New York State Guernsey Breeders Co-Operative, Inc. v. Noyes

• Decision Date: 19 November 1940
• Citation: 284 N.Y. 197,30 N.E.2d 471
• Parties: NEW YORK STATE GUERNSEY BREEDERS CO-OPERATIVE, Inc., v. NOYES, Commissioner of Agriculture and Markets of State of New York (SCOTT et al., Interveners).
• Court: New York Court of Appeals Court of Appeals

284 N.Y. 197

30 N.E.2d 471

NEW YORK STATE GUERNSEY BREEDERS CO-OPERATIVE, Inc.,

v.NOYES, Commissioner of Agriculture and Markets of State of New York (SCOTT et al., Interveners).

Court of Appeals of New York.

Nov. 19, 1940.

Appeal from Supreme Court, Appellate Division, Third Department.

Proceeding in the matter of the application of the New York State Guernsey Breeders Co-Operative, Inc., for an order under article 78, s 1283 et seq., of the Civil Practice Act, against Holton V. Noyes, as Commissioner of Agriculture and Markets of the State of New York, to review the Commissioner's promulgation of a milk order regulating and fixing prices for milk produced and sold in the Niagara Frontier Marketing Area, wherein the Buffalo Milk Producers Co-Operative Association, Inc., and Hugh Scott intervened. From an order of the Appellate Division of the Supreme Court in the Third Judicial Department, entered July 23, 1940, 260 App.Div. 240, 22 N.Y.S.2d 132, which confirmed an order made by the Commissioner of Agriculture and Markets of the State of New York, the applicant appeals.

Orders modified, and, as modified, affirmed. Irving G. Hubbs and Merritt A. Switzer, both of Pulaski, and Henry S. Manley, of Albany, for appellant.

Robert G. Blabey and Milo R. Kniffen, both of Albany, for respondent.

Harry D. Suitor, of Niagara Falls, for interveners, respondents.

SEARS, Judge.

New York State Guernsey Breeders Co-Operative, Inc., challenges, in a proceeding under article 78 of the Civil Practice Act, Official Order No. 127, promulgated by the Commissioner of Agriculture and Markets on September 19, 1938. The order was issued under the authority vested in the Commissioner by sections 258-k to 258-n, inclusive, of the Agriculture and Markets Law (Consol.Laws, ch. 69, added L.1937, ch. 383 The Rogers-Allen Act).

The Niagara Frontier Co-Operative Milk Producers Bargaining Agency, Inc., representing approximately 85 per cent. of the milk producers in the production area supplying the Niagara Frontier Marketing Area, informally petitioned the Commissioner of Agriculture and Markets to conduct a public hearing upon a proposed milk marketing order which had been unanimously approved by the delegates of the bargaining agency. The petitioner in this proceeding was a member of the bargaining agency and its delegate had approved the proposed order and the petitioning of the Commissioner for a hearing thereon.

The proposed order provided, among other things, for (1) the classification of milk received by marketers at plants to supply the marketing area as follows: Class 1, milk which leaves the plant where received as whole milk; Class 2A, milk which leaves the plant where received in the form of fluid cream; Class 2B, milk used in the manufacture of ice cream, and purposes not otherwise described; Class 4A, milk made into butter; (2) the establishment of minimum prices for milk used in each class; (3) the fixing of a uniform price (subject to certain differentials) to be paid by marketers for all milk regardless of the use made thereof; (4) the creation of an equalization fund into which each marketer would pay the amount of the purchase price in excess of the uniform price, and from which each marketer would draw for payment to its producers the amount by which the purchase price fell below the uniform price, ‘so as to bring all lower rates of payment up to the uniform price,’ and to reduce all higher rates to the uniform price. Price differentials were provided for butterfat content, market service, and for milk sold as Guernsey milk. The differential in favor of milk sold as Guernsey milk was thirty cents per hundredweight, to be paid by the marketers.

The Commissioner gave the required notice of the hearing upon the proposed order. At the hearing petitioner's representative and business manager testified that petitioner had forty-five members in the marketing area, ‘a drop in the bucket’ as there were over 3,000 producers in the area; that the presentation he was about to make was not at all in opposition to the order or to any principle involved in it; that the provision in the proposed order for a premium of thirty cents per hundredweight for milk sold as Guernsey milk placed his association under a handicap in selling the milk of its forty-five members in this market; that Guernsey milk is different from all other milk, not only in its richness in butterfat, but also in its fine color, flavor, vitamin activity, minerals and other characteristics; that petitioner, among others, had identified its milk by the registered trade-mark, ‘Golden Guernsey’; that its superiority as a table milk had been advertised in a national way; that petitioner had devoted a great deal of money and effort to ‘build up’ for Golden Guernsey milk a definite place in the fluid markets in each city; that it costs more to produce milk from Guernsey cows than from some other breeds; and that the provision in the proposed order for Guernsey milk was not in the interest of comsumers and might under some circumstances be very much against the interest of Guernsey producers. On the basis of these facts, he requested ‘That the Commissioner amend this proposed order by striking out from it the provision imposing an extra thirty cents per hundredweight ‘for milk sold as Guernsey milk’ and insert therein a provision somewhat like that requested for the New York City order which will exempt from equalization milk of certain breed characteristics and market identity.'

It appears that petitioner at the hearing opposed the premium on Guernsey milk under the equalization plan, primarily because, to its collective mind, complete exemption would be more advantageous and equitable. It was not averse to separate treatment of Guernsey milk. Indeed, no one was. Another spoke in opposition to the premium, but she also opposed the entire equalization plan.

After the hearing and after a referedum that showed that over 75 per cent. of the producers affected favored it, the Commissioner promulgated Official Order 127. The final order conformed with the proposed order in essentials, except that no provision whatsoever was made in it for a price differential for milk sold as Guernsey milk. The differential of thirty cents per hundredweight was struck out as requested, but the correlated alternative asked by petitioner, complete exemption, was not inserted.

The order...