Roloff v. Perdue, Civ. No. 10.

• Decision Date: 28 December 1939
• Docket Number: Civ. No. 10.
• Citation: 31 F. Supp. 739
• Parties: ROLOFF et al. v. PERDUE, Milk Market Adm'r, et al.
• Court: U.S. District Court — Northern District of Iowa

31 F. Supp. 739

ROLOFF et al. v. PERDUE, Milk Market Adm'r, et al.

Civ. No. 10.

District Court, N. D. Iowa, E. D.

December 28, 1939.

W. A. Smith, F. A. O'Connor, Paul F. Smith, and E. Marshall Thomas, all of Dubuque, Iowa, for plaintiffs.

Edward G. Dunn, U. S. Atty., of Mason City, Iowa, John S. L. Yost, Sp. Asst. to Atty. Gen., Mary Connor Myers, Principal

Atty., Solicitor's Office, Department of Agriculture, of Washington, D. C., and Wm. B. Danforth, Asst. U. S. Atty., of Mason City, Iowa, for defendants.

SCOTT, District Judge.

An action by Al Roloff, owner and operator of a dairy and creamery known as "Happy Corners Dairy" in Grant County, Wisconsin, alleged to be a "handler" under the terms of the Agricultural Marketing Agreement Act of 1937, 7 U.S.C.A. § 601 et seq., and Order No. 12 as amended, issued by the Secretary of Agriculture, regulating the handling of milk in the Dubuque, Iowa, marketing area, effective June 16, 1939, and twenty-one dairy farmers resident and operating in said County and State, alleged to be "producers" under the terms of said Act and Order, against William O. Perdue, Milk Market Administrator, and C. W. Gould, Assistant Milk Market Administrator under said Order for Dubuque marketing area, praying for a declaratory judgment finding that the milk received by Al Roloff at his "Happy Corners Dairy" from the twenty-one dairy farmer plaintiffs, and others similarly situated, and used by him in the manufacture of cheese, should be included in the pooling arrangement of said Order; that said Al Roloff be declared to be a "handler" under the terms of said Order, both as to milk used by him for fluid milk distribution and for the manufacture of cheese; that the twenty-one dairy farmer plaintiffs and others similarly situated be declared to be "producers" under the terms of said Order; and that in the event the foregoing prayer is denied, plaintiffs then pray the Court to declare said Order repugnant to and in violation of the Fifth Amendment to the Constitution of the United States, U.S.C.A., on the ground that it deprives plaintiffs of liberty and property without due process of law and takes the plaintiffs' property for public use without just compensation.

As grounds of jurisdiction of this Court plaintiffs allege the Act of Congress and the constitutional provision above stated, and that the matter in controversy exceeds, exclusive of interest and costs, the sum or value of $3,000. The facts stated probably disclose jurisdiction under the eighth paragraph of the Judicial Code § 24, as amended, U.S.Code Annotated, Title 28, § 41, conferring jurisdiction on United States District Courts "Of all suits and proceedings arising under any law regulating commerce." As well as jurisdiction under the provisions of § 8a(6) of the Act of May 9, 1934, 48 U.S.Stats. at Large, Chapter 263, page 675, as amended by § 9 of the Act of August 24, 1935, 49 U.S. Stats. at Large, Chapter 641, page 762, and as reenacted by § 1(c) of the Act of June 3, 1937, 50 U.S.Stats. at Large, Chapter 296, page 246, U.S.Code Annotated, Title 7, § 608a(6), by the provisions of which "The several district courts of the United States are hereby vested with jurisdiction specifically to enforce, and to prevent and restrain any person from violating any order, regulation, or agreement, heretofore or hereafter made or issued pursuant to this chapter, in any proceeding now pending or hereafter brought in said courts."

The further pertinent allegations of the complaint, concisely stated, are: That Roloff is engaged in processing milk, manufacturing cheese, butter and other dairy products, and distributing fluid milk in Cuba City, Wisconsin, East Dubuque, Illinois, Dubuque, Iowa, and in the environs of said places. That plaintiffs, other than Roloff, are farmers resident and operating as aforesaid, engaged in the production of milk which they sell and deliver to Roloff at "Happy Corners Dairy". That Roloff receives milk from forty-two farmers, including the twenty-one plaintiffs. That fluid milk distributed by Roloff is received from eleven farmers none of whom are parties, which farmers have complied with the requirements of the health ordinances of the City of Dubuque, Iowa, governing the supply of milk sold within said city, and each of said eleven farmers has been certified for more than six months last past by the health authorities of the City of Dubuque, as qualified producers of milk to be sold within said city. That other farmers who supply Roloff with milk, including the twenty-one plaintiffs, have never been so certified and all of their product has been used by Roloff in the manufacture of cheese, butter and other products, and is presently used in the manufacture of cheese. That all uncertified farmers, including the twenty-one plaintiffs, are eligible to be certified, and the milk produced by them is eligible to be certified under the ordinance of the City of Dubuque, had such farmers petitioned for such certification.

Plaintiffs further allege in substance that all milk sold and delivered to Roloff should be included in the market-wide pool arrangement provided in said Order and that each of such farmers should in the administration of said Order be considered a "producer" as defined by said Order. That defendants contend that only the eleven farmers who produce, sell and deliver milk to Roloff which is used by him for sale in the Dubuque marketing area as milk or cream are "producers" within the terms of said Order, and that others whose milk is used by Roloff for the manufacture of cheese are not "producers" within the terms of said Order.

It is the contention of plaintiffs that Roloff is a "handler" as defined in said Order, and that all milk received at his "Happy Corners Dairy" should be included in the market-wide pool arrangement of said Order, but that defendants contend that Roloff is a "handler" only as to milk received by him and used for fluid milk distribution, and refuse to otherwise classify Roloff as a "handler" and refuse to classify the twenty-one farmer plaintiffs as "producers".

That defendants contend that milk produced by the twenty-one farmers and others similarly situated cannot be included in the pool arrangement of the Order because such farmers have not been certified by the health department of the City of Dubuque as qualified producers of milk for sale within the corporate limits of that city, although the Order itself is silent on the subject. That the defendants further contend that Roloff has kept physically separate milk sold fluid from milk used for cheese manufacture, and paid different prices for the two classes; that milk used for the making of cheese cannot be pooled under the arrangement of the Order, and that farmers producing such milk are not "producers" within the terms of the Order; that plaintiffs contend to the contrary, averring there is no provision in the Milk Order or the Agricultural Marketing Agreement Act to support defendants' contention.

That since the effective date of the Order, June 16, to August 31, 1939, the eleven fluid milk producers have delivered at "Happy Corners Dairy" 181,146 pounds, and the twenty-one plaintiffs and others, 559,667 pounds of milk, being a total of 740,823 pounds. That defendants have at all times refused to include in the pooling arrangement of the Order, the twenty-one farmers as "producers" and Roloff as a "handler" as to milk produced by them. That on this basis defendants have announced pool prices and billed Roloff for payment of "Producers Settlement Fund" and for "Administration Expense" as follows: During the foregoing period, amounts aggregating $508.02 for "Settlement Fund", and $94.85 "Administration Expense".

That defendants have erred in so construing the Order, and had they properly construed it and included the twenty-one farmer plaintiffs' milk in the pool, defendants would owe Roloff on "Producers Settlement Fund", $2,659.69, and Roloff would owe defendants' "Administration Expense" $296.33; thereby a balance in favor of Roloff in the sum of $2,363.36.

Plaintiffs then allege Roloff's inability to pay the pool price to his co-plaintiffs because of his exclusion from the pool; and because of the...