Grandview Dairy v. Jones, 310
| Decision Date | 09 December 1946 |
| Docket Number | Docket 20233.,No. 310,310 |
| Citation | 157 F.2d 5 |
| Parties | GRANDVIEW DAIRY, Inc., v. JONES, War Food Adm'r., et al. |
| Court | U.S. Court of Appeals — Second Circuit |
Harry L. Marcus, of Brooklyn, N. Y. (Herbert L. Maltinsky, of Brooklyn, N. Y., of counsel), for Grandview Dairy, Inc., plaintiff-appellant.
W. Carroll Hunter, Sp. Asst. to Atty. Gen., Karl R. Price and Katherine A. Markwell, Attys., United States Department of Agriculture, both of Washington, D. C., Wendell Berge, Asst. Atty. Gen., J. Stephen Doyle, Jr., Sp. Asst. to Atty. Gen., and J. Vincent Keogh, U. S. Atty., of Brooklyn, N. Y., for Marvin Jones, War Food Administrator, and Claude R. Wickard, Secretary of Agriculture of the United States, defendants-appellees.
Before L. HAND, AUGUSTUS N. HAND and CLARK, Circuit Judges.
Writ of Certiorari Denied December 9, 1946. See 67 S.Ct. 355.
A Milk Order was issued by the Secretary of Agriculture pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937. 50 Stat. 246, 7 U.S.C.A. §§ 601, 608c. The order is known as Federal Milk Order No. 27 as amended, and concerns the New York metropolitan marketing area. It defines a "producer" as any person who produces milk which is delivered to a handler at a plant approved by any health authority for the receiving of milk to be sold in the marketing area, and defines a "handler" as any person who engages in the handling of milk or cream received at a plant approved by any health authority for the receiving of milk to be sold in the marketing area. 7 C.F.R. (1940 Supp.) Sec. 927.1(e) (f).
The general offices of the plaintiff, Grandview Dairy Inc., are located at 60-71 Metropolitan Avenue, Ridgewood, Queens, New York, which is inside the marketing area. A milk distributing plant is maintained at the location of that office. Country stations for receiving milk from producers are maintained by the plaintiff at Webster Crossing and Lakeville, Livingston County, New York; Arkport, Steuben County, New York, and Bear Lake, Warren County, Pennsylvania. The plaintiff is also engaged in the manufacture of milk products at each of the above places except Ridgewood and Lakeville.
7 C.F.R. (1940 Supp.) Sec. 927.3 provides that all milk received during any month by handlers from producers shall be classified, and Sec. 927.4 fixes minimum prices to be paid to the producers for the different classes. Each handler is required to report to the Milk Administrator the quantity of milk used in each class. The total of the use value of all handlers less the total allowance made to all such handlers as have diverted excess fluid milk into market products under the terms of Sec. 927.7(f) is divided by the total quantity of milk received from all producers. The result is announced by the Milk Administrator as the uniform price to be paid by all handlers to all producers. The variance among handlers in the percentage of milk used in a given class will normally mean that the total use value for a particular handler may be greater or less than the total payments at the uniform price required to be made by him to his producer. Any handler for whom there is a plus difference is required to pay the difference into the Producers-Settlement-Fund, while any handler for whom there is a minus difference is entitled to withdraw the difference from the fund. Payments into the fund constitute the only source of withdrawal from the fund. This price mechanism is applicable to each monthly delivery for milk. Handlers are entitled to an allowance paid out of the Producers-Settlement-Fund known as "marketing service" or "diversion" payments for diverting excess fluid milk into milk products. The uniform prices paid to producers are reduced as against the handlers to the extent of the aggregate amount of such allowance. Diversion allowances may be had where the plant of the handler is "equipped only" for the receiving of milk for disposition in the marketing area. The plant of diversion must be a second plant located outside the marketing area.
The plaintiff was refused payment for the diversion of excess milk into milk products during the monthly delivery period August 1940 through February 1941, at its place of business at Webster Crossing, Livingston County, New York, where it had both a receiving and a manufacturing plant.
In support of plaintiff's application for an allowance aggregating $23,974.31 it states that the milk was received at a building equipped only for the receipt of milk for disposition in the marketing area, and diverted into milk products in an adjacent building approximately 50 feet away to which it was moved from the receiving building by means of a pipe line. The Milk Administrator denied the application for the reason that he regarded the two buildings as constituting a single plant equipped not only for the receipt of milk but also for the making of milk products. Thereupon plaintiff petitioned the War Food Administrator for the allowances contending that the two buildings were in reality two separate plants — one a receiving, and the other a manufacturing plant — within the meaning of the allowance provisions of the order. It further contended that in any event a prior ruling of the Assistant Secretary of Agriculture in a similar administrative proceeding in which the plaintiff was held entitled to an allowance for milk diverted during the month of June 1940 from its receiving to its manufacturing plant at Webster Crossing precludes a contrary ruling for the subsequent months from August 1940 to February 1941 inclusive. These contentions were denied, whereupon the plaintiff appealed to the District Court, which affirmed the action of the War Food Administrator. From the judgment of the District Court the present appeal has been taken.
In our opinion the disposition of each contention was correct and the summary judgment denying the plaintiff's application for an allowance and granting the defendant's motion for the dismissal of plaintiff's complaint should be affirmed.
The purpose of the creation of the Producers-Settlement-Fund was to deal with the troublesome surplus milk problem which arises during the periods of the year when the milk supply is far greater than needed for consumption. Such a surplus, however, must necessarily occur during those periods if there are to be enough cows to furnish the requisite supply at periods when the milk yield is less. The remedy afforded by the Agricultural Adjustment Act was to avoid surpluses of milk which flood the metropolitan market during the spring and summer seasons by inducing handlers to divert them into butter, cheese or other products through the payment out of the Producers-Settlement-Fund of what amounts to a bonus to those handlers who divert some of the raw milk to the manufacture of milk products.
7 C.F.R. (1940 Supp.) Sec. 927.7(f) provides for such claims as are sought to be asserted here and permits allowance for diversion only "with respect to milk received from a plant equipped only for the receiving and shipping of milk to the marketing area which was moved to a second plant outside of the marketing area and there separated into cream and skim milk or manufactured."
The question, which the War Food Administrator and the District Court answered in the negative, is whether the plaintiff's establishment at Webster Crossing was one plant "equipped only for the receiving and shipping of milk to the marketing area," with another plant 50 feet away used only for manufacturing products; or whether the two buildings conducted as they were under the same management and personnel were a single plant chiefly engaged in the manufacture of milk products.
The War Food Administrator made the following findings which are supported by substantial evidence and justify his conclusion that the plaintiff operated one and not two plants:
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