Constitutional Law - Economic Legislation - D.C. Circuit Rejects Challenge to Milk Regulation
Economic liberty, defined broadly as "the right to earn a living through trade or labor," (1) is protected under the Fourteenth Amendment of the United States Constitution. (2) Starting in the New Deal era, however, courts have afforded sweeping deference to legislatures when hearing challenges to laws impinging on claimants' economic freedoms, leaving governments free to "adopt whatever economic policy may reasonably be deemed to promote public welfare." (3) In 1938, the Supreme Court held that economic liberties are not fundamental rights worthy of close scrutiny by the courts. (4) Today, courts review legislation affecting this class of rights under the highly deferential rational basis test, under which a law is upheld "if there is any reasonably conceivable state of facts that could provide a rational basis" relating the law to a legitimate government purpose. (5) As a consequence, citizens who have been wronged by their government in the economic sphere are left with no recourse but the inhospitable democratic processes that infringed on their liberties in the first place. (6)
Recently, in Hettinga v. United States, (7) the D.C. Circuit upheld the dismissal of a challenge to a statute regulating dairy markets. (8) An impassioned concurring opinion by a majority of the panel, however, challenged the blind deference to legislatures that precedent demands, signaling its discontent with the doctrinal status quo in the field of economic liberty. (9) Democratic processes are sometimes manipulated by special interest politics, and in an effort to be ideologically neutral toward any economic policy, courts may be enabling the "crony capitalism" that afflicts the American economy by foreclosing any meaningful opportunity for citizens to challenge laws curtailing their economic liberties. (10) Given the present concern over the influence of corporate interests on the American political process, the time is ripe for the Supreme Court to reconsider its approach to constitutional challenges to economic legislation as a new way to guard against illegitimate special interest policies.
Dairy farmers and milk processors operate under a complex regulatory scheme established by the Agricultural Marketing Agreement Act of 1937 (11) (AMAA). Under the AMAA, producers supply raw milk to handlers, who must then pay money into a centralized pool called the "producer settlement fund." (12) These payments are regularly redistributed to producers at a fixed rate based on the quantity of milk sold. (13) Until recently, the Secretary of Agriculture exempted from participation in the price-control system farmers who operated both as producers and handlers (14) and handlers who sold milk to customers in regions that were not regulated under the federal scheme. (15)
Hein and Ellen Hettinga owned two dairies in Arizona that operated under the exceptions present in the AMAA. (16) By operating outside the scope of the AMAA, the Hettingas were able to sell milk to retailers at discounted prices. (17) This advantage evaporated, however, when the U.S. Department of Agriculture (USDA) enacted a Final Rule (18) that eliminated the exceptions underpinning the Hettingas' business advantage. (19) The Hettingas challenged the rule, (20) but their case was still pending when Congress passed the Milk Regulatory Equity Act of 2005 (21) (MREA), which amended the AMAA to include the Final Rule's major provisions. The only dairy operations in the country impacted by these laws were those owned by the Hettingas. (22)
The Hettingas dropped their USDA challenge and brought suit against the United States, alleging that the MREA was unconstitutional because (1) it was an unlawful bill of attainder, (2) it violated their equal protection rights by singling them out for enforcement, and (3) it denied them due process by mooting their challenge to the USDA rule. (23) The district court dismissed the Hettingas' case for failure to exhaust their administrative remedies pursuant to the AMAA. …