Before L. HAND, Chief Judge, and SWAN and CHASE, Circuit Judges.
The Dairymen's League appeals from a judgment which dismissed its complaint in an action to review an order of the Secretary of Agriculture, which had for the most part denied its petition filed under § 8c(15)(A) of the Act, 7 U.S.C.A. § 608c(15)(A), for a refund of sums paid to the "producer-settlement fund."*fn1 The petition was referred to a "judicial officer," who held a hearing and on March 8, 1946, made an extensive and detailed report which has been published.*fn2 The findings of fact incorporated into the report are too voluminous and detailed to be repeated here; and, since our decision will be primarily of interest to those who are concerned with the administration of milk regulation in the Metropolitan Marketing Area,*fn3 we may proceed in our discussion upon the assumption of an acquaintance with the findings. The defendant's brief contains at its end a graphic chart of the plaintiff's four claims, which in small compass makes clear the controlling facts, and this we append hereto: it will, we believe, make intelligible what we have to say, or at least serve as a skeleton to which such facts as are necessary may be added.
During the two periods in question (October 1, 1938, to February 1, 1939, and July 1, 1939, to April 30, 1940) the plaintiff had two plants, one at Horseheads, New York, the other at Mansfield, Pennsylvania, which we shall speak of as its "country plants." Both were outside the "marketing area," which comprised only the City of New York and the Counties of Westchester, Nassau and Suffolk. To these plants "producers" - farmers - delivered part of the milk which is in question in Claims One and Two; the rest of this milk was delivered to the "country plants" by "feeder" plants which had received it from other "producers." Nearly all the milk in question in Claims Three and Four was delivered to the Borden Company by "producers," who were members of the plaintiff, or by the plaintiff's "feeders." The case turns upon how all this milk should be "classified" under the Regulation, of which we set out in the margin those parts that are controlling.*fn4
The milk in question in Claim One, having been received either at Horseheads or Mansfield from "producers" or "feeders," was there turned into cream, and all sold, F.O.B. Newark, New Jersey, to the Philadelphia Dairy Products Company. That company had an "affiliate," called the Janssen Dairy Corporation, which had a "plant" in Hoboken. Newark was not in an "approved county"; but Hoboken was - Hudson County. The cream, though billed to, and paid for by, the Philadelphia Company, was "picked up" at the railway platform at Newark by the Janssen Company, and was taken by trucks to the Janssen Company's Hoboken plant, whence all of it went to three of that company's other buildings, except such part as was sold to one, Decker, in Hudson County. One of the three buildings was in Bergen County - "unapproved"; the other two were in Hudson County.
The question in whether this cream was properly classified under subdivision (b) of § 927.4 as II-A, or should have been classified as III-D. The defendant argues, and the "judicial officer" found, that III-D (except for the concluding clause covering "cream cheese") was limited to cream sold from the first of the two plants covered by the second proviso of subdivision (a). The argument is that, since the body of subdivision (a) makes classification depend upon "utilization at" the first "plant," or "movement from" it, in contrast with both provisos which make "utilization at" the second "plant" the only basis of classification, some distinction must be presupposed, and classification at the second "plant" can never depend upon the milk's "movement from" it. There is much to be said for this; but the difficulty is that subdivision (b), which defines "classes of utilization," speaks throughout (except in the first phrase of III-D itself) of the form in which the produce "leaves" a "plant"; and, therefore, incorporates the factor of "movement from" a "plant." The question is a vexed one and we shall leave it undecided, accepting the plaintiff's argument, for the purposes of this appeal, that it had an option of classifying the cream at either the first or the second "plant."
Coming then to the cream in Claim One, we shall first consider its proper classification at the two "country plants." Concededly, it was within II-A, unless it could be brought within III-D: that is, unless it was delivered to a "purchaser" who was "not a handler." We shall start by assuming with the plaintiff that the milk which the "feeders" delivered to the two "country plants" is to be classified like that delivered by "producers" - that is, that the "feeders" shall not count as a first "plant." The record leaves uncertain just what was the relation between the Philadelphia Company and the Janssen Company; all it says is that the second corporation was an "affiliate," which may mean that the corporations should be treated as a single jural person, or as two. We shall consider Claim One on both hypotheses.
If we treat the corporation as several, the cream was never "delivered" to the Philadelphia Company at all; the Janssen Company took it directly from the platform of the carrier, a bailee, and carried it by truck to the Hoboken "plant." The plaintiff does not suggest that the Philadelphia Company was not the "purchaser," and it necessarily follows that upon this hypothesis III-D was not available at the two "country plants." If, on the other hand, we treat the Philadelphia Company and the Janssen Company as one, when the Janssen Company "picked up" the cream from the carrier's platform in Newark, although the delivery was to the "purchaser," the Philadelphia company was also a "handler," by virtue of the ownership by the Janssen Company of that company's Hoboken "plant," which was in an "approved county." This is quite another question than whether a person who has a "plant" in an "approved county" and another "plant" in an "unapproved county" is to be regarded as a "handler" as to milk which he receives in the "unapproved county." All we need hold as to Claim One is that when a "purchaser" receives cream in an "unapproved county" and takes it at once to a "plant" in an "approved county," his status as "handler" of that milk is to be determined by the location of that "plant."
What we have said disposes of the classification of the cream at the two "country plants"; it remains to consider its classification at the Janssen Company's Hoboken "plant." So much of the cream as was delivered from the Hoboken "plant" to other "plants" of the Janssen Company whether on Hudson County - an "approved county" - or in Bergen County - an "unapproved" - was not delivered to a "purchaser." We will state the justification for this conclusion is our discussion of Claim Two, where the question also arises. The only "purchaser" from the Hoboken "plant" was Decker, who was a "sub-dealer" in Hoboken; but since the "delivery" was in an "approved county," III-D did not cover it. Claim One was properly dismissed.
The milk involved in this claim was also delivered by "producers" and "feeders" to the plaintiff's two "country plants" where it was made into cream. From the two "country plants" it went to a plant of the plaintiff in Newark in an "unapproved county," whence part of it was sold to the Janssen Company, and was taken to one of its "plants" in Bergen County, an "unapproved county." The remainder was sold to dealers or "sub-dealers," who did their business, so far as appears, in "approved counties." Some of this cream was sold at the "plant" in Newark, some was shipped by express collect, and some was delivered "on route" by the plaintiff's trucks.
The plaintiff first argues that its delivery to its Newark "plant" was a purchase, for which it relies upon a remark of Reed, J., in United States v. Rock Royal Co-Operative, Inc.*fn5 that "purchased" means "acquired for marketing." That was said in discussing sales of milk by "producers" to their cooperative, as to which the Act was explicit; it was not intended as a general definition, and to use it in interpreting III-D would unduly expand the court's meaning. Class III-D was probably put into to Regulation because it was supposed that cream actually bought by someone outside an "approved county" was unlikely to find its way into the "marketing area." Since the first "plant" was the two "country plants" and there was no sale from them, we need consider only the proper classification at the plaintiff's Newark "plant." As to the cream sold to the Janssen Company and taken by it to its own "plant" in Bergen County, since the company was a "purchaser" and the delivery was in an "unapproved county," the question whether the cream was within III-D depends upon whether the "purchaser" was a "handler." That, in turn, depends upon whether its ownership of the Hoboken "plant" in an "approved county" made it a "handler" as to cream delivered at its "plant" in the "unapproved county," or whether its character as "handler" should be determined by the location of the "plant" at which the cream was "delivered." The defendant argues that unless the phrase, "not a handler," in III-D means, "not a handler anywhere," it is a redundant interpolation, which we should not assume. His reason for this is that by definition*fn6 a "handler" is one who handles milk or cream "which was received at a plant approved by any health authority for the receiving of milk to be sold in the marketing area"; and that a person who handles milk or cream, only at a "plant" in an "unapproved county," would not come within that definition, even without the addition of the phrase, "not a handler." Hence, to give the phrase any significance whatever, it must mean that the "purchaser" is not a "handler" elsewhere; which results in saying that he must not have a "plant" in any "approved county." To this the plaintiff answers that, if the phrase, "not a handler," were left out, a New York City dealer might bring himself within III-D by buying cream in an "unapproved county" and taking it to sell in New York; and that it was necessary to provide that he must not himself be a handler to prevent this.However, we cannot believe that, if III-D had not contained the phrase, it would have been susceptible to such easy evasion as this argument presupposes. It would be true that "delivery" would in that case have been made in an "unapproved county," if by "delivery" no more was intended than the transfer of possession to the "purchaser"; but that, we submit, is not a tenable reading. We have already so decided in discussing Claim One as to the delivery of cream to the Janssen Company on the railroad platform at Newark, which it carried by truck to its Hoboken "plant." In the plaintiff's example of the New York City dealer the applicability of III-D (if the phrase were left out) would depend upon whether the "purchaser" took delivery at the seller's "plant," or the seller delivered at the "purchaser's" "plant"; and to make that circumstance determinative would introduce a factor altogether alien to the general purposes of the Act. Since the Janssen Company had a "plant" in an "approved county," the cream delivered to it at its Bergen County "plant" was delivered to a "handler," and was not within III-D.
The cream sold to the dealers and sub-dealers from the Newark "plant" was in part delivered to them in Newark and in part "on routes" or by express. The only remaining question as to these is whether they were "handlers"; but in view of what we have said as to "delivery" this is not important. So far as appears, all had their place of business in "an approved county," and the "delivery" was in that county, regardless of whether they took possession at ...