, or termination of a marketing order, the director shall determine by a referendum whether the affected producers assent to the proposed action or not. The director shall conduct the referendum among the affected producers based on the list as provided for in RCW 15.66.060, and the affected producers shall be deemed to have assented to the proposed issuance or termination order if fifty-one percent or more by number reply to the referendum within the time specified by the director, and if, of those replying, sixty-five percent or more by number and fifty-one percent or more by volume assent to the proposed order. . . ." (Emphasis added)

Thus, under the 1955 Act, the referendum will be considered valid if 51 percent of the affected producers who appear on the list provided for in RCW 15.66.0602/ respond to the referendum‑-regardless of what volume of their particular commodity those growers produce.

1961 Act. Conversely, if it is the 1961 Act which is being utilized the applicable statute is RCW 15.65.160(2) which reads:

"The director may conduct a referendum among producers and the requirements of assent or approval shall be held to be complied with if of the total number of producers and the total volume of production represented in such referendum the percentage assenting to or favoring is equal to or in excess of the percentage specified in RCW 15.65.140, 15.65.150 or 15.65.190 (whichever is applicable) as now or hereafter amended: Provided, That thirty percent of the affected producers producing thirty percent by volume of the affected commodity have been [[Orig. Op. Page 5]] represented in a referendum to determine assent or approval of the issuance of a marketing order:3/ . . ." (Emphasis supplied)

Thus, under the 1961 Act, 30 percent of the affected producers producing 30 percent by volume of the affected commodity must be represented in a referendum in order for it to be valid.

Question (2)(b):

The next part of your second question also involves the conduct of a referendum to determine the approval or rejection of a marketing order to create a new commodity commission and asks:

1955 Act. Once again, the applicable statute is RCW 15.66.090, supra. The remainder of that statute, not above quoted, reads as follows:

". . . The producers shall be deemed to have assented to the proposed amendment order if sixty percent or more by number and sixty percent or more by volume of those replying assent to the proposed order. The determination [[Orig. Op. Page 6]] by volume shall be made on the basis of volume as determined in the list of affected producers created under provisions of RCW 15.66.060, subject to rules and regulations of the director for such determination. . . ." (Emphasis added)

Thus, under the 1955 Act, of those replying to the referendum within the specified time 65 percent by number and 51 percent by volume must assent. Under this statute, the volume determinations are based upon those producers and their volumes as set forth in the Department's list as compiled pursuant to RCW 15.66.060,supra. See, footnote 1,supra.

1961 Act. RCW 15.65.140 sets forth the required percentages and volumes for assenting to a marketing order under the 1961 Act, as follows:

"No marketing order or amendment thereto directly affecting producers or producer marketing shall be issued unless the director determines (in accordance with any of the procedures described at RCW 15.65.160) that the issuance of such order or amendment is assented to or favored by producers who during a representative period determined by the director constituted either (1) at least sixty-five percent by numbers and at least fifty-one percent by volume of production of the producers who have been engaged within the area of production specified in such marketing order in the production for market of the commodity specified therein, or who during such representative period have been engaged in the production of such commodity for marketing in the marketing area specified in such marketing order, or (2) at least fifty-one percent by numbers and at least sixty-five percent by volume of production of such producers: Provided, That producers shall be deemed to have assented to or approved a proposed amendment order if sixty percent or more by number and sixty percent or more by volume of those replying assent or approved the proposed order in a referendum."

In addition, RCW 15.65.160(2) further provides that:

Thus, under the 1961 Act the percentages and volumes required apply only to the producers and their respective volumes as they are actually represented in the referendum.

Question (2)(c):

The third and final segment of your second question, again relating to the conduct of a referendum to determine the approval or rejection of a marketing order to create a new commodity commission, inquires as follows:

1955 Act. With respect to the identification of affected producers the 1955 Act, in RCW 15.66.060, provides:

"Upon receipt of a petition for the issuance, amendment, or termination of a marketing order, the director shall establish a list of producers of the agricultural commodity affected or make any such existing list current. In establishing or making current such a list of producers and their individual production, the director shall publish a notice to producers of the commodity to be affected requiring them to file with the director a report showing the producer's name, mailing address, and the yearly average quantity of the affected commodity produced by him in the three years preceding the date of the notice or in such lesser time as the producer has produced the commodity in question. Such information as to production may also be accepted from other valid sources if readily available. The notice shall be published once a week for four consecutive weeks in such newspaper or newspapers, including a newspaper or [[Orig. Op. Page 8]] newspapers of general circulation within the affected areas, as the director may prescribe, and shall be mailed to all affected produces on record with the director. All reports shall be filed with the director within twenty days from the last date of publication of the notice or within thirty days after the mailing of the notice to affected producers, whichever is the later. The director shall keep such lists at all times as current as possible and may require information from affected producers at various times in accordance with rules and regulations prescribed by the director: Provided, That any commission established under the provisions of this chapter may at its discretion prior to any election for any purpose by such commission carry out the above stated mandate to the director for establishing a list of producers and their individual production, and supply the director with a current list of all producers subject to the provisions of the marketing order under which it was formed.

"Such producer list shall be final and conclusive in making determinations relative to the assent by producers upon the issuance, amendment or termination of a marketing order and in elections under the provisions of this chapter.

"The director shall then notify affected producers, so listed, by mail that the public hearing affording opportunity for them to be heard upon the proposed issuance, amendment, or termination of the marketing order will be heard at the time and place stated in the notice. Such notice of the hearing shall be given not less than ten days nor more than sixty days prior to the hearing."

The 1955 Act does not specifically provide for judicial review of determinations by the Department of Agriculture under that chapter. However, under the common law, judicial review of administrative determinations, even though nonjudicial in nature, has been allowed in some circumstances in the superior courts. Our State Supreme Court inLeschi v. Highway Commission, 84 Wn.2d 271, 278, 525 P.2d 774 (1974), stated:

". . . we have held in State ex rel. Cosmopolis Consol. School Dist. 99 v. Bruno, 59 Wn.2d 366, 367 P.2d 995 (1962), pursuant to article 4, section 6 (amendment 28) [[Orig. Op. Page 9]] of the Washington Constitution that whether or not the administrative function of an agency could be characterized as discretionary and nonjudicial, our courts possessed constitutional and inherent power to review illegal or manifestly arbitrary and capricious action violative of fundamental rights. InDupont, at page 794, we recognized in the earlier Cosmopolis case an accepted judicial approach to reviewability of administrative actions which, though discretionary and functionally nonjudicial, could, if illegally or arbitrarily and capriciouly [capriciously] exercised, do violence to fundamental rights. As Justice Hamilton stated:

"'The essential touchstone, impelling invocation of the inherent or constitutional power of judicial review of nonjudicial administrative action, is the basic nature and extent or magnitude of the right involved coupled with the patency and character of the alleged violation.'

"The inherent power of constitutional review under these circumstances was again restated inState ex rel. Hood v. State Personnel Bd., 82 Wn.2d 396, 511 P.2d 52 (1973).

"An illegal act, in the context of administrative agency action, is an act which is contrary to statutory authority. Mobil Oil Corp. v. Reynolds, 202 Kan. 179, 446 P.2d 715 (1968). . . ."

Thus, judicial review of a determination made by the Department of Agriculture under the 1955 Act may be available under Washington case law depending upon ". . . the basic nature and extent or magnitude of the right involved coupled with the patency and character of the alleged violation." Leschi,supra, at 279. Certainly, review will be available under these doctrines if the Department's action is ". . . illegally or arbitrarily and capriciously exercised." Leschi,supra, at 278. The court has noted that an illegal act by an administrative agency is one which is contrary to its statutory authority.

1961 Act. The functions and responsibilities of the Department of Agriculture under the 1961 Act for ascertaining affected producers are set forth in RCW 15.65.200 as follows:

"Whenever application is made for the issuance of a marketing agreement or order or the director otherwise determines to hold a hearing for the purpose of such [[Orig. Op. Page 10]] issuance, the director or his designee shall cause lists to be prepared from any information which he has at hand or which he may obtain from producers, associations of producers and handlers of the affected commodity. Such lists shall contain the names and addresses of persons who produce the affected commodity, the amount of such commodity produced by each such person during the period which the director determines for the purposes of the agreement or order to be representative, and the name of any cooperative association authorized to market for him the commodity specified in the marketing agreement or order. Such lists shall also contain the names and addresses of persons who handle the affected commodity and the amount of such commodity handled by each person during the period which the director determines for the purposes of the agreement or order to be representative. Any qualified person may at any time have his name placed upon any list for which he qualifies by delivering or mailing his name, address and other information to the director and in such case the director shall verify such person's qualifications and if he qualifies, place his name upon such list. At every hearing upon the issuance, amendment or termination of such order or agreement the director or his designee shall take evidence for the purpose of making such lists complete and accurate and he may employ his powers of subpoena of witnesses and of books, records and documents for such purpose. After every such hearing the director shall compile, complete, correct and bring lists up to date in accordance with the evidence and information obtained at such hearing. For all purposes of giving notice, holding referenda and electing members of commodity boards, the lists on hand corrected up to the day next preceding the date for issuing notices or ballots as the case may be shall, for all purposes of this chapter, be deemed to be the list of all persons entitled to notice or to assent or dissent or to vote."

Department determinations as to the required percentages and volumes to assent to the order are set forth in RCW 15.65.140 and 15.65.160, supra.

Regarding judicial review of Department determinations under the chapter, the 1961 Act provides in RCW 15.65.570 that:

[[Orig. Op. Page 11]]

"All proceedings held by the director for the promulgation of any marketing agreement or order and the amendment, modification, or dissolution thereof and all proceedings concerning the promulgation of any rules or regulations or the amendment or modification thereof and appeals therefrom shall be subject to the provisions of chapter 34.04 RCW as enacted or hereafter amended."

The Administrative Procedure Act (in chapter 34.04 RCW) however, does not specifically set forth a means for judicial review of rules promulgated by agencies such as is provided for judicial review of "contested cases" under the A.P.A. Thus, although the promulgation of any marketing order must be done pursuant to that law, any judicial review available would be pursuant to the common law principles described with reference to the 1955 Act.

We trust that the foregoing responds to your questions.

Very truly yours,
KENNETH O. EIKENBERRY
Attorney General

NIXON HANDY
Senior Assistant
Attorney General

*** FOOTNOTES ***

1/In so concluding we are aware of RCW 15.65.050 which provides, in relevant part, as follows:

"The director shall administer and enforce this chapter and it shall be his duty to carry out its provisions and put them into force in accordance with its terms, but issuance, amendment, modification, suspension and/or termination of marketing agreements and orders and of any terms or provisions thereof shall be accomplished according to the procedures set forth in this chapter and not otherwise. . . ." (Emphasis added)

Under that provision it might be argued that marketing agreements and orders may only be formulated pursuant to procedures set forth in chapter 15.65 RCW, and not through any other law‑-such as chapter 15.66 RCW. However, "marketing order" and "marketing agreement" are both defined in RCW 15.65.020 to mean orders and agreements issued by the director "pursuant to this chapter." Thus, it is only those marketing orders or marketing agreements which are issued under chapter 15.65 RCW in the first place which become, in turn, subject to RCW 15.65.050,supra.

2/RCW 15.66.060 sets forth procedures which the Department of Agriculture is to follow in compiling a list of all known producers of the affected commodity and their respective volume of production.

3/A different formula is set forth in the second proviso to RCW 15.65.160 in the case of a referendum in which a cooperative marketing association participates as described in subsection (2) of RCW 15.65.160. That provision states:

". . . Provided further, That a marketing order shall not become effective when the provisions of subdivision (3) of this section are used unless sixty-five percent by number of the affected producers producing fifty-one percent by volume of the affected commodity or fifty-one percent by number of the affected producers producing sixty-five percent by volume of the affected commodity approve such marketing order;"