Lehigh Valley Cooperative Farmers, Inc. v. United States

PETITIONER: Lehigh Valley Cooperative Farmers, Inc., et al.
RESPONDENT: United States, et al.
LOCATION: Lehigh Valley, Pennsylvania

DECIDED BY: Warren Court (1962)
LOWER COURT: United States Court of Appeals for the Third Circuit

CITATION: 370 US 76 (1962)
ARGUED: Jan 17, 1962 / Jan 18, 1962
DECIDED: Jun 04, 1962
GRANTED: Jun 19, 1961

Alan S. Rosenthal - for the respondents
Willis F. Daniels - for the petitioners

Facts of the case

In accordance with the Agricultural Marketing Agreement Act of 1937, the Secretary of Agriculture promoted milk-marketing orders in the New York/New Jersey region that included compensatory payment provisions. The provisions in question required those who buy milk elsewhere and bring it into the region to pay the farmers who supply that region a “compensatory payment.” The petitioners were milk processing plant operators in Pennsylvania who challenged the validity of the “compensatory payment” provisions by arguing that they failed notice requirements and conflicted with other provisions of the Act that required uniform prices. The district court held these provisions to be invalid, but the U.S. Court of Appeals for the Third Circuit reversed and upheld the validity of the provisions as authorized by the Act.


Were the “compensatory payment” provisions that the Secretary of Agriculture enacted valid under the Agricultural Market Agreement Act of 1937?

Media for Lehigh Valley Cooperative Farmers, Inc. v. United States

Audio Transcription for Oral Argument - January 18, 1962 in Lehigh Valley Cooperative Farmers, Inc. v. United States

Audio Transcription for Oral Argument - January 17, 1962 in Lehigh Valley Cooperative Farmers, Inc. v. United States

Earl Warren:

Number 79, Lehigh Valley Cooperative Farmers, Incorporated, et al., Petitioners versus United States et al.

Mr. Daniels.

Willis F. Daniels:

Mr. Chief Justice, Justices, may it please the Court.

This litigation which has extended over a long period of time starting on August 1, 1957, now comes before this Court and the statute involved is the Agricultural Marketing Agreement Act of 1937, which is the successor to the Agricultural Adjustment Act as amended in 1935 following the Schechter and the Panama Oil case.

Also involved is Order 27.

Now, Order 27 is an order issued by the Secretary of Agriculture, establishing a marketing area and as it was amended on August 1 or as of August 1, 1957, it includes Metropolitan New York, some upstate areas and 11 North Jersey areas.

I deem it appropriate this time to outline the facts surrounding these two particular petitioners before I go into the act in detail and the order in detail.

But I might say at the outset that it is in the minds of a lot of people that milk is a very complex situation.

I -- in my years, pardon the first pronoun, do not find it as complex but this particular situation is not going to be very complex as I see it.

The facts that I'm going to recite if the Court please, are facts that were not disputed in the promulgation hearing or in the review hearing.

Now, the review hearing is under Section 15A and it means that we must, if we are to agree, we must go to the administrative agency for relief before we can go the Court.

We did that on the very first day at 9 o'clock when the order became effective, as soon as the door is open and we asked for -- for interim relief, but before the 15A was acted upon or even heard, the Government moved against us in an enforcement proceeding and Judge Corey of the United States District Court of the Eastern District of Pennsylvania granted the injunction which required us to file reports, but made this exception of we need not pay the money into the administrator or to be distributed among the producers which I'll explain later, but we should pay it into the registry of the Court, that's what we have done.

As of July 31 when our briefs were filed, Lehigh Valley had paid into the registry of the Court $617,454 and Suncrest Dairy $108,767.

Now, how do these petitioners operate and what is their situation?

Number one, the Lehigh Valley is a cooperative.

It has 3,400 members, 900 of whom are milk producers.

Lehigh Valley accepts all the milk that their producers produce.

They sell in fluid form, they manufacture cottage cheese, they manufacture butter and they manufacture ice cream.

At no time and the record does not dispute it, at no time has Lehigh Valley, since it was organized in 1935, diverted any of its milk into the marketing area of Order 27 except the milk it itself sells in that area.

Lehigh Valley had been doing business in Philipsburg which is right across the river on Eastern Pennsylvania, Philipsburg, New Jersey a short bridge of less than a half a mile I believe since 1935.

It built its business there and has been there continuously ever since.

Lehigh Valley and Suncrest, if the Court please, are not strangers to regulations, nor are we opposed to regulations per se, but we do insist at heart that the statute be followed and the standards be complied with and the chartered course followed, and we do resist discrimination.

William O. Douglas:

What is the meaning of the -- of a non-pool plant as distinguished from a pool plant?

Willis F. Daniels:

Mr. Justice Douglas that I was going to explain when I come to the order that we don't --

William O. Douglas:

Right, right, in your own time.

Willis F. Daniels:

Thank you.

Now --

Charles E. Whittaker:

As I understand, Philipsburg is within the area placed in Order 27.

Willis F. Daniels:


Northern New Jersey as of August on 1957, North Jersey -- the marketing area of 27 which was previously Metropolitan New York since 1938 was extended to take in the 11 counties of Northern New Jersey, and Philipsburg is one of those counties.