Lapas attēli
PDF
ePub

proceeding applicable to the producer-handler exemption in former Milk Marketing Order No. 2 supports a finding that Petitioner should be denied designation as a producer-handler without further factual findings that Petitioner was "riding the pool." The United States District Court for the Eastern District of Pennsylvania remanded the action to the Secretary of Agriculture for further factual findings and a decision regarding whether Petitioner was "riding the pool." The Court explained the purpose of its remand order, as follows:

The [Judicial Officer] and Defendant assert that to allow producer-handlers to sell to subdealers would frustrate the economic purpose behind [Milk Marketing] Order [No.] 2's producer-handler exemption. The [Judicial Officer] explains the economic purpose as follows:

"[M]ilk marketing orders were adopted to end the chaotic
conditions previously existing, by enabling all producers to
share in the [fluid milk] market, and, also, requiring all
producers to share in the necessary burdens of surplus milk . . .
through means of the producer-settlement fund. The only
justification for exempting a producer-handler from the pooling
requirements is because the producer-handler is a self-contained
production, processing and distribution unit. Since a
producer-handler does not share its [fluid milk] utilizations with
the other producers supplying milk to the area, it is vital to the
regulatory program that the producer-handler not be permitted
to "ride the pool," i.e., to count on milk supplied by other
producers to provide milk for the producer-handler during its
peak needs. That principle has been frequently stated...."

In re: Kreider, 1995 WL 598331, at *32 (citations omitted). How this "pool riding" problem arises when a producer-handler is allowed to sell to subdealers is explained as follows:

[Kreider] does not have to produce enough milk to satisfy its
customers' needs in the period of short production, because,

'Kreider Dairy Farms, Inc. v. Glickman, No. Civ. A. 95-6648, slip op. at 24, 1996 WL 472414, at *11 (E.D. Pa. Aug. 15, 1996).

62 Agric. Dec. 406

during the period of short production, [Kreider] can count on Ahava's other suppliers to supply pool milk to meet the needs of the firms ultimately buying [Kreider's] milk. If a producer-handler could turn over its distribution function to a subdealer, it could achieve the same result as if it were permitted to receive milk from other sources. That is, during the period of short production, it could meet the needs of its (ultimate) customers by means of the subdealer getting pool milk from other handlers during the period of short production.

Id. at *31. In other words, Kreider receives an unearned economic benefit unavailable to handlers who do not enjoy producer-handler status: Unlike other handlers, Kreider does not need to pay into the producer-settlement fund, and, unlike other handlers, Kreider has no surplus-milk concerns because it never has to produce an over-supply to satisfy its customers during times when cows produce less milk.

This court finds that this purported economic benefit is not supported by the record before it. In its Amicus brief, Ahava states that in order for Kreider's milk to receive Ahava's certification that the milk is kosher, there must be "direct and daily supervision and control over the production and processing facilities by appropriate rabbinical authorities" and that such supervision is "extensive." (Amicus Ahava's Mem. Supp. Pl.'s Mot. Summ. J. at 3 & 3 n.2.) Because of Ahava's special requirements, it is not apparent from the record that Kreider can depend on other handlers from the pool to supply Ahava's needs in the period of short production.

If the record cannot support the economic justification behind the Defendant's action, then it appears arbitrary, especially since, as noted previously, the language of [Milk Marketing] Order [No.] 2 is ambiguous and the [Market Administrator's] action is not clearly supported by the promulgation history of [Milk Marketing] Order [No.] 2 or departmental interpretation. . . Therefore, this action is remanded to the Secretary to hold such further proceedings necessary to determine whether in fact Kreider is "riding the pool." To this end, the Secretary must determine whether it is in fact feasible for Ahava to turn to other handlers in a period of short production.

Kreider Dairy Farms, Inc. v. Glickman, No. Civ. A. 95-6648, slip op. at 18-21 (footnote omitted), 1996 WL 472414, at *8-9 (E.D. Pa. Aug. 15, 1996).

On December 30, 1996, Administrative Law Judge Edwin S. Bernstein issued a notice of hearing stating:

In a December 30, 1996, telephone conference with Denise Hansberry and Marvin Beshore, counsel for the parties, the following were agreed and/or decided:

I reviewed with counsel that the remand was triggered by the following language in the Judicial Officer's September 28, 1995, Decision:

Respondent is arguing that Petitioner avoids producing a great
deal of surplus milk. That is, Petitioner does not have to
produce enough milk to satisfy its customers' needs in the
period of short production, because, during the period of short
production, Petitioner can count on Ahava's other suppliers to
supply pool milk to meet the needs of the firms ultimately
buying Petitioner's milk. If a producer-handler could turn over
its distribution functions to a subdealer, it could achieve the
same result as if it were permitted to receive milk from other
sources. That is, during the period of short production, it could
meet the needs of its (ultimate) customers by means of the
subdealer getting pool milk from other handlers during the
period of short production.

[In re Kreider Dairy Farms, Inc., 54 Agric. Dec. at 847-48.]

Based upon this language, the United States District Court for the Eastern District of Pennsylvania stated in its August 15, 1996, Decision:

Because of Ahava's special requirements, it is not apparent from the record that Kreider can depend on other handlers from the pool to supply Ahava's needs in the period of short production. [p. 19]

Therefore, this action is remanded to the Secretary to hold such

62 Agric. Dec. 406

further proceedings necessary to determine whether in fact
Kreider is 'riding the pool.' To this end, the Secretary must
determine whether it is in fact feasible for Ahava to turn to
other handlers in a period of short production.

p[p. 20-21]

The issue is, during the Ahava and Kreider dealings going back to November 1990, were there any instances of short production by Kreider when Ahava acquired kosher milk from other handlers from the pool? This includes the following questions:

Are there seasonal periods of shortages in milk production from
Kreider and other similar producer-handlers?

What are the patterns as to whether and how regularly Kreider
maintains a surplus?

Summary of Telephone Conference--Notice of Hearing, filed in Kreider I, December 30, 1996.

On April 23, 1997, Judge Bernstein conducted a hearing in Washington, DC, to receive evidence on the remand issue. On August 12, 1997, Judge Bernstein issued a Decision and Order [hereinafter Decision and Order on Remand]: (1) finding it was feasible for Ahava to obtain fluid milk products from other handlers in periods of Petitioner's short production; (2) finding Ahava was supplied with fluid milk products by at least one producer other than Petitioner during the period January 1991 through December 1996; (3) finding an inference can be made that Petitioner was able to reduce its surplus because of its ability to rely on other producers to meet Ahava's needs; (4) finding Petitioner was "riding the pool" and receiving an unearned economic benefit; (5) concluding the decision of the Market Administrator to deny Petitioner producer-handler status under former Milk Marketing Order No. 2 must be upheld; and (6) dismissing Petitioner's Kreider I Petition.* Petitioner failed to file a timely appeal, and the Kreider I Decision and Order

"In re Kreider Dairy Farms, Inc., 59 Agric. Dec. 21 (1997).

on Remand became final.

Kreider II (The Instant Proceeding)

On February 17, 1998, Petitioner instituted the instant proceeding, In re Kreider Dairy Farms, Inc., 98 AMA Docket No. M 4-1 [hereinafter Kreider II], by filing a "Petition Pursuant to 7 U.S.C. § 608c(15)(A) and 7 C.F.R. § 900.50-900.71" [hereinafter the Kreider II Petition].

On March 12, 1998, the Agricultural Marketing Service, United States Department of Agriculture [hereinafter Respondent], filed a "Motion to Dismiss❞ stating the doctrine of res judicata requires dismissal of the Kreider II Petition. On June 20, 2000, the Hearing Clerk received Petitioner's opposition to Respondent's Motion to Dismiss. On June 29, 2000, Respondent filed "Respondent's Reply to Petitioner's Opposition to Motion to Dismiss." Petitioner filed "Final Reply Brief of Petitioner Kreider Dairy Farms, Inc. in Opposition to Respondent's Motion to Dismiss." On September 15, 2000, Administrative Law Judge Dorothea A. Baker denied Respondent's Motion to Dismiss stating neither the factual nor the legal issues raised in the Kreider II Petition were decided in Kreider I (Kreider II Ruling on Motion to Dismiss). On September 7, 2000, Petitioner filed an "Amended Petition Pursuant to 7 U.S.C. § 608c(15)(A) and 7 C.F.R. § 900.50-900.71" [hereinafter Amended Petition]. Petitioner: (1) challenges the determination by the Market Administrator that Petitioner was a handler regulated under former Milk Marketing Order No. 2 during the period December 1995 through December 1999; (2) asserts it was a producer-handler under former Milk Marketing Order No. 2 exempt from the obligation under former Milk Marketing Order No. 2 to pay into the producer-settlement fund during the period December 1995 through December 1999; and (3) seeks a refund, with interest, of the money it paid into the producer-settlement fund during the period December 1995 through December 1999 (Amended Pet. ¶¶ 13-16).

Petitioner alleges the six former Milk Marketing Order No. 2 customers to which Petitioner distributed fluid milk products during the period December 1995 through December 1999 were Ahava, FPPTLC, Jersey Lynn Farms, Parmalat Farmland Dairies, D.B. Brown, Inc., and Readington Farms, Inc. Further, Petitioner identifies which of its six former Milk Marketing Order No. 2 customers paid for fluid milk products in each month during the period

'In re Kreider Dairy Farms, Inc., 57 Agric. Dec. 397 (1998) (Order Denying Late Appeal), aff'd, 190 F.3d 113 (3d Cir. 1999), reprinted in 58 Agric. Dec. 719 (1999).

« iepriekšējāTurpināt »