Columbia Cheese Co. v. McNutt, 239.

• Decision Date: 20 August 1943
• Docket Number: No. 239.,239.
• Parties: COLUMBIA CHEESE CO. et al. v. McNUTT, Federal Security Adm'r.
• Court: U.S. Court of Appeals — Second Circuit

137 F.2d 576 (1943)

COLUMBIA CHEESE CO. et al. v. McNUTT, Federal Security Adm'r.

No. 239.

Circuit Court of Appeals, Second Circuit.

August 20, 1943.

Martin A. Fromer, of New York City (Martin A. Fromer and Leo Pfeffer, both of New York City, of counsel), for petitioners.

Wendell Berge, Asst. Atty. Gen., and Oscar A. Provost and Edward G. Jennings, Sp. Assts. to Atty. Gen. (Edward B. Williams, Atty., Federal Security Agency, of Washington, D. C., of counsel), for respondent.

Before SWAN, CHASE, and CLARK, Circuit Judges.

CHASE, Circuit Judge.

The petitioners are cheese manufacturers who allege that they are adversely affected by the order and regulations which will be discussed later in greater detail and they brought this proceeding for judicial review in accordance with § 701(f) of the Act, 21 U.S.C.A. § 371(f), which provides for such a review in cases of actual controversy.

The administrative proceedings which led to the issuance of the order here under review began in August of 1939 with the object of establishing a definition and standard of identity for cream cheese; and these resulted in a proposed order which was issued on September 28, 1940, with findings of fact and a proposed regulation. But on application of the petitioners, who filed exceptions to the order, the hearing was reopened and consolidated with a hearing on proposals for standards for neufchatel, cottage and creamed cottage cheeses. This hearing resulted in a final order of December 22, 1942, which substantially rejected petitioners' arguments in favor of standards which would allow lower fat and higher moisture content in the manufacture of these cheeses.

The regulations, Code of Federal Regulations, Title 21, Pt. 19, which are now under attack are in substance as follows: Sec. 19.515 requires that cream cheese contain by weight not less than 33% of milk-fat and not over 55% of moisture; that it must be made from a pasteurized starting mixture of cream with milk or skim milk or both, to which may be added lactic acid producing bacteria; that it may be "hot-packed" and that designated moisture-retaining gums, not to exceed 0.5% by weight, may be used provided the presence of these gums is stated on the label. Cream, milk or skim milk or a mixture of two or all of these may be used if the product is "hot-packed"; and water, since it was not specified, may not be used. Sec. 19.520 sets the standard for neufchatel cheese and prescribes that the manufacture and basic ingredients be the same as cream cheese except that the milk fat content may vary from 20 to 32% inclusive and a moisture content up to 65% is allowed. Sec. 19.525 requires that cottage cheese have a moisture content of no more than 80% and that it be made from pasteurized sweet skim milk; and by Sec. 19.530 creamed cottage cheese must contain no more than 80% by weight of moisture and must be made so that at least 4% of milk fat is added by "mixing cottage cheese with pasteurized cream or a pasteurized mixture of cream with milk or skim milk or both."

The questions presented on this review are whether the Administrator's definitions and standards of identity, establishing the fat and moisture content of cream and neufchatel cheeses are supported by substantial evidence of record; are reasonable definitions and standards of identity; will promote honesty and fair dealing in the interests of consumers; and establish definitions of the foods in question under their common names so far as is practicable; whether the standards which fail to provide for the addition of water in the "hot-pack" process of manufacture of cream and neufchatel cheeses are reasonable and based on substantial evidence; whether the cottage cheese standard, which requires the use of pasteurized skim milk, is valid under the Act and whether the standard requiring a maximum of 80% moisture content is based on substantial evidence; and finally, whether the creamed cottage cheese standard, which calls for the addition of milk fat after the making of the curd, and not before, is valid.

It will be helpful to state at the outset that the scope of review of an order of the Administrator of the Federal Food, Drug and Cosmetic Act is necessarily limited, as Federal Security Administrator v. Quaker Oats Co., 318 U.S. 218, 63 S.Ct. 589, 87 L.Ed. — shows clearly enough, and does not allow the substitution of the court's judgment, even though the court on the same record might reach a conclusion different from that of the Administrator. The order of the Administrator must, therefore, be affirmed if it is supported by substantial evidence of record and is within statutory and constitutional limitations. The question, then, presented by this review is largely one of determining whether the Administrator's findings were supported by the evidence and whether his order conformed to the statutory purposes of the Act.

The Administrator found that there are produced and marketed various cheeses of a soft uncured nature, but that these cheeses, while they have similar characteristics, have separate and distinct identities. These cheeses have the same basic constituents (coagulated proteins of milk, soluble nonfat milk solids, and varying proportions of water and milk fat) and it is by changing the proportions of the basic constituents in the starting mixture that the differences in characteristics are obtained. Of these soft uncured cheeses cream cheese was found to be the relatively high-fat, low-moisture cheese, containing traditionally from 35 to 40% or more of fat and 55 to 50% or less of moisture, although in good commercial practice the percentages might vary 2% above or below what the manufacturer sought to obtain.

One of the problems in the manufacture of cream cheese has been the leakage of moisture, which renders the cheese less attractive and correspondingly less merchantable. But in 1927 or thereabouts it was discovered that moisture leakage could be largely prevented by the addition of harmless vegetable gums, such as carob or locust bean gum, or karaya gum, or tragacanth gum; and it was found that the use of these gums for this purpose, up to 0.5% by weight, could not be abused when the moisture content of cream cheese is restricted. But following the discovery that gum could be used to prevent leakage it became the practice of many manufacturers to heat the gum and curd together so as to disperse the gum in the curd, by homogenization, and it became possible by this "hot-pack" process to raise the moisture and lower the fat content of the cheese without losing the appearance and texture of cream cheese. Thus it was found that most of the cheese made by this process contains from about 23 to 30% of fat and from about 60 to 65% of moisture, whereas cheeses with the same percentage of fat and moisture made by the older method of manufacture would have a softer texture than that which was found to be the traditional cream cheese. It was also found that the desired percentage of fat and moisture in the "hot-pack" process could be obtained by adding the proper amounts of cream or milk or skim milk, or any combination of these, before the curd is heated and homogenized; and that water has also been used for this purpose, although skim milk can be used to accomplish...