Queensboro Farms Products v. Wickard

• Decision Date: 13 August 1943
• Docket Number: No. 319.,319.
• Citation: Queensboro Farms Products v. Wickard, 137 F.2d 969 (2nd Cir. 1943)
• Parties: QUEENSBORO FARMS PRODUCTS, Inc., v. WICKARD.
• Court: U.S. Court of Appeals — Second Circuit

137 F.2d 969 (1943)

QUEENSBORO FARMS PRODUCTS, Inc., v.WICKARD.

No. 319.

Circuit Court of Appeals, Second Circuit.

July 19, 1943.

As Revised August 13, 1943.

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Harry Polikoff, of New York City, for appellant.

John S. L. Yost and W. Carroll Hunter, Sp. Assts. to Atty. Gen., Margaret H. Brass, Sp. Atty., Department of Justice, David P. Gordon and Rufe Edwards, Attys., Department of Agriculture, all of Washington, D. C., Tom C. Clark, Asst. Atty. Gen., and Harold M. Kennedy, U. S. Atty., of Brooklyn, N. Y., for appellee.

Before L. HAND, CLARK, and FRANK, Circuit Judges.

FRANK, Circuit Judge.

We approachthis case having in mind the following important background facts:

The Act was originally enacted in 1933 and was amended in 1935 and again in 1937, 7 U.S.C.A. § 601 et seq.Its original provisions relating to milk were the result of nation-wide distress of milk farmers, a distress which had culminated in a milk farmers' "strike" — accompanied by violence and constituting an incipient agrarian revolution — that threatened to cut off a vital part of the nation's food supply.Experience before and since the passage of that legislation has disclosed that the "milk problem" is exquisitely complicated.The city-dweller or poet who regards the cow as a symbol of bucolic serenity is indeed naive.From the udders of that placid animal flows a bland liquid indispensable to human health but often provoking as much human strife and nastiness as strong alcoholic beverages.The milking of animals in order to make use of their lactic secretions for human food was one of the greatest human inventions,³ but the domestication of milk has not been accompanied by a successful domestication of some of the meaner human impulses in all those engaged in the milk industry.The difficulties described as "the milk problem" revolve in some considerable measure about the complex relations between the farmers and the "handlers" who buy the milk from the farmers and sell it, in fluid or altered form, directly or indirectly through others, to the ultimate consumers.The resultant intricacies of milk-marketing have frequently led farmers and consumers — sometimes justifiably and sometimes not — to believe that they have been dealt with unfairly.⁴The difficulties have given rise to much legislation and are reflected in many judicial decisions.⁵The pressure of milk is indeed powerful.A milk flood washed away the foundations of what seemed the firmly entrenched constitutional doctrine that the legislature could regulate only business "affected with a public interest"⁶; and the lactic tides have eroded another constitutional doctrine which more recently appeared to have been strongly established (i. e., that only within very narrow limits can Congress delegate "legislative" powers), showing that what oil and chickens could not do milk could.⁷The milk problem is so vast that fully to comprehend it would require an almost universal knowledge ranging from geology, biology, chemistry and medicine to the niceties of the legislative, judicial and administrative processes of government.It affects an industry immense in scope, for dairying is said to be the largest single branch of agriculture in this country with the exception of that of raising livestock for slaughter, the annual money value of dairy products running to billions of dollars.

Appellant makes two principal contentions: first, that the orders, if properly construed, do not justify the Secretary's decision as to appellant; second, that, if construed so as to justify the decision, the orders themselves are invalid because not authorized by the Act.We shall, for convenience, consider those questions in inverse order.

1.In passing on the issue of the invalidity of the orders, we shall assume, for the time being, that the Secretary's interpretation of them, as applied to appellant, is correct.Briefly stated, that interpretation is as follows: A handler, receiving milk from producers at his receiving plant, processes the milk into cream and then ships that cream to a second plant, owned by the same handler, whence it is reshipped, unchanged in form, to buyers at whose plants the cream is processed into ice-cream which is then shipped to their customers; in each such case the milk is, under the orders, classified as cream in determining the price to be paid by the handler who received it from the producers.

Appellant contends that, thus interpreted, the orders are invalid because they employ a classification which is based on "movement" and not on "use" as required by § 8c(5)(A) of the Act.Appellant insists that that section requires a classification under which milk leaving any plant of a handler is classified according to its form when marketed for ultimate consumption.

The legislative history demonstrates that Congress, in employing the words "use" and "use classification" in that section, did not mean "ultimate use."That section and related sections were added to the Agricultural Adjustment Act of 1933 by amendments enacted in 1935.As the bill which eventuated in the amendatory Act of 1935 passed the House, it provided for the classification of milk in accordance with its ultimate utilization.As it passed the Senate, it provided for classification "in accordance with the form in which or the purpose for which it is used * * *" A conference resulted.The conferees on behalf of the House said in their report to the House: "Under the House bill orders relating to milk and its products were to include, among other provisions, provisions for classifying milk in accordance with the form in which it is ultimately used or consumed.The comparable provision in the Senate amendment provides for classification in accordance with the form in which, or the purpose for which, the milk is used.The House recedes."⁸

Whose use, then, did Congress have in mind in providing for "use classification"?Section 8c(1) makes it clear that Congress meant primarily the "handler's use," for that section provides that the Secretary's orders are "applicable to handlers" and to no one else; and they alone are to be regulated under the Act.Certainly nothing is expressly said in the Act as to "the use made by buyers from the handlers."It is noteworthy that the last sentence of § 8c(5)(A) speaks of "the locations at which delivery of such milk, or any use classification thereof, is made to such handlers."^8a

That same section, however, provides for two alternative kinds of "use classification": milk may lawfully be classified by the Secretary "in accordance with" either (1)"the form in which" the milk is used or (2)"the purpose for which" it is used.The provision is disjunctive.It follows that there may be a valid classification solely in accordance with the "form in which" the milk is used and without regard to "the purpose" of the use.And since it is clear that the use is primarily that of the handlers, it also follows that the Secretary may, in his discretion, classify solely according to "the form in which" the milk is used by a handler without regard to the intended use by (i. e., the purpose of) a purchaser from that handler or by any subsequent purchaser.For we take "purpose" to mean that the handler's use may, in the sole discretion of the Secretary, be determined by reference to the use made by the handler's purchaser or by some subsequent purchaser.

As above noted, it is argued that "form" means solely the "form in which the milk is to be marketed for ultimate consumption" and not any intermediate form; but such an interpretation would obliterate the differentiation between "form" and "purpose," and would thus result in rubbing out of the statute the words, "form in which * * * it is used."Unless there are compelling reasons so requiring — such as, for instance, that of avoiding grave doubts as to constitutionality — courts should not use erasers on legislation, but should try to give a meaning to all the terms of a statute.^8bWe cannot say that the differentiation here is unconstitutional; the legislature, especially when dealing with a complicated subject matter, may make (or authorize to be made) rough-and-ready classifications.^8cConsequently, this Act is not invalid because it permits a classification which has the result that a handler who makes his own ice-cream can pay the farmer less for his milk than an ice-cream manufacturer who buys his milk or cream from a handler who has bought the milk from the farmer.

The statutory differentiation between "form" and "purpose" justifies, then, the following conclusion: The Secretary, in his order, can lawfully say that, when a handler processes milk into cream, and delivers it to a purchaser in the form of cream, the handler is "using"(or making a "utilization" of) the milk as cream, regardless of the use which his purchaser or any subsequent purchaser may make of it.In other words, Congress gave the Secretary this power at least: to establish a conclusive "use classification" on the sole basis of the form of the milk at the time when the handler moves it from his plant for delivery to his customer.

The following legislative history confirms that interpretation: After the Act was amended in 1935, the Secretary issued several regional milk orders.In some of them, he adopted as a measure of "use," and as a basis for classification, the form in which milk was sold by, or moved from, the plants of, handlers.While those orders were in effect, Congress(because of the decision in United States v. Butler, 297 U.S. 1, 56 S.Ct. 312, 80 L.Ed. 477, 102 A.L.R. 914, holding certain aspects of the Act unconstitutional) after reconsidering inter alia, the provisions which had been added in 1935 and pursuant to which these orders had been made, reenacted those 1935 provisions with amendments not here pertinent.^8dIt is true, of...