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M.H. RENKEN DAIRY CO. v. WICKARD

May 18, 1942

M.H. RENKEN DAIRY CO.
v.
WICKARD, Secretary of Agriculture



The opinion of the court was delivered by: CAMPBELL

CAMPBELL, District Judge.

This is a motion for summary judgment in favor of the defendant under Rule 56 of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c.

This action is brought to review the ruling made by the Secretary of Agriculture upon a petition filed by the plaintiff pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937, § 8c (15) (A), 7 U.S.C.A. § 608c (15) (A).

 The complaint herein is filed pursuant to Section 8c (15) (B) of the said Act, and is for the purpose of reviewing the following ruling made by the Commissioner upon the above-mentioned petition: "It is Ordered: (1) The Market Administrator was correct in ruling that under the provisions of Section 6, Subsection 1, Article VII of the order, and under Section 927.7 (f) of the amended order, that the milk diverted by petitioner from its plant in Marshall, New York, to its plant in Frankfort, New York, a part of which was manufactured into buttermilk, and was there shipped to and sold in New York City, constitutes a shipment of milk from its plant at Frankfort, New York, into the marketing area, and that the petitioner is not entitled to receive market service payments upon any of the milk transferred by it from the plant at Marshall, New York, to its plant at Frankfort, New York, during the months of April and May 1940. (2) The petition is denied. (3) * * *."

 The plaintiff is a handler of milk subject to the New York milk order and pursuant to such order filed reports for its handling of milk during the months of April and May, 1940.

 At the same time it filed a claim for market service payments pursuant to Article VII, Section 6 of the original order, and to Section 927.7(f) of the order as amended. The claim was for market service payments for milk moved from the petitioner's plant at Marshall, New York, to its plant at Frankfort, New York, where the plaintiff, then the petitioner, claimed the milk was manufactured so as to entitle it to the market service payments pursuant to the above-mentioned section.

 On the audit of the plaintiff's, then petitioner's, books at Frankfort, New York, the Market Administrator ascertained, as is also shown in the complaint herein and the petition filed with the Secretary, that the plaintiff had manufactured buttermilk at the Frankfort plant by mixing a large quantity of skim milk with whole milk and adding a souring culture to produce the buttermilk.

 The Market Administrator ruled that this buttermilk was Class 1 milk, pursuant to Article III, Section 2, paragraph 1 of the original order, and to Section 927.3(b) (1) of the order as amended.

 The market service payment provision provided that market service claims would not be paid if the second plant was operated by the same handler, and if Class 1 milk was shipped to the marketing area from such plant during the particular delivery period. By the order as amended this provision was changed, so as to provide that the claim would not be allowed if the milk on which the claim is made is manufactured at a second plant, operated by the same handler, from which within 24 hours prior to, or 48 hours after the calendar day during which such milk was received at the second plant, Class 1 milk was shipped to the marketing area. The Market Administrator ruled that the production at the Frankfort plant of buttermilk, a product properly classified pursuant to the order as Class 1 milk, prohibited him from paying the market service claim.

 The petition of the handler, the plaintiff, hereinbefore referred to, was filed with Secretary of Agriculture pursuant to Section 8c (15) (A) of the Agricultural Marketing Agreement Act, of 1937, supra, protesting against the Market Administrator's ruling, and alleging that the interpretation made by the Market Administrator was illegal and erroneous, in that the interpretation was made upon a basis of classification not contemplated in the spirit of the order, nor in its explicit wording, nor was it based on any legal basis whatsoever.

 The hearing was held upon a stipulation of facts, the presiding officer issued a tentative report finding against the petitioner.

 Exceptions were filed by the petitioner, the plaintiff herein, one of which was granted by the presiding officer, and the case then went to the Secretary of Agriculture, who on August 20th, 1941, made the hereinbefore recited finding against the petitioner.

 It is conceded that buttermilk, as such, is not specifically placed in any one of the numerous classifications set forth in the order.

 At the time of the issuance of the order it was known that there were a number of products that could be made from milk as to which a particular classification could not be set up. Class 1 milk was, therefore, defined in part as "all milk which leaves a plant as milk, chocolate milk, or any whole milk drink and whole milk the utilization of which is not ...


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