SW Legal studies in Business

Agriculture Regulations May Discriminate Based on Income
Description Appeals court upheld the Department of Agriculture regulations that distributed disaster relief partly on the basis of income. The Department did not have to provide a rationale for the rule, so long as it effected the purpose of the aid as instructed by Congress.
Topic Administrative Law
Key Words Disaster Relief; Criteria; Arbitrary and Capricious
C A S E   S U M M A R Y
Facts In 1998 Congress provided $1.5 billion to "producers on a farm who have incurred losses in 1998 due to disasters" and instructed the Secretary of Agriculture to distribute the aid in a "fair and equitable manner." The Secretary issued regulations about distribution of the aid, including a rule that no person "who has gross revenue in excess of $2.5 million for the 1997 tax year" would be eligible for any aid. No rationale was given for that income figure. Farmers who had gross revenue above $2.5 million but suffered disaster losses sued, contending that the regulation was arbitrary and capricious. The district court ruled for the government; the farmers appealed.
Decision

Affirmed. The regulations are valid. The Secretary was not required to provide a justification for the regulations; they only had to be reasonable. The criteria were reasonable since they permitted the most effective distribution of the limited disaster relief money. Courts give great deference to administrative implementation of statutory provisions when Congress delegates such authority to an agency.

Citation McDaniels v. U.S., 300 F.3d 407 (4th Cir., 2002)

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