The opinion of the court was delivered by: KNIGHT
The plaintiff has moved for summary judgment. The defendant does not oppose.
The plaintiff is a milk handler. It purchased and received milk from producers at Cohocton, New York. It separated and sold sweet cream to Heicklen Farms, Inc., and delivered it at Hoboken, New Jersey. from the last-mentioned place this cream was taken to the premises of Fairmont Creamery Company at New York, New York, where it was placed in refrigerators and at some time sold by Heicklen Farms, Inc., to the Fanny Farmer Candy Shops, Inc., in Brooklyn, New York, and delivered there by direction of the Fairmont Creamery Company.
Plaintiff's Cohocton plant is outside of the New York City milk marketing area, but the plaintiff was a handler of milk coming within the provisions of Order No. 27 (C F R, 1938 Sup., part 927) relating to milk handling in New York City.
The shipments in question covered a period from July 1, 1939, to March 31, 1940, and reports of such sales were made as required monthly to the market administrator, and such reports purported to show that the cream was entitled to be classified as III-A. This classification was made on the basis that the delivery to the Fanny Farmer Candy Shops, Inc., was the 'second plant' and that the cream was utilized there in the making of milk chocolate.
Thereafter the market administrator reclassified the cream so sold as II-A resulting in an additional charge against the plaintiff in the sum of $ 5,624.66, which was deducted from the milk pool from the amount due the plaintiff for cream for the month of June, 1940. As provided by Section 8c(15)(A) of the Agricultural Marketing Agreement Act of 1937, 50 Stat. 246, 7 U.S.C.A. § 608c(15)(A), plaintiff petitioned for a hearing on this reclassification, and after such hearings the classification of the cream as II-A was sustained by the Secretary to the Commissioner of Agriculture.
Plaintiff now brings this suit to review the action of the Secretary and for a refund of the sum hereinbefore stated, as authorized by Section 8c(15)(B) of the Agricultural Adjustment Act of 1933 as amended and reenacted and amended by the Agricultural Marketing Agreement Act of 1937, 50 Stat. 246, 7 U.S.C.A., § 608c(15)(B).
The authority of the court is limited to determining whether or not the rulings of the Secretary are in accordance with law. Queensboro Farms Products, Inc. v. Wickard, 2 Cir., 137 F.2d 969; Crull v. Wickard, 6 Cir., 137 F.2d 406. The Court will not pass upon the weight of the evidence before the Secretary. If his findings are supported by substantial evidence, they will not be disturbed. Swayne & Hoyt v. United States, 300 U.S. 297, 57 S. Ct. 478, 81 L. Ed. 659; National Labor Relations Board v. Link-Belt Co., 311 U.S. 584, 61 S. Ct. 358, 85 L. Ed. 368; United States v. Morgan, 313 U.S. 409, 61 S. Ct. 999, 85 L. Ed. 1429. This is a rule of determination which is applicable in the consideration of decisions of administrative boards.
The plaintiff asserts its right to maintain this suit upon two grounds: First, that the Fairmont Creamery Company premises did not constitute a second plant as that term was used in Official Order No. 27, Article III, section 1, as it existed prior to the amendment effective May 1, 1940; that the Fanny Farmer Candy Shops, Inc., constituted such plant; and, therefore, the plaintiff was entitled to classification of III-A, as provided by Article III, section 2, (4) of said Order; and second, that the market administrator was not justified in re-classifying the cream on the basis of a change of administrative interpretation when any possibility of recoupment was ended. It is the contention of the government that the Fairmont Creamery Company premises constituted a plant and that the cream was properly classified II-A by virtue of said Order 27.
The Agricultural Adjustment Act provides that the Secretary of Agriculture shall, subject to its provisions, make orders applicable to those engaged in the handling of any agriculture commodity or product therefrom specified in the Act. Section 8c(5) provides that orders issued pursuant to the Act in the case of milk and its products shall contain certain terms and conditions, among which are:
'(A) Classifying milk in accordance with the form in which or the purpose for which it is used, and fixing, or providing a method for fixing, minimum prices for each such use classification which all handlers shall pay, (as plaintiff) * * * . Such prices shall be uniform as to all handlers' subject as to certain adjustments.
The orders involved in this suit regulate only the handling of milk in the New York Metropolitan area, and all of the transactions in question here arose prior to certain amendments to Order 27, which became effective May 1, 1940.
Order No. 27 was issued pursuant to the provisions of the Agricultural Adjustment Act, 7 U.S.C.A. § 601 et seq. It provided that 'handlers' (plaintiff's are such as defined in the Act) regulated under this order shall pay for milk from producers prices according to a method called by the trade the 'classified class plan.'
Article III, section 1 of Order 27, in part, reads: ' * * * if milk is moved as cream, * * * from any plant outside the marketing area to any second plant, classification of such milk at the first plant may be in accordance with its utilization at such second plant.'
Article III, section 2, Classes of Utilization -- 2 reads: 'Class II-A milk shall be all milk the butterfat from which leaves * * * a plant in the form of cream, except as set forth in paragraphs 5 and 7 ...