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UNITED STATES v. CRONENWETH DAIRY CO.

December 20, 1951

UNITED STATES
v.
CRONENWETH DAIRY CO. et al.



The opinion of the court was delivered by: MARSH

The United States asks that an injunction issue against 13 defendants who are processors of milk and milk products in the Pittsburgh Milk Marketing Area, and alleges that they are selling processed milk and milk products at prices in excess of the maximum prices established by the General Ceiling Price Regulation promulgated by the Office of Price Stabilization pursuant to the Defense Production Act of 1950 and its amendments. 50 U.S.C.A.Appendix, 2061 et seq. The Pennsylvania Milk Control Commission which by State law fixes prices for the milk industry, including the prices at which the defendant processors sell their products, asked leave to intervene as a party defendant which was granted. Processors in the Erie Milk Marketing Area were also granted leave to intervene. Certain producers of milk appeared by counsel amicus curiae. Several legal questions were presented for solution, but, insofar as prices are concerned, the narrow issue for decision is whether the prices of standard milk being sold by defendants at 23 cents per quart retail and 21 cents per quart wholesale are in excess of the maximum ceiling prices established by O.P.S. In the opinion of the court they are not. From the pleadings, stipulations, and evidence, the following are the

Findings of Fact

 1. The defendants in this proceeding are processors of milk and are doing business in the Western District of Pennsylvania in the Pittsburgh Milk Marketing Area.

 2. The Pennsylvania Milk Control Commission (Commission) intervened as a party defendant in this proceeding. This Commission was created by an Act of the General Assembly approved April 28, 1937, P.L. 417, as amended, 31 Pa.Purdon's Statutes, ยง 700j-101 et seq., and by virtue of said Act has the power and duty, inter alia, to fix the minimum prices at which milk and milk products shall be sold by producers and processors in the Pittsburgh Milk Marketing Area (Pittsburgh Area). Penalties are imposed for non-compliance.

 3. The General Ceiling Price Regulation (G.C.P.R.) issued by the Office of Price Stabilization (O.P.S.) purported to freeze the price of all commodities at the highest price charged for said commodities during the base period which is from December 19, 1950, to January 25, 1951 (Sections 1 and 3, 16 F.R. 808, 812).

 4. The highest prices at which the defendant processors sold milk *fn1" during the base period are as follows:

 Retail per quart . . . 21 cents Wholesale per quart . . . 19 cents

 By order *fn2" of the Commission the processors were required to pay to the producers of milk, during this period, $ 5.35 per cwt.

 5. Pursuant to requests by the Commission, O.P.S., by Order No. L-1, dated April 3, 1951, effective April 6, 1951, adjusted the ceiling prices for processors of milk in the Pittsburgh Area by increasing the processors' milk prices 1 cent per quart. It also purported to approve an increased price to producers of 32 cents per cwt. *fn3"

 6. Pursuant to the aforesaid order of O.P.S., the Commission ordered *fn4" and the defendants sold milk from April 16, 1951 to July 16, 1951, at the following prices:

 Retail per quart . . . 22 cents Wholesale per quart . . . 20 cents

 According to the Commission's order *fn4" the processors were required to pay to the producers, during this period, $ 5.70 per cwt., which was an increase of 35 cents per cwt. instead of 32 cents per cwt. contemplated and approved by O.P.S.

 7. The adjustment authorized by O.P.S. gave to defendant processors in the Pittsburgh Area 11- 1/2 cents per cwt. or .247 plus of a cent per quart in excess of the increased price they were required to pay to the producers. This differential will be hereinafter referred to as the 'processors' spread.'

 8. On July 11, 1951, the Commission again requested O.P.S. for authority to increase the processors' ceiling prices of milk 1 cent per quart. By letter dated July 23, 1951, and signed by the Director of O.P.S., this request was denied.

 9. There is no evidence that the decision of O.P.S., denying the request of the Commission to increase the ceiling prices as aforesaid, was communicated to the defendant processors by the Commission. It does not appear that it was published in the Federal Register or otherwise.

 10. Pursuant to an order *fn5" of the Commission promulgated July 10, 1951, defendants were required to sell milk from July 17, ...


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