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UNITED STATES v. ABBOTTS DAIRIES

July 23, 1970

UNITED STATES of America
v.
ABBOTTS DAIRIES, DIVISION OF FAIRMONT FOODS CO.


Luongo, District Judge.


The opinion of the court was delivered by: LUONGO

This is a suit instituted pursuant to § 8a(6) of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. § 608a(6)) for enforcement of Milk Marketing Order No. 4 (7 C.F.R. Part 1004) issued by the Secretary of Agriculture regulating the handling of milk in the Delaware Valley marketing area.

 Facts and Background.

 Production of milk is subject to seasonal fluctuations. Fluid milk must be consumed relatively quickly after it is produced. If it cannot be sold as fluid milk, it must be disposed of in manufacturing outlets such as for butter and cheese. Fluid milk commands a higher price than milk used in manufacturing. Production must be maintained at a sufficiently high level to supply the needs of the fluid milk market even in periods of low production, consequently in periods of high production there is a substantial surplus. To avoid ruinous competition among farmers searching for the more profitable fluid milk markets, the legislation here involved (7 U.S.C. § 601 et seq.) was enacted.

 The Act permits the Secretary of Agriculture, after notice and hearing, to issue orders regulating the marketing of milk in given areas. The regulatory scheme provides a method of pooling so that all producers (farmers) are paid a minimum uniform or blend price by handlers (milk processors) for the milk delivered by them regardless of the actual use of the milk by a handler. The handlers are required to account to the Secretary of Agriculture's designee (the Market Administrator) for the actual use made of the milk. The blend prices paid by handlers to producers, in most instances, do not equal the use value of the milk. Under the Act necessary adjustments are made through a producer-settlement fund administered by the Market Administrator. Handlers whose use value exceeds the blend price make payments into the fund, while handlers whose use value is less than the blend price receive payments from the fund. Balances in the fund are ultimately distributed to producers. There is a provision for payment by handlers, on a prorata basis, of the expense of administering the fund.

 For a number of years in the Philadelphia area, covered by Order No. 4, prices paid by handlers to producers were generally adjusted in movements approximating 20 cents per hundredweight. Effective September 1, 1969, the Department of Agriculture abolished bracketed pricing in Order No. 4 and substituted a system of regulation which moved prices penny by penny each month. Pursuant to request of the industry in the Philadelphia area, a hearing was held by the Department on October 30, 1969 following which the Department declined to change its decision. A petition was thereafter filed with the Department pursuant to § 8c(15)(A) of the Act (7 U.S.C. § 608c(15)(A)). No hearing has yet been scheduled on that petition.

 Discussion.

 Section 8a(6) of the Act provides:

 
"(6) The several district courts of the United States are vested with jurisdiction specifically to enforce, and to prevent and restrain any person from violating any order, regulation, or agreement, heretofore or hereafter made or issued pursuant to this chapter, in any proceeding now pending or hereafter brought in said courts."
 
7 U.S.C. § 608a(6).

 It is clear that in enforcement proceedings under that section, the defendant may not raise as a defense, and the court may not inquire into, matters touching upon the merits of the order sought to be enforced. United States v. Ruzicka et al., 329 U.S. 287, 67 S. Ct. 207, 91 L. Ed. 290 (1946). Administrative procedures, subject to judicial review, for attacking orders on their merits have been provided in § 8c(15) of the Act, subject to the express limitation by Congress that

 
"The pendency of proceedings instituted pursuant to this subsection (15) shall not impede, hinder, or delay the United States or the Secretary of Agriculture from obtaining relief pursuant to section 608a(6) of this title. Any proceedings brought pursuant to section 608a(6) of this title * * * shall abate whenever a final decree has been rendered in proceedings between the ...

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