LOCATION: St. Petersburg City Hall
DOCKET NO.: 25
DECIDED BY: Burger Court (1969-1970)
LOWER COURT: United States Court of Appeals for the District of Columbia Circuit
CITATION: 396 US 168 (1969)
ARGUED: Oct 16, 1969
DECIDED: Dec 09, 1969
Facts of the case
Media for Zuber v. Allen
Audio Transcription for Oral Argument - October 16, 1969 in Zuber v. Allen
Warren E. Burger:
Number 25 and Number 52.
Gentlemen as you observed, I sat on this case in the Court of Appeals and therefore, will not participate in it here.
I will yield in Senior Justice Black will preside and carry on.
Daniel M. Friedman:
Mr. Justice Black and may it please the Court.
The principal question in these consolidated cases which are here on writ of certiorari to the Court of Appeals for the District of Columbia Circuit is one of the Secretary of Agriculture has authority under the Agricultural Marketing Agreement Act of 1937 to include in note marketing orders a provision for the payment of a premium to farmers who are located close to the center of the milk market.
More specifically, the case involves the validity of the so-called “farm differential payments in the Boston Rhode Island Milk Order.
Under which farmers whose farms are located within 40 miles of the center of the market are paid a differential over and above it the blended price of all farmers receive are 46 cents per 100 pounds of milk which is the equivalent of one cent a quart.
There's also a provision in the order which provide for payment of 23 cents a 100 pounds for farmers who are located in the next area 40 to in effect, 40 to 80 miles from the center of the mark.
But that involves a very small percentage of the differentials involved in under the order and I therefore sure limit my discussion because its considerations of equally applicable to the 46 cent differential.
The present case brought as a class action is by farmers in Vermont who are located beyond the area covered by these differentials and therefore under the order and not eligible for them.
The District Court and the Court of Appeals in this case held with the statute does not authorized these particular differentials and enjoined the enforcement and payment of the differential.
In so ruling of the Court appeals relied squarely on an earlier case which I shall discuss called Blair against Freeman which it struck down a similar differential in a New York-New Jersey Milk Marketing Order and I'd also say that the outset that these two decisions of the Court of Appeals saying the Secretary has no authority to include this differentials contrary to a decision of the Court of Appeals for the First Circuit in 1939, 30 years ago which specifically held these particular differentials.
Now, to put these statutory issues in the appropriate frame of reference, first, I just very briefly like it, refresh the Court on what I'm sure is already familiar to it.
The peculiarities of the way in which milk is sold in the problems that require this kind of legislation, and then I'd like to sketch the legislative history of full statutes involved and finally to describe the administrative background of this order and its predecessors.
We start with the fact of course, that milk basically has two uses.
The use of milk as fluid milk for drinking purposes which is known as Class I use and then the use of other milk for manufactured purposes, butter, cheese, ice cream which is known as Class II purposes.
The demand for so-called fluid milk, milk for drinking is relatively static throughout the whole year.
But unfortunately for the milk industry, the production of the cows is not static.
The cows produce more milk in the spring and the summer than they do in the fall and the winter.
So, this means in order to meet the uniform demand for class milk, one milk throughout the year, it is necessary to add sufficient cows to produce that amount during the winter months. When they're not producing as much and accordingly, the result is in the spring and summer months, there is a surplus of milk production.
Milk of course is a highly perishable commodity and the result is that milk that is produced of the great distance from the market cannot compete with locally produced milk for the Class I use.
Although of course, it can compete the Class II use.
That is in the Boston market, fresh milk from Wisconsin cannot compete with Massachusetts' milk, but obviously manufactured cheese from Wisconsin easily competes with manufactured cheese from the Massachusetts area.
Now traditionally, milk is which is used for Class I purposes has commanded a substantially higher price in the market than milk that is used for Class II purposes.
Now, the result of this combination of fact, this has been that without any regulation drastic and devastating cut throat competition developed among the farmers to try to get their milk sold for the Class I use which would yield them a higher amount.
The dairies for example would play different farmers off against each other driving the prices down.
And as a result by the time of the depression in the earlier 1930's, the milk prices had been drastically reduced and in some instance, farmers -- where farmers were forced to sell milk at less than their cost.
Now, in order to stabilize this completely disorganized milk market, two purposes were achieved.
First, it was important to raise the price of milk and secondly, it was important to avoid the destructive competition among farmers to try to get access to this Class I market.