Titusville Dairy Products Co. v. Brannan

176 F.2d 332, 1949 U.S. App. LEXIS 3050
CourtCourt of Appeals for the Third Circuit
DecidedAugust 4, 1949
DocketNos. 9774, 9831
StatusPublished
Cited by10 cases

This text of 176 F.2d 332 (Titusville Dairy Products Co. v. Brannan) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Titusville Dairy Products Co. v. Brannan, 176 F.2d 332, 1949 U.S. App. LEXIS 3050 (3d Cir. 1949).

Opinion

O’CONNELL, Circuit Judge.

Titusville Dairy Products Co. (“Titus-ville”), plaintiff in the court below, is a Pennsylvania corporation which operates a [334]*334milk plant in western Pennsylvania. At some time prior to September 1, 1938, it applied for and was granted the approval of its plant by the Department of Health of New York. Some of its cream was shipped into the New York Milk Marketing Area (“the Area”) periodically between September 1, 1938, and October 5, 1941. The approval of the Department of Health of New York was retained not only throughout the' 'aforementioned 37 months when' shipments were made, but also until January 16, 1942, when the approval of the plant was withdrawn at the request of Titusville.

Ón September 1, 19138, Order' No. 27 of the Department of Agriculture of the United States became effective. The background'of, and justification for, its issuance have received full consideration in Nebbia v. New York, 1934, 291 U.S. 502, 54 S.Ct. 505, 78 L.Ed. 940, 89 A.L.R. 1469, and United States v. Rock Royal Co-op, 1939. 307 U.S. 533, 59 S.Ct. 993, 83 L.Ed. 1446, andJrieed not here be repeated. Suffice it to say that near-chaos in the distribunalstages of the milk industry, with the concomitant threat to the public health and welfare, was deemed imminent unless a cooperative system was evolved. Consequently, Order No. 27, governing the milk industry in the Area, and designed to insure the payment of a uniform price by all- milk handlers to producers, was promulgated. The Order established a producer-settlement fund to equalize the cost of milk to handlers and provided for administrative assessments. A “handler” was defined in the Order as “any person who engages in the handling of milk, or cream [or milk products] therefrom, which [milk] was received at a plant approved by any health'authority for the receiving of milk to be sold in the marketing area, which handling is in the current of interstate commerce or directly burdens, obstructs,1 or affects interstate commerce.” 1

Titusville does not appear to have taken exception to Order No. 27 in. any way prior to 1941. It complied with all requirements of “handlers,” and in fact continued to submit the periodic reports due from “handlers”, under the Order until January 16, 1942, which was more than three months after it stopped shipping into the Area. Up'to April 30, 1941, Titusville had collected from the producer-settlement furid, for transmission to its suppliers, more than $55,000.

On March 1, 1941, Order No. 27 was amended in a manner of .considerable importance to Titusville. Prior to that time, Titusville had been subject -to the provisions of the Order only to the extent that it shipped milk or cream , into the Area, which was not. the bulk, of the Titusville business;2, that sold by Titusville elsewhere than in the Area was not covered by the Order. The March, 1941, amendment, however, priced and pooled all the milk and cream received by companies like Titusville, regardless of where sold.

This change of coverage placed Titus-ville in a position where it became a contributor to, rather than a recipient from, the producer-settlement fund. In May and June, 1941, Titusville paid $6665.59 into ■that fund. Between July 1, 1941, and January 16, 1942, Titusville is asserted to owe an additional $21,706.04, the amount of the instant controversy.

On October 5, 1941, without making any formal notification to that effect to any official body, Titusville stopped all shipments into the Area. In late November, 1941, Titusville by letter asked for information concerning the method of withdrawing from the ambit of Order No. 27. The Market Administrator promptly advised Titusville that the relinquishing of its approval by the Department of Health of New 'York was the necessary step. Titus-ville then requested withdrawal of its approval on January 13, 1942, the Depart[335]*335ment of Health granting the request three days later.

Titusville then proceeded under the applicable statutory provisions to secure administrative and, eventually, court review of its liability under Order No. 27. 7 U.S.C.A. § 608c(15). The presiding officer and judicial officer of the Department of Agriculture both found that Titusville properly was fully subject to Order No. 27 until January 16, 1942, and consequently denied the petition of Titusville.3 When Titusville thereafter filed a bill of complaint, however, the district court, without taking evidence, made two rulings: As to the July 1-October 5, 1941, period, the district court agreed with the decision of the judicial officer that the liability of Titus-ville to the fund was properly based upon all milk and cream received at the plant during that time, regardless of the destination of the milk and cream; but, as to the October 5, 1941-January 16, 1942, period when Titusville shipped nothing into the Area, the court below held that the administrative decision was not in accordance ■with law. The opinion of the lower court is reported fit D.C.W.D.Pa.1948, 77 F.Supp. 232. Titusville appeals from the former ruling, and the Secretary of Agriculture from the latter.

We are not disposed to weigh yet again questions which have received full consideration and become accepted law in the field of milk regulation. The Rock Royal case, for example, besides upholding the validity of Order No. 27, has pointed •out that “the marketing of fluid milk in New York has contacts at least with the entire national dairy industry. The approval of dairies by the Department of Health of New York City, as a condition for the sale of their fluid milk in the metropolitan area, isolates from this general competition a well recognized segment of the entire industry.” 307 U.S. at page 550, 59 S.Ct. at page 1002, 83 L.Ed. 1446. This quotation is but cumulative attestation of the immunity of Order No. 27 to two attacks: (1) the allegation that the Order attempts to regulate milk and cream Sales which do not and cannot affect the Area market meets the insuperable obstacle that at least those sales in Pennsylvania by handlers with permission to ship into the Area do affect interstate commerce in general and, specifically, the Area market; and (2) any argument that mere approval by the Department of Health cannot legally be a sufficient incident to bring a dealer like Titusville within the definition of “handler” is without substance. The only questions raised by Titusville which appear to us to merit discussion, therefore, are (1) whether the Order in fact did require only the Health Department approval, or whether actual'shipment into the Area was likewise necessary, and (2) whether the Order must yield to any inconsistent regulations of Pennsylvania with which Titus-ville was required to conform. ,

The latter contention will be discussed first. Ever since Titusville filed its1 petition in the Department of Agriculture, Titusville has argued as though Order No. 27 was imposed upon it willy-nilly. That is not this case. Titusville has never been required to sell its wares in the Area. Its approval by the Health Department of New York was voluntarily solicited and retained. Moreover, as the instant facts .unmistakably demonstrate, Titusville continuously was in a position wherein it could voluntarily place itself beyoild the coverage of the Order at any time, merely by obtaining the termination of the Health Department approval.

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176 F.2d 332, 1949 U.S. App. LEXIS 3050, Counsel Stack Legal Research, https://law.counselstack.com/opinion/titusville-dairy-products-co-v-brannan-ca3-1949.