Commonwealth, Milk Marketing Board v. Kreider Dairy Farms, Inc.

433 A.2d 472, 495 Pa. 268, 1981 Pa. LEXIS 939
CourtSupreme Court of Pennsylvania
DecidedJuly 22, 1981
DocketNo. 80-2-284
StatusPublished

This text of 433 A.2d 472 (Commonwealth, Milk Marketing Board v. Kreider Dairy Farms, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Commonwealth, Milk Marketing Board v. Kreider Dairy Farms, Inc., 433 A.2d 472, 495 Pa. 268, 1981 Pa. LEXIS 939 (Pa. 1981).

Opinions

OPINION OF THE COURT

FLAHERTY, Justice.

This is an appeal from a final decree of Commonwealth Court permanently enjoining appellant from selling milk at its store located on Route 72, Manheim, Pennsylvania at prices below the minimum prices established by the Milk Marketing Board. The appeal comes to us pursuant to § 723(a) of the Judicial Code, 42 Pa. C.S.A. § 723(a) as an appeal from a final order of Commonwealth Court. We reverse.

The case was commenced in the Commonwealth Court when the Pennsylvania Milk Marketing Board filed a complaint in equity and petition for preliminary injunction to prevent appellant from continuing to sell milk at his Manheim store on Route 72 below the minimum price established by the Board for the area in which the store is located. After hearing, the Commonwealth Court issued a Decree Nisi on February 27, 1980 granting injunctive relief to the Commonwealth. Exceptions were taken to the Decree Nisi, and on April 16, 1980 the court filed an opinion on the exceptions and entered a final decree permanently enjoining the appellant from selling milk at prices below the minimum set by the Board.

The Milk Marketing Law, Act of April 28, 1937, P.L. 417, Art. I, § 101, et seq. (currently Act of July 31, 1968, P.L. 963, No. 294, § 1, et seq., 31 P.S. § 700j-101 et seq. (Supp. 1981-1982) is the statutory scheme pursuant to which the Milk Marketing Board is charged with the responsibility of regulating virtually every aspect of the production and sale of milk and milk products in the Commonwealth. Whereas most retailers of milk are subject to the restrictions of minimum pricing which may be established by the Board, there is an exemption from these restrictions for certain [271]*271milk dealers who produce and sell only limited amounts of milk. 31 P.S. § 700j-402 (Supp. 1981-1982).

Appellant Kreider Dairy Farms, Inc. operates a dairy farm in Lancaster County, Pennsylvania consisting of several contiguous and several noncontiguous tracts of land on which the appellant grows feed crops, manages a dairy herd, processes milk, and operates two retail stores where milk is sold to the public. One store is located on the same tract of land where the herd and the production facilities are located. That the appellant is not subject to the Board’s pricing regulation at this store is not disputed. However, the second store is located on an eighty acre tract noncontiguous to the tract on which the herd and production facilities are located. This land is used for the growth of feed crops as well as for the sale of milk at the second store. Milk is transported approximately 3.6 miles from the processing facility to the second store by use of the public highways.

Section 700j-402 of the Milk Marketing Law, 31 P.S. § 700j-402 (Supp.1981-1982) provides that a milk dealer may be exempted from the licensing requirements of the act provided that in cash sales of milk to consumers:

he shall have produced all the milk on the farm where sold and such milk has at no time left the producer’s farm prior to its sale to the consumer and he shall have neither purchased, handled or received any milk from other producers or handlers for cash sale or any other purpose and his total sales to consumers do not exceed two gallons to any one consumer in any one day ....

The issue in this case, then, is whether the milk sold at the second store “has at no time left the producer’s farm prior to its sale to the consumer.” If it has left the farm, the exemption of § 402 is not available to appellant; if it has not left the farm, the exemption is available.

The court below found that the several noncontiguous tracts of land owned by appellant make up a single farm and that these tracts are a part of an enterprise which is “operated as an integrated dairy agriculture unit.” Since it is commonplace that a farm may consist of various nonconti[272]*272guous parcels of land, purchased over years as the need may have arisen, and that these noncontiguous parcels may be integral to the functioning of the entire farm unit, we hold that where there is such integral functioning of noncontiguous parcels, the transportation of milk from one noncontiguous parcel of a farm to another for short distances over public roads does not remove the dairy farmer so transporting milk from the exemption of § 402.

In Milk Control Commission v. Battista, 413 Pa. 652, 198 A.2d 840 (1964), app. dismissed, Battista v. Milk Control Comm., 379 U.S. 3, 85 S.Ct. 75, 13 L.Ed.2d 22 (1964), this Court addressed the question of whether the “jug-dealer” exemption of Section 402 was available to a producer who sent his milk to an outside processor for homogenizing, pasteurizing and bottling. After processing, the producer received the same milk back from the processor for sale to consumers. In Battista the parties stipulated that “ ‘The only issue involved ... is the right of defendants to sell milk at unregulated prices where such milk is processed off the farm where produced and sold.’ ” Id. 413 Pa. at 655, 198 A.2d at 841. Although Battista does not control the present case because of the difference in legal issues, that case is, nevertheless, relevant because of its construction of Section 402:

In Section 402, the Legislature has set forth the conditions under which farmer-producers may sell directly to consumers the milk of their herds produced on their farms without disrupting or endangering effective regulation of the remaining industry. In exempting the producer-handler, the Legislature not only sought to aid him in selling such milk but also to give recognition to the historical custom that individual, self-sufficient farm activity has traditionally been free of many forms of licensing and regulations. This exemption is an acknowledgement by the Legislature of the need to permit the local, family farm to continue to function unregulated by the Milk Control Commission in this particular activity.

[273]*273Id., 413 Pa. at 657, 198 A.2d at 842. In the present case, the record indicates that Kreider Dairy Farms, Inc., is a Pennsylvania corporation engaged in the business of operating a dairy herd, producing milk, processing milk, and selling the milk at two retail dairy stores. The corporation leases its land, buildings, equipment and livestock from Noah W. Kreider and Sons, a partnership.

If Kreider were to have acquired the land between the main parcel and the eighty acre tract, or a corridor linking the two parcels, presumably the Board would not have brought this action, for then Kreider would have been able to transport milk from his processing facility to the second store without “leaving” his farm under any definition of that term. To require the acquisition of the land between the two parcels, however, would be to exalt form over substance. If Kreider owned a legal interest in a corridor of land wide enough to accommodate a milk truck and connecting the eighty acre parcel with the main parcel, over which milk were transported to the second store, presumably Kreider would not be subjected to price regulation on the grounds that his milk never left the farm. The only variable between the present case and the hypothetical case would be ownership of a legal interest in the corridor of land.

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Related

Battista v. Milk Control Comm'n of Pa.
379 U.S. 3 (Supreme Court, 1964)
Milk Control Commission v. Battista
198 A.2d 840 (Supreme Court of Pennsylvania, 1964)

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Bluebook (online)
433 A.2d 472, 495 Pa. 268, 1981 Pa. LEXIS 939, Counsel Stack Legal Research, https://law.counselstack.com/opinion/commonwealth-milk-marketing-board-v-kreider-dairy-farms-inc-pa-1981.