New York State Guernsey Breeders Co-op., Inc. v. Wallace

28 F. Supp. 590, 1939 U.S. Dist. LEXIS 2368
CourtDistrict Court, N.D. New York
DecidedMay 16, 1939
StatusPublished
Cited by8 cases

This text of 28 F. Supp. 590 (New York State Guernsey Breeders Co-op., Inc. v. Wallace) is published on Counsel Stack Legal Research, covering District Court, N.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
New York State Guernsey Breeders Co-op., Inc. v. Wallace, 28 F. Supp. 590, 1939 U.S. Dist. LEXIS 2368 (N.D.N.Y. 1939).

Opinions

PATTERSON, Circuit Judge.

The Secretary of Agriculture on August 5, 1938, issued an order regulating the handling of milk in the New York metropolitan marketing area to the extent that such milk is in interstate commerce or directly burdens interstate commerce. The order, known as Order 27, was made under the Agricultural Marketing Agreement Act of 1937 (7 U.S.C.A. § 601ff). By the Order producers are paid uniform prices for milk delivered, irrespective of the uses made of the milk, subject to certain adjustments. Some weeks after the Order had gone into operation New York State Guernsey Breeders Co-operative, Inc., referred to for brevity as the Co-operative, filed with the Secretary a petition under Section 8c(15)(A) of the Act.1 In the petition the Co-operative alleged that the milk handled by it in behalf of producers had acquired a predominantly fluid milk market and commanded the highest prices by reason of superiority, advertising and contracts entered into, and that the Order had had an adverse effect on the prices received. It charged that the Order was not “in accordance with law” because it failed to give the Co-operative “an adjustment for the grade or quality of the milk delivered”, as provided by the Act, and because the Order did not conform to the Act in certain other respects. It added the charge that the equalization provisions of the Order and the Act purporting to authorize such provisions deprived it of property without due process and took its property for public use without compensation, in violation of the Constitution (U.S.C.A. Const. Amend. 5). The relief asked for was that it be exempted from the equalization provisions or that the Order be amended to give it an appropriate differential. A hearing on the petition was held and evidence taken. The Secretary, having made findings and conclusions, entered a ruling denying the petition.

Within twenty days after denial of the petition the Co-operative, joined by Mac-Elroy, one of its members, commenced the present suit against the Secretary in the District Court for the Northern District of New York, the district of residence and principal place of business, of the plaintiffs. The complaint makes reference to section 8c(15)(B) of the Act, 7 U.S.C.A. § 608c(15)(B). Subsection (15)(B) is to the effect that a handler whose petition has been denied by the .Secretary may bring a bill in equity in the District Court of his residence or principal place of business “to review such ruling”, that “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,” and that the pendency of the proceedings shall not abate proceedings brought by the United States or the Secretary for enforcement of orders in the same subject matter.2

[592]*592The complaint pleads the foregoing facts and contains, a prayer that the Secretary’s decision be reviewed and held not in accordance with law, because the Secretary did not truly interpret and apply Order 27 and the Act to the Co-operative’s case and also because the proceeding before the Secretary was not properly conducted. But the complaint goes further and contains many .allegations of fact not touched in the petition or in the proceeding before the Secretary. The additional allegations relate in the main to alleged errors by the Secretary in determining “base period” and minimum price factors in his Order 27. On these allegations the complaint tenders further issues of constitutionality of the Act and departure of Order 27 from the provisions of the Act, and asks for temporary and permanent injunction against enforcement of the Act, Order and ruling. Service was made on the defendant in the District of Columbia.

The defendant moved to dismiss the action or to quash service on the ground that he could not be sued in the district against his consent; in the alternative to strike from the complaint all allegations that go beyond the matters covered in the petition filed with the Secretary and to strike the prayer for an injunction; in the alternative to dismiss the action because the complaint endeavors to state two causes of action, one to review the Secretary’s ruling under section 8c(15)(B) of the Act and one for an injunction on the ground that the. Act and the Order are; unconstitutional. The motion was heard before a three-judge court convened under the Act of August 24, 1937, 28 U.S.C.A. § 380a, providing that an application for interlocutory or permanent injunction against enforcement of a federal statute on constitutional grounds shall be heard by a court composed of three judges.

We are of opinion that the motion should be granted to the extent of striking from the complaint the allegations concerning the necessity for an injunction. The complaint so pruned down will be merely one for review of the Secretary’s ruling on the Co-operative’s petition, and the case in its further stages will be heard by a single judge.

The suit in equity (“civil action” under the Rules of Civil Procedure, 28 U.S.C.A. following section 723c), prescribed by section 8c(15)(B) of the Agricultural Marketing Agreement Act of 1937, is a method- of reviewing for errors of law a decision or ruling by an administrative officer. The Act, after providing that an aggrieved handler may file with the Secretary a petition stating that his order is not in accordance with law and asking for modification or exemption and may have a hearing, and after providing that the Secretary’s ruling on the petition shall be “final if in accordance with law”, accords to a handler who loses before the Secretary the right to have the Secretary’s ruling reviewed by the courts. The review thus afforded is on bill in equity against the Secretary, brought in the District Court of the handler’s residence within a twenty day period. On such bill the court shall “review such ruling”, and if the court determines that “such ruling is not in accordance with law”, it shall “remand” the proceedings to the Secretary with directions to make the ruling determined by the court to be in accordance with law or to take such further proceedings as in the court’s opinion the law requires. The final provision is that the pendency of the suit shall not abate counter proceedings brought by the United States or the Secretary to enforce the latter’s orders. These statutory provisions, particularly the terms “review” and “remand”, savoring as they do of appeals from the District Court to the Circuit Court of Appeals (28 U.S.C.A. §§ 225, 877), make it certain that the District Court is not to conduct a trial de novo, that the question whether a ruling of the Secretary is “in accordance with law” is to be determined on the record before him, save as there may be an exception.of issues of constitutional right, and that new issues of fact may not be injected into the case in the District Court. Phillips v. Commissioner, 283 U.S. 589, 51 S.Ct. 608, 75 L.Ed. 1289; Anniston Mfg. Co. v. Davis, 301 U.S. 337, 57 S.Ct. 816, 81 L.Ed. 1143. See also Tagg Bros. & Moorhead v. United States, 280 U.S. 420, 443, 50 S.Ct. 220, 74 L.Ed. 524; Crowell v. Benson, 285 U.S. 22, 52 S.Ct. 285, 76 L.Ed. 598; Shields v. Utah Idaho Cent. R.

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Bluebook (online)
28 F. Supp. 590, 1939 U.S. Dist. LEXIS 2368, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-york-state-guernsey-breeders-co-op-inc-v-wallace-nynd-1939.