Court Opinion

ID: 9489237
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:09:47.201935+00
Date Added: 2024-06-11T17:53:24.739704
License: Public Domain

MANION, Circuit Judge,
dissenting.
Accidental destruction by someone who has to pay top dollar seems to be the best thing that could happen to this butter. Reimbursement of out-of-pocket expenses may not be the proper measure of damages, but the “fair market” value determined by the district court and affirmed by this court is neither a “fair” value nor a “market” value.
Before it was burned, the butter in question was purposely and permanently removed from the commodity market. Because this butter was not “market butter,” the district court erred in equating its value, as a matter of law, with the fair market value determined by the Chicago Mercantile Exchange. The uses to which the Commodity Credit Corporation puts such butter does not include marketing it. Indeed, the butter was packaged in wrappers which stated “NOT TO BE SOLD OR EXCHANGED.” While a market may exist for butter that cannot be sold or exchanged under federal law, that very limited market is not the same market that is represented on the Exchange. In fact, the price for commercial butter is artificially raised by the price the Commodity Credit Corporation dictates through its purchase of “surplus” butter. Fair market value presupposes a fair market. In this case we are dealing with a controlled market, controlled by the withdrawal from the market of the very butter destroyed in the fire.
The court correctly determined that it must apply Wisconsin law, but it instead relies upon two old federal cases, United States v. New York, N.H. & H.R. Co., 211 F.2d 404 (2d Cir.1954), and Ft. Worth & Denver Railway Company v. United States, 242 F.2d 702 (5th Cir.1957), neither of which considered Wisconsin law. Both cases dealt with Commodity Credit Corporation-owned goods damaged while in railroad transit and thus subject to damages determination under provisions of the Interstate Commerce Act. Because the butter at issue here was not in railroad transit and thus would not be governed by the Interstate Commerce Act (assuming the provisions were still in effect), these two federal cases are not particularly useful. Again, neither case applied Wisconsin law, which, as the court instructs, we are bound to follow.
Wisconsin courts have not been silent on computing damages for destroyed commodities. Except when no such value exists, in Wisconsin fair compensation is generally fair market value. Hills Bros. Coffee, Inc. v. Dairyland Transport, Inc., 157 Wis.2d 645, 460 N.W.2d 433, 435 (Ct.App.1990). But again, we are not dealing with a fair market and thus no “fair market” value exists. Under Wisconsin law, damages are therefore determined by “the value of the property to the plaintiff,” calculated by “the nature of the property, the use to which the plaintiff puts such property, its original cost, the cost of replacement, if such property can be replaced, its age, the amount and rate of its depreciation, [and] all other facts and circumstances received in evidence____” Id. These measures do not require speculation by a jury. They simply require consideration of several real calculations that would enable a jury to determine the value of this particular butter that had clearly been forever removed from the commercial butter market.
*712As there is no definitive value for this butter, the weighing of these factors is a task for the jury not the court. Pincus v. Pabst Brewing Co., 893 F.2d 1544, 1554 (7th Cir. 1990) (“fixing of a damage award- is an exercise in fact-finding”). Applying Wisconsin law, a jury would consider those amorphous benefits the United States allegedly derives from maintaining warehouses full of butter (policy options; bargaining power; distribution to developing countries, schools, prisons, and the armed services). However it also would consider the actual cost to the United States of repackaging bulk into print butter. The age of this particular butter and the fact that print butter has a shelf life of only two years would also be factors for a jury to consider. These factors are especially significant in light of the fact that two years after the fire, during fiscal year 1990-1991, the Commodity Credit Corporation showed an inventory loss of 53.9 million pounds of butter, which the defendants suggest was the intentional destruction of unpalatable surplus butter. Thus, if some of this butter was destined for the dump, a jury could consider that. The cost to purchase replacement butter from international butter stores at the world market price, far below the artificially high U.S. price, could also influence a jury’s assessment of damages. In short, a jury should have been allowed to consider any number of factors dictating this butter’s value. Summary judgment on the ground that this butter had the highest possible value as dictated by the Chicago Mercantile Exchange inappropriately deprived Crown of a jury’s consideration of many other factors that probably would have significantly reduced that value. As it stands this fortuitous fire has given the United States a windfall.
I respectfully dissent.