General Foods Corp. v. Priddle
| Citation | 569 F. Supp. 1378 |
| Decision Date | 09 August 1983 |
| Docket Number | No. 82-4111.,82-4111. |
| Court | United States District Courts. 10th Circuit. United States District Courts. 10th Circuit. District of Kansas |
| Parties | GENERAL FOODS CORPORATION, a Delaware Corporation, Plaintiff, v. Harland E. PRIDDLE, Secretary of the Kansas State Board of Agriculture; Brace Rowley, Dairy Commissioner of the State of Kansas; and the Kansas State Board of Agriculture, Defendants, Associated Milk Producers, Inc., and Mid-America Dairymen, Inc., Intervenors. |
Burditt & Calkins, Chicago, Ill., George M. Burditt & Robert G. Epsteen, Fisher, Patterson, Sayler & Smith, Donald Patterson, Topeka, Kan., Michael J. Quillinan, General Foods Corp., White Plains, N.Y., for plaintiff.
Kenneth Wilke, Topeka, Kan., for defendants.
Boyer, Donaldson & Stewart, Wichita, Kan., for intervenors.
This is an action brought by the plaintiff, General Foods Corporation, to enjoin the defendants, Harland E. Priddle, Secretary of the Kansas State Board of Agriculture, Brace Rowley, Dairy Commissioner of the State of Kansas, and the Kansas State Board of Agriculture, from prohibiting the sale of their frozen whipped toppings with dairy ingredients within the State of Kansas under the provisions of the Kansas filled dairy products act (FDPA), K.S.A. 65-725 et seq. This opinion represents the findings of fact and conclusions of law in this case in accordance with F.R.Civ.P. 52.
In 1965, after many years of research, plaintiff introduced a product called Cool-Whip, a frozen non-dairy whipped topping designed to be used as a garnish on desserts or to be mixed with other dessert products in the home for special recipes. The topping is prepared by homogenizing non-dairy ingredients: sodium caseinate, vegetable oil, sugar, emulsifiers and stabilizers. It is a wholesome product which clearly identifies its ingredients on its label. The product resembles whipped cream, a dairy product, in color, consistency and taste. It was developed to serve essentially the same function as whipped cream. However, it is also different from whipped cream in several ways. It is packaged and sold in different containers. Cool-Whip is sold in bowl-shaped tubs while whipped cream is generally sold in aerosol cans or in milk cartons in its pre-whipped state. Further, since Cool-Whip is a frozen product, it is sold in the freezer section of the grocery store while whipped cream is sold in the refrigerated area where other dairy products are sold. Finally, Cool-Whip and other non-dairy whipped toppings have a much longer shelf life than whipped cream. The public has enthusiastically accepted Cool-Whip and its similar competitive products. Plaintiff's sales of Cool-Whip have grown to $125 million annually with a Kansas sales volume of over $3 million.
In the early 1980's, frozen whipped toppings with dairy ingredients were developed for the first time. The use of dairy products was considered to be an improvement in the product because of improved flavor and texture. Nonetheless, the product remained essentially the same as non-dairy whipped toppings in terms of color, taste and consistency. The new product was also packaged and marketed in almost the identical manner as non-dairy whipped toppings. The labels of these new products clearly indicated that they contained dairy ingredients. The new products remained completely wholesome. In 1982, plaintiff planned to introduce its two new frozen whipped toppings with dairy products—Dover Farms Whipped Topping and Cool-Whip Extra Creamy Whipped Topping—into Kansas. Plaintiff's officials met with Kansas officials, including defendant Rowley, regarding the planned introduction of Dover Farms into the state. The discussions centered around whether the FDPA applied and thus prohibited the sale of plaintiff's product in the State of Kansas. At the time of the discussions, state officials failed to reach a determination on the issue and plaintiff went ahead with its nationwide campaign to introduce Dover Farms. Plaintiff planned to introduce the product to the public during strawberry season. On February 8, 1982, the Dover Farms product was released in Missouri and Kansas. Thereafter, defendant Rowley advised the plaintiff that Dover Farms was in violation of the FDPA and began notifying wholesalers and retailers that this product could not be sold in Kansas. On May 14, 1982, the plaintiff filed the instant lawsuit. Plaintiff sought injunctive and declaratory relief under 42 U.S.C. §§ 1983, 1985 and 1986. Plaintiff sought to enjoin the defendants from prohibiting the sale of their whipped toppings with dairy products within the State of Kansas.
On May 19, 1982, this court, after a hearing, issued a temporary restraining order preventing the defendants from prohibiting the sale of plaintiff's two new products in Kansas until the court could consider plaintiff's motion for a preliminary injunction. Thereafter, on June 7, 1982, the court heard evidence on plaintiff's motion for a preliminary injunction. At that time, the Associated Milk Producers, Inc., and the Mid-America Dairymen, Inc., moved to intervene in this case and their motions were sustained. At the hearing, it was agreed by the parties that the evidence presented at the earlier hearing on plaintiff's motion for a temporary restraining order could be considered by the court in determining plaintiff's preliminary injunction motion. It was further stipulated by the parties, pursuant to F.R.Civ.P. 65(a)(2), that the merits of plaintiff's complaint would be consolidated with the preliminary injunction motion.
Before considering the arguments of the parties, it is first necessary to set forth the various pertinent provisions of the FDPA. K.S.A. 65-728 makes it unlawful for any person to manufacture, sell, exchange, or offer for sale or exchange any "filled dairy product." The penalty for a violation of the FDPA, as set forth in K.S.A. 65-729, is a fine not to exceed five hundred dollars or by imprisonment not to exceed one year or both. A "filled dairy product" is defined as follows:
Any milk, cream or skimmed milk or any combination thereof, whether or not condensed, evaporated, concentrated, frozen, powdered, dried or desiccated, or any food product made or manufactured therefrom, to which has been added, or which has been blended or compounded with, any fat or oil other than milk fat, or any solids other than milk solids, except sweeteners, stabilizers and flavorings, so that the resulting product is in imitation or semblance of any dairy product, including but not limited to, milk, sour cream, butter cream, skimmed milk, ice cream, ice milk, whipped cream, flavored milk or skim milk drink, dried or powdered milk, cheese, cream cottage cheese, ice cream mix, sherbet, condensed milk, evaporated milk, or concentrated milk: Provided, however, That this term shall not be construed to mean or include: (1) Any distinctive proprietary food compound not readily mistaken for a dairy product, when such compound is customarily used on the order of a physician and is prepared and designed for medicinal or special dietary use and prominently so labeled; (2) any dairy product flavored with chocolate or cocoa, or the vitamin content of which has been increased, or both, where the fats or oils other than milk fat contained in such product do not exceed the amount of cocoa fat naturally present in the chocolate or cocoa used and the food oil, not in excess of one-hundredth of one percent of the weight of the finished product used as a carrier of such vitamins; or (3) oleomargarine, when offered for sale and sold as and for oleomargarine.
The purposes of the FDPA are contained in K.S.A. 65-726:
Filled dairy products resemble genuine dairy products so closely that they lend themselves readily to substitution for or confusion with such dairy products and in many cases cannot be distinguished from genuine dairy products by the ordinary consumer. The manufacture, sale, exchange or offering for sale or exchange of filled dairy products creates a condition conducive to substitution, confusion, deception, and fraud, and one which if permitted to exist tends to interfere with the orderly and fair marketing of foods essential to the well-being of the people of this state. It is hereby declared to be the purpose of this act to correct and eliminate the condition above referred to; to protect the public from confusion, fraud, and deception; to prohibit practices inimical to the general welfare; and to promote the orderly and fair marketing of essential foods.
In seeking to enjoin the defendants from prohibiting the sale of its new products in Kansas under the FDPA, plaintiff advances a number of arguments. First, plaintiff contends that the FDPA is not applicable to its new products. Second, plaintiff argues that the FDPA violates the due process clause of the fourteenth amendment because of its vagueness. Third, plaintiff asserts that the FDPA violates the equal protection clause of the fourteenth amendment because it has no substantial relationship to its purported purpose. Finally, plaintiff contends that the FDPA violates Article I, Section 8 of the Constitution because it imposes an undue burden on interstate commerce. Defendants, of course, contend that the FDPA is applicable to plaintiff's new products and that the FDPA is constitutional as a valid exercise of the state's police power. Defendants argue that they are immune from suit here by virtue of the eleventh amendment. They also argue that the plaintiff has failed to establish the existence of a conspiracy pursuant to 42 U.S.C. §§ 1985 and 1986. The intervenors have raised the question of whether the court should defer to the state courts on the issue of whether the FDPA is applicable to plaintiff's new products. The other arguments made by the intervenors are similar to those raised by the defendants.
The court shall first consider the abstention issue raised by the intervenors. The intervenors assert...
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