same competitive position as prior to the enlargement of the said area. This competitive use value would be determined on the basis of the price that could be readily obtained in the New York metropolitan district for such utilization. If the lower price could be obtained by purchasers seeking same in the New York metropolitan district, it would clearly undercut the competitive position of handlers located in that district and having to abide by the higher Class II price category. See 7 U.S.C.A. § 608c(18). The Judicial Officer found that these contentions were fully supported by the evidence and this Court is of the opinion that the record militates toward this conclusion.
The resultant economic loss upon the handler plaintiff in this case does not change this concept. See Secretary of Agriculture v. Central Roig Refining Co., 338 U.S. 604, 617, 70 S. Ct. 403, 94 L. Ed. 381 (1950).
The empowering Act declares as its policy the establishment and maintenance of orderly marketing conditions for agricultural commodities and Interstate Commerce. 7 U.S.C.A. § 602(1). 7 U.S.C.A. § 608c(18) states that the Secretary shall fix such price as he finds will reflect economic conditions which affect market supply and demand for milk and its products in the marketing area. The enunciated policy of the Act appears aimed at the maintenance of orderly marketing conditions to stabilize statutory price levels. See Grant v. Benson, 97 U.S.App.D.C. 191, 229 F.2d 765 (1955), cert. denied, 350 U.S. 1015, 76 S. Ct. 658, 100 L. Ed. 875 (1956). A situation involving an analogous concept of area price differential may be found in Titusville Dairy Products Co. v. Brannan, supra, and Wawa Dairy Farms, supra. See also Shawangunk Cooperative Dairies v. Jones, 153 F.2d 700 (2nd Cir. 1946).
The Wawa case dealt with a situation where the Secretary had fixed a 31 mile line outside of which a receiving station allowance might be deducted and within which the allowance was not to be deducted. The Court in dealing with the problem recognized that the Secretary had the power to promulgate a demarkation point on a reasonable basis and to be supported by substantial evidence. While the problem involved in such an order is based on different factors than the case at Bar, there is the analogous idea of separate areas being subject to separate and distinct regulation.
This entire situation is a difficult one for the Court to decide. At first blush it would seem that the plaintiff is suffering from a discriminatory policy inasmuch as deliveries to a purchaser of the same product involved different costs. It would appear that the purchaser was penalized unfairly. However, careful analysis of the situation reveals that neither the plaintiff nor the purchaser is being subjected to the vagaries of inconsistent administrative action. The Secretary must consider the total picture and promulgate rules to cover areas of different competitive makeup, even though separated by the breadth of the Hudson River. However, once established through the proper administrative process that competitive differences do exist, the rules thereafter promulgated must be uniformly applied to all handlers operating in the affected areas. There is no penalty being inflicted upon the plaintiff in this situation despite the added payments required. The plaintiff incurs such costs because his operation transgresses predetermined competitive area boundaries. To prevail plaintiff must show that the time tested promulgations by the Secretary in regard to the order and to classification by area are without basic foundation in principle and not in accord with the statutory criteria laid down by the empowering legislation. This burden has not been met.
The plaintiff's alternative argument may be categorized as stating that the milk in question was beyond the power of the Secretary to regulate inasmuch as it was involved in 'foreign commerce.' This contention may be disposed of summarily. The classification of the Secretary was based upon the utilization of the milk prior to its shipment in foreign commerce. 7 U.S.C.A. § 608c(1) authorizes regulation of milk and milk products when such product 'is in the current of interstate or foreign commerce, or which directly burdens, obstructs, or affects, interstate or foreign commerce * * *.'. See 7 U.S.C.A. § 610(j). It must also be pointed out that the milk in question was to be consumed by the passengers of the vessel owned by the purchaser and can in no way be considered goods for export or for foreign trade.
The plaintiff further contends the milk delivered to the ship is 'in transit' only and not subject to a classification by the Secretary. Plaintiff states that since the milk is not opened or used until the ship is on the high seas that it is not to be considered under the Class II category since it will find ultimate use outside the New York metropolitan district. As stated previously, it is not the ultimate use of the milk by the purchaser which controls the classification but rather the utilization of the milk by the handler which makes same subject to the regulation.
It is difficult to rationalize the argument of the plaintiff in regard to the categories under attack. The plaintiff desires that all milk be classified as Class III yet argues that Class II-III category is not promulgated in accordance with law. If the validity of such views would be accepted and the provision stricken, it would be difficult to see any benefit accruing to the plaintiff. At oral argument counsel declared that the Class III category should prevail and that the Class II provision be stricken alluding to the theory that the Secretary may make whatever change he deems just under the circumstances if the plaintiff's arguments are successful. However, the Court is not completely in accord with this reasoning. The Judicial Officer was of a similar opinion and cited Queensboro Farms Products, Inc., supra, 137 F.2d at pp. 979, 980 to support this contention that the exemption afforded by Class III would be void. This seems in accord with the common sense analysis of the problem.
In view of the foregoing and in light of the substantial record and the opinion of the Judicial Officer, it is the judgment of this Court that the defendant's motion for summary judgment be granted and the plaintiff's motion for summary judgment be denied.
Let counsel for the defendant submit an appropriate order.
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