United States v. Daylight Dairy Products, Inc.
United States v. Daylight Dairy Products, Inc.
Opinion of the Court
MEMORANDUM AND ORDER
I. INTRODUCTION
This is an action brought under Section 8a(6) of the Agricultural Marketing Agreement Act of 1937 (“Act”), 7 U.S.C. § 608a(6). The United States seeks enforcement of the provisions of the Federal Milk Marketing Order No. 1 (“Order No. 1”), 7 C.F.R. Part 1001, which regulates milk handling in the New England marketing area.
This matter is presently before the Court upon the objection of defendant Daylight Dairy Products, Inc. (“Daylight Dairy”) to the Magistrate’s July 15, 1986 Report and Recommendation Regarding Plaintiff’s Motion for Summary Judgment or, in the Alternative, for a Preliminary Mandatory In
This Court has made a de novo review of that portion of the Magistrate’s Report and Recommendation to which Daylight Dairy has objected. 28 U.S.C. § 636(b)(1); Rule 3(b) of the Rules for United States Magistrates in the United States District Court for the District of Massachusetts. For the reasons discussed below, the Court will accept the Magistrate’s recommendations.
II. REVIEW A.
The Magistrate found that Daylight Dairy had failed, as of November 13, 1985, to make the following payments required under Order No. 1:
Producer’s Settlement Fund $576,580.21
Administrative Expenses 16,809.47
Marketing Services 219.61
Payment to Agri-Mark, Inc. (§
1001.9(d) milk) 319,855.40
Payment to Agri-Mark, Inc. (Plant milk) 64,678.62
Payment to Agri-Mark, Inc. (For
milk received under § 1001.74(d)) 86,958.44
Payment to Cabot Farmers Cooperative Creamery Co., Inc. 61,799.33
Payment to National Dairy Promotion and Research Board 629.85
Payment to Commodity Credit Corporation 1,055.77
Total Unpaid $1,128,586.70
Report and Recommendation 5-6.
The Magistrate also found that Daylight Dairy had failed to fully comply with Order No. l’s reporting requirements. Id. at 6.
Daylight Dairy objects only to the Magistrate’s finding that it failed to make payments to Agri-Mark, Inc.
B.
This enforcement action is brought under section 8a(6) of the Act, 7 U.S.C. § 608a(6). Section 8a(6) provides that
[t]he 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 title, in any proceeding now pending or hereafter brought in said courts.
In United States v. Ruzicka, 329 U.S. 287, 67 S.Ct. 207, 91 L.Ed. 290 (1946), the Supreme Court held that a milk handler
*568 To be sure, Congress did not say in words that, in a proceeding under § 8a(6) to enforce an order, a handler may not question an obligation which flows from it. But meaning, though not explicitly stated in words, may be imbedded in a coherent scheme. And such we find to be the provisions taken in their entirety, as a means for attaining the purposes of the Act while at the same time protecting adequately the interests of individual handlers.
The procedure devised by Congress explicitly gave to an aggrieved handler an appropriate opportunity for the correction of errors or abuses by the agency charged with the intricate business of milk control. In addition, if the Secretary fails to make amends called for by law the handler may challenge the legality of the Secretary’s ruling in court. Handlers are thus assured opportunity to establish claims of grievances while steps for the protection of the industry as a whole may go forward. Sections 8a(6) and 8c(15) thus form a complementary procedural scheme. Contrariwise, it would make for disharmony to extrapolate from these provisions of the statute the right to consider independently, in a proceeding by the Government for the enforcement of the Secretary’s order, questions for which Congress explicitly furnished the handler an expert forum for contest with ultimate review by a district court.
329 U.S. at 292, 67 S.Ct. at 209. Ruzicka remains viable. E.g., Naval Orange Administrative Committee v. Exeter Orange Co., Inc., 722 F.2d 449 (9th Cir. 1983); United States v. Lamars Dairy, Inc., 500 F.2d 84 (7th Cir. 1974). See also Block v. Community Nutrition Institute, 467 U.S. 340, 104 S.Ct. 2450, 81 L.Ed.2d 270 (1984) (holding that individual milk consumers may not obtain judicial review of milk market orders).
As stated above, Daylight Dairy’s sole argument is that it satisfied its Order No. 1 payment obligation to Agri-Mark by means of a secured note. Daylight Dairy thus seeks either a judicial interpretation of 7 C.F.R. § 1001.74(d), or judicial review of the Market Administrator’s interpretation of that provision. But in either case, the Act requires Daylight Dairy to exhaust its administrative remedies pursuant to section 8c(15). This Daylight Dairy has not done. Having failed to file a petition under section 8c(15), Daylight Dairy may not challenge the Market Administrator’s interpretation of Order No. 1 in this enforcement proceeding. Ruzicka, supra. Therefore, the Court accepts the Magistrate’s recommendation to allow the government’s motion for summary judgment.
For the reasons discussed above, the Court accepts the Magistrate’s recommendation, and hereby ALLOWS the plaintiffs Motion for Summary Judgment in the amount of $1,128,586.70.
(a) promptly pay all additional obligations which have accrued during the pendency of this action, pursuant to the provisions of Order No. 1;
(b) promptly pay all future obligations when due, according to the provisions of Order No. 1;
(c) file all reports with the Market Administrator promptly and completely each month as required by Order No. 1; and
(d) make available to the Market Administrator, his agents and employees, all of its records and facilities as the Market Administrator finds necessary for verification of the information defendant is required to report to the Market Administrator.
The Court retains jurisdiction over this action for the purpose of entering such further orders and judgments as may be necessary in order to give full relief as provided herein.
It is So Ordered.
. The Magistrate described the background and goals of the Act and Order No. 1. See Report and Recommendation 2-5.
. Agri-Mark is a farmers’ cooperative. The payments due to it represent monies owed to farmers for milk received. As the Magistrate noted, these payments amount to less than half of the total claimed due.
. "Handler” is defined at 7 C.F.R. § 1001.9. Daylight Dairy does not dispute that it is a handler subject to Order No. 1.
. 7 U.S.C. § 608c(15) provides:
(B) The District Courts of the United States ... are hereby vested with jurisdiction in equity to review such ruling____ If the court determines that such ruling is not in accordance with law, it shall remand such proceedings to the Secretary with directions either (1) to make such ruling as the court shall determine to be in accordance with law, or (2) to take such further proceedings as, in its opinion, the law requires. The pendency of proceedings instituted pursuant to this subsection (15) shall not impede, hinder, or delay the United States or the Secretary of Agriculture from obtaining relief pursuant to section 8a(6) of this title [7 USCS § 608a(6)j. Any proceedings brought pursuant to section 8a(6) of this title [7 USCS § 608a(6) ] (except where brought by way of counterclaim in proceedings instituted pursuant to this subsection (15)) shall abate whenever a final decree has been rendered in proceedings between the same parties, and covering the same subject matter, instituted pursuant to this subsection (15).
. If the question was properly before this Court, I would most likely uphold the Market Administrator's interpretation of 7 C.F.R. § 1001.74(d) as requiring full cash payments at a time cer
. The Market Administrator shall credit Daylight Daily’s unpaid obligation to Agri-Mark with all payments made on the secured note.
Reference
- Full Case Name
- United States v. DAYLIGHT DAIRY PRODUCTS, INC.
- Cited By
- 1 case
- Status
- Published