Suntex Dairy v. Bergland, No. 77-1632

CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Writing for the CourtBefore JONES, CLARK and GEE; CHARLES CLARK
Citation591 F.2d 1063
PartiesSUNTEX DAIRY et al., Plaintiffs-Appellants, v. Robert BERGLAND, Secretary of Agriculture of the United States, Defendant-Appellee.
Docket NumberNo. 77-1632
Decision Date22 March 1979

Page 1063

591 F.2d 1063
SUNTEX DAIRY et al., Plaintiffs-Appellants,
v.
Robert BERGLAND, Secretary of Agriculture of the United
States, Defendant-Appellee.
No. 77-1632.
United States Court of Appeals,
Fifth Circuit.
March 22, 1979.

Gary Gurwitz, Charles C. Murray, McAllen, Tex., for plaintiffs-appellants.

Page 1064

James R. Gough, U. S. Atty., Mary L. Sinderson, James S. Dougherty, Asst. U. S. Attys., Houston, Tex., John H. Sandor, Atty., U. S. Dept. of Agriculture, Washington, D. C., for defendant-appellee.

Appeal From the United States District Court for the Southern District of Texas.

Before JONES, CLARK and GEE, Circuit Judges.

CHARLES CLARK, Circuit Judge:

This appeal concerns whether producers of milk have standing under the Agricultural Marketing Agreement Act of 1937, 7 U.S.C. § 601 Et seq., to seek judicial review of the imposition of a federal milk marketing order. The appellants are independent milk producers operating in the Rio Grande Valley and the area surrounding Corpus Christi, Texas. They allege that the Secretary of Agriculture's promulgation of a Texas-wide milk marketing order was invalid because not supported by substantial evidence, and because a large dairy cooperative, Associated Milk Producers, Inc. ("AMPI"), allegedly violated a Missouri district court antitrust injunction by bloc voting its members during the referendum conducted to ratify the order. 1 The district court held that the milk producers did not have standing to bring a substantive attack on the milk marketing order, but that the producers did have standing to challenge the referendum procedures. The court ruled on the merits of that issue that the actions of AMPI were not violative of the Missouri district court injunction.

Holding that Milk producers do have standing to launch a substantive attack on a federal milk marketing order, we reverse the district court and remand for a determination of the merits of the producer's substantive claims. Although we believe that AMPI's conduct may well be held to have violated the Missouri district court injunction, we hold that the producers may not attack the federal milk marketing on that ground.

I.

Prior to 1975, the sale of milk in the area encompassing the Rio Grande Valley and Corpus Christi, Texas was regulated under the Corpus Christi Federal Milk Marketing Order. The Corpus Christi Order was one of six separate federal milk marketing orders regulating different geographic regions within Texas. On May 2, 1975, the Secretary of Agriculture promulgated an order eliminating the six separate milk marketing orders in Texas and instituting a new Texas Marketing Area Milk Market Order, an order comprising all the area previously regulated by the six separate orders and some additional areas.

The effect of the new Texas-wide order was to lower the minimum price paid to milk producers in the former Corpus Christi Marketing Order area. Although a federal milk marketing order does not literally set the price for milk sales, it does set the minimum price which must be paid producers for their milk. Milk producers dairy farmers receive a "blend price" from the "handlers" who purchase and distribute their milk. The blend price is the uniform price paid to producers for all milk they sell to handlers no matter how it is eventually used. The blend price is arrived at by averaging under a weighted formula the prices of Class I milk primarily fluid milk and the prices of Class II milk milk used for the production of cheese and other dairy products. Fluid milk brings higher prices than milk sold for cheese or other by-products, but it must be sold soon after its production to avoid spoilage.

The blend price mechanism established by a milk marketing order acts as a stabilizing influence that insulates farmers from the

Page 1065

buffeting of prices that would otherwise accompany differences in consumer demand. Handlers basically sell all that the market will absorb as Class I milk, with the surplus going to Class II usages. Any handler who receives more income from the sale of his purchased milk supply (after certain subtractions and additions) than he paid his producers under the blend price deposits the difference in a producer-settlement fund. This excess would reflect a strong consumer demand for fluid milk and thus relatively higher overall milk sale income. Any handler who receives less income than he paid producers under the blend price may subtract the difference from the producer settlement fund. By incorporating the former Corpus Christi order into a larger Texas-wide order, the Secretary of Agriculture forced the Corpus Christi area producers to share in a much larger marketing pool than they had under the prior order. Because the Corpus Christi area Class I utilization was higher than the Texas-wide average Class I utilization, the effect was redistributive; the Corpus Christi area producers received a lower minimum price for their milk, while producers in other areas of Texas saw their income rise.

The process leading to the promulgation of a federal milk marketing order is set forth in section 8c of the Agricultural Marketing Agreement Act, 7 U.S.C. § 608c. The Secretary of Agriculture initiates the process of establishing a marketing order by proposing an order whenever he has "reason to believe" that an order is warranted. 7 U.S.C. § 608c(3). Following the proposal, there must be notice of an opportunity for a hearing. 7 U.S.C. § 608c(3). After conducting a hearing, the Secretary is to issue the order if "upon the evidence introduced at such hearing" the Secretary finds that issuance of the order "will tend to effectuate the declared policy" of the Act. 7 U.S.C. § 608c(4). After promulgation of the order under section 608c(4), an order still may not become effective until two-thirds of the producers in the market area or producers accounting for two-thirds of the total volume of milk produced in the area ratify the order by referendum. 7 U.S.C. § 608c(8). Section 608c(9) provides that handlers also have some ratification rights; no marketing agreement adopting the terms of an order can become effective if handlers accounting for 50 percent of the volume in an area fail to sign it. The 50 percent handler approval requirement can be overcome, however, if the Secretary finds that the order tends to effectuate the Act's policy and "the issuance of (an) order is the only practical means of advancing the interests of the producers." 7 U.S.C. § 608c(9)(B). Finally, section 608c(15) gives handlers the right to petition the Secretary any time any obligation imposed by the market order is deemed to be "not in accordance with law" and modification or exemption from the order is sought. 7 U.S.C. § 608c(15). Upon such petition the handler is entitled to a hearing, and the section specifically provides for judicial review of the Secretary's determination. Although handlers are the only group that the statute specifically mentions as having a right to seek judicial review, the statute nowhere explicitly excludes producers from seeking such review.

The district court ruled that milk producers did not...

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17 practice notes
  • Alderwoods Grp., Inc. v. Garcia, No. 10–14726.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • 30 May 2012
    ...must occur in the issuing jurisdiction because contempt is an affront to the court issuing the order.”); Suntex Dairy v. Bergland, 591 F.2d 1063, 1068 (5th Cir.1979) (“If [conduct] is found by the Missouri court to be in violation of its injunction, it may be in contempt of that court. The ......
  • Arkansas Dairy Co-Op Ass'n v. U.S. Dept. of Agr., No. 08-5406.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • 24 July 2009
    ...336 F.3d 560, 566, 569 (7th Cir. 2003). See Dairylea Coop., Inc. v. Butz, 504 F.2d 80, 83 (2d Cir.1974); Suntex Dairy v. Bergland, 591 F.2d 1063, 1067 (5th Cir.1979); Minn. Milk Producers Assoc. v. Madigan, 956 F.2d 816, 818 (8th Cir.1992).6 Only the Ninth Circuit has read Block as broadly ......
  • Baker v. Bell, No. 79-2173
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • 17 November 1980
    ...to be protected by the statute; and (3) there must be no statutory prohibition of judicial review." Suntex Dairy v. Bergland, 591 F.2d 1063, 1066 (5th Cir. Page 1051 The constitutionally-compelled injury-in-fact element of the standing test requires the plaintiffs to demonstrate a suff......
  • JH Rutter Rex Mfg. Co., Inc. v. United States, Civ. A. No. 80-2865.
    • United States
    • United States District Courts. 5th Circuit. United States District Court (Eastern District of Louisiana)
    • 19 February 1982
    ...or constitutional guarantee in question; and 3) there must be no statutory prohibition of judicial review. Suntex Dairy v. Bergland, 591 F.2d 1063, 1066 (5th Cir. 1979); Baker v. Bell, 630 F.2d 1046, 1050 (5th Cir. A. Injury in Fact Plaintiff's stake in the outcome of this controversy is su......
  • Request a trial to view additional results
17 cases
  • Alderwoods Grp., Inc. v. Garcia, No. 10–14726.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • 30 May 2012
    ...must occur in the issuing jurisdiction because contempt is an affront to the court issuing the order.”); Suntex Dairy v. Bergland, 591 F.2d 1063, 1068 (5th Cir.1979) (“If [conduct] is found by the Missouri court to be in violation of its injunction, it may be in contempt of that court. The ......
  • Arkansas Dairy Co-Op Ass'n v. U.S. Dept. of Agr., No. 08-5406.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • 24 July 2009
    ...336 F.3d 560, 566, 569 (7th Cir. 2003). See Dairylea Coop., Inc. v. Butz, 504 F.2d 80, 83 (2d Cir.1974); Suntex Dairy v. Bergland, 591 F.2d 1063, 1067 (5th Cir.1979); Minn. Milk Producers Assoc. v. Madigan, 956 F.2d 816, 818 (8th Cir.1992).6 Only the Ninth Circuit has read Block as broadly ......
  • Baker v. Bell, No. 79-2173
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • 17 November 1980
    ...to be protected by the statute; and (3) there must be no statutory prohibition of judicial review." Suntex Dairy v. Bergland, 591 F.2d 1063, 1066 (5th Cir. Page 1051 The constitutionally-compelled injury-in-fact element of the standing test requires the plaintiffs to demonstrate a suff......
  • JH Rutter Rex Mfg. Co., Inc. v. United States, Civ. A. No. 80-2865.
    • United States
    • United States District Courts. 5th Circuit. United States District Court (Eastern District of Louisiana)
    • 19 February 1982
    ...or constitutional guarantee in question; and 3) there must be no statutory prohibition of judicial review. Suntex Dairy v. Bergland, 591 F.2d 1063, 1066 (5th Cir. 1979); Baker v. Bell, 630 F.2d 1046, 1050 (5th Cir. A. Injury in Fact Plaintiff's stake in the outcome of this controversy is su......
  • Request a trial to view additional results

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