Cranston v. Hardin, s. 916

• Decision Date: 12 September 1974
• Docket Number: 919,D,918,Nos. 916,s. 916
• Citation: 504 F.2d 566
• Parties: Harold R. CRANSTON et al., Plaintiffs-Appellees, v. Clifford M. HARDIN, Secretary of Agriculture of the United States, Defendant-Appellee, and Albert Guilian et al., Defendants-Intervenors- Appellees, Roger L. Noble et al., Appellants, Laval Bilodeau et al., Appellants, Charles P. Ryan et al., Appellants. ockets 73-2275, 73-2367, 73-2368.
• Court: U.S. Court of Appeals — Second Circuit

Page 566

504 F.2d 566

Harold R. CRANSTON et al., Plaintiffs-Appellees, v. Clifford M. HARDIN, Secretary of Agriculture of the United

States, Defendant-Appellee, and Albert Guilian et al.,

Defendants-Intervenors- Appellees, Roger L. Noble et al.,

Appellants, Laval Bilodeau et al., Appellants, Charles P.

Ryan et al., Appellants.

Nos. 916, 918, 919, Dockets 73-2275, 73-2367, 73-2368.

United States Court of Appeals, Second Circuit.

Argued June 18, 1974.

Decided Sept. 12, 1974.

Sanford Rosenblum, Albany, N.Y., for appellants Bilodeau and Ryan, and others.

John P. Weatherwax, Troy, N.Y., for plaintiffs-appellees Cranston, and others.

Irwin Goldbloom, Atty., Dept. of Justice (Irving Jaffe, acting Asst. Atty. Gen., Morton Hollander, Atty., Dept. of Justice, Washington, D.C., of counsel), for defendant-appellee Secretary of Agriculture.

Frederick U. Conard, Jr., Hartford, Conn. (Coleman H. Casey, Shipman & Goodwin, Hartford, Conn., of counsel), for defendants-intervenors-appellees Guilian, and others.

Charles P. Ryan, Washington, D.C., for appellants Noble, and others.

Caroline Nickerson, Montpelier, Vt., for amicus curiae Vermont Public Interest Research Group, Inc.

William C. Kittell, Burlington, Vt., for amici curiae Alliance of the Northeast Dairyman, National Farmers Organization, and Northern Farms Cooperative Association.

Before SMITH and MANSFIELD, Circuit Judges, and BARTELS, District judge. ^*

MANSFIELD, Circuit Judge:

On a previous appeal in this case we held that a provision in the Connecticut Milk Marketing Order, 7 C.F.R. 1015, et seq., permitting 'nearby' dairy farmers to receive 46 cents per hundredweight more for their milk marketed in Connecticut than 'distant' farmers-- i.e., farmers located outside of the market area-- was invalid. ¹ See Cranston v. Hardin, 428 F.2d 822 (2d Cir. 1970), cert. denied, 401 U.S. 949, 91 S.Ct. 937, 28 L.Ed.2d 232 (1971). We are now asked to decide whether, on remand, Judge Foley of the Northern District of New York fairly disposed of all funds held in escrow in connection with these proceedings. We hold that he did except in one instance where he charged funds that had been placed in escrow after our prior decision was announced with a proportionate share of an award to the 'nearby' Connecticut farmers. In all other respects the judgment of the district court is affirmed.

The history of this protracted litigation, which wer briefly recapitulate, began in February, 1967, when the action was first brought in the Northern District of New York by six 'distant' dairy farmers located in New York (Harold R. Cranston, et al.) against the then Secretary of Agriculture, Orville Freeman. The plaintiffs, who sued on behalf of themselves and all other persons in their class, claimed that the farm location price differential in the Connecticut Milk Marketing Order, 7 C.F.R. 1015.72 (1968), which became effective in 1959, was not authorized by 8c(5) of the Agricultural Marketing Agreement Act, 7 U.S.C. 608c(5) ('the Act' herein). Under the differential provision an amount sufficient to pay the 'nearby' farmers 46 cents per hundredweight for their milk was first deducted each month from the monthly pool of milk receipts before distribution of that pool on a prorata basis to all dairy farmers (nearby, intermediate and distant) selling milk in Connecticut. After three 'nearby' farmers (Albert Guilian, et al.) had been permitted to intervene as representatives of their class, Judge Foley of the Northern District ordered that all amounts which plaintiffs and other 'distant' farmers would, in the absence of the differential, received over and above the pro rata share of the pool to which they were entitled be placed in an escrow account to be held by the federal Market Administrator for the Connecticut market. These deposits in escrow-- totalling approximately $20,000 to $25,000 per month ² -- were continued throughout the earier stages of the litigation and even, as we shall see below, after this court had held that the differential was invalid.

Prior to trial of the underlying claim, which was assigned to Judge Timbers, then sitting by designation in the Northern District, two members of the plaintiffs' class, Leonard Duncan and Kenneth Hewitt, petitioned to intervene or, alternatively, to have the suit dismissed on the grounds that the suit was collusive. Duncan and Hewitt, who were represented by attorney Charles P. Ryan, claimed that John Weatherwax, counsel for the named plaintiffs, was being paid and controlled by the Consolidated Milk Producers' Association (CMPA), formerly the Connecticut Milk Producers' Association. A large majority of the Association's membership were 'nearby' Connecticut farmers. That Association's counsel, Frederick Conard, was also counsel for the defendants-intervenors. After a hearing on the collusion claim and an 11-day trial of the plaintiff's underlying claim, Judge Timbers found 'not an iota of credible evidence' that the CMPA, the defendants-intervenors, or the defendant himself 'acted or attempted to act, or even desired to act' to control the plaintiff's conduct in the proceedings. He therefore refused to dismiss the action or deny it class action status. Proceeding to the merits, he held that the 'nearby' differential was authorized by 8c(5)(B) of the Act, 7 U.S.C 608c(5)(B), which specifically authorizes adjustments to the uniform price to be paid to dairy farmers for 'market . . . differentials customarily applied by the handlers subject to such order.' See Cranston v. Freeman, 290 F.Supp. 785 (S.D.N.Y.1968).

Both the named plaintiffs and Duncan, et al. appealed to this court from Judge Timbers' decision. Pending their appeals, the Supreme Court on December 9, 1969, handed down its decision in Zuber v. Allen, 396 U.S. 168, 90 S.Ct. 314 (1969). In Zuber several Vermont dairy farmers had challenged the validity of the 'nearby' price differential in the Massachusetts-Rhode Island Milk Marketing Order, see 7 C.F.R. 1001.72 (1968). The Supreme Court, upholding judgments of the district and circuit courts invalidating the differential, held that the differential was not authorized by the Marketing Agreement Act since it was not related to any additional economic service performed by the 'nearby' farmers. See 396 U.S. at 188, 90 S.Ct. 314. The Court also affirmed the circuit court's final disposition of the funds which had been accumulating in an escrow account during the litigation. The circuit court had held that, although the differential was invalid from its inception, the 'nearby' farmers could recover all funds escrowed prior to the district court's decision invalidating it, since 'the nearby farmers could legitimately have expected to receive, and the distant farmers to pay, the differential until it had been held invalid, after full opportunity for the presentation of views on both sides, by a court.' See Zuber v. Allen, 131 U.S.App.D.C. 109 402 F.2d 660, 676 (1968).

Following the Supreme Court's decision in Zuber, the named plaintiffs in the present litigation filed a supplemental brief in this court urging reversal of Judge Timbers' decision in light of Zuber. In a lengthy response, however, the Secretary of Agriculture urged that the entire matter should be remanded to him for possible refashioning of the differential provision and that, in the meantime, the escrowing should be continued since otherwise market conditions in Connecticut could be seriously disrupted. In an affidavit in support of the Secretary's response, Herbert L. Forest, Director of the Dairy Division, Consumer and Marketing service, United States Department of Agriculture, predicted that immediated termination of the differential would lead to a substantial increase in the uniform price for 'distant' farmers marketing their milk in Connecticut, which would attract more milk than the manufacturing facilities could handle. Two months later, however, on April 1, 1970, the Secretary withdrew his request that the escrowing be continued since none of the parties had submitted a proposal which would effectively deal with the danger of surplus milk. In papers which he filed with this court the Secretary stated:

'After a careful review of the proposals received, the Department of Agriculture has concluded that none of the ones which it believes appropriate subjects for administrative hearings, would be likely to alleviate substantially the problem which prompted the request that the escrowing be continued; i.e., the possibility of a substantial influx of milk into the market for which there are not adequate facilities. Accordingly there are no present proposals before the Secretary which will meet the problem, and no present way of taking substantial appropriate administrative action, with a definite and reasonable time period. In the circumstances, any request for continued escrowing would serve no useful purpose, and therefore the Secretary withdraws the previous request for the continued escrowing.'

Agreeing with the Secretary that immediate termination of the 'nearby' differential would disrupt the Connecticut market, but disagreeing that none of their proposals could effectively deal with the problem, the 'nearby' farmers urged this court to remand to the district court with directions either to 'enter an order providing for the gradual elimination of the price differential . . . at the rate of 12 cents on the date of its decision, 12 cents as of dates respectfully four and eight months from the date of the decision and 10 cents as of twelve months from the date of the decision,' or to conduct hearings 'with regard to whether or not such a remedy would be justifified in the interests of equity, economic efficiency and the larger public interest.' In either event, the 'nearby' producers argued, this court should order 'continued escrowing of the differential monies pending final termination of the challenged provisions.'

In a brief per curiam opinion we ...