Brown v. Parker

• Decision Date: 09 July 1941
• Docket Number: No. 78.,78.
• Citation: 39 F. Supp. 895
• Court: U.S. District Court — Southern District of California
• Parties: BROWN v. PARKER, Director of Agriculture et al.

39 F. Supp. 895

BROWN v. PARKER, Director of Agriculture et al.

No. 78.

District Court, S. D. California, N. D.

July 9, 1941.

Irvine P. Aten, Richard V. Aten, and G. L. Aynesworth, all of Fresno, Cal., for plaintiff.

Strother P. Walton, of Fresno, Cal., for the Zone.

W. L. Bowers, Deputy Atty. Gen., for State of California.

Before STEPHENS, Circuit Judge, YANKWICH and BEAUMONT, District Judges.

STEPHENS, Circuit Judge.

The plaintiff, who is a packer of raisins in the State of California, instituted this action to restrain the enforcement of a prorate program for raisins prescribed under the authority of the California Agricultural Prorate Act, Chap. 754, p. 1969, Cal.Stats.1933 as amended, hereinafter called the Act. He has alleged and we hold that he has proved that the issues involve a sum in excess of $3,000, in that the State of California is attempting to enforce the provisions of the Act and is claiming penalties in the amount of $13,000 against the plaintiff.

It is plaintiff's position that the program formulated under the Act is unconstitutional in that it prevents his purchase in open market for shipment in interstate commerce and that it constitutes a direct interference with interstate commerce in contravention of the provisions of the Federal Constitution.

The defendant Proration Zone No. 1 filed a cross complaint praying that the Act and program thereunder be declared a valid exercise of the police power of the State of California, that the plaintiff be enjoined from refusing to comply therewith, and for an accounting and damages for his failure to comply in the past.

The case was tried before United States Circuit Judge ALBERT LEE STEPHENS and United States District Judges LEON R. YANKWICH and CAMPBELL E. BEAUMONT, sitting as a "three judge court" under the authority of 28 U.S.C.A. § 380, and was submitted upon the question of the constitutionality of the program set up under the Act.¹

The raisin industry is an important one in California. It is uncontroverted that 95% of the naturally dried raisins consumed in the United States are produced in said Zone No. 1,² and 95% of such raisins produced in said zone are consumed outside the State of California. The stipulation of facts filed by the parties shows the following with reference to the customary manner in which the producers of raisin grapes in California, including Zone No. 1, operate:

"The producer of grapes is generally either the owner or the lessee of the land upon which the grapevines are located. * * * The producer picks the bunches of grapes to be utilized for raisins and spreads them on trays laid between the rows of vines, turns the trays from time to time, and finally dumps the dried contents into sweat boxes or picking boxes. The producer grades the same for quality and to eliminate substandard and inferior raisins and sometimes leaves this to be done for him by the packer before the latter takes delivery. When the producer is ready to deliver his raisins, he hauls the same, or employs independent truckers to haul the same, in sweat boxes or picking boxes to the packing plant, or in some cases the packer calls and takes delivery of the same in the vineyard. * * * All raisins sold by producers are sold to such packers in the State of California. Sale is completed when delivery is made and practically all sales are cash transaction, the producer receiving full payment for all raisins delivered immediately or within a ten day period.

"When the raisins are delivered by producers to such packers, they are cured but have not been subjected to any cleaning or other treatment. When delivered in such sweat boxes or picking boxes to the packer, the raisins are in clusters attached to the dried stems upon which they matured, except such as have fallen from said stems and have generally still attached a portion of the stem. * * *

"The raisins received from the producers are stored by the packers in containers upon the premises of the latter and are held by him sic in such containers for periods varying from a few days up to two years. * * * The packer at any time or at various times during this period removes the raisins from such containers and prepares the same for commercial sale and distribution to the public by cleaning, stemming, cap-stemming, seeding (muscats only), grading, sorting and packaging in various sized containers. * * *

"When such raisins are so prepared for commercial sale and delivery, the packer delivers the same to jobbers, wholesalers, brokers, distributors, and dealers for resale and distribution to the public.

"From the time of the delivery of raisins by the producer to the packer, as set forth herein, the preparation, care, handling, selling and distributing of such raisins is carried on by such packer and all subsequent purchasers and handlers independently of the producer and entirely free from any control or direction of such producer. * * * No producer has any knowledge of the subsequent movement or ultimate use or consumption of the particular raisins delivered by him and has no right, title or interest in any of such raisins after the sale and delivery by him to the packer. This procedure is carried on by the packer independently of the producer of the raisins who has no knowledge nor means of knowledge as to the ultimate disposition of his particular raisins or as to whether the same ultimately move in intrastate or interstate commerce, except that at times certain producer-packers ship some of their own production directly into interstate commerce."

It will thus be seen that without any prorate provisions in the law, the plaintiff as a packer-dealer would be free to buy and would ordinarily buy the raisins which he boxes and sells in interstate commerce direct from the producer thereof and in amounts limited only by his desire or ability.

Under the Act after a prorate program has been formulated and approved by the commission,³ the agent appointed to administer the program shall issue to the producers certificates as provided in the Act. These certificates are divided into primary and secondary certificates. Each producer shall be entitled to one primary certificate which identifies him as a "producer" under the terms of the Act. The Act, § 20, as amended by St.1939, p. 1948, provides that "secondary certificates shall be numbered consecutively and shall be used to control the time and volume of harvesting or other preparation for disposal. Such secondary certificates shall accompany all deliveries of the prorated commodity by producers into a primary trade channel,"⁴ and it shall be unlawful for any prorated commodity to be delivered into a primary trade channel without the necessary secondary certificate therefor. It is also unlawful for any handler to receive or have in his possession without proper authority any such commodity. The Act contains a further provision that "in the case of commodities which are normally concentrated for preparation for market, the program committee may authorize harvesting of the entire crop for the purpose of delivery to a concentration point and subsequent marketing control."

The program formulated under the Act provides that 20% of all "standard"⁵ raisins shall be delivered into a surplus pool,⁶ the producers to be given an advance of $27.50 per ton for Muscat and Thompson Seedless raisins, and $25 per ton for Sultanas, the advance to be obtained from the proceeds of a nonrecourse loan from the Commodity Credit Corporation, a federal agency.

Fifty percent of all standard raisins are to be delivered into a stabilization pool, the producers to receive an advance from the Commodity Credit Corporation funds of $55 per ton for Muscat and Thompson Seedless raisins, and $50 per ton for Sultanas.

The balance of 30% of standard raisins may be disposed of by the producer without restriction as "free tonnage" provided he has obtained a secondary certificate, which certificate is issued to him when he has satisfied the pool requirements and upon payment of a certificate fee of $2.50 per ton of such free tonnage.

It is provided that no substandard or inferior⁷ grade of raisins may be offered as free tonnage or delivered into surplus or stabilization pools, but such raisins are delivered into separate pools for disposal by the program committee at the best prices obtainable and under the fairest conditions obtainable for by-product purposes. The net proceeds are distributed ratably to the producers contributing to such pools.

Raisins in the surplus pool may be sold by the committee "as soon as practicable after delivery of the same to the committee * * * provided, however, that none of the standard raisins in such pool shall be sold or otherwise disposed of prior to January I of the marketing season in which such pool is established". The Committee determines the prices at which the raisins shall be sold, but it is provided in the program that sales of surplus pool raisins shall be only for assured by-product and other diversion purposes, and that they shall not be sold into normal marketing channels.⁸ There is a provision for transfer of raisins from the surplus pool into the stabilization pool in the event the original estimates were not in accord with later found facts and it later appears that an excessive quantity of raisins has been placed in the surplus pool.

As to the raisins in the stabilization pool, the program provides that they shall be sold by the committee "as soon as practicable after delivery of same to the committee, * * * in such manner as to maintain stability in the markets and to dispose of such raisins". No sales of raisins from the stabilization pool shall be made at less than the prevailing market price for raisins of the same variety and grade on the date of sale. Stabilization pool raisins shall be sold only into normal marketing channels. There is a provision for transfer of raisins from the stabilization pool into the surplus...