Milk Industry Foundation v. Glickman

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 20, 1997 Decided January 20, 1998

No. 97-5163

Milk Industry Foundation,

Appellant

v.

Daniel R. Glickman, Secretary,

United States Department of Agriculture and

Northeast Dairy Compact Commission,

Appellees

Appeals from the United States District Court

for the District of Columbia

(No. 96cv02027)

Steven J. Rosenbaum argued the cause for appellant, with
whom Jonathon C. Drimmer and Jason A. Levine were on
the briefs.

Douglas N. Letter, Appellate Litigation Counsel, U.S. De-
partment of Justice, argued the cause for appellee Daniel R.

Glickman, Secretary, United States Department of Agricul-
ture, with whom Frank W. Hunger, Assistant Attorney Gen-
eral, Mary Lou Leary, U.S. Attorney, and Stephen W. Pres-
ton, Deputy Assistant Attorney General, U.S. Department of
Justice, were on the brief.

Clifford M. Sloan argued the cause for appellee Northeast
Dairy Compact Commission, with whom Michael A. Rotker
was on the brief.

Paul A. Strandberg, Assistant Attorney General, State of
Minnesota, was on the brief for amici curiae States of Minne-
sota, Wisconsin, and South Dakota.

Emily J. Gould, Assistant Attorney General, State of Ver-
mont, was on the brief for amici curiae State of Connecticut,
et al.

Eric Rome was on the brief for amici curiae Public Voice
for Food and Health Policy, et al.

Roy J. Rodney, Jr. and Endya E. Delpit were on the brief
for amici curiae Commissioners of the Louisiana, Arkansas,
Georgia, South Carolina and West Virginia Departments of
Agriculture.

Before: Edwards, Chief Judge, Henderson, and Rogers,
Circuit Judges.

Opinion for the Court filed by Chief Judge Edwards.

Concurring opinion filed by Circuit Judge Rogers with
whom Circuit Judge Henderson concurs.

Edwards, Chief Judge: In 1993, the six New England
states--Connecticut, Maine, Massachusetts, New Hampshire,
Rhode Island, and Vermont ("Compact states")--agreed to
form the Northeast Interstate Dairy Compact ("Compact") to
enable them to raise the minimum milk prices that dairy
processors must pay to dairy farmers in their region for milk
processed and consumed in fluid form ("farm-gate prices").
The Constitution provides that "[n]o State shall, without the
Consent of Congress, ... enter into any Agreement or Com-
pact with another State...." U.S. Const. art. I, s 10, cl. 3
("compact consent clause"). Congress purported to consent
to the Compact with the passage of the Federal Agricultural

Improvement and Reform Act of 1996 ("FAIRA") s 147, 7
U.S.C. s 7256 (Supp. 1996). Congress conditioned its consent
on a finding of a "compelling public interest" by the Secretary
of Agriculture ("Secretary").

Appellant, the Milk Industry Foundation, contends that
Congress did not "consent" to the Compact but instead
impermissibly delegated this constitutional responsibility to
the Secretary. Appellant also claims that even assuming,
arguendo, that the delegation was lawful, the Secretary exer-
cised his delegated authority arbitrarily and capriciously in
violation of the Administrative Procedure Act ("APA").

The congressional action here is not substantially different
from countless pieces of contingent legislation enacted by
Congress over the last few decades--including many that
have been challenged and upheld by the courts. Appellant
asserts that the instant delegation is somehow different be-
cause it involves an interstate compact. This claim is merit-
less. Furthermore, we have no doubt that, in instructing the
Secretary to authorize the Compact only upon finding a
"compelling public interest in the Compact region," Congress
provided an "intelligible principle" to guide the Secretary's
exercise of the delegated power. Accordingly, we hold that
the delegation is constitutional.

We also reject Appellant's APA claim. Evaluating the
Secretary's finding of a "compelling public interest" within
the relevant context at issue, we find that he "examine[d] the
relevant data and articulate[d] a satisfactory explanation for
[his] action[,] including a rational connection between the
facts found and the choice made." Thus his decision is not
arbitrary and capricious under the APA. See Motor Vehicle
Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29,
43 (1983) (internal quotations omitted).

I. Background

A. The National Scheme for the Regulation of Milk Prices

Congress initiated the federal program for the regulation of
farm-gate milk prices with the passage of the Agricultural

Marketing Agreement Act of 1937 ("AMAA") s 2, 7 U.S.C.
ss 601-624, 671-674 (1994). The AMAA delegates the au-
thority to set minimum milk prices nationwide to the Secre-
tary, s 608c(18), while the states retain authority to establish
milk prices above the federal price floor. See United Dairy
Farmers Coop. Ass'n v. Milk Control Comm'n of Pennsylva-
nia, 335 F. Supp. 1008, 1013-15 (M.D. Pa.) (three judge
court), aff'd without opinion, 404 U.S. 930 (1971).

B. The Northeast Interstate Dairy Compact

In 1988, Vermont initiated an effort to regulate milk prices
beyond its own state borders by forming an interstate com-
pact with neighboring states. By 1993, all of the New
England state legislatures had approved the formation of the
Northeast Interstate Dairy Compact, and all of the states'
governors had signed resolutions supporting it. See Milk
Indus. Found. v. Glickman, 949 F. Supp. 882, 885 (D.D.C.
1996) ("MIF I") (explaining history of Compact). A principal
objective of the Compact is to preserve dairy farms in the
Compact states. See Compact art. I, s 1, reprinted in Ap-
pendix to Brief for Appellee Northeast Dairy Compact Com-
mission. The Compact states agreed to establish a Commis-
sion consisting of three to five representatives from each
state, with at least one person from each state being a dairy
farmer and another a consumer representative, to administer
the Compact. Compact art. III, s 4.

The Compact grants the Commission authority to, among
other things, establish an "over-order" farm-gate price, a
price of up to $1.50 per gallon over the federal minimum price
for milk used for fluid products. Compact art. IV, s 9. The
Compact's voting requirements are designed to ensure that
the Commission does not pass any over-order prices without
the broad consensus of the Compact states, both dairy-
producing and dairy-consuming states. See Compact art.
III, s 5 (requiring at least two-thirds vote of the delegations
present to establish or terminate an over-order price); id.
("The establishment of a regulated area which covers all or
part of a participating state shall require also the affirmative
vote of that state's delegation.").

C. Congress' Consent to the Compact

Congress consented to the Compact with the enactment of
FAIRA s 147, 7 U.S.C. s 7256 (Supp. 1996). See MIF I, 949
F. Supp. at 886-87 (detailing efforts to obtain congressional
consent to the compact). Congress' consent to the Compact
was made subject to a number of conditions and limitations,
two of which are relevant here. First, Congress conditioned
its consent on a finding by the Secretary that the implemen-
tation of the Compact is in the compelling public interest of
the Compact region. s 7256. ("Based upon a finding by the
Secretary of a compelling public interest in the Compact
region, the Secretary may grant the States that have ratified
the Northeast Interstate Dairy Compact ... the authority to
implement the [ ] Compact."). Second, Congress limited the
duration of its consent to the Compact, providing for its
termination upon the Secretary's implementation of compre-
hensive reforms of the federal scheme for regulating milk
prices mandated by FAIRA. See id. (providing that Con-
gress' consent "shall terminate concurrent with the Secre-
tary's implementation" of pending reforms to the federal
milk-pricing scheme); see also 7 U.S.C. s 7253 (Supp. 1996)
(mandating the consolidation and reform of the federal milk-
pricing scheme not later than April 4, 1999).

D. The Secretary's Findings and Appellant's Challenges to
the Compact

On August 28, 1996, the Secretary published a two-
sentence finding of a compelling public interest and autho-
rized the Compact states to implement the Compact. 61 Fed.
Reg. 44,290 (1996) ("Initial Finding"). Appellant promptly
filed a motion in the District Court for the District of
Columbia for a preliminary injunction to bar the implementa-
tion of the Compact, claiming that section 147 of FAIRA was
an unconstitutional delegation of legislative power and that
the Secretary had exercised his delegated authority arbitrari-
ly and capriciously in violation of the APA.

Following the District Court's denial of Appellant's motion
for a preliminary injunction, the Secretary moved to stay

proceedings so that he could review the entire administrative
record and provide an amplified decision justifying his finding
of a compelling public interest. The District Court granted
this motion, instructing the Secretary to hold open the possi-
bility of reaching a contrary conclusion upon reexamination of
the record. Milk Indus. Found. v. Glickman, 955 F. Supp. 8,
9 (D.D.C. 1997).

The Secretary issued a second decision on March 28, 1997,
again finding a compelling public interest in the Compact
region warranting authorization of the Compact. 62 Fed.
Reg. 14,879 (1997) ("Amplified Decision"). In reaching his
decision, the Secretary emphasized the importance of taking
"reasonable measures to preserve small family farms," noting
that "America wants and still needs the family farm. This
belief is obviously strongly held by the people of the Compact
region." Id. at 14,879-80 (finding that "small dairy farms are
an essential part of the character and culture in the Compact
region"). The Secretary also noted that the Compact is a
short-term measure which will expire upon the completion of
the pending reform of the federal milk-pricing scheme. Id. at
14,880. The Secretary found that the Compact likely would
result in higher milk prices and therefore, at least in the
short-term, provide higher profitability for, and decrease
financial pressures on, family-sized dairy farms in New Eng-
land. Id. at 14,879. After noting his countervailing concern
over the Compact's potential to increase the cost of milk for
low-income families, the Secretary concluded that there is a
compelling public interest in the Compact region in favor of
authorizing the Compact, stating that, "the balance has been
properly struck, given current conditions. The Compact is a
short-term measure that, if implemented with common sense
and sensitivity to the needs of all affected persons and
interests, can benefit the dairy producers and all citizens in
the Compact region without producing adverse side effects."
Id. at 14,880.

At the time the Secretary published his Initial Finding, he
also published a statement saying that he was "concerned
about potential effects of the Compact in several respects"
and that he would revoke his authorization if he determined

that conditions warranted revocation. 61 Fed. Reg. at 44,291.
Likewise, in his Amplified Decision, the Secretary maintained
that he would revoke authorization if he determined that
changing conditions in the Compact region warranted such
action. 62 Fed. Reg. at 14,880. However, in an addendum to
his Amplified Decision, the Secretary retreated from this
position. 62 Fed. Reg. 16,539 (1997) ("Addendum").

Following issuance of the Secretary's Amplified Decision,
the parties cross-moved for summary judgment. The District
Court granted Appellees' summary judgment motion and
denied Appellant's summary judgment motion. Milk Indus.
Found. v. Glickman, 967 F. Supp. 564 (D.D.C. 1997) ("MIF
II").

II. Analysis

We review the District Court's grant of summary judgment
de novo. See Tao v. Freeh, 27 F.3d 635, 638 (D.C. Cir. 1994);
see also Dr Pepper/Seven-Up Cos. v. FTC, 991 F.2d 859, 862
(D.C. Cir. 1993) ("Where the decision under review is the
district court's assessment of the legal sufficiency of an
agency's action in light of the record, ... [w]e proceed as if
the Commission's decision had been appealed to this court
directly," notwithstanding the intervening step; the district
court's decision is not entitled to any particular deference)
(internal quotations and citations omitted). On the APA
claim, our review of the Secretary's finding is deferential.
See State Farm, 463 U.S. at 43 ("The scope of review under
the 'arbitrary and capricious' standard is narrow and a court
is not to substitute its judgment for that of the agency.").

A. Congress' Contingent Consent Was a Lawful Delegation

In Field v. Clark, 143 U.S. 649 (1892), the Supreme Court
articulated what has come to be known as the "delegation
doctrine." However, since Field, the Court has invalidated
statutes on grounds of unlawful delegations on only two
occasions, both of which occurred prior to the full develop-
ment of the regulatory state ushered in by the New Deal.
See A.L.A. Schecter Poultry Corp. v. United States, 295 U.S.

495 (1935); Panama Refining Co. v. Ryan, 293 U.S. 388
(1935). In recent decades, it has become widely accepted that
Congress may, as a general matter, confer substantial author-
ity upon a coordinate branch of government, as long as it
provides an "intelligible principle" to guide the delegatee's
exercise of the power conferred. See, e.g., Mistretta v. Unit-
ed States, 488 U.S. 361, 372 (1989).

1. The Power Delegated was Delegable Power

In the instant case, Congress made its consent contingent
upon a finding by the Secretary that the Compact was in the
compelling public interest of the Compact region. This act of
contingent legislation is not substantially different from
countless pieces of legislation passed by Congress over the
last several decades--including many which have been chal-
lenged under the delegation doctrine and found to be consti-
tutional by reviewing courts. We are unpersuaded by Appel-
lant's efforts to distinguish the delegation in this case, on the
grounds of both the nature of the legislative power delegated
and the extent of executive action involved, from delegations
that have been upheld as constitutional.

Appellant argues that consent to the Compact does not
entail on-going administration of a regulatory scheme by the
Executive Branch, on the assumption that this matters.
However, precedent does not support Appellant's suggestion
that contingent legislation is permissible only when associated
with the administration of an on-going regulatory scheme.
Rather, the Supreme Court has adopted the "general rule"
that " '[a] constitutional power implies a power of delegation
of authority under it sufficient to effect its purposes.' " Lov-
ing v. United States, 116 S. Ct. 1737, 1748 (1996) (quoting
Lichter v. United States, 334 U.S. 742, 778 (1948) (alteration
in original)). See also Yakus v. United States, 321 U.S. 414,
425-26 (1944) ("Congress is not confined to that method of
executing policy which involves the least possible delegation
of discretion to administrative officers.").

The Court frequently has upheld Congress' delegation of
responsibilities to the Executive through contingent legisla-
tion requiring an executive agent to take some action upon

the finding of specified conditions. For example, in upholding
Congress' delegation to the Price Administrator to fix com-
modity prices that would be fair and equitable and would
effectuate the purposes of the Emergency Price Control Act
of 1942, the Court stated:

The essentials of the legislative function are the determi-
nation of the legislative policy and its formulation and
promulgation as a defined and binding rule of con-
duct.... These essentials are preserved when Congress
has specified the basic conditions of fact upon whose
existence or occurrence, ascertained from relevant data
by a designated administrative agency, it directs that its
statutory command shall be effective.

Yakus, 321 U.S. at 424-25. Thus, the relevant distinction
between the legislative and the executive is one of function,
not of frequency. See Loving, 116 S. Ct. at 1744 (" 'The true
distinction ... is between the delegation of power to make
the law, which necessarily involves a discretion as to what it
shall be, and conferring authority or discretion as to its
execution, to be exercised under and in pursuance of the law.
This first cannot be done; to the latter no objection can be
made.' ") (quoting Field, 143 U.S. at 693-94) (alteration in
original).

In any case, the Secretary's delegated role here is consis-
tent with the Secretary's role in the regulation of milk prices
nationwide. In this instance, the Secretary was not asked to
regulate milk prices directly. Instead, he was asked to
determine whether permitting the Compact Commission to
override the national minimum price for milk, in the case of
the Compact states pending reform of the federal milk-
pricing scheme, would be in the compelling public interest of
the Compact region. This question implicates the Secretary's
administrative role in regulating milk prices.

Appellant asserts that congressional consent to interstate
compacts must be "effective of its own force, with no role for
the Executive," Brief for Appellant at 11, but fails to offer
any compelling reason why the compact consent clause should
be understood differently from Congress' other Article I

powers for the purposes of the delegation doctrine. Cf.
Loving, 116 S. Ct. at 1748 (Congress' power to "make Rules
for the Government and Regulation of the land and naval
forces" pursuant to U.S. Const. art. I, s 8, cl. 14 ("Clause 14")
"is no less plenary than other Article I powers") (citations
omitted). If, as the Court held in Loving, Congress can
lawfully delegate the power to define crimes--a power which
is arguably at the height of that which might be defined as
legislative--then surely it can lawfully delegate to the Secre-
tary the power to authorize an interstate compact upon the
finding that the Compact would serve a compelling public
interest in the Compact region. Although it may still be
possible to posit hypothetical instances of delegations which
might be found unlawful, we are unconvinced that this is such
an instance.

Appellant notes that, in Loving, the Court observed at
length that the Executive has traditionally played a signifi-
cant role in the regulation of the military, see id. at 1744-48,
thus suggesting that Loving should not be viewed as a
weighty precedent in this case. There is nothing in the
Loving opinion that we can find, however, indicating that this
historical fact is a limiting principle governing application of
the delegation doctrine. Indeed, such a reading of Loving
would conflict with previous statements of the Court. See,
e.g., Mistretta, 488 U.S. at 385 ("Our constitutional principles
of separated powers are not violated ... by mere anomaly or
innovation."). Rather, it appears that the Loving Court
examined the historical practice of England as a tool for
ascertaining the Framers' intent in drafting Clause 14. See
Loving, 116 S. Ct. at 1747 ("... the Framers knew well this
history ..."). In addition, the Court emphasized the lack of
any clear and "absolute rule against" the delegation at issue
in Loving. See id. at 1748. Although Appellant maintains
that the delegation at issue here is a novelty, it fails to
identify any clear and absolute rule against such a delegation.

2. The Delegation Was Governed by an Intelligible
Principle

Where the power at issue is a delegable power, Congress
may provide discretionary authority to a coordinate branch of
government "[s]o long as Congress 'lay[s] down by legislative
act an intelligible principle to which the person or body
authorized to [exercise the delegated authority] is directed to
conform.' " Mistretta, 488 U.S. at 372 (quoting J.W. Hamp-
ton, Jr., & Co. v. United States, 276 U.S. 394, 406 (1928)
(second alteration in original)). Applying this general rule
over the last several decades, the Supreme Court has upheld,
"without deviation, Congress' ability to delegate power under
broad standards," id. at 373, including delegations authorizing
the Executive to take action upon finding that it would be in
the "public interest" to do so. See, e.g., National Broadcast-
ing Co. v. United States, 319 U.S. 190, 225-26 (1943) (uphold-
ing delegation to FCC to regulate broadcast licensing in the
"public interest"); New York Cent. Sec. Corp. v. United
States, 287 U.S. 12, 24 (1932) (upholding delegation to ICC to
authorize the consolidation of carriers where it finds that such
consolidation would be in "the public interest"); see also
Yakus, 321 U.S. at 425 ("It is no objection [under the delega-
tion doctrine] that the determination of facts and the infer-
ences to be drawn from them in the light of the statutory
standards and declaration of policy call for [the delegated
agent's] judgment, and for the formulation of subsidiary
administrative policy within the prescribed statutory frame-
work.") (citations omitted).

The "compelling public interest in the Compact region"
standard falls well within established "intelligible principle"
parameters. Indeed, Appellant's arguments in support of its
APA claim convincingly demonstrate that the "compelling
public interest" standard is discernible and demanding. In
advancing this argument, Appellant has no difficulty--nor do
we--in defining the scope of the "compelling public interest"
standard.

B. The Secretary's Finding Was Not Arbitrary and
Capricious

Congress' requirement that the Compact can only be au-
thorized upon a finding of a compelling public interest in the

Compact region provides a demanding standard requiring
that the data and reasoning justifying the Secretary's finding
weigh heavily in favor of authorizing the Compact. We find
that the Secretary's Amplified Decision meets this standard.

1. The Secretary's Finding is "Agency Action" Reviewable
Under the APA

As a threshold matter, the Secretary argues that his find-
ing is not "agency action" reviewable under the APA, but
rather "merely [a] determin[ation] that conditions in the
Compact region met the condition set by Congress for imple-
mentation of the Compact." Brief for Appellee Secretary at
30. This is a distinction without a difference. The APA
defines "agency action" to include agency rules, see 5 U.S.C.
s 551(13), and defines an agency "rule" as "the whole or a
part of an agency statement of general or particular applica-
bility and future effect designed to implement, interpret, or
prescribe law or policy...." 5 U.S.C. s 551(4). The Secre-
tary neither disputes that the APA's procedural requirements
for informal rulemaking were satisfied, see 5 U.S.C. s 553,
nor explains why his Amplified Decision should not be under-
stood as a rule implementing congressional policy. We see no
meaningful distinction between the delegation at issue here
and the many acts of contingent legislation passed by Con-
gress over recent decades. Through such contingent legisla-
tion, Congress enacts a policy (in this case, consent to the
Compact), which is to be implemented upon the Executive's
finding of the conditions specified by Congress (in this case, a
"compelling public interest in the Compact region"). Clearly,
the Secretary's finding and his corresponding authorization of
the Compact is a rule reviewable under the APA's "arbitrary
and capricious" standard.

2.The Secretary's Finding of a Compelling Public Inter-
est in the Compact Region is Not Arbitrary and Capri-
cious

Under familiar and well-established principles, the Secre-
tary's finding must be upheld as long as the Secretary
"examine[d] the relevant data and articulate[d] a satisfactory
explanation for its action including a 'rational connection
between the facts found and the choice made.' " State Farm,

463 U.S. at 43 (quoting Burlington Truck Lines, Inc. v.
United States, 371 U.S. 156, 168 (1962)); Republican Nat'l
Comm. v. Fed. Election Comm'n, 76 F.3d 400, 407 (D.C. Cir.
1996) (APA's arbitrary and capricious standard of review is
"satisfied if the agency enables us to see what major issues of
policy were ventilated ... and why the agency reacted to
them as it did") (internal quotations omitted), cert. denied,
117 S. Ct. 682 (1997). To meet this standard, the factors
undergirding the Secretary's finding must be appropriate to
the relevant context. In the instant case, four aspects of the
relevant context are particularly noteworthy.

First, the Secretary was required to find a compelling
public interest in the Compact region. See 7 U.S.C. s 7256
(Supp. 1996). Thus, contrary to Appellant's arguments, how
the situation of dairy farmers in New England compares to
that of dairy farmers in the remainder of the country is
largely irrelevant. Rather, an appropriate inquiry must focus
on the Compact region measured in absolute, not relative,
terms.

Second, it is significant here that Congress' consent to the
Compact is for a very limited duration. Consent expires
upon the completion of pending reforms of the federal scheme
for regulating milk prices nationwide, rendering the Compact
a transitional, interim measure. See id. (providing that Con-
gress' consent "shall terminate concurrent with the Secre-
tary's implementation of the dairy pricing and Federal milk
marketing order consolidation and reforms under section 7253
of this title").

Third, it is also important to bear in mind that, under the
disputed legislation, the Secretary is not authorized to imple-
ment any particular regulatory measure, but, rather, to deter-
mine whether the Compact Commission should be allowed to
regulate milk prices in the Compact region. Appellant ar-
gues that the Secretary erred in failing to give due weight to
the possibility that increased milk prices might burden low-
income families in the Compact region. However, any
"weighing" of this factor must take into account the gover-
nance structure of the Commission, for it will be the Commis-

sion's actions, not the Secretary's, that will affect consumer
prices. Significantly, the Commission is composed of equal
numbers of representatives from each Compact state--those
which are primarily dairy-consuming states as well as those
which are primarily dairy-producing states. Compact art.
III, s 4. In addition, at least one representative from each
state must be a consumer representative, id., a two-thirds
vote of the Commission is required to raise farm-gate prices,
and each state is subject to a Compact regulation increasing
farm-gate prices only if the state's delegation votes for the
measure. Compact art. III, s 5.

Finally, the record clearly identifies a strong consensus
within the Compact states that the preservation of family
dairy farms is of vital importance to the region's economic
and environmental interests in a number of ways. Thus,
although the availability of a sufficient supply of milk from
large-scale farmers--even in the event that local family farm-
ers go out of business--is a relevant inquiry in assessing
whether there is a compelling public interest, it must be
balanced against this countervailing factor of a strong region-
al desire to maintain family dairy farms.

Within this overall context, the Secretary's finding of a
compelling public interest within the Compact region was
reasonably supported by the following key factors: (1) a
principal objective of the Compact is to preserve family farms
in the Compact region; (2) family dairy farmers in the region
are under severe financial stress; and (3) the Compact will
effectively preserve family dairy farms during the transitional
period pending reform of the national scheme for regulating
milk prices, at which time congressional consent will expire.
These factors, in turn, were reasonably supported by the
record before the Secretary. See MIF II, 967 F. Supp. at 571
n.8 (citing portions of the record supporting key factors relied
on by the Secretary).

Prior to this case, the Secretary, in reviewing milk prices
pursuant to his authority under the AMAA, found that it
would not be in the public interest to raise farm-gate prices in
New England. See 58 Fed. Reg. 12,634 (1993). Appellant

argues that this prior decision cannot be squared with the
decision under attack here. We disagree. First, the question
addressed by the Secretary in the instant case is not whether
farm-gate prices should be increased, but whether the Com-
pact Commission should be authorized to raise prices during
the transitional period pending reform of the national price-
regulation scheme. Notably, the factors relevant to a price
determination in a federal milk marketing order under the
AMAA and those considered by the Commission under the
Compact are not identical. Compare 7 U.S.C. ss 602,
608c(18) (1994) with Compact arts. I, IV, ss 1, 9(e), (f).
Moreover, individual states already possess the authority to
regulate prices above the AMAA floor. See United Dairy
Farmers, 335 F. Supp. at 1013. In a region in which individ-
ual state regulation is impracticable because of the small
geographic area and the interrelationships among neighbor-
ing states, the Compact simply gives the New England region
similar authority. Thus, permitting state governments to
collaborate in setting farm-gate prices above the AMAA price
floor is hardly incompatible with the objectives of the AMAA.
In any event, even if the Secretary were deciding directly
whether prices should be raised, it is well-established that he
would not be bound by his prior decision, so long as the
decision under review is well-reasoned. See, e.g., DIRECTV,
Inc. v. FCC, 110 F.3d 816, 826 (D.C. Cir. 1997); National
Audubon Soc'y v. Hester, 801 F.2d 405, 408 (D.C. Cir. 1986).

Furthermore, the fact that the Secretary considered possi-
ble negative consequences of authorizing the Compact does
not render his finding invalid; rather, this merely demon-
strates that the Secretary realized that the compelling public
interest standard is a high hurdle and weighed factors on
every side. In particular, the Secretary's concern that the
Compact might result in higher retail prices for fluid milk in
the Compact region does not invalidate his finding. The
Secretary noted this concern, but, while expressing some
uncertainty as to how the Commission would implement the
Compact, he ultimately assumed that the Commission would
be sensitive to consumer needs and thus that any rise in milk
prices would not be so great as to offset the compelling public

interests warranting authorization of the Compact. See Am-
plified Decision, 62 Fed. Reg. at 14,880. The reasonableness
of this assumption is amply supported by the Compact's
structural requirements designed to protect consumer inter-
ests, described above. As an additional safeguard to ensure
that the Compact is implemented with sensitivity to all affect-
ed persons and interests, the Secretary offered the Commis-
sion the assistance of the Department of Agriculture to
achieve this goal. Id.

Finally, the Secretary's initial emphasis on a perceived
authority to revoke the Compact, followed by his acknowledg-
ment that he lacks such revocation authority, is not determi-
native of the question before us. The Secretary first stated,
in his Amplified Decision, that, "[g]iven the shifting nature of
the compelling interest test, the Department strongly believes
that the authority to withdraw or revoke its authorization is
an essential element of any decision which finds that a
compelling public interest exists." 62 Fed. Reg. at 14,880.
In an Addendum to that decision, published approximately
one week later, the Secretary recognized that he "may have
inadvertently created the impression that it would have been
impossible for [him] to authorize implementation in the ab-
sence of revocation authority" and clarified that, "[i]n fact,
... [his] finding of compelling public interest was based on a
broad array of factors which [he] discussed in [the Amplified
Decision and] was not contingent upon the existence of revo-
cation authority." 62 Fed. Reg. at 16,539.

The Secretary's mistaken belief that he could revoke autho-
rization of the Compact, should he determine that changing
conditions warranted revocation, does not render his decision
invalid in light of the demanding "compelling public interest"
standard. In his Amplified Decision, the Secretary concluded
that "given current conditions" authorization of the Compact
was in the compelling public interest of the Compact region.
62 Fed. Reg. at 14,880. Rather than attempt to predict
precisely how relevant conditions might play out in the future,
the Secretary simply planned to revoke his authorization
should changing conditions warrant. See id. ("Facts and
circumstances that may currently justify authorization may

subsequently change to the extent that a compelling public
interest no longer exists in the Compact region."). However,
when pushed to clarify whether--even without revocation
authority and without being able to predict with certainty
how relevant conditions might change--he anticipated that
authorization nevertheless would be in the compelling public
interest of the Compact region, the Secretary clarified that
authorization was still warranted. See Addendum, 62 Fed.
Reg. at 16,539. On the record at hand, we have no good
reason to question this predictive judgment.

Under the arbitrary and capricious standard of review, "an
agency's predictive judgments about areas that are within the
agency's field of discretion and expertise" are entitled to
"particularly deferential" review, as long as they are reason-
able. International Ladies' Garment Workers' Union v.
Donovan, 722 F.2d 795, 821-22 (D.C. Cir. 1983) (citations
omitted). The question of whether permitting the Compact
Commission to override federal farm-gate prices pending the
reform of the national milk pricing scheme would be in the
compelling public interest of the Compact region implicates
the Secretary's expertise in the regulation of milk prices. We
find that the Secretary's predictive judgment on this point is
reasonable, notwithstanding his confusion over the authority
to revoke.

III. Conclusion

For the reasons explained above, the District Court's deci-
sion granting Appellees' summary judgment motion and de-
nying Appellant's summary judgment motion is affirmed.

So ordered.

Rogers, Circuit Judge, with whom Henderson, Circuit
Judge joins, concurring: I join the opinion of the court and
write separately only to note another reason underscoring
why the condition requiring that the Secretary of Agriculture
determine whether a compelling public interest existed in the
Compact region does not involve an impermissible delegation.

The Compact Clause has always been recognized as a
device to protect federal power from encroachments by the
states. The Framers required the "Consent of Congress"
before any state could "enter into any Agreement or Compact
with another State." U.S. Const. art. I, s 10, cl. 3. It has
ever since been "evident that the [Compact Clause] prohibi-
tion is directed to the formation of any combination tending to
the increase of political power in the States, which may
encroach upon or interfere with the just supremacy of the
United States." Virginia v. Tennessee, 148 U.S. 503, 519
(1893). As Joseph Story explained, "the consent of congress
may be properly required, in order to check any infringement
of the rights of the national government; and at the same
time a total prohibition, to enter into any compact or agree-
ment, might be attended with permanent inconvenience, or
public mischief." Joseph Story, 3 Commentaries on the
Constitution of the United States s 1397 (1833); see also
Felix Frankfurter & James M. Landis, The Compact Clause
of the Constitution--A Study in Interstate Adjustments, 34
Yale L.J. 685, 694-95 (1925).

The Compact Clause was drafted at a time when the states
were relatively powerful and independent entities. The draft-
ers of the Constitution sought to ensure the supremacy of
federal power in interstate affairs. Although the drafters
spoke of congressional consent, it is clear that they hoped not
just to vindicate the legislative power of Congress, but to
protect the power of the entire federal government with the
Clause. Indeed, the Supreme Court has since recognized
that the Compact Clause required congressional consent for
interstate compacts only when the compact infringes upon

federal power. See, e.g., United States Steel Corp. v. Multi-
state Tax Comm'n, 434 U.S. 452, 459-60, 471 (1978).

With this background in mind, it is clear that the process of
consent in the instant case fully realized the purpose of the
Compact Clause. The New England states appropriately
sought congressional consent to the dairy compact, which will
affect the federal regulation of milk prices pursuant to the
Agricultural Marketing Agreement Act of 1937, 7 U.S.C.
ss 601-624, 671-674 (1994). They obtained that consent from
Congress and its delegate, the Secretary of Agriculture.
Both Congress and the Secretary were capable of vindicating
the federal power protected by the Compact Clause, the
former under the Clause itself, and the latter by virtue of
delegated and statutory powers. As the Supreme Court has
observed, "the constitution makes no provision respecting the
mode or form in which the consent of congress is to be
signified, very properly leaving that matter to the wisdom of
that body, to be decided upon according to the ordinary rules
of law, and of right reason." Green v. Biddle, 21 U.S. (8
Wheat.) 1, 85-86 (1823). For these reasons, the balance of
power envisioned in the Compact Clause has been preserved
by the actions of the New England states, Congress, and the
Secretary.