These proceedings are before the court on orders to show cause why an injunction should not issue in each case restraining and enjoining the defendants according to the demands of the respective complaints. Plaintiff also moves for summary judgment for a permanent injunction or, in the alternative, for an interlocutory injunction. Prior to the return of said orders to show cause defendants moved to vacate the ad interim restraints contained therein. By agreement those motions were adjourned and considered on the return of the orders to show cause.
Plaintiff is the Director of the Office of Milk Industry (herein referred to as "OMI") which was established pursuant to the Milk Control Act, N.J.S.A. 4:12A-1 et seq. (herein referred to as "act"). Defendants Garden State Farms, Inc. (herein referred to as "Garden State") and Lampert Dairy Farm, Inc. (herein referred to as "Lampert Dairy") are dealers licensed under the act. Defendant State Farms Stores, Inc. owns and operates licensed retail stores through which it sells to consumers milk purchased from Garden State in reusable gallon and half-gallon deposit containers. Mr. Peter Sandfort is president and principal stockholder of Garden State and State Farms Stores, Inc. Similarly, Farm Stores, Inc., duly licensed under the act, operates retail stores through which it sells milk in gallon and half-gallon jugs or containers. Mr. Samuel Lampert is the president of Lampert Dairy and Farm Stores, Inc.
Defendant Belleville Dairy, Inc. is a licensed milk dealer and processor under the act, and defendant Farm Fair Stores, Inc. is licensed to operate stores. Defendant Meade Dairy Farms, Inc. (herein referred to as "Meade Dairy") is a corporation of New Jersey not licensed under the act, but purports to operate the retail stores of Farm Fair Stores, Inc. Mr. Leslie Woodruff, Jr. is the president of Belleville Dairy, Inc. and sole stockholder of Meade Dairy.
Each of the complaints alleges an interlocking identity or management and ownership between the respective milk dealers, processors and companies engaged in operating retail stores selling milk to the public. N.J.S.A. 4:12A-30 declares it to be unlawful and contrary to the public interest for any licensee or other person or corporation to operate under any mutual or secret agreement, arrangement, combination, contract or common understanding whereby the price of milk to be paid by stores or consumers for such milk is decreased.
The complaints assert that pursuant to statutory authority (N.J.S.A. 4:12A-22) plaintiff promulgated Order 60-1 which establishes minimum prices in the sale to consumers of milk in gallon containers at $1.02 and in half-gallon containers at $.52. This order has been in effect for some time, and the State Supreme Court recently stated in Lampert Dairy Farm, Inc. v. Hoffman , 37 N.J. 598, 606 (June 1962) that "Order 60-1 remains in effect."
Plaintiff, on March 15, 1957, promulgated Regulation H-5, effective March 31, 1957. This regulation, insofar as pertinent hereto, provides that "No licensee of the Office of Milk Industry shall give or lend anything of value to any customer served by the licensee or solicited to be served by the licensee * * *."
On or about July 17, 1958 Garden State and Lampert Dairy began a program of distributing milk refund certificates and bottle tops, respectively, to each purchaser of a gallon or half-gallon container of milk at the stores of their respective allied corporations.
The Garden State certificate is labeled "Milk Freedom Certificate." The face of the certificate admittedly distributed to each purchaser of a gallon container states:
"On the day on which retail milk controls established by the Office of Milk Industry are abolished in New Jersey, or declared void by the courts, Garden State Farms, Incorporated, will authorize payment to the bearer hereof the sum of fifteen cents upon surrender of this certificate. This certificate may be redeemed upon the conditions set forth and listed on the reverse side hereof."
The reverse side of the certificate reads as follows:
"Bearer may redeem this certificate for the sum of fifteen cents upon meeting the following conditions:
1. Certificate must be redeemed at location as specified by Garden State Farms when certificate has matured.
2. This certificate must be endorsed on the line below by the bearer upon presentation and surrender.
3. This certificate is void one year after the date upon which it matures, as stated on the face hereof, or on January 1, 1964."
The certificates distributed with sales of half-gallons are identical except that they are redeemable for eight cents each. Concurrently with the first distribution of milk freedom certificates, Garden State began advertising the certificates in the local newspaper and by window notices stressing the issuance of cash refund certificates redeemable "when milk controls are abolished."
It is further alleged that on or about July 17, 1962 defendant Farm Stores, Inc. commenced issuing certain bottle tops and fliers or handouts. With the sale of half-gallon bottles of milk were distributed bottle tops with black print reading:
"SAVE -- LAMPERT DAIRY FARM, INC. -- * -- HALF GALLON."
(The asterisk represents a black star.)
With the sale of gallon bottles of milk were distributed bottle tops with red print reading:
"SAVE -- LAMPERT DAIRY FARM, INC. -- * -- GALLON."
(The asterisk represents a red star.)
The handouts distributed to purchasers of milk by Farm Stores, Inc. read in part:
SAVE YOUR LAMPERT DAIRY FARM INC. CAPS WITH THE STAR EMBLEM. THEY ARE WORTH 15 CENTS ON THE PURCHASE OF A GALLON GLASS JUG AND 7 CENTS ON THE HALF GALLON GLASS JUG.
LAMPERT WILL CHEERFULLY PAY YOU 15 CENTS FOR EACH RED-STAR CAP AND 7 CENTS FOR EACH BLACK STAR CAP as soon as such payments are approved by the New Jersey Milk Director and the State courts. If no approval is forthcoming, Lampert ...