Minnesota Milk Producers Ass'n v. Glickman

153 F.3d 632, 1998 WL 470361
CourtCourt of Appeals for the Eighth Circuit
DecidedAugust 13, 1998
DocketNos. 97-4145MN, 97-4241MN, 97-4220MN, 97-4224MN, 97-4226MN, 97-4331MN, 97-4334MN, 97-4361MN and 97-4362MN
StatusPublished
Cited by13 cases

This text of 153 F.3d 632 (Minnesota Milk Producers Ass'n v. Glickman) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Minnesota Milk Producers Ass'n v. Glickman, 153 F.3d 632, 1998 WL 470361 (8th Cir. 1998).

Opinions

RICHARD S. ARNOLD, Chief Judge.

The Minnesota Milk Producers Association (MMPA) challenges the Secretary of Agriculture’s system for pricing “Class I” milk under the Agricultural Marketing Agreement Act of 1937 (AMAA), 7 U.S.C. §§ 601 et seq. (1994). The District Court held that one aspect of the pricing system — the “differential” — was unlawful and the Secretary’s decision to maintain its operation unsubstantiated, and therefore enjoined the Secretary from enforcing this price component in most of the country’s milk-marketing areas. The Court upheld the other component of the Class I price — the “base price.” Subsequently, the Court denied the post-judgment motions of other producer organizations and numerous state agencies for intervention, as well as for relief from judgment. On the Secretary’s motion, it stayed the injunction pending appeal. We extended the stay until this decision.

The Secretary of Agriculture appeals the Court’s holding that the differential component of the Class I milk price is unlawful, and that the Secretary’s decision to maintain it was arbitrary and capricious. On cross-appeal, the MMPA challenges the Court’s upholding of the base-price component of the Class I milk price. The various movants appeal the Court’s denial of their post-judgment motions.

We hold that the Secretary’s decision to maintain the current system for pricing Class I milk was within his discretion, and therefore reverse the portions of the District Court’s order that hold otherwise. We af[637]*637firm the denial of intervention, and other post-judgment relief, to the various movants.

I. BACKGROUND

A. General

A brief examination of the milk industry and the development’ of milk price regulation is helpful to understand the issues on appeal. As the Supreme Court has explainedj “two distinctive and essential phenomena of the milk industry” create the potential for market disequilibrium. Zuber v. Allen, 396 U.S. 168, 172, 90 S.Ct. 314, 24 L.Ed.2d 345 (1969). The first is that the price of raw milk depends on its end use. The second is that production yield varies seasonally, resulting in oversupply in summer months. Absent regulation or coordination, therefore, the milk market is vulnerable to destabilizing competition among producers to sell for the highest-price use, on the one hand, and inequitable bargaining power favoring buyers, on the other.

Ultimately, these market characteristics led to the establishment, as part of‘the AMAA,2 of federal milk regulation through marketing orders. The statute was intended “to raise producer prices” and “to ensure that the benefits and burdens of the milk market are fairly and proportionately shared by all dairy farmers.” Block v. Community Nutrition Inst., 467 U.S. 340, 342, 104 S.Ct. 2450, 81 L.Ed.2d 270 (1984) (citation omitted).

First, as to raising producer prices, the statute requires the Secretary to classify milk according to its end use, and to provide a method for fixing minimum prices for each classification in each marketing area. The minimum prices are to be uniform as to all handlers, subject only to certain adjustments for: “(1) volume, market, and production differentials customarily applied by the handlers subject to such order, (2) the grade or quality of the milk purchased, and (3) the locations at which delivery of such milk, or any use classification thereof, is made to such handlers.” 7 U.S.C. § 608c(5)(A).

Accordingly, the Department of Agriculture uses three end-use classifications for milk products: Class I denotes fluid milk, Class II soft manufactured products, and Class III hard, storable manufactured products. The minimum-price calculation for each classification begins with a base price— known as the Minnesota-Wisconsin (M-W) price3 — representing the competitive value of milk used for manufacturing purposes. Specifically, the base price is the average price paid to milk producers for Class III milk in Minnesota and Wisconsin by plants producing manufactured products. Class III milk is then priced at the base price; Class II milk at the base price plus a differential that is uniform in all areas; and Class I milk at the base price plus an area-specific differential that is intended to stimulate nonlocal producers to supply that area sufficiently.

Second, regarding the equitable distribution of sale proceeds, the statute requires the Secretary to ensure that all milk producers supplying a particular marketing area be paid a uniform price, “irrespective of the uses made of such milk by the individual handler to whom it is delivered,” subject to certain adjustments. 7 U.S.C. § 608c(5)(B)(ii).4

The current system operates as a settlement fund based on a uniform “blend price.” The blend price is calculated as the weighted average of the minimum prices of the three classes of milk. All handlers in a marketing area pay the blend price to producers supplying that area, regardless of the classification [638]*638of the milk they are buying. For Class I milk, whose minimum price is higher than the blend price, the handler pays the difference into the settlement fund. For Class II and III milk, whose minimum prices are lower than the blend price, the handler withdraws the difference from the fund. In this way, all producers supplying a marketing area receive the same price, yet all handlers pay at least the minimum price specifically applicable to the milk’s end use.

B. Class I Differentials

The subject of this dispute is the pricing of Class I milk. The current computation— base price plus an area-specific Class I differential — has been used since the 1960s. Until then, during the first 25 years of the milk-marketing-order program, “[t]he independence of markets ... made it easier to deal with local changes in supply and demand.” Agricultural Marketing Service, U.S. Department of Agriculture, Marketing Bulletin No. 27, The Federal Milk Marketing Order Program 34. In the 1960s, however, “[ajdvances in transportation and refrigeration facilitated the movement of milk between markets and, thus, markets began to lose many of their local characteristics. The ability of handlers to obtain their supply of milk from sources outside the traditional milkshed made it necessary to give more weight to the cost of alternative milk supplies in establishing the Class I price level for a market. The increased mobility of milk made national supply-demand conditions an important factor in the supply-demand conditions of local markets- Class I prices [came to be] viewed as a coordinated system of prices for the various markets.... ” Id. Therefore, “[cjhanges in individual order prices usually are made only in the context of a system of prices for all markets.” Id.

The last such changes before 1985 occurred in 1968. Thereafter, no significant changes were made, in part because markets “remained adequately supplied at existing Class I price levels.

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Minnesota Milk Producers Association, a Non-Profit Minnesota Corporation, Individually, on Behalf of Themselves and Others Similarly Situated Bill Dropik, Individually, on Behalf of Himself and Others Similarly Situated Chester Kolstad, Individually, on Behalf of Himself and Others Similarly Situated Greg Radermacher, Individually, on Behalf of Himself and Others Similarly Situated Arnold Ness, Individually, on Behalf of Himself and Others Similarly Situated Fredrick J. Bianchi, Individually, on Behalf of Himself and Others Similarly Situated Marlon Restad, Individually, on Behalf of Himself and Others Similarly Situated Delbert Mandelko, Individually, on Behalf of Himself and Others Similarly Situated John Fischer, Individually, on Behalf of Himself and Others Similarly Situated Lee Johnston, Individually, on Behalf of Himself and Others Similarly Situated Leslie Kyllo, Individually, on Behalf of Himself and Others Similarly Situated James Muzzy, Individually, on Behalf of Himself and Others Similarly Situated, Appellees/cross-Appellants v. Dan Glickman, Secretary, United States Department of Agriculture, Appellant/cross-Appellee. Minnesota Milk Producers Association, a Non-Profit Minnesota Corporation, Individually, on Behalf of Themselves and Others Similarly Situated Bill Dropik, Individually, on Behalf of Himself and Others Similarly Situated Chester Kolstad, Individually, on Behalf of Himself and Others Similarly Situated Greg Radermacher, Individually, on Behalf of Himself and Others Similarly Situated Arnold Ness, Individually, on Behalf of Himself and Others Similarly Situated Fredrick J. Bianchi, Individually, on Behalf of Himself and Others Similarly Situated Marlon Restad, Individually, on Behalf of Himself and Others Similarly Situated Delbert Mandelko, Individually, on Behalf of Himself and Others Similarly Situated John Fischer, Individually, on Behalf of Himself and Others Similarly Situated Lee Johnston, Individually, on Behalf of Himself and Others Similarly Situated Leslie Kyllo, Individually, on Behalf of Himself and Others Similarly Situated James Muzzy, Individually, on Behalf of Himself and Others Similarly Situated v. Southeast Dairy Farmers Association and United Dairymen of Arizona, Minnesota Milk Producers Association, a Non-Profit Minnesota Corporation, Individually, on Behalf of Themselves and Others Similarly Situated Bill Dropik, Individually, on Behalf of Himself and Others Similarly Situated Chester Kolstad, Individually, on Behalf of Himself and Others Similarly Situated Greg Radermacher, Individually, on Behalf of Himself and Others Similarly Situated Arnold Ness, Individually, on Behalf of Himself and Others Similarly Situated Fredrick J. Bianchi, Individually, on Behalf of Himself and Others Similarly Situated Marlon Restad, Individually, on Behalf of Himself and Others Similarly Situated Delbert Mandelko, Individually, on Behalf of Himself and Others Similarly Situated John Fischer, Individually, on Behalf of Himself and Others Similarly Situated Lee Johnston, Individually, on Behalf of Himself and Others Similarly Situated Leslie Kyllo, Individually, on Behalf of Himself and Others Similarly Situated James Muzzy, Individually, on Behalf of Himself and Others Similarly Situated v. National Farmers Organization ("Nfo"), Minnesota Milk Producers Association, a Non-Profit Minnesota Corporation, Individually, on Behalf of Themselves and Others Similarly Situated Bill Dropik, Individually, on Behalf of Himself and Others Similarly Situated Chester Kolstad, Individually, on Behalf of Himself and Others Similarly Situated Greg Radermacher, Individually, on Behalf of Himself and Others Similarly Situated Arnold Ness, Individually, on Behalf of Himself and Others Similarly Situated Fredrick J. Bianchi, Individually, on Behalf of Himself and Others Similarly Situated Marlon Restad, Individually, on Behalf of Himself and Others Similarly Situated Delbert Mandelko, Individually, on Behalf of Himself and Others Similarly Situated John Fischer, Individually, on Behalf of Himself and Others Similarly Situated Lee Johnston, Individually, on Behalf of Himself and Others Similarly Situated Leslie Kyllo, Individually, on Behalf of Himself and Others Similarly Situated James Muzzy, Individually, on Behalf of Himself and Others Similarly Situated v. Association of Dairy Cooperatives in the Northeast ("Adcne"), Minnesota Milk Producers Association, a Non-Profit Minnesota Corporation, Individually, on Behalf of Themselves and Others Similarly Situated Bill Dropik, Individually, on Behalf of Himself and Others Similarly Situated Chester Kolstad, Individually, on Behalf of Himself and Others Similarly Situated Greg Radermacher, Individually, on Behalf of Himself and Others Similarly Situated Arnold Ness, Individually, on Behalf of Himself and Others Similarly Situated Fredrick J. Bianchi, Individually, on Behalf of Himself and Others Similarly Situated Marlon Restad, Individually, on Behalf of Himself and Others Similarly Situated Delbert Mandelko, Individually, on Behalf of Himself and Others Similarly Situated John Fischer, Individually, on Behalf of Himself and Others Similarly Situated Lee Johnston, Individually, on Behalf of Himself and Others Similarly Situated Leslie Kyllo, Individually, on Behalf of Himself and Others Similarly Situated James Muzzy, Individually, on Behalf of Himself and Others Similarly Situated v. Texas Association of Dairymen Dairy Producers of New Mexico Lone Star Milk Producers, L.C. And Premier Milk Producers, Inc., Minnesota Milk Producers Association, a Non-Profit Minnesota Corporation, Individually, on Behalf of Themselves and Others Similarly Situated Bill Dropik, Individually, on Behalf of Himself and Others Similarly Situated Chester Kolstad, Individually, on Behalf of Himself and Others Similarly Situated Greg Radermacher, Individually, on Behalf of Himself and Others Similarly Situated Arnold Ness, Individually, on Behalf of Himself and Others Similarly Situated Fredrick J. Bianchi, Individually, on Behalf of Himself and Others Similarly Situated Marlon Restad, Individually, on Behalf of Himself and Others Similarly Situated Delbert Mandelko, Individually, on Behalf of Himself and Others Similarly Situated John Fischer, Individually, on Behalf of Himself and Others Similarly Situated Lee Johnston, Individually, on Behalf of Himself and Others Similarly Situated Leslie Kyllo, Individually, on Behalf of Himself and Others Similarly Situated James Muzzy, Individually, on Behalf of Himself and Others Similarly Situated v. National Farmers Organization, Inc. (Nfo) and Association of Dairy Cooperatives in the Northeast, Minnesota Milk Producers Association, a Non-Profit Minnesota Corporation, Individually, on Behalf of Themselves and Others Similarly Situated Bill Dropik, Individually, on Behalf of Himself and Others Similarly Situated Chester Kolstad, Individually, on Behalf of Himself and Others Similarly Situated Greg Radermacher, Individually, on Behalf of Himself and Others Similarly Situated Arnold Ness, Individually, on Behalf of Himself and Others Similarly Situated Fredrick J. Bianchi, Individually, on Behalf of Himself and Others Similarly Situated Marlon Restad, Individually, on Behalf of Himself and Others Similarly Situated Delbert Mandelko, Individually, on Behalf of Himself and Others Similarly Situated John Fischer, Individually, on Behalf of Himself and Others Similarly Situated Lee Johnston, Individually, on Behalf of Himself and Others Similarly Situated Leslie Kyllo, Individually, on Behalf of Himself and Others Similarly Situated James Muzzy, Individually, on Behalf of Himself and Others Similarly Situated v. Louisiana Department of Agriculture and Forestry Alabama Department of Agriculture and Industries Arkansas Livestock and Poultry Commission Colorado Department of Agriculture Georgia Department of Agriculture Kentucky Department of Agriculture Maine Department of Agriculture, Food and Rural Resources Massachusetts Department of Food and Agriculture Mississippi Department of Agriculture and Commerce New Hampshire Department of Agriculture, Markets and Food New Mexico Department of Agriculture North Carolina Department of Agriculture South Carolina Department of Agriculture State of Vermont and Washington Department of Agriculture
153 F.3d 632 (Eighth Circuit, 1998)

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Bluebook (online)
153 F.3d 632, 1998 WL 470361, Counsel Stack Legal Research, https://law.counselstack.com/opinion/minnesota-milk-producers-assn-v-glickman-ca8-1998.