Mich. C. & F. Assn. v. Agric. M. & B. Bd., 467 U.S. 461 (1984)

Michigan Canners & Freezers Association, Inc.

v. Agricultural Marketing and Bargaining Board
No. 82-1577

Argued March 19, 1984
Decided June 11, 1984
467 U.S. 461

APPEAL FROM THE SUPREME COURT OF MICHIGAN

Syllabus

The federal Agricultural Fair Practices Act of 1967 (AFPA) was enacted to enable individual farmers and other producers of agricultural commodities to join together voluntarily in cooperative associations in order to protect their marketing and bargaining position as against large and powerful agricultural processors. The AFPA makes it unlawful for "handlers" defined to include both processors and producers’ associations -- to coerce any producer "in the exercise of his right to join . . . or to refrain from joining" a producers’ association, 7 U.S.C. § 2303(a), or to coerce any producer to enter into or terminate a marketing contract with a producers’ association or a contract with a handler, § 2303(e). The Michigan Agricultural Marketing and Bargaining Act (Michigan Act) includes the same prohibitions as the AFPA, but goes beyond it by establishing a state-administered system by which producers’ associations are organized and certified as exclusive bargaining agents for all producers of a particular commodity. Under this system, if an association’s membership constitutes more than 50% of the producers of a particular commodity and its members’ production accounts for more than 50% of the commodity’s total production, the association may be accredited as the exclusive bargaining agent for all producers of that commodity. Upon accreditation of the association, all producers of the commodity, regardless of whether they have chosen to become members of the association, must pay a service fee to the association, and must abide by the contracts the association negotiates with processors. The Michigan Agricultural Cooperative Marketing Association (MACMA), a producers’ association accredited under the Michigan Act, is the sole sales and bargaining representative for asparagus producers in the State. After the MACMA had negotiated contracts on behalf of Michigan asparagus growers to sell the asparagus crop for a certain year, appellant asparagus growers and association of asparagus processors sued MACMA in state court seeking a declaratory judgment that the provisions of the Michigan Act requiring service fees and mandatory adherence to an association-negotiated contract are preempted by the AFPA. The Michigan Supreme Court rejected appellants’ claim, holding that the AFPA prohibited only processor misconduct, whereas the challenged provisions of the Michigan Act regulated producers’ activities.

Held: The challenged provisions of the Michigan Act are preempted by the AFPA. Pp. 469-478.

(a) This is a case where the basis for preemption is that Congress, while not displacing state regulation entirely, has preempted state law to the extent that it conflicts with federal law and "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Hines v. Davidowitz, 312 U.S. 52, 67. Pp. 469-470.

(b) The AFPA’s theme of voluntariness is carried through to the provisions defining the prohibited practices. By defining the term "handler" to include producers’ associations as well as processors, the AFPA prohibits interference by the former to the same extent that it prohibits interference by the latter. Just as the AFPA forbids processors to interfere in a producer’s decision to become or remain affiliated with an association, it also forbids a producers’ association to interfere in that decision by coercing producers to belong to, or participate in a marketing contract with, the association. Pp. 470-471.

(c) Congress’ intent to shield producers from coercion by both processors and producers’ associations is confirmed by the AFPA’s legislative history, which reveals that the question of the producer’s free choice was a central focus of congressional attention during passage of the Act. Despite the fact that the Michigan Act and the AFPA share the goal of augmenting the producer’s bargaining power, the Michigan Act conflicts with the AFPA by establishing "accredited" associations that wield the power to coerce producers to sell their products according to terms established by the association, and to force producers to pay a service fee for the privilege. Pp. 471-477.

(d) The Michigan Act empowers producers’ associations to do precisely what the AFPA forbids them to do. In effect, an association accredited under the Michigan Act may coerce a producer to enter into a marketing contract with a producers’ association -- a clear violation of § 2303(c). In addition, although the Michigan Act does not compel a producer to join an association, it binds him to the association’s marketing contracts, forces him to pay fees to the association, and precludes him from marketing his goods himself, and thus, in practical effect, imposes on the producer the same incidents of association membership with which Congress was concerned in enacting § 2303(a). Pp. 477-478.

416 Mich. 706, 332 N.W.2d 134, reversed.

BRENNAN, J., delivered the opinion for a unanimous Court.