Oyarzo v. Dept. of Health

• Decision Date: 26 August 2009
• Docket Number: No. 1515, September Term, 2007.,1515, September Term, 2007.
• Citation: 978 A.2d 804,187 Md. App. 264
• Parties: Kevin OYARZO v. MARYLAND DEPARTMENT OF HEALTH AND MENTAL HYGIENE, et al.
• Court: Court of Special Appeals of Maryland

978 A.2d 804

187 Md. App. 264

Kevin OYARZO v.MARYLAND DEPARTMENT OF HEALTH AND MENTAL HYGIENE, et al.

No. 1515, September Term, 2007.

Court of Special Appeals of Maryland.

August 26, 2009.

Paul Walter(Thomas M. Wilson, III, Tydings & Rosenberg, LLP, on brief), Baltimore, for Appellant.

Lisa A. Barkan(Douglas F. Gansler, Atty. Gen., on brief), for Appellee.

Panel: MEREDITH, ZARNOCH and JAMES A. KENNEY, III, (Retired, specially assigned), JJ.

MEREDITH, J.

In common parlance, Kevin Oyarzo, the appellant, might be referred to as a dairy farmer.When a dairy farmer provides services such as boarding and milking a herd of dairy cows owned by others, he acts as an agister and provides agistment services.The term "agister" is defined in BLACK'S LAW DICTIONARY (8th ed.2004)at 73 as: "One who takes and pastures grazing animals for a fee; a person engaged in the business of agistment.An agister is a type of bailee for hire.Also spelled agistor."Similarly, "agistment" is defined as: "A type of bailment in which a person, for a fee, allows animals to graze on his or her pasture; the taking in of cattle or other livestock to feed at a per-animal rate."Id.

Oyarzo wished to offer agistment services to people who might want to own a fractional interest in a herd of dairy cattle.The belief that there is an unmet demand for such services is based upon the fact that there are persons who wish to drink raw milk (rather than pasteurized milk), and in Maryland, it is illegal to sell raw milk to consumers.Maryland Code(1982, 2000 Repl.Vol., 2008 Supp.), Health-General Article ("HG"), § 21-434("Except for sale of raw milk by a holder of a milk producer permit to a holder of a milk processor permit, a person may not sell raw milk for human consumption.").But it is not illegal in Maryland for an owner of cows to drink the raw milk those cows produce.Oyarzo's plan was to sell fractional ownership interests in a herd of dairy cattle, after which he would board and care for the cows, and then provide the raw milk produced by those cows to the owners of the herd in accordance with their percentages of ownership.

Oyarzo sought a declaratory judgment in the Circuit Court for Frederick County to confirm that the proposed contract for cattle syndication and agistment services he wanted to offer was not in violation of the Maryland laws governing the sale of raw milk.Oyarzo also asked the court to declare unenforceable a regulation that had been promulgated by the Secretary of the Maryland Department of Health and Mental Hygiene("the Department"), appellee, purporting to preclude Oyarzo and others from offering such services.

The circuit court ruled contrary to Oyarzo's requests; it declared that COMAR 10.15.06.06(F)(1), as amended August 1, 2006, does preclude him from entering into the proposed cow-sharing agreement, and further, that that regulation does not exceed the authority given to the Maryland Department of Health and Mental Hygiene to carry out the statutory prohibition on the sale of unpasteurized milk in this State.

Oyarzo appealed and presents the following issues for our review:

1.Whether the trial court erred by construing the Act as conferring on the Secretary the regulatory power to define the unambiguous words "sale" and "sell" in a way that "adds to, extends, or enlarges ... the [A]ct being administered"[.]

2.Whether the trial court erred by construing the Agreement as one in which the syndicated owners of the herd acquire, by a "transfer for consideration"(i.e., by a "sale"), title to the raw milk that they already own[.]

3.Whether the trial court erred by sua sponte dismissing Count II as having been mooted by the dismissal of Count I[.]

We agree with Oyarzo that: (a) it is not illegal in Maryland for the owner of a dairy cow to drink the raw milk which that cow produces; (b) it is not illegal in Maryland to sell a fractional interest in a herd of dairy cattle; and (c) it is not illegal in Maryland for an agister to provide agistment services by boarding and caring for dairy cows owned by others.Nevertheless, we agree with the Department that the transactions proposed by Oyarzo, pursuant to which persons who wish to consume raw milk pay him fees and he provides them unpasteurized milk as long as they pay the fees, is a transaction within the scope of the Department's regulatory purview.Accordingly, the August 2006 amendment to COMAR 10.15.06.06(F)(1) was a permissible exercise of the authority of the Department to regulate transactions involving the distribution of milk in Maryland.Therefore, we answer Oyarzo's first two questions "no."We agree with Oyarzo, however, that his second count, challenging the delegation of legislative power as unconstitutional, was not moot.We shall remand the case for further proceedings consistent with this opinion.

Facts and Procedural History

Kevin Oyarzo is a farmer residing in Buckeystown, Maryland, in Frederick County.He wishes to market fractional ownership interests in a herd of dairy cattle for which he would provide agistment services.Oyarzo's counsel drafted a proposed "Bovine Sale and Agistment Agreement" that would permit individuals to purchase a percentage ownership interest in a herd.The agreement also calls for Oyarzo to act as the agister; i.e., the agreement specifies that Oyarzo would board and care for the herd, and would milk the cows.The proposed agreement provides that the fractional owners would be "entitled to receive the [herd's] production [(i.e., raw milk)]" in proportion to their ownership interest in the herd.

Because HG§ 21-434 prohibits the sale of raw milk for human consumption, except for transactions in which the seller has a milk producer permit and the buyer has a milk processor permit, Oyarzo contacted the Department in 2006, requesting advance approval of his proposed agreement.The Department is the agency tasked with enforcing the milk statute.HG§ 21-406 states: "The Secretary [of the Department] shall adopt rules and regulations to carry out the provisions of this subtitle [i.e., HG Title 21(`Food, Drugs, and Cosmetics'), Subtitle 4 (`Milk Products'), herein sometimes referred to as `the milk statute']."

After reviewing Oyarzo's request, the Department not only declined to approve the proposed agreement, but the Department also promulgated COMAR 10.15.06.06(F)(1), effective August 28, 2006, as an "emergency" measure in order to "resolve current ambiguity regarding whether cow-sharing or agistment arrangements, whereby the investor buys a share in a cow or cows, or provides funding to feed or care for a cow or cows, and obtains raw milk in return, are included in [the] prohibition [of HG§ 21-434]."33 Md. Reg. 809(April 28, 2006).The regulation purported to redefine the terms "sale" and "sell" in the context of transactions that involve the right to acquire raw milk.As amended in August 2006, COMAR 10.15.06.06F provides:

F.Sale of Raw Milk.

(1) In this section, "sale" or "sell" means a transaction that involves the:

(a) Transfer or dispensing of milk and milk products; or

(b) Right to acquire milk and milk products:

(i) Through barter or contractual arrangement; or

(ii)In exchange for any other form of compensation including, but not limited to, an agistment agreement, which is the sale of shares or interest in a cow, goat, or other lactating hooved mammal or herd of cows, goats, or other lactating hooved mammals.

* * *

(4) Except [for a sale by a milk producer to a milk processor, receiving station or transfer station], a person may not sell raw milk or raw milk products for human consumption.

According to the statement of purpose published in the Maryland Register, this broadened definition of the statute's words "sale" and "sell" was intended to "prevent [cow-sharing or agistment] arrangements from being utilized to circumvent the existing prohibition on the sale of raw milk for direct human consumption."33 Md. Reg. 809.

In response to the action of the Department, Oyarzo filed a complaint in the Circuit Court for Frederick County, requesting (a) a declaratory judgment that the new regulation is invalid as and if applied to his proposed Bovine Sale and Agistment Agreement, and (b) an injunction preventing enforcement of the new regulation.The defendants, now appellees, were the Department; S. Anthony McCann, in his capacity as the Secretary of the Department; the Milk Control Division of the Department; and Theodore Elkin, in his capacity as the Chief of the Milk Control Division.Count one of the complaint alleged that the regulation exceeds the authority that was delegated to the Department by the General Assembly when it enacted the milk statute, HG§§ 21-401 through 21-436.Count two alleged, in the alternative, that "if in enacting § 21-406 of the Act the General Assembly somehow purported actually to authorize the Secretary to adopt regulations that change the meanings of `milk products,'`sale,' and `agistment,' as described in" COMAR 10.15.06.06F(1), as amended in August 2006, then the statute is an unconstitutional delegation of legislative power in violation of Article 8 of the Maryland Declaration of Rights.

Oyarzo and the defendants filed cross-motions for partial summary judgment, with accompanying affidavits, requesting summary judgment as to Count one.The circuit court held a hearing on the motions, and then issued a written opinion and order that (1) denied Oyarzo's motion for summary judgment as to Count one, (2) granted the defendants' motion for summary judgment as to that count, and (3) dismissed Count two as moot.Oyarzo timely noted this appeal.

Analysis

A. Justiciability

As a preliminary matter, the appellees have raised an issue as to the justiciability of Oyarzo's claims, noting that Oyarzo's proposed contract is incomplete because it does not contain a price term or the number of cows, and further noting that Oyarzo has not yet identified...