NEW YORK STATE GUERNSEY BREEDERS' CO-OP. v. WICKARD No. 244.
141 F.2d 805 (1944)
NEW YORK STATE GUERNSEY BREEDERS' CO-OP., Inc., v. WICKARD, Secretary of Agriculture.
Circuit Court of Appeals, Second Circuit.
March 30, 1944.
Irving G. Hubbs, of Pulaski, N. Y. (Merritt A. Switzer, of Pulaski, N. Y., on the brief), for plaintiff-appellant.
W. Carroll Hunter, Sp. Asst. to Atty. Gen. (J. Stephen Doyle, Jr., Sp. Asst. to Atty. Gen., David P. Gordon, Atty., Dept. of Agriculture, of Washington, D. C., Wendell Berge, Asst. Atty. Gen., and Irving J. Higbee, U. S. Atty., of Syracuse, N. Y., on the brief), for defendant-appellee.
Before CHASE, CLARK, and FRANK, Circuit Judges.
CLARK, Circuit Judge.
For reasons readily understandable, the old controversy as to the relative merits of milk from Guernsey and from Holstein cows has flared up with increased vigor in consequence of the promulgation of federal and state milk orders under legislation designed to secure uniform minimum prices to the milk producers. The Guernsey producers seek either complete exemption from the orders or a substantial differential in their favor — beyond the allowance made all producers for better-than-average butterfat content — based upon asserted superior quality, greater production costs, and increased consumer demand than in the case of average or Holstein milk. Other producers oppose such a differential, and the administrative agencies have refused it. In the extensive court proceedings which have resulted, the Guernsey producers have had an occasional temporary success, as in an early ruling in this proceeding and in certain state rulings — all limited in ultimate decision, however, to orders of remand to the administrative agencies for further or other findings. Now this appeal brings up a final judgment of the District Court refusing to disturb the decision of the Secretary of Agriculture against the Guernsey contention, which decision is vigorously attacked as unsupported in law or fact and as unconstitutionally discriminatory.
The milk order in question is Order No. 27, regulating the handling of milk in the New York metropolitan marketing area, originally issued by the Secretary of Agriculture on August 5, 1938, under the Agricultural Marketing Agreement Act of 1937, § 8c, 7 U.S.C.A. § 608c.
Thereafter, the Secretary filed his answer, with a counterclaim for affirmative relief, and the action was heard upon cross-motions for judgment. On January 9, 1940, Judge Cooper filed a lengthy opinion, together with findings of fact and conclusions of law, which were largely favorable to the plaintiff in finding superior quality, increased consumer demand, and greater cost of production in Guernsey than in average milk. His decision was, however, to remand the matter to the Secretary "to make new findings of fact and conclusions upon the evidence and to grant or deny plaintiff's proposed findings and conclusions, with the right to make new or additional findings and with the right of each party to submit additional evidence upon proper notice to the other." Then he ordered the plaintiff to make a special deposit in a bank, subject
The statutory provisions requiring the payment of uniform prices to producers, "irrespective of the uses made of such milk by the individual handler," allow certain "adjustments" not here in issue — including one for "location," which has been granted plaintiff, beginning in 1940 — and, in addition, the one here pertinent, namely, adjustment for "the grade or quality of the milk delivered." § 8c(5), paragraph (B) (ii), cf. also paragraph (A). Acting under the authority of this statute the Secretary in Order No. 27 established a butterfat differential of four cents per hundredweight for each one-tenth of one per cent above or below the average butterfat test of 3.5 per cent, this being the differential customarily applied in the market for many years before the order. This differential necessarily works to plaintiff's advantage, since Guernsey milk has one of the highest butterfat contents of any of the milks involved.
In considering the legality of the Secretary's action we need to bear in mind not merely the limited character of review accorded in general to the courts over administrative agencies, including the milk marketing agencies, cf. Stark v. Wickard, 64 S.Ct. 559, 571, but also, as we have had occasion to stress before, the fact that Order No. 27 involves a difficult and complicated adjustment of the most extensive character and detail which is more likely to achieve fairness in the greater number of cases than any we can think of or suggest. Waddington Milk Co. v. Wickard, supra, 140 F.2d at page 102. Since its main features have been so often sustained, we should be particularly hesitant to require distinctions between milk produced by different breeds of cows which have been rejected by the Secretary after full and complete hearing of the parties interested and which will certainly hamper the operation of the order if it does not well have stultifying effects on its effective administration far beyond our present power to visualize or foresee. True, plaintiff represents only a very small part of the milk here regulated;
First, we may refer to certain subordinate contentions made by plaintiff. It says that the Secretary in his second hearing did not obey Judge Cooper's mandate, but went beyond it in making new findings and in not definitely passing upon the proposed findings in plaintiff's favor which were discussed by the judge. This seems to us too narrow a reading of the district judge's order which definitely provided for the taking of additional evidence, and surely implied the finding of additional facts. In any event, the point does not seem to us important or controlling at this time. This is the first review possible of the proceedings; and since our approach differs from Judge Cooper's, there is little occasion for a remand to the Secretary merely to provide at most for more complete grounds for our disagreement. The record is adequate for final disposition of the matter. Plaintiff then objects to certain recitals in the Secretary's ruling of the former hearings and the evidence introduced, made apparently for the general information of readers of the decision; but these were not essential parts of the decision, and we need not stop to pass upon their details or decide immaterial issues as to their complete accuracy. Further, plaintiff asserts that under the Act the allowance of grade and quality differentials is mandatory upon the Secretary, while the Secretary says that the matter is left to "his informed discretion." So far as we can see, this is but an issue of labels. The Act states a governing principle which the Secretary in his quasi-judicial capacity is to apply to the facts he has found to the best of his ability. To that extent, no more, no less, is the statutory principle mandatory. And we review his action under the legal limitations we have stated above. To that review we turn.
In reaching his ultimate conclusion the Secretary considered and rejected each of the factors urged by plaintiff as setting off Guernsey milk in a class by itself. His conclusion is based upon the evidence of experts, as well as others familiar with the business; and although this is attacked in various particulars, its weighing was properly within the Secretary's province. Plaintiff, of course, emphasized the high butterfat content of Guernsey milk; but since the order contains a differential established by the practices of the trade, we think this point has been fully met. Plaintiff asserted greater Vitamin A potency for Guernsey milk, basing its contention particularly on the carotene content of the milk; but we think the evidence justified the conclusion that Guernsey milk "is not greatly, if at all, different in total Vitamin A potency (including convertible carotene)" from other types of milk. The evidence tended to show that the human body converts carotene far less readily than do the laboratory rats upon which plaintiff premised its argument; and hence carotene content in itself would not require a finding of higher Vitamin A potency. The Secretary also found that Guernsey milk, because of its comparatively high butterfat content, was not so suitable for infant feeding as are milks, such as Holstein, with a lower butterfat content; and this, too, was justified by the testimony, and, indeed, was supported, in part at least, by plaintiff's own course of business in undertaking to supply its customers with pure Holstein milk for infant feeding. The Secretary's conclusion that Guernsey milk tasted no better than other milk had the support of even one of plaintiff's experts who admitted he could not differentiate between milks by taste. And there was evidence to justify the Secretary in finding Guernsey only "slightly richer" in sugar, protein, and ash content, and only "somewhat" yellower in color.
But plaintiff strenuously objects to the Secretary's refusal to make findings to the effect that the higher cost of production of Guernsey milk and its greater marketability required special treatment of it. The Secretary, however, held that these factors of themselves did not show a difference in quality or grade, since inferior milk might be accompanied by high production costs, and that, while there was evidence to show that before the order plaintiff had been able to secure a higher-than-average Class I (fluid milk) utilization for the milk of its members, that fact might be due to causes other than quality, such as extensive advertising, superior selling practices, and proximity to fluid milk markets, or, indeed, to the butterfat differential for which allowance had been made. And he held that under the Act only factors affecting quality and grade could be considered, and hence that the required uniform minimum prices could not be varied with the higher cost of production of certain kinds of milk or the greater public demand for them.
What we have said applies also to the claim of unconstitutional discrimination, and is all we think it necessary here to add to the discussion of constitutionality had in United States v. Rock Royal Co-op., supra, Waddington Milk Co. v. Wickard, supra, and the other cases cited. Since on this record only questions of law were involved, summary judgment was proper. The mandatory injunction against the plaintiff and the order for payment of the impounded funds to the Market Administrator are likewise justified in a final adjudication of the issues.
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