Opinion for the court filed by Circuit Judge WRIGHT.
Statement concurring in the result and in Parts I and II of the court's opinion filed by Circuit Judge WILKEY.
J. SKELLY WRIGHT, Circuit Judge:
Plaintiffs-appellants challenge the coupon allotment system established by the United States Department of Agriculture (USDA) to implement the directive of the Food Stamp Act, 7 U.S.C. §§ 2011-2025, that food stamp recipients be given "an opportunity to obtain a nutritionally adequate diet * * *." Id. § 2013(a). See also id. §§ 2011, 2014(a), 2016(a). We find that the Secretary of Agriculture violated the procedural requirements of Section 4 of the Administrative Procedure Act (APA), 5 U.S.C. § 553 (1970), in promulgating the coupon allotment system, that the system is therefore void as promulgated, and that the case must be remanded to the Secretary for new proceedings.
The Food Stamp Act (the Act) was first passed in 1964. Its purposes were to distribute the agriculture surplus of this nation in a beneficial manner, to safeguard the health and well-being of our citizens, and to raise the level of nutrition among low-income households. 7 U.S.C. § 2011 (1964). The Act allows eligible recipients to purchase food stamps (coupons) at prices significantly below their face value. The stamps, in turn, may be used at face value to purchase food at certain retail stores. The cost of the coupons for each household is variable; the Act directs that it "shall represent a reasonable investment on the part of the household, but in no event more than 30 per centum of the house-hold's income * * *." 7 U.S.C. § 2016(b). The original Act directed the
Following the 1971 amendments, the Secretary published notice of a proposed rule-making, 36 Fed.Reg. 7240 (1971), inviting comments from interested parties. New regulations, all dealing with the administration of the program, not with the size of the coupon allotments, were issued on July 29, 1971. Id. at 14102-14117. New coupon allotments were issued on April 16 and 17, id. at 7273, 7320-7321, and reissued in slightly revised form on July 29, 1971. Id. at 14118-14120. The coupon allotment system was based on the cost to a hypothetical family of four
Plaintiffs-appellants began this litigation in December 1971, seeking declaratory and injunctive relief because of the Secretary's alleged violations of the Food Stamp Act. The individual appellants are members of nine low-income households, all of which receive food stamps. They sue on behalf of themselves and others similarly situated. The other appellants are the City of New York, the Commonwealth of Pennsylvania, and the National Welfare Rights Organization and its affiliates. In District Court appellants charged the Secretary was violating the Act in two ways:
157 U.S.App.D.C. at 137, 482 F.2d at 726.
On remand, the District Court sought to narrow the issues so as to permit a final adjudication. Thereupon, appellants submitted a motion for partial summary judgment, App. 273a, accompanied by a statement of material facts not in dispute, App. 276a-292a, and a statement of genuine issues, App. 293a-298a. USDA filed a supplemental memorandum in support of its motion for summary judgment. App. 299a-301a. Without hearing oral argument, the District Court, on December 12, 1973, granted USDA's motion for summary judgment and denied appellants' motion for partial summary judgment. Rodway v. United States Department of Agriculture, D.D.C., 369 F.Supp. 1094 (1973). Appellants again appealed to this court.
At oral argument it became apparent that the Secretary's compliance with the procedural requirements of the APA in promulgating the allotment regulations was a substantial issue in this case, although it had not been raised in the District Court or in the prior appeal to this court. On their face the regulations had seemingly been promulgated without notice, solicitation of comments, or issuance of a basis and purpose statement. See 5 U.S.C. § 553. Accordingly, we ordered the parties to respond in writing to a list of questions probing the consequences of this apparent omission.
All parties agree that the APA would not, by its own terms, govern the issuance of the allotment regulations. Expressly exempted from the procedural requirements of Section 4 are any matters "relating to * * * public property, loans, grants, benefits, or contracts." 5. U.S.C. § 553(a)(2). The food stamp program would appear to be a matter relating to public "grants" or "benefits," thereby exempting rules relating to the program from the APA. See Rodriguez v. Swank, N.D.Ill., 318 F.Supp. 289 (1970), affirmed, 403 U.S. 901, 91 S.Ct. 2202, 29 L.Ed.2d 677 (1971) (A.F.D.C. benefits excluded). See generally, Bonfield, Public Participation in Federal Rulemaking Relating to Public Property, Loans, Grants, Benefits, or Contracts, 118 U.Pa.L.Rev. 540 (1970).
USDA does not argue that it was not bound by the regulation of July 24, 1971,
To show its compliance with the APA, USDA points to the procedures surrounding its adoption of various rules for the administration of the food stamp program. For these rules, there was notice soliciting comments published on April 16, 1971, 36 Fed.Reg. 7240, final rules incorporating changes suggested by comments received published on July 29, 1971, id. at 14102-14117, and a subsequent analysis of the comments received published on October 16, 1971, id. at 20145-20148. Nonetheless, the answer to USDA's argument is short: however procedurally proper the adoption of these rules, they did not concern in any way the allotment regulations that are the subject of this lawsuit. The proposed rule-making dealt with a vast number of rules necessary for administration of the program. Proposed rules outlined the participation of state agencies, individual households, wholesale and retail food stores, and banks. Plans were proposed for emergency food assistance for disaster victims, and procedures were outlined for administrative and judicial review of USDA actions. But of the basic ingredient of the program, the allotments system, there was not a word. See 36 Fed.Reg. 7240-7254. Admittedly, the notice was framed broadly:
Id. at 7240. The provisions that followed, however, were only the proposed administrative regulations described above. Such notice is insufficient to include the allotment system by inference. Section 4 of the APA is clear in its demands: the notice must include "either the terms or substance of the proposed rule or a description of the subjects and issues involved." 5 U.S.C. § 553(b)(3). The notice appearing at 36 Fed.Reg. 7240 does not meet this requirement so far as the allotment system is concerned.
USDA Supplemental Memorandum at 4. While 5 U.S.C. § 553(b) does exempt from the formal notice requirement situations where "persons subject [to the proposed regulations] are named and either personally served or otherwise have actual notice thereof in accordance with law," the exception plainly does not apply to this case. Appellants, of course, were named nowhere. Moreover, they did not have actual notice. Even if the legislative history fully supported the Secretary's view of the law, it cannot seriously be asserted that the congressional debates provided more than constructive notice to appellants. Only publication in the Federal Register meets the APA requirement of constructive notice. If the notice requirement of the APA could be avoided by reference to inferential discussions obscurely placed throughout various federal publications, much of the salutory purpose of the procedural rule-making requirements of the APA would be vitiated. Absent actual notice, the public should be held accountable only for notice plainly set forth in the Federal Register. By this standard, USDA's asserted notice must fail.
Having failed to comply with the first procedural requirement of informal rule-making, USDA in due course failed to comply with the other two. Since there was no notice, there was no solicitation of comments. Unremarkably, no comments on the allotment regulations were received. And, when the revised allotment figures were promulgated on July 29, 1971, they were accompanied by no basis and purpose statement. 36 Fed.Reg. 14118-14120. USDA relies on the analysis that finally was produced for those administrative regulations that were a product of orderly rule-making. But that analysis dealt, again unremarkably, only with the comments received concerning those regulations.
The absence of an administrative record has significance apart from the doubt it casts upon after-the-fact explanations. Even if the proffered affidavits did provide an acceptable explanation of the Secretary's decision, it would be an explanation of a decision reached without the comments of interested parties. Not only would appellants' comments
In sum, the Secretary failed to comply with the procedural command of the APA in promulgating allotment regulations for the food stamp program. This failure cannot be cured by litigation affidavits because, as post hoc rationalizations, they are unacceptable substitutes for a contemporaneous basis and purpose statement and because they do not provide a "whole record" to review. Accordingly, we find the regulations are invalid as promulgated.
In so holding, however, we are mindful of the critical importance of the allotment regulations to the functioning of the entire food stamp system, on which over ten million American families are now dependent to supplement their food budgets. Thus we do not order the regulations vacated pending the rule-making proceedings. Rather, they must continue in effect, and the Secretary must continue to make the cost-of-living adjustments mandated by the Act, 7 U.S.C. § 2016(a), until validly promulgated regulations can take their place. However, we think that transition should occur with expedition. In matters as vital as
Since this case must be remanded for a new rule-making proceeding, we have no occasion to address the substantive validity of the present regulations. Whether the Economy Food Plan provides the basis for a nutritionally adequate diet is plainly a factual question within the Secretary's expertise. While we can review his ultimate determination to see whether it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law * *," 5 U.S.C. § 706(1)(A), we can offer him no guidance at this point in making that initial determination.
Once the Secretary determines what constitutes a nutritionally adequate diet, the Economy Food Plan or something else, any distribution mechanism must necessarily comport with the demands of the Act. We think it plain that the Food Stamp Act requires the Secretary to distribute the food stamp coupons in such a way that all, or at least virtually all, recipients are given the "opportunity to obtain a nutritionally adequate diet * * *." 7 U.S.C. § 2013(a). We reach this conclusion from the face of the statute itself, and from its legislative history.
The statute offers no suggestion that any distribution system that offered significant numbers of recipients less than that necessary to purchase a nutritionally adequate diet would be acceptable. Congress found substantial malnutrition in America and sought to alleviate it. 7 U.S.C. § 2011. The food stamp program was designed to permit "low-income households to purchase a nutritionally adequate diet through normal channels of trade." Id. That the program would offer recipients this opportunity is repeated again and again throughout the Act. Id. §§ 2013(a), 2014(a), 2016(a). We find no suggestion on the face of the Act, or any reason to impute one, that the opportunity is not to be offered to all eligible recipients.
This conclusion is bolstered by reference to the legislative history. Most significant
Hearings on H.R. 12430 and H.R. 12222 Before the House Committee on Agriculture, 91st Cong., 1st Sess., Serial Q, Part 1, at 8 (1969) (emphasis added). Secretary Hardin also testified before a Senate Committee:
Hearings on S. 6, S. 339, S. 1608, S. 1864, and S. 2014 Before the Senate Committee on Agriculture and Forestry, 91st Cong., 1st Sess., 389 (1969) (emphasis added). The Administration's proposed deletion of the phrase "more nearly" was accepted without opposition; congressional debate centered on whether offering recipients merely an "opportunity" to purchase a nutritionally adequate diet was itself sufficient.
116 Cong.Rec. 44440-44441 (1970) (emphasis added).
We are thus convinced by the language of the statute and by the legislative history that the 1971 amendments marked a major shift in the policy of the Food Stamp Act, a shift from supplementing the diets of low-income households to guaranteeing those households the opportunity for an adequate diet. Congress plainly intended the 1971 amendments to assure that no eligible family need go malnourished; the Government would provide all the opportunity to be healthfully fed. Manifestly, that congressional intent is frustrated if the food stamp program is administered in such a way that a substantial number of eligible households do not receive sufficient coupons to purchase what the Secretary determines to be a nutritionally adequate diet.
While we have no need to determine whether the present administrative system, based on the cost of a nutritionally adequate diet for a hypothetical family of four, complies with the Act,
USDA's failure to account for the composition of each recipient household by age and sex is not the only reason why appellants receive less than they need to purchase a nutritionally adequate diet. The recipient's health and the amount of his daily physical activity also influence the cost to him of a nutritionally adequate diet. The fact that, in accordance with the Act, 7 U.S.C. § 2016(a), the Secretary adjusts the allotment figures for inflation only twice a year, and in so doing uses cost of food data current six months prior to the effective date of the new allotment schedules, means that the actual cost of the Economy Food Plan is frequently higher than the allotment even for the hypothetical family of four. Moreover, appellants are all from Northeastern states where the cost of food is higher than the national average, which the Secretary uses in pricing the Economy Food Plan.
All this the Secretary concedes.
Further than this we do not go. We express no view on what allotment system is to be preferred, or, should an individualized approach be used, how many variables should be accommodated. That is initially to be determined by the Secretary, and we think a proper determination must await the presentation of facts not now before us. But we stress that the Secretary must make an active inquiry into the facts and must take whatever steps are required to comply with the legislative mandate. The nation's poor and low-income families who are so dependent on the relief promised by the Food Stamp Act deserve no less.
Accordingly, this case is remanded to the District Court with instructions to return it to the Secretary for a new rule-making proceeding.
WILKEY, Circuit Judge:
I concur in the result and in Parts I and II of the court's opinion. I respectfully suggest that Part III is dicta, and whether it is all helpful dicta may be problematical.
Order, March 6, 1975.
36 Fed.Reg. 20148. Even if that sentence dealt fully with the substance of appellants' complaint, which it in fact addresses only inferentially, it is not a sufficient statement of basis and purpose to show that the agency engaged in reasoned decision-making or to provide an adequate basis for appellate review. See Greater Boston Television Corp. v. FCC, 143 U.S.App.D.C. 383, 444 F.2d 841 (1970), cert. denied, 403 U.S. 923, 91 S.Ct. 2229, 29 L.Ed.2d 701 (1971). See also Wright, The Courts and the Rulemaking Process: The Limits of Judicial Review, 59 Cornell L.Rev. 375, 381 (1974). And, of course, even if the sentence were fully adequate it would not remedy the deficiencies caused by the absence of notice and comment rule-making.
This is not to suggest, however, that once allotment regulations are promulgated in compliance with APA procedures, those procedures must be followed for every semi-annual allotment adjustment mandated by the Act. 7 U.S.C. § 2016(a). So long as the adjustment is purely a statistical calculation involving no change in underlying policy, the Secretary may properly exempt those proceedings from the notice and comment requirements if he can
5 U.S.C. § 553(b)(B).
Aguayo v. Richardson, 2 Cir., 473 F.2d 1090, 1103 n.20 (1973).
5 U.S.C. § 553(c) (emphasis added).
Buckeye Power, Inc. v. EPA, 6 Cir., 481 F.2d 162, 171 (1973).
(Emphasis added.) The italicized word "any" was added, without comment, to this provision by the 1971 amendments. See H.R.Rep. No. 91-1402, 91st Cong., 2d Sess., 22 (1970); S.Rep. No. 91-292, 91st Cong., 1st Sess., 14 (1969).
116 Cong.Rec. 44441 (1970).
Rodway v. United States Department of Agriculture, D.D.C., 369 F.Supp. 1094, 1098 (1973). While we do not quarrel with the District Court's view of the equal protection clause, we must observe that this case concerns statutory construction, not constitutional interpretation. That the allotment regulations may be constitutional does not, of course, imply that they comport with the dictates of the Food Stamp Act.
Cost of Food at Home Estimated for the Economy Food Plan
1September 1971, U. S. Average ________________________________________________________________________ | Cost for — | ____________________________________________________|___________________| Sex-age groups 2| 1 Week | 1 Month | ____________________________________________________|_________|_________| FAMILIES| Dollars| Dollars| Family of two, 20-35 years 3..................... | 15.00 | 65.10 | Family of two, 55-75 years 3..................... | 12.30 | 53.40 | Family of four, preschool children 4............. | 21.70 | 94.50 | Family of four, school children 5................ | 25.30 | 109.70 | | | | INDIVIDUALS 6| | | | | | | Children, under 1 year ............................ | 2.90 | 12.60 | 1-3 years ....................................... | 3.70 | 16.10 | 3-6 years ....................................... | 4.40 | 19.20 | 6-9 years ....................................... | 5.40 | 23.30 | Girls, 9-12 years ................................. | 6.10 | 26.50 | 12-15 years ..................................... | 6.80 | 29.30 | 15-20 years ..................................... | 6.90 | 29.90 | Boys, 9-12 years .................................. | 6.30 | 27.20 | 12-15 years ..................................... | 7.40 | 31.90 | 15-20 years ..................................... | 8.50 | 36.80 | Women, 20-35 years ................................ | 6.30 | 27.40 | 35-55 years ..................................... | 6.10 | 26.30 | 55-75 years ..................................... | 5.20 | 22.30 | 75 years and over ............................... | 4.70 | 20.30 | Pregnant ........................................ | 7.50 | 32.60 | Nursing ......................................... | 8.80 | 38.00 | Men, 20-35 years .................................. | 7.30 | 31.80 | 35-55 years ..................................... | 6.80 | 29.50 | 55-75 years ..................................... | 6.00 | 26.20 | 75 years and over ............................... | 5.60 | 24.40 | Per person 7..................................... | 6.10 | 26.30 | ____________________________________________________|_________|_________| 1Costs for the Economy Plan are estimated at 80 percent of the cost for the Low-cost Plan. Quantities of major food groups in these plans were published in Family Economics Review, October 1964. In estimating costs for the Low-cost Plan, selections of foods within groups and prices paid were based on these urban households with incomes of $2,000 to $2,999 surveyed in spring 1965. Survey prices were updated to the reporting period by the change in "Estimated Retail Food Prices by Cities" released by the Bureau of Labor Statistics. 2Persons of the first age listed up to but not including the second age. 3Ten percent added for family size adjustment. 4Man and woman, 20 to 35 years; children 1 to 3 and 3 to 6 years. 5Man and woman, 20 to 35 years; child 6 to 9; and boy 9 to 12 years. 6Costs given for persons in families of 4. For other size families, adjust thus: 1-person, add 20 percent; 2-person, add 10 percent; 3-person, add 5 percent; 5-person, subtract 5 percent; 6-or-more person, subtract 10 percent. 7Plan for an average person in the civilian population (1960). App. 88 ½a.
Monthly Cost Monthly Appellant and of Economy Coupon Monthly Household Size Food Plan Allotment Difference Rodway (11) $410.24 $248 $162.24 McKnight (11) 407.46 248 159.46 Hollis (9) 294.34 216 78.34 Robinson (8) 286.90 200 86.90 Butler (8) 276.64 200 76.64 Walker (3) 125.11 94 31.11 Angiletta (8) 281.60 200 81.60 McArthur (3) 129.75 94 35.75 James (7) 271.92 180 91.92
App. 284 1/2a. Thus USDA concedes that appellants receive an average of 32% less than that necessary for them to have an opportunity to purchase what the Secretary determined to be a nutritionally adequate diet, an opportunity Congress guaranteed appellants in the Food Stamp Act.
Affidavit of Richard E. Lyng, Assistant Secretary of Agriculture for Marketing and Consumer Services, App. 106a-108a.
The variables of inflation and the differential price of food in different parts of the country are already quantified by the Government itself. Adjustment for these figures in a system that works largely through individual state programs does not seem difficult.
The variables of health and individual physical activity may be more difficult to quantify in any efficient manner, but we would expect the Secretary on remand to inquire diligently into the significance of these variables, as well as any others of import raised by the comments, and the possibility of their quantification.