Cranston v. Freeman

• Decision Date: 02 August 1968
• Docket Number: Civ. A. No. 67-CV-38.
• Citation: 290 F. Supp. 785
• Parties: Harold R. CRANSTON, Dale R. French, Helmer A. Carlson and David B. Phillips, Individually and on Behalf of all Other Persons in their Class who are Similarly Situated and Affected, Plaintiffs, v. Orville L. FREEMAN, Secretary of Agriculture of the United States, Defendant, and Albert Guilian, Grover C. Atwood, and A. J. Malnati, Individually and on Behalf of all Other Persons in their Class who are Similarly Situated and Affected, Defendant-Interveners.
• Court: U.S. District Court — Northern District of New York

290 F. Supp. 785

Harold R. CRANSTON, Dale R. French, Helmer A. Carlson and David B. Phillips, Individually and on Behalf of all Other Persons in their Class who are Similarly Situated and Affected, Plaintiffs, v. Orville L. FREEMAN, Secretary of Agriculture of the United States, Defendant and Albert Guilian, Grover C. Atwood, and A. J. Malnati, Individually and on Behalf of all Other Persons in their Class who are Similarly Situated and Affected, Defendant-Interveners.

Civ. A. No. 67-CV-38.

United States District Court N. D. New York.

August 2, 1968.

John P. Weatherwax, Troy, N. Y. (James M. Strang, Troy, N. Y., of counsel), for plaintiffs.

J. C. Krause and John G. Liebert, Attys., Dept. of Agriculture, Washington, D. C., Jane M. Friedman, Irwin Goldbloom, Harland F. Leathers, Attys., Dept. of Justice, Washington, D. C., Justin J. Mahoney, U. S. Atty., and Frank A. Dziduch, Asst. U. S. Atty., Albany, N. Y., for defendant Freeman.

Frederick U. Conard, Jr., Don C. Polley, and Theodore Space, of Shipman & Goodwin, Hartford, Conn., for defendant-interveners.

MEMORANDUM OF DECISION AFTER TRIAL

TIMBERS, District Judge.^*

QUESTION PRESENTED

This action was brought by six dairy farmers residing in Rensselaer County, New York, suing for themselves individually and on behalf of all other persons in their class similarly situated and affected.¹ They seek declaratory and injunctive relief against the Secretary of Agriculture. Three other dairy farmers residing in Litchfield County, Connecticut, and Berkshire County, Massachusetts, for themselves individually and on behalf of all other persons in their class similarly situated and affected, were permitted to intervene as defendants. The essential questions presented are: (1) whether the Agricultural Marketing Agreement Act of 1937, 7 U.S.C. § 601, et seq., authorizes the Secretary of Agriculture to include in the Connecticut Milk Marketing Order, 7 C.F.R. § 1015, et seq. (1968), certain farm location differentials, 7 C.F.R. § 1015.72 (1968), which have been in effect since 1959; (2) whether the farm location differentials are unconstitutionally discriminatory; and (3) whether there is substantial evidence in the administrative record to support the Secretary's inclusion of these differentials in the Connecticut Milk Marketing Order.

After an eleven day trial at Albany, the Court holds that the Act does authorize the farm location differentials; that such differentials are not unconstitutionally discriminatory; and that there is substantial evidence in the administrative record to justify inclusion of these differentials in the Connecticut Milk Marketing Order. Accordingly, a permanent injunction enjoining the Secretary of Agriculture from administering the Connecticut Milk Marketing Order in such a way as to give effect to the farm location differentials is denied.

JURISDICTION AND VENUE

Jurisdiction is founded upon 28 U.S.C. § 1331(a), 28 U.S.C. § 1337, 28 U.S.C. §§ 2201-02, 5 U.S.C. §§ 701-06 and 7 U.S.C. § 601, et seq.

Venue is properly laid in this District pursuant to 28 U.S.C. § 1391(e).

PROPRIETY OF CLASS ACTION AND CLASS ACTION DEFENSE; ADVERSARY NATURE OF PROCEEDINGS

Pursuant to Rule 23(c)(1), Fed.R. Civ.P., the Court on October 20, 1967, after hearing evidence, entered two orders: one permitting the named plaintiffs to maintain the instant action as a class action and the other permitting the named defendant-interveners to maintain a class action defense.

With respect to the named plaintiffs, the Court determined, pursuant to Rule 23(a) and (b)(1)(B), Fed.R.Civ.P., that they may properly represent the interests of those producers producing milk on their respective farms and selling such milk to handlers operating under the order regulating the handling of milk in the Connecticut marketing area, 7 C.F.R. § 1015, et seq. (1968), where the farms of such producers are located outside the area described in 7 C.F.R. § 1015.72(a) (1968) (in short, those who do not qualify for the 46¢ differential).

With respect to the three named defendant-interveners, the Court likewise determined, pursuant to Rule 23(a) and (b) (1) (B), Fed.R.Civ.P., that they may properly represent the interests of those producers producing milk on their respective farms and selling such milk to handlers operating under the order regulating the handling of milk in the Connecticut marketing area, 7 C.F.R. § 1015, et seq. (1968), where the farms of such producers are located within the area described in 7 C.F.R. § 1015.72(a) (1968) (in short, those who do qualify for the 46¢ differential).

In view of the recent decision of the United States Court of Appeals for this Circuit in Eisen v. Carlisle & Jacquelin, 391 F.2d 555 (2 Cir. 1968), the Court on April 22, 1968 directed that all members of plaintiffs' and defendant-interveners' classes be given formal notice of the pendency of the action and an opportunity to be heard with respect to the continued maintenance of the action as a class action. The notices were sent by April 24, 1968 and made returnable on May 15, 1968.

Prior to the Court's order of April 22, 1968, Kenneth Hewitt and Leonard Duncan, members of plaintiffs' class, filed two papers entitled "Motion For Leave To Intervene Under Rule 24 or to Otherwise Enter Action Under Rule 23 for Purpose of Taking Depositions, to Move Dismissal of Suit and for Other Related Relief," and "Answer of Interveners and Motion to Dismiss Action, for Disposition of Escrow Fund and Other Relief." Since these papers made allegations of collusion which if true would not only have merited reversal of the class action orders but dismissal of the action, a hearing was similarly directed on May 15, 1968.

The Court thereafter held exhaustive hearings on May 15, May 27, and June 10, 1968, at which hearings all questions relating to the propriety of the maintenance of this action as a class action and all questions relating to Hewitt's and Duncan's claim of collusion were explored. Every interested person was given an opportunity to be heard and to present evidence through the testimony of witnesses and by means of exhibits. The complete record of all prior proceedings in this case was available for inspection by all interested persons at the Albany seat of Court from May 9, 1968.²

The evidence presented not only does not in any way justify dismissal of the action but it clearly merits reaffirmation of the Court's orders of October 20, 1967 permitting plaintiffs and defendant-interveners to maintain this action as a class action pursuant to Rule 23(a) and (b)(1)(B), Fed.R.Civ.P. Plaintiffs' class of approximately 250 persons and defendant-interveners' class of approximately 3000 are without any doubt "so numerous that joinder of all members is impracticable." No one has disputed, nor can anyone dispute, that there are questions of both law and fact common to the classes and that the claims of plaintiffs and defenses of defendant-interveners are typical of the claims and defenses of their classes. Furthermore, as a practical matter, the adjudication of the differentials' validity with respect to individual members of the classes would be dispositive as to all class members because the differentials cannot be enforced or withdrawn piecemeal.

The only issue which merits discussion is the charge of collusion raised by Hewitt and Duncan. Also involved here is the issue of fairness and adequacy of representation with respect to plaintiffs' maintenance of this action as a class action. Basically, Hewitt and Duncan claim that the Consolidated Milk Producers' Association (CMPA), formerly the Connecticut Milk Producers' Association, solicited plaintiffs to bring this action in the Northern District of New York, and through payment of plaintiffs' counsel fees and other means have acted to control this action for the benefit of defendant-interveners' class who constitute the majority of the Association's members.

There is no question about the fact that CMPA as an organization is interested in the continuation of farm location differentials. The vast majority of its members receive these differentials and feel that it will be to their benefit to continue to receive them. Defendant-interveners are members of CMPA and their counsel also serves as counsel to CMPA. Furthermore, CMPA readily admits that after the farm location differentials in the neighboring New York-New Jersey Milk Marketing Order were held invalid by the Court of Appeals for the District of Columbia in 1966, the Association was troubled by the consequential uncertainty surrounding the validity of the Connecticut differentials. Part of this concern derived from the fact that a minority of its members, including all the named plaintiffs, did not receive the differentials and had vocally expressed their unhappiness with the situation. In fact, as established by the credible evidence, plaintiff Cranston had discussed the institution of a legal action to challenge the differentials with his long-time friend and neighbor, Attorney John P. Weatherwax, both before and after the decision in the District of Columbia.

It was only after Attorney Weatherwax had agreed to institute such an action challenging the differentials, that Cranston was contacted on January 27, 1967 by a CMPA official who had heard rumors that Cranston and others intended to commence a suit. This contact was the result of a decision on January 25, 1968 by CMPA to aid any members undertaking either to challenge or defend the differentials by reimbursing such members for reasonable expenses and attorney fees. The CMPA official explained the policy and mentioned the name of a possible attorney, but Cranston said that he already had his own. The official told Cranston that he would like to check on his reputation and see what kind of an attorney he was and if he was capable, because the Association was concerned about having good attorneys on both sides of the question. Aside from...