Opinion ID: 199150
Heading Depth: 2
Heading Rank: 3

Heading: The Federal/State Interface.

Text: 11 The case at bar arises from the interaction of these two regulatory systems. A handler that sells a stipulated percentage of its milk into the Northeast Marketing Area -- the figure, once ten percent, is now twenty-five percent -- becomes a fully federally regulated handler, even if it is located outside the area. 7 C.F.R. 1001.7(a). Being fully federally regulated means that a handler must pay no less than the federal minimum price on all the milk that it receives at its plant and must contribute to the federal pool that equalizes the price paid to producers for milk put to divergent uses. Id. 1001.71, 1001.73. 12 In 1990, H.P. Hood, one of the first Maine handlers to become fully federally regulated, simultaneously stopped making payments into the Maine Milk Pool and started making payments into the federal pool. Maine brought suit in a state court to compel Hood to continue paying into the Maine Milk Pool. In an unpublished rescript dated September 16, 1991, a state superior court judge ruled that the Maine Milk Pool Act did not apply to fully federally regulated Maine handlers. From then on, federally regulated handlers in Maine turned a cold shoulder to the Maine Milk Pool. Hood, however, continued to comply with Maine's minimum price requirement. 13 Grant is a Maine corporation that owns and operates a fluid milk bottling plant in Bangor, Maine. In 1997, Grant for the first time began selling enough milk into the Northeast Marketing Area to become fully federally regulated. When that occurred, Grant informed the Commission that it did not consider itself bound to pay its Maine producers the Maine minimum price, but would pay them instead the federal minimum (location adjusted to Bangor). The Commission disagreed, maintaining that Grant, notwithstanding its federally regulated status, was obligated to pay the Maine minimum. In a preemptive strike, Grant brought suit in Maine's federal district court challenging the authority of state officials to enforce the Maine minimum in these circumstances. 14 The district court, in an interlocutory order, found it reasonably clear that Maine's statute did not authorize the Commission to require a fully federally regulated handler to honor Maine's minimum pricing. Grant's Dairy, Inc. v. McLaughlin, 20 F. Supp. 2d 112, 116-18 (D. Me. 1998). Within months, however, the Maine legislature passed An Act to Clarify the Authority of the Maine Milk Commission, Me. Rev. Stat. Ann. tit. 7, 2954(9) (the Clarification Act). This legislation cleared away the mist and made it plain that Maine intended to require its fully federally regulated handlers to pay the Maine minimum price to Maine producers for milk destined to be sold within the state. 4 With the meaning of the Maine Milk Commission Act clarified, the district court, ruling on cross-motions for summary judgment, determined that Maine's system passed constitutional muster. This appeal ensued.