obligations. The Court, in Rock Royal was also called upon to construe the word 'purchased' in determining whether a cooperative of producers was required to pay into the producer settlement fund. The Court determined that this cooperative, although marketing milk under an agency contract with its members, was a handler as defined in the Act and in the Order, and therefore, was obligated to pay into the fund. That the cooperative was of the agency type, acting for the producer members, did not, in the Court's opinion, eliminate its contributive obligation. At page 579, of 307 U.S., at page 1016 of 59 S. Ct. (of Rock Royal), the opinion points out:
'It is obvious that the use of the word 'purchased' in the Act, Section 8c(5) (A) and (C), would not exclude the 'sale' type of cooperative. When Section 8c(5)(F) was drawn, however, it was made to apply to both the 'sale' and 'agency' type without distinction. This would indicate there had been no intention to distinguish between the two types by (A) and (C). The section which authorizes all orders, Section 8c(1), makes no distinction. The orders are to be applicable to 'processors, associations of producers, and others engaged in the handling' of commodities. The reports on the bill show no effort to differentiate. Neither do the debates in Congress. * * * As here used, the word 'purchased' means 'acquired for marketing.' Subsection (A) cannot be construed as freeing agents, cooperative or proprietary, from the requirement to account at the minimum prices for milk handled.' (Emphasis supplied.)
Elm Spring Farm, Inc. v. United States, 1 Cir., 1942, 127 F.2d 920, was an action to enforce compliance with Order No. 4, covering the Greater Boston Marketing Area, upon a cooperative handling milk produced on farms operated under contract by 'herdsmen'. In this case, the reliance of the cooperative upon a narrow reading of § 8c(5)(A)
'These sections, which delimit the contents of orders to be issued under the Act, refer to milk 'purchased' from producers by handlers, and 'prices' to be paid by handlers for milk so purchased. The argument is as follows: 'Nothing in the language of the Act anywhere modifies the ordinary meaning of these words or authorizes an order to contain any monetary provisions applicable to a person, i.e., in this instance, a corporation, engaged in the distribution of milk given by its own cows. In such a case it is manifestly impossible for a 'purchase' to take place, with respect to milk which has been the property of such person, not merely from the instant of its being drawn into the pail, but even from the very earliest instant in its process of creation in which it could be recognized as having any existence whatsoever.' This contention is foreclosed by United States v. Rock Royal Co-Operative, Inc., 307 U.S. 533, 578-581, 59 S. Ct. 993, 83 L. Ed. 1446, * * *.'
A more recent decision construing the phrases 'purchased from producers' and 'purchased by handlers' in the light of the other provisions of the Act, is to be found in Shawangunk Cooperative Dairies, Inc. v. Jones, 2 Cir., 1946, 153 F.2d 700. That case also dealt with Order No. 27 before its scope was extended to include the northern New Jersey area. At page 704 of that opinion, in disposing of the contention that only milk purchased by a handler need be considered in computing the handler's net pool obligation, the Court said:
'Plaintiff points out that the statute, * * * in prescribing the terms of milk orders, * * * 'purchased from producers' and 'purchased by handlers.' 7 U.S.C.A. § 608c(5)(A, C, D, E). But since the Rock Royal case, * * * determined that the word 'purchased' was not to be literally construed, but was to read as the equivalent of the alternative statutory phrase 'acquired for marketing,' and since the 'acquired' of the statute can mean no more than the 'received' of the regulation, plaintiff's contention is reduced to its claim that it did not acquire the milk for marketing. With this, however, we cannot agree, for since no milk can enter the New York market without prior reception at an approved plant, plaintiff's acts here were indispensable to the total routing of the milk from the farms of the producers to its destination in New York City.'
I accept the construction of the word 'purchased' as applied in the Rock Royal case, supra, and those decisions which have followed it. I therefore conclude that the provisions of § 927.65 of Order No. 27 are fully in accord with the enabling statute, and that the refusal of the Secretary to exempt the plaintiffs from the obligation to include their own-produced milk in the calculation of their net pool obligations, was in all respects legal and within his statutorily delegated power.
In the proceedings for the enlargement of the territory of Order No. 27 to include northern New Jersey within the milk marketing area thereof, I find no unconstitutional lack of due process nor violation of the provisions of the applicable rules of the Secretary of Agriculture or of the provisions of the Administrative Procedure Act.
I find in the record before the Secretary substantial evidence justifying his promulgation of Order No. 27 in its present comprehensive form and his determination that northern New Jersey is appropriately includable with metropolitan New York and the other counties of that State named in § 927.3 of the Order, in a single milk marketing area.
I further conclude that the provisions of § 927.65 of the Order regulate own-produced milk of handlers within the area, and that the authority for such regulation is to be found in the Agricultural Marketing Agreement Act of 1937.
For these reasons defendant's motions for summary judgment are granted, and the cross-motions of the plaintiffs for summary judgment are denied.
An order may be presented in conformity with these conclusions.