United States v. Ridgeland Creamery Co., 313.

• Decision Date: 26 October 1942
• Docket Number: No. 313.,313.
• Citation: 47 F. Supp. 145
• Court: U.S. District Court — Western District of Wisconsin
• Parties: UNITED STATES v. RIDGELAND CREAMERY CO. (QUILLING et al., Intervenors).

47 F. Supp. 145

UNITED STATES v. RIDGELAND CREAMERY CO. (QUILLING et al., Intervenors).

No. 313.

District Court, W. D. Wisconsin.

October 26, 1942.

John J. Boyle, U. S. Atty., of Madison, Wis., and G. Osmond Hyde, Senior Atty., U. S. Department of Agriculture, of Washington, D. C., for plaintiff.

Myer H. Gladstone, Ralph J. Gutgsell, and George F. Callaghan, all of Chicago, Ill., for defendant.

STONE, District Judge.

This cause having come on for trial before the Court without a jury on October 6, 1942, and the Court having heard and considered all of the evidence submitted by the parties hereto, and having heard the arguments of counsel for the respective parties, and being fully advised in the premises, now makes its Findings of Fact and Conclusions of Law as follows:

Findings of Fact.

1. Order No. 41, Order Regulating the Handling of Milk in the Chicago, Illinois, Marketing Area, was issued on August 28, 1939, by the Secretary of Agriculture of the United States, in accordance with the provisions of the Agricultural Marketing Agreement Act of 1937, 7 U.S.C.A. § 601 et seq., and became effective September 1, 1939.

2. Order No. 41, as Amended, Order Regulating the Handling of Milk in the Chicago, Illinois, Marketing Area, was issued on June 21, 1940, by the Secretary of Agriculture of the United States, in accordance with the provisions of the Agricultural Marketing Agreement Act of 1937, and became effective July 1, 1940.

3. Order No. 41, as Amended, Order Regulating the Handling of Milk in the Chicago, Illinois, Marketing Area, was issued on June 27, 1941, by the Secretary of Agriculture of the United States, in accordance with the provisions of the Agricultural Marketing Agreement Act of 1937, and became effective July 1, 1941.

4. Amendment No. 1 to Order No. 41, As Amended, Order Regulating the Handling of Milk in the Chicago, Illinois, Marketing Area, was issued on August 29, 1941, by the Secretary of Agriculture of the United States, in accordance with the provisions of the Agricultural Marketing Agreement Act of 1937, and became effective September 6, 1941.

5. The defendant, Ridgeland Creamery Company, is a corporation organized and existing under the laws of the State of Wisconsin, with its office and principal place of business at Ridgeland, Dunn County, Wisconsin.

6. The defendant, Ridgeland Creamery Company, since prior to the effective date of Order No. 41, as originally issued, has been engaged continuously in the business of purchasing, receiving, processing, selling, distributing and handling milk in interstate commerce in the Chicago, Illinois, Marketing Area, and is a handler of milk within the meaning of Section 8c(1) of the Agricultural Marketing Agreement Act of 1937, and Section 941.1(a) (4) of Order No. 41, as originally issued, and Section 941.1(a) (5) of Order No. 41, as subsequently amended.

7. The Secretary of Agriculture of the United States found and on August 30, 1939, proclaimed the period August, 1919-July, 1929, to be the base period to be used in determining the purchasing power of milk sold in the Chicago, Illinois, Marketing Area.

8. Order No. 41, as originally issued and subsequently amended, and the Marketing Agreement for Evaporated Milk Industry, executed by the Secretary of Agriculture of the United States on May 31, 1935, do not regulate milk produced for the same purposes, nor milk produced of the same grade and quality, and any difference between the prices fixed in Order No. 41, as originally issued and subsequently amended, and the prices fixed by the said Marketing Agreement for Evaporated Milk Industry is immaterial and irrelevant and have no bearing on this case.

9. The minimum prices for milk utilized as Class I milk and Class II milk set forth in Order No. 41, as originally issued and subsequently amended, are based upon a premium to be paid to producers in addition to the minimum prices fixed by the Marketing Agreement for Evaporated Milk Industry issued by the Secretary of Agriculture of the United States on May 31, 1935, for milk used for the production of evaporated milk.

10. There is only one formula in Section 1 of Article VI of the Marketing Agreement for Evaporated Milk Industry issued by the Secretary of Agriculture of the United States on May 31, 1935, fixing the minimum price to be paid to producers for milk used for the production of evaporated milk.

11. The defendant filed with the Market Administrator its monthly reports showing receipts of milk from producers and the utilization thereof for each and every delivery period commencing May 1, 1941, and ending August 31, 1942, as required by Order No. 41, as amended.

12. The Market Administrator made the computations required to be made by him by the provisions of Order No. 41, as amended, with respect to the reports referred to in paragraph 11 hereof, and rendered the defendant a transcript of its account with the producer-settlement fund for each and every delivery period commencing May 1, 1941, and ending August 31, 1942, within the time required by Order No. 41, as amended.

13. The defendant, prior to the commencement of this action, never protested or challenged the method or accuracy of any of the computations made by the Market Administrator with respect to its account with the producer-settlement fund as based upon its own reports, nor has the defendant petitioned the Secretary of Agriculture for an administrative review thereof.

14. The defendant has failed and refused to pay to the Market Administrator the amount it owes to the Market Administrator for the producer-settlement fund on the basis of its filed reports for each and every delivery period commencing May 1, 1941, and ending August 31, 1942, with the exception of the amount thus due for the monthly delivery period May 1-30, 1942, and there is now due and owing from the defendant to the Market Administrator for the producer-settlement fund, on the basis of the reports filed with the Market Administrator by the defendant, the total sum of $7,913.73.

15. The defendant, during each and every month commencing August 1, 1940, and ending June 30, 1942, in its reports to the Market Administrator, reported sales to the Service Dairy Products, Inc., of Chicago, Illinois, and claimed that such product had been utilized in classes lower than Class I, as Class I milk is described in the Order as originally issued and subsequently amended. The Market Administrator was denied access to the books and records of the Service Dairy Products, Inc., and was unable to verify how the product thus reported as sold to the Service Dairy Products, Inc., by the defendant was used, and in accordance with Section 941.4(c) of Order No. 41, as amended, the Market Administrator reclassified the product in Class I and billed the defendant for the difference between the value of the utilization of the product, as claimed by the defendant, and the Class I value thereof.

16. The Board of Directors of the defendant corporation and the Board of Directors of the Service Dairy Products, Inc., consist, to a material extent, of the same persons.

17. The Market Administrator audited the books and records of the defendant for the delivery periods commencing August 1, 1940 and ending June 30, 1942, for verification of reports and payments made to the Market Administrator for the producer-settlement fund, and found errors in payments made by the defendant to the Market Administrator for the producer-settlement fund. The Market Administrator promptly following such audits billed the defendant for the amounts thus found so due. None of the amounts for which the defendant has been thus billed by the Market Administrator have been paid. The defendant has never, prior to the commencement of this action, protested or challenged the accuracy of these bills for adjustments, and the defendant has never petitioned the Secretary of Agriculture for a review of the actions of the Market Administrator in this regard. There is now due and owing from the defendant to the Market Administrator for the producer-settlement fund, by reason of such adjustments, the total sum of $93,615.29.

18. The Market Administrator, acting in accordance with the provisions of Order No. 41, as originally issued and subsequently amended, determined that each handler, including the defendant, should pay to the Market Administrator, as his pro rata share of the expense of the administration of Order No. 41, as originally issued and subsequently amended, two cents per hundredweight on all milk received from producers, or produced by such handlers during the period from September 1, 1939, to and including June 30, 1940,...