engaged in the handling of certain agricultural commodities, including milk, and provided that "such orders shall regulate * * * only such handling of such agricultural commodity, or product thereof, as is in the current of interstate or foreign commerce, or which directly burdens, obstructs, or affects, interstate or foreign commerce in such commodity or product thereof." Title 7, § 608c (1), U.S.C.A.
The purpose of the order as stated in the preamble is "to effectuate the declared policy to establish and maintain such marketing conditions in the handling of milk in the aforesaid area as would re-establish prices of milk to producers of milk in the said area at a level that would give such milk a purchasing power with respect to articles that such producers buy equivalent to the purchasing power of milk in the base period August, 1924-July, 1929."
The so-called "marketing conditions" which the order seeks to establish and maintain are founded upon two plans, viz.: (1) "The classifying and pricing of milk to handlers according to the use made of it and (2) the base-reating plan of equitably distributing among all producers the burden of the necessary surplus in the market." See affidavit of E. W. Gaumnitz. With reference to the first plan and the price fixed thereunder in the order, Mr. Gaumnitz said: "This price appeared sufficiently high at that time to assure a volume of milk sufficient to meet market requirements, produced in conformity with the health regulations applicable to such milk, and to be feasible in view of the current consumptive demand in the market, at the same time being below the parity level above referred to." In other words, the price fixed was such as to induce the dairy farmer to produce sufficient milk to supply the demand, notwithstanding the price fixed was below the parity level. Further in the affidavit referred to, the affiant in discussing plan No. 2, the baserating plan, said: "If one producer greatly increases his production he can increase his share of the limited fluid milk market only by reducing the share of other producers. The base-rating plan recognizes this problem and is a means whereby the burden of the surplus is divided equitably among producers."
The question here is not an open one. It has been settled by the Supreme Court of the United States. Congress may not under the commerce clause (art. 1, § 8, cl. 3) regulate the production of milk or any other farm commodity. United States v. Butler, 297 U.S. 1, 56 S. Ct. 312, 80 L. Ed. 477, 102 A.L.R. 914, Rickert Rice Mills v. Fontenot, 297 U.S. 110, 56 S. Ct. 374, 80 L. Ed. 513. See, also, Carter v. Carter Coal Co., 298 U.S. 238, 56 S. Ct. 855, 80 L. Ed. 1160. A similar question was presented in the case of U.S. ex rel. v. Buttrick Company, 15 F.Supp. 655, 658, in the District Court of the United States for the District of Massachusetts, decided July 23, 1936. In that case, the bill was brought against the distributors or handlers of milk in Boston to compel them to comply with an order of the Secretary of Agriculture regulating the handling of milk in the Greater Boston area. Judge Brewster, in sustaining the motion to dismiss, said:
"I do not decide whether Congress has the power to enact legislation authorizing the Secretary of Agriculture to impose regulations upon the sale of milk in interstate commerce. I only decide that, as yet, Congress has not enacted such legislation. What it has done is to pass a law intended to control and regulate the agricultural industry, to the end that the agricultural purchasing power may be increased. The Supreme Court has definitely adjudged such a purpose to be beyond the granted powers of the federal government. The provisions for orders by the Secretary of Agriculture were merely a means to effectuate the declared purpose of the act. The purpose failing, the means failed with it. * * *
"Finally, I conclude that it is not possible to wrest from the outlawed statute separable provisions which can stand as a legislative enactment authorizing the orders involved in this suit."
The original Agricultural Adjustment Act (48 Stat. 31) was also questioned with respect to the control and regulation of milk, and the so-called base-surplus plan was considered. See Edgewater Dairy Co. v. Wallace (D.C.) 7 F.Supp. 121; Columbus Milk Producers' Ass'n v. Wallace (D.C.) 8 F.Supp. 1014, holding milk licenses unenforceable on the ground that Congress is without power to regulate the production of milk. See, also United States v. Seven Oaks Dairy Co. (D.C.) 10 F.Supp. 995.
It follows that the rules to show cause must be made absolute and that injunctions pendente lite issue.
It is so ordered, and counsel will prepare proper decree.
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