Darks Dairy, Inc. v. Alabama Dairy Commission

• Citation: 367 So.2d 1378
• Parties: DARKS DAIRY, INC. et al. v. ALABAMA DAIRY COMMISSION et al. 77-464.
• Decision Date: 23 February 1979
• Court: Supreme Court of Alabama

Page 1378

367 So.2d 1378

DARKS DAIRY, INC. et al. v. ALABAMA DAIRY COMMISSION et al.

77-464.

Supreme Court of Alabama.

Feb. 23, 1979.

Curtis H. Springer, Montgomery, for appellants.

Robert M. Alton, Jr., Montgomery, for appellees.

ALMON, Justice.

This is an appeal from a declaratory judgment rendered in the Circuit Court of Montgomery County. Darks Dairy, Inc., and other milk distributors ¹ brought this action seeking a declaration that they should not be required to pay the license fees required by tit. 22, § 215, Code of Alabama 1940 (Recomp. 1958).

In January, 1977, the Alabama Dairy Commission terminated both the minimum retail price controls and the minimum and maximum wholesale price controls. Certain milk distributors took the position that the Alabama Dairy Commission, by abolishing the wholesale price control, had also abolished the license fee schedule for milk distributors. Accordingly, they refused to pay their monthly license fees, or paid their license fees under protest. The distributors also filed this action for a declaratory judgment seeking an order: 1) declaring Ala. Code, tit. 22, § 215 (Recomp. 1958) (Supp. 1973) ² void, ineffective and without force of law; 2) compelling the escrow and eventual refund of all license fees paid to the Commission pursuant to § 215, subsequent to January 27, 1977; 3) and a permanent injunction restraining the enforcement of § 215 against the distributors.

In April of 1977, while the declaratory judgment action was pending, the Alabama Dairy Commission rejected the distributors' position and issued an order requiring that the distributors pay all delinquent license fees within ten days and that a $50.00 per day fine be imposed on any distributor who failed to pay its license fee.

After hearing evidence, the trial court entered the following judgment:

1. That the Plaintiffs are required by Section 215, Title 22, Code of Alabama, 1940, (now § 2-13-53(c)(2), Code 1975), to pay and the Alabama Dairy Commission is authorized to collect a license fee of two cents for each 100 pounds of milk and controlled milk products processed and sold for human consumption within those areas controlled by the Commission.

2. That the phrase in Section 215, Title 22, Code of Alabama, 1940, (now § 2-13-53(c)(2), Code 1975), to wit: 'in those areas controlled by the Commission' does not refer to or have any connection with the power of the Alabama Dairy Commission to establish minimum resale milk prices in the State of Alabama.

The applicable Code section provides that

"(a) distributor shall pay a license fee of two cents ($.02) for each one hundred pounds of milk and Controlled milk products processed and sold for human consumption In those areas controlled by the commission except when such payment is ordered discontinued as hereinafter provided. A distributor may reduce the number of pounds of milk on which he would otherwise pay a license fee as provided above, by the number of pounds of milk on which a license fee has been paid by a bobtailer as provided herein. It is the intent of this provision to assure that in no event shall more than two cents ($.02) per hundred pounds of milk be ultimately collected as a license fee at the distribution level." (Emphasis added.)

The distributors contend that the emphasized language above is clear and unambiguous; that "controlled" and "in those areas controlled by the commission" refer solely to the products upon which the Alabama Dairy Commission controls the resale price. Alternatively, the distributors contend that if the statute authorizing the collection of license fees be found ambiguous, then the construction placed upon the statute by the body administering the statute is presumed correct. The distributors therefore assert that since 1961, the Alabama Dairy Commission, (prior to 1971, the Alabama Milk Control Board), has construed the license fee as a levy only upon those milk products whose prices were set by the Commission, and that this interpretation should be regarded as binding.

The regulatory scheme enacted by the Legislature for the supervision and regulation of milk is very comprehensive. In addition to controlling prices, the Alabama Dairy Commission is directed to supervise and regulate the fluid milk industry. Ala. Code of 1940, tit. 22, § 205 (Recomp. 1958). These supervisory and regulatory powers include the power to: Inter alia, designate marketing areas, Ala. Code of 1940, tit. 22, § 209 (Recomp. 1958); promulgate and enforce rules, Ala. Code of 1940, tit. 22, § 211 (Recomp. 1958); enter, inspect, and investigate, Ala. Code of 1940, tit. 22, § 212 (Recomp. 1958); license all persons or entities dealing with fluid milk products, Ala. Code of 1940, tit. 22, § 213 (Recomp. 1958); and require certain periodic reports, Ala. Code of 1940, tit. 22, § 216 (Recomp. 1958). Section 210 of Title 22 of the Alabama Code of 1940 provides that:

"(t)he diary commission is hereby vested with the powers, and it shall be its duty to supervise and regulate the fluid milk industry of the state of Alabama, including the production, production-distribution, transportation, manufacturing, storage, distribution, delivery, processing, and sale of milk in the state of Alabama . . ."

This broad grant of power to regulate is not consistent with the distributors' position that "controlled" and "in those areas controlled by the Commission" refer only to the Commission's control of wholesale milk prices.

The paragraph immediately following the previously quoted portion of tit. 22, § 215, sets out the license fee scheme for producers; and it provides in pertinent part:

"A producer shall pay a license fee of two cents ($.02) for each one hundred pounds of milk produced for sale in this state Where the prices governing such sale are established by the commission . . ." (Emphasis added.)

Thus, it is clear that the legislature intended that producers were to pay a license fee only where the commission...