Cloverdale Foods Co. v. State

• Court: Montana Supreme Court
• Decided: December 30, 1975
• Docket: 13074
• Status: Published

Opinion

No. 13074 I N THE SUPREME COURT OF THE STATE OF MONTANA 1975

CU)VERDALE FOODS COMPANY, a North Dakota C o r p o r a t i o n , P l a i n t i f f and A p p e l l a n t ,

THE STATE OF MONTANA, and t h e DEPARTMENT OF BUSINESS REGULATION, a n a d m i n i s t r a t i v e agency o f t h e S t a t e o f Montana, D e f e n d a n t s and Respondents.

Appeal from: D i s t r i c t Court o f t h e F i r s t J u d i c i a l D i s t r i c t Honorable P e t e r G. Meloy, Judge p r e s i d i n g . Counsel o f Record: For P l a i n t i f f : S m a l l , Cummins and Hatch, Helena, Montana Gregory J a c k s o n a r g u e d , Helena, Montana F o r Respondents: James H McFarland a r g u e d , Helena, Montana James Wood, Helena, Montana

Submitted: September 30, 1975 M r . J u s t i c e Gene B . Daly d e l i v e r e d t h e Opinion of t h e Court.

T h i s i s an a p p e a l by Cloverdale Foods Company from an a d v e r s e d e c i s i o n i n a d e c l a r a t o r y judgment a c t i o n t r i e d t o t h e d i s t r i c t c o u r t , Lewis and C l a r k County. I n t h e f a l l 1974, C l o v e r d a l e Foods Company ( h e r e i n a f t e r c a l l e d C l o v e r d a l e ) , a North Dakota c o r p o r a t i o n l i c e n s e d t o do b u s i n e s s i n t h e s t a t e o f Montana, began s e l l i n g and o f f e r i n g f o r s a l e i n t h i s s t a t e milk i n t h r e e q u a r t containers. On November 1 4 , 1974, t h e S t a t e of Montana, a c t i n g

through t h e Department of Business R e g u l a t i o n , D i v i s i o n of Weights and Measures, h e r e i n a f t e r c a l l e d S t a t e , n o t i f i e d C l o v e r d a l e t h a t i n so s e l l i n g and o f f e r i n g f o r s a l e i t s milk i n t h r e e q u a r t con- t a i n e r s i t was i n v i o l a t i o n of s e c t i o n 90-180, R.C.M. 1947, which provides : "Fluid d a i r y p r o d u c t s . A l l f l u i d d a i r y p r o d u c t s , i n c l u d i n g b u t n o t l i m i t e d t o whole m i l k , skimmed m i l k , c u l t u r e d m i l k , sweet cream, s o u r cream, and b u t t e r m i l k , s h a l l be packaged f o r r e t a i l s a l e o n l y i n u n i t s of one (1) g i l l , one-half (112) l i q u i d p i n t , t e n (10) f l u i d ounces, one (1) l i q u i d p i n t , one (1) l i q u i d q u a r t , one- h a l f (112) g a l l o n , one (1) g a l l o n , one and one-half (1-112) g a l l o n s , two (2) g a l l o n s , two and one-half (2-112) g a l l o n s , o r m u l t i p l e s of one (1) g a l l o n ; provided, t h a t packages i n u n i t s of l e s s t h a n one (1) g i l l s h a l l be permitted." (Emphasis s u p p l i e d ) . It t h u s o r d e r e d Cloverdale t o c e a s e t h e s a l e of milk s o packaged. Cloverdale brought a d e c l a r a t o r y judgment a c t i o n a g a i n s t the State. A t t h e time t h e complaint was f i l e d , an o r d e r t o show

c a u s e and a temporary r e s t r a i n i n g o r d e r i s s u e d from t h e d i s t r i c t court. The S t a t e f i l e d a motion t o quash t h e temporary r e s t r a i n i n g o r d e r and a b r i e f i n s u p p o r t . Subsequent t h e r e t o , t h e m a t t e r was t r i e d t o the d i s t r i c t court. The c o u r t f i l e d f i n d i n g s of f a c t and c o n c l u s i o n s of law i n f a v o r of t h e S t a t e . Those f i n d i n g s of f a c t and c o n c l u s i o n s of law, i n p e r t i n e n t p a r t , provided: "FINDINGS O FACT F "7 * ik * "a. That a l l milk which p l a i n t i f f s e l l s i n Montana complies w i t h a l l s t a t e and f e d e r a l h e a l t h o r s a n i t a t i o n requirements; "b. That t h e s i z e of c o n t a i n e r used i n packaging does n o t a f f e c t t h e q u a l i t y o r s t a n d a r d of t h e milk contained t h e r e i n ; "c. That i n t h e manufacture of t h r e e (3) q u a r t c o n t a i n e r s a s compared t o s m a l l e r c o n t a i n e r s l e s s o i l and wood products would be used; "d. That S e c t i o n 90-180, R.C.M. 1947, provides reasonable s i z e s o r c l a s s i f i c a t i o n s (and numbers) f o r t h e c o n t a i n e r s of milk a s f o l l o w s : one (1) g i l l one-half (1/2) l i q u i d p i n t t e n (10) f l u i d ounces one (1) l i q u i d p i n t one (1) l i q u i d q u a r t one-half (1/2) g a l l o n one (1) g a l l o n one and one-half (1-1/2) g a l l o n s two ' ( 2 ) g a l l o n s two and one-half (2-1/2) g a l l o n s m u l t i p l e s of one (1) g a l l o n 1I e . The t h r e e (3) q u a r t c o n t a i n e r i s n o t a s i z e g e n e r a l l y recognized by t h e p u b l i c and i s of such s i z e and appearance t h a t i t w i l l be mistaken f o r t h e w e l l - known one (1) g a l l o n c o n t a i n e r by t h e p u b l i c and a c c o r d i n g l y c r e a t e s t h e p o t e n t i a l of d e c e p t i o n ; "f. That t h e p r e s e n t l y e x i s t i n g s i z e s (and number of s i z e s ) of milk c o n t a i n e r s a d e q u a t e l y and reasonably meet t h e need and demands of t h e p u b l i c ; "g. That t h e a d d i t i o n of y e t a n o t h e r c o n t a i n e r s i z e w i l l r e q u i r e s u b s t a n t i a l investment by milk p r o c e s s o r s and t h o s e investment c o s t s w i l l b e u l t i m a t e l y borne by t h e public, t o i t s detriment; "h. That t h e e n t i r e system of weights and measures w i l l a p p a r e n t l y soon be switched t o t h e m e t r i c system which w i l l r e q u i r e s u b s t a n t i a l investment of c a p i t a l by milk p r o c e s s o r s t o comply t h e r e w i t h ; "i. That i t i s i n t h e p u b l i c i n t e r e s t because of t h e p o t e n t i a l f o r f r a u d , deception and misunderstanding t h a t t h e number (and s i z e ) of milk c o n t a i n e r s be reasonably l i m i t e d under t h e p o l i c e power. 11 "CONCLUSIONS OF LAW "3. That S e c t i o n 90-180, R.C.M. 1947, provides r e a s o n a b l e s i z e s and numbers of s i z e s f o r milk con- t a i n e r s and they b e a r a r e a l and s u b s t a n t i a l r e l a t i o n - s h i p t o t h e e x e r c i s e of t h e p o l i c e power and f o r t h e purpose of p r e s e r v i n g p u b l i c h e a l t h , s a f e t y , morals o r g e n e r a l w e l f a r e and preventing f r a u d ; t h a t , t h e r e f o r e , it is constitutional. "4. That S e c t i o n 90-180, R.C.M. 1947 does n o t d i s - c r i m i n a t e a g a i n s t p l a i n t i f f n o r d e p r i v e p l a i n t i f f of t h e e q u a l p r o t e c t i o n of t h e laws, a s provided under t h e C o n s t i t u t i o n of Montana o r t h e C o n s t i t u t i o n of t h e United S t a t e s . "5. That t h e language of S e c t i o n 90-180, R.C.M. 1947, c l e a r l y and reasonably p r o h i b i t s t h e packaging of d a i r y products i n t h r e e (3) q u a r t c o n t a i n e r s . "6. That t h e u s e of t h e t h r e e (3) q u a r t c o n t a i n e r s i s p r o h i b i t e d f o r t h e r e t a i l packaging, s a l e , marketing and d i s t r i b u t i o n of d a i r y products i n Montana. "7. That t h e temporary r e s t r a i n i n g o r d e r h e r e t o f o r e issued i s dissolved. 1I Let Judgment be e n t e r e d accordingly. Cloverdale o b j e c t e d t o t h e f i n d i n g s and moved t h e c o u r t f o r a new t r i a l . T h e r e a f t e r t h e c o u r t denied t h e motion f o r a new t r i a l , o v e r r u l e d c lover dale's o b j e c t i o n s and d i s s o l v e d t h e r e s t r a i n - ing order. Judgment was then e n t e r e d i n f a v o r of t h e S t a t e . Cloverdale then p e t i t i o n e d t h i s Court t o s t a y execution of t h e judg- ment pending appeal. The s t a y pending a p p e a l was g r a n t e d and t h e appeal perfected. O a p p e a l , Cloverdale p r e s e n t s t h e s e i s s u e s : n 1) Whether s e c t i o n 90-180, R.C.M. 1947, i s u n c o n s t i t u - t i o n a l i n l i g h t of t h e United S t a t e s and Montana C o n s t i t u t i o n s . 2) Whether a proper r e a d i n g of s e c t i o n 90-180, R.C.M. 1947, permits t h e marketing of milk i n t h r e e q u a r t packages. 3) Whether s e c t i o n 90-180, R.C.M. 1947, can b e amended by adding " t h r e e (3) q u a r t " language. 4) Whether t h e d i s t r i c t c o u r t e r r e d i n : (a) concluding t h a t t h e t h r e e ( 3 ) q u a r t c o n t a i n e r has t h e p o t e n t i a l of d e c e i v i n g t h e p u b l i c and (b) denying Cloverdale a new t r i a l . Inasmuch a s t h e remaining i s s u e s f o r review a r e dependent on I s s u e No. 2 , we w i l l examine t h e s t a t u t e and t h e f i n d i n g r e l a t e d thereto. I n Cherry Lane Farms v. G i l b e r t C a r t e r , a s T r e a s u r e r of G a l l a t i n County, 153 Mont. 240, 249, 456 P.2d 296, t h i s Court s a i d : "The c a s e law of t h i s s t a t e long ago e s t a b l i s h e d t h a t i n c o n s t r u i n g s t a t u t e s t h e i n t e n t i o n of t h e l e g i s l a t u r e i s t o be followed, i f p o s s i b l e , and they must be construed i n r e f e r e n c e t o t h e s u b j e c t m a t t e r and o b j e c t s which prompted and induced t h e legislature t o act." (Emphasis s u p p l i e d ) F i r s t , i t should be understood t h a t code s e c t i o n s 27- 401 through 27-429, R.C.M. 1947, r e g u l a t e and c o n t r o l t h e milk i n d u s t r y a s i t r e l a t e s t o production, t r a n s p o r t , p r o c e s s i n g , s t o r a g e , d i s t r i b u t i o n and p r i c e c o n t r o l , - e t c . , under t h e a u t h o r i t y of t h e Montana Milk Control Board. The q u a l i t y of manufactured d a i r y p r o d u c t s , i n c l u d i n g milk, i n t h e a r e a of s a n i t a r y production, t r a n s p o r t a t i o n , s t o r a g e , s t a n d a r d s of q u a l i t y , purity, licensing, - . e t c . , a r e c o n t r o l l e d by t h e Commission of A g r i c u l t u r e i n s e c t i o n s 3-2404 through 3-24-139, R.C.M. 1947. Although t h e above a r e a s of c o n t r o l a r e f r e q u e n t l y a l l u d e d t o i n t h e c a s e b e f o r e u s , t h e y a r e o f no concern h e r e and have no b e a r i n g on our c o n s i d e r a t i o n s . I n o t h e r words we a r e n o t h e r e concerned w i t h p r i c e c o n t r o l o r r e l a t e d m a t t e r s . This c a s e i n v o l v e s t h e i n t e r p r e t a t i o n of a s t a t u t e , s e c t i o n 90-180, R.C.M. 1947, contained i n T i t l e 90-Weights-Measures and Grades - Time - Money. S e c t i o n 90-180, R.C.M. 1947, has i n one form o r a n o t h e r been Montana law s i n c e i t s o r i g i n a l enactment i n Chapter 34, S e c t i o n s 19 and 20, Sessions Laws of 1911. I n 1911 t h e Act was entitled: "An Act t o c r e a t e t h e O f f i c e of S t a t e S e a l e r of Weights and Measures and Providing t h e Duties and Powers r e l a t i v e t o t h e I n s p e c t i o n and S e a l i n g of Weights and Measures, and Providing P e n a l t i e s f o r the Violation thereof." The s u b j e c t m a t t e r and o b j e c t o f t h i s l e g i s l a t i o n which induced t h e l e g i s l a t u r e t o a c t was t o e s t a b l i s h a s t a t e s e a l e r of weights and measures and t o provide f o r h i s d e p u t i e s throughout t h e s t a t e ; t o e s t a b l i s h s t a n d a r d s of w e i g h t s , l i q u i d measures, e t c . , and t o enable t h e f i e l d t o be p o l i c e d t o prevent f r a u d upon t h e consumer by m i s l a b e l i n g , s h o r t weight o r measure. S e c t i o n 19 provides t h e s t a n d a r d of l i q u i d measure f o r milk products t o be "sold only by s t a n d a r d wine measure." Wine measure being a measure formerly used f o r wine and s p i r i t s i n which t h e g a l l o n was e q u a l t o t h e p r e s e n t United S t a t e s g a l l o n . A r e a d i n g of t h e Act a s a whole c l e a r l y permits t h e s a l e of milk products i n m u l t i p l e s of a g a l l o n , a s long a s t h e c o n t a i n e r i s c l e a r l y marked a s t o t h e c a p a c i t y . The amendment t o t h e o r i g i n a l Act of 1911 t h a t o f f e r s c l a r i f i c a t i o n of l e g i s l a t i v e i n t e n t i s c o n t a i n e d i n Chapter 146, Session Laws of 1939, S e c t i o n 21. This amendment e s t a b l i s h e s t h e s t a n d a r d measure a s t h e g a l l o n , t h e 112 g a l l o n which c o n t a i n s 112 a s much a s a g a l l o n e t c , down t o t h e p i n t . The s t a t u t e f u r t h e r provided : "Any purchaser of milk, cream o r skimmed m i l k , having reason t o b e l i e v e t h a t any measure, can, j a r , b o t t l e o r o t h e r v e s s e l o r r e c e p t a c l e , i n which milk, cream, o r skimmed milk i s s o l d and d e l i v e r e d t o him. i s n o t of s u f f i c i e n t s i z e o r c a p a c i t y t o c o n t a i n , b$ s t a n d a r d wine measure, t h e amount t h e r e o f purchased, may apply t o t h e s e a l e r of weights + : +:." : k (Emphasis s u p p l i e d . ) With each amendment i t became c l e a r e r t h a t t h e l e g i s l a t u r e

intended t o e s t a b l i s h a " c o n t r o l u n i t f f t o which m u l t i p l e s could be compared i n t h e enforcement process t o prevent f r a u d . Fraud has been d i s c u s s e d i n terms of m i s l a b e l i n g a s t o c a p a c i t y of t h e c o n t a i n e r and s h o r t measure. T h e r e a f t e r t h e term "unit" was introduced i n t o t h e d e s c r i p t i v e language o f t h e law a s found i n T i t l e 90, R.C.M. 1947, s e c t i o n s 90-101 through 90-129 [ s i n c e r e p e a l e d ] . For example, s e c t i o n 90-102-Unit of extension- "The s t a n d a r d yard i s t h e u n i t o r s t a n d a r d measure of l e n g t h i i" JJ . ; 90-106- Unit of weights -"The s t a n d a r d avoirdupois and t r o y weights a r e t h e u n i t s o f s t a n d a r d of weights from which a l l o t h e r weights a r e d e r i v e d and a s c e r t a i n e d . " ; 90-108 - Unit of l i q u i d measure - he s t a n d a r d g a l l o n and i t s p a r t s a r e t h e u n i t s o r s t a n d a r d s of measure of c a p a c i t y f o r l i q u i d s , from which a l l o t h e r measures of l i q u i d s a r e derived and a s c e r t a i n e d . II The ? e g i s i a c u u e i-n t n e L a w s a r 1969, Chapter 99, erlacceil

he presenr law:

"An Act R e l a t i n g t o Weights and Pleasures, Providing f o r a S t a t e S e a l e r of Weights and Measures, Providing f o r a System of Weights and Measures, R e g u l a t i n g t h e S a l e of Commodi- t i e s by Weight and Measure, Providing f o r Enforcement [and r e p e a l e r c l a u s e ] . 11

T h i s i c c e f f e c t i v e l y revamped and modernized t h e e n t i r e Act.

Ihe term " u n i t " i s used b u t n o t r e d e f i n e d . S e c t i o n 2 of t h e Act

provided : "Systems of Weights and Measures. The system of weights and measures i n customary u s e i n t h e United S t a t e s and t h e m e t r i c system of w e i g h t s and measures a r e j o i n t l y r e c o g n i z e d , and e i t h e r one o r b o t h of t h e s e systems s h a l l be used f o r a l l commercial purposes i n t h e S t a t e of Montana. The d e f i n i t i o n s of b a s i c u n i t s of weight and measure, t h e t a b l e s of weight and measure, and weights and measures e q u i v a l e n t s a s p u b l i s h e d by t h e N a t i o n a l Bureau o f Standards a r e recognized and s h a l l govern weighing and measuring equipment and t r a n s a c t i o n s i n t h e s t a t e . " (Emphasis supplied. ) The f e d e r a l s t a n d a r d s adopted r e c o g n i z e t h e g i l l , p i n t , q u a r t , g a l l o n , b a r r e l and hogshead. Another s e c t i o n r e d e f i n e s a s ! ' s p e c i a l U n i t s of ~ e a s u r e "t h e b a r r e l a s 31 g a l l o n s , a s opposed t o t h e

f e d e r a l s t a n d a r d of 3 1 1 / 2 g a l l o n s and s e v e r a l o t h e r u n i t s n o t r e l e v a n t t o our c o n s i d e r a t i o n h e r e . I t i s t h e o p i n i o n of t h i s Court t h a t t h e term " u n i t " o r

" u n i t s " a s used i n t h i s Act i s i n t e n d e d by t h e l e g i s l a t u r e t o mean

an a b s o l u t e s t a n d a r d of measure of c a p a c i t y from which o t h e r measures Il II a r e d e r i v e d and a s c e r t a i n e d . T h e r e f o r e , t h e term unit" or units"

could n o t , a s used i n t h e s e c t i o n under c o n s i d e r a t i o n , be c o n s t r u e d t o be r e s t r i c t i v e t o t h e a b s o l u t e u n i t i t s e l f b u t o n l y t o d i v i s -

i b l e parts o r multiples thereof. The f r a u d t h e l e g i s l a t u r e i n t e n d e d t o c o n t r o l o r t h e inducement t h a t prompted t h e l e g i s l a t u r e t o a c t was p r i n c i p a l l y

so c o n t r o l a c t u a l f r a u d a s i t r e l a t e d t o f a l s e o r m i s l e a d i n g pack- ages o r c o n t a i n e r s s o a s t o mislead t h e consumer a s t o q u a n t i t y o f

c o n t e n t s o r t h e c o n t e n t s of t h e c o n t a i n e r f a l l i n g below t h e adver- ~:isedf i l l i . e . , s h o r t weight o r f i l l . A c l o s e examination of t h e r e c o r d d i s c l o s e s no evidence t o s u p p o r t an a l l e g a t i o n o r proof of t h i s kind of f r a u d . W r e v e r s e t h e t r i a l c o u r t ' s sub-paragraphs o f i t s e f i n d i n g of f a c t No. 7 and i t s c o n c l u s i o n s of law No. 5 and No.6 r e l a t i n g t o t h e c o n s t r u c t i o n of s e c t i o n 90-180, R.C.M. 1947, a s i t r e l a t e s t o c o n t a i n e r s c o n t a i n i n g u n i t s of t h r e e q u a r t s .

W f i n d , a s our d i s c u s s i o n p o i n t s o u t , t h e language of e s e c t i o n 90-180, R.C.M. 1947, does n o t p r o h i b i t t h e u s e of a s i n g l e

c o n t a i n e r of t h e c a p a c i t y of t h r e e ( 3 ) one (1) q u a r t u n i t s f o r r e t a i l packaging, s a l e , marketing and d i s t r i b u t i o n o f f l u i d d a i r y products i n Montana . The cause i s remanded t o t h e t r i a l c o u r t t o e n t e r t h e

proper judgment n o t i n c o n s i s t e n t w i t h t h i s opinion.

Justices.