The question presently under consideration in this case, which is before the court for the fourth (and hopefully final) time, is whether a milk handler (dairy) is entitled to recover damages from the producer settlement fund for overpayments made to the fund and to milk producers (farmers) because of an illegal milk pricing order issued by the Secretary of Agriculture.
The factual background and procedural history of this case have been exhaustively recounted in my earlier opinions
and need not be repeated here. Suffice it to say that on August 20, 1969, the Secretary issued a milk pricing order for the Delaware Valley marketing area that changed a previously existing bracketed pricing system, under which the price paid by handlers to producers moved in intervals of twenty cents per hundred pounds, and substituted in its stead a system whereby milk prices in the Delaware Valley moved on a penny-by-penny basis according to changes in prices in the Minnesota-Wisconsin area. In an opinion issued on January 9, 1975, (see 389 F. Supp. 1) and adhered to after reconsideration on October 4, 1976 (see 421 F. Supp. 415), I held that the Secretary's decision to adopt penny-by-penny pricing was not supported by substantial evidence and therefore was invalid.
The plaintiff in this case, Abbotts' Dairies, is a milk handler. For thirteen months prior to the invalid August 20, 1969, order the price for Class I milk in the Delaware Valley had been pegged by the Secretary at $7.17 per hundredweight. The effect of the purported order was to raise this price by varying amounts in each month after August, 1969. However, since the decision was illegal, the pre-existing price of $7.17 per hundredweight remained as the only valid order price in the Delaware Valley. Therefore, theoretically Abbotts might contend that it is entitled to damages computed on the basis of the difference between the order price and $7.17 multiplied by Abbotts' total hundredweight purchases of Class I milk for each month from September, 1969, to the present time. That such a damage computation would be only theoretical stems from the fact that the order price set by the Secretary is merely the minimum price that handlers must pay farmers for milk. See Borden, Inc. v. Butz, 544 F.2d 312, 318 (7th Cir. 1976). Farmers are free to sell their milk at higher prices if market conditions enable them to do so. In view of rising prices in the economy in general and in milk prices in other areas of the country
in particular, it is chimerical to suggest that farmers would have been willing to sell their milk to handlers for the same $7.17 per hundredweight price throughout the period from September, 1969, to the present. Apparently recognizing this, Abbotts has scaled down considerably its request for damages in terms of both the price differential and the period of time for which damages are claimed.
The price which Abbotts uses in making its computations is that which would have been set under a bracketed pricing formula proposed but not adopted at a June, 1969, hearing that preceded the challenged decision. The price under this formula (and which Abbotts concedes it would have been willing to pay) was higher than the $7.17 per hundredweight price in existence prior to the invalid order but lower than the price established by that order. Abbotts also asks for damages only for the period from September, 1969, the month when the illegal order purportedly went into effect, until July, 1970, the last month before the geographic scope of this marketing region was increased to include the Washington, D.C. and Chesapeake Bay areas.
Limited in the manner just described, the total amount claimed by Abbotts, exclusive of interest, is $166,536.45, computed as follows:
Month Class I Announced Bracketed Differ- Change in
Pounds Order Price Price ence Value
Sept. '69 22,723,613 $7.26 $7.17 -.09 $20,451.25
Oct. '69 24,594,803 7.33 7.37 .04 (-$9,837.92)
Nov. '69 21,907,402 7.42 7.37 -.05 $10,953.70
Dec. '69 22,800,526 7.46 7.37 -.09 $20,520.47
Jan. '70 22,194,193 7.47 7.37 -.10 $22,194.19
Feb. '70 20,220,229 7.51 7.37 -.14 $28,308.32
Mar. '70 21,701,959 7.47 7.37 -.10 $21,701.96
Apr. '70 22,458,730 7.42 7.37 -.05 $11,229.37
May '70 21,252,311 7.44 7.37 -.07 $14,876.62
June '70 19,923,017 7.42 7.37 -.05 $ 9,961.51
July '70 20,221,225 7.45 7.37 -.08 $16,176.98