Court Opinion

ID: 9793005
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:40:39.796989+00
Date Added: 2024-06-11T08:02:25.946246
License: Public Domain

THORNTON, J.,
dissenting.
Analyzing as a whole the Oregon Milk Audit and Stabilization Law and the regulations adopted by the State Department of Agriculture to implement that law, it appears the entire price classification scheme is based on the initial usage to which the handler places the raw bulk milk. Once the handler commits the raw bulk milk to a particular use (class 1, 2 or 3), that use is conclusive, with one exception hereinafter discussed.
ORS 583.007 (l)(b) provides:
“ ‘Class 2 milk’ includes * * * Grade A * * * milk * * * used or sold to others for ultimate use in the manufacture of cottage cheese * * (Emphasis supplied.)
*232Oregon Administrative Rules ch 603, § 66-030 (2) (a) (8-15-67), provides:
“(2) Class 2 milk shall be all milk or butterfat:
“ (a) used or sold for use in the manufacture of:
“(A) all types of cottage cheese;
“* * * * (Emphasis supplied.)
Plaintiff corporation committed a certain volume of skim milk to the manufacture of cottage cheese, a class 2 utilization under the Oregon law and departmental regulations. It now contends that it should be allowed a reclassification (and a refund) for the whey which results from the manufacturing process, plus a refund for the unused cottage cheese returned from the grocers’ shelves, both of which then had to be used for animal feed or dumped. I do not believe that these subsequent events constituted a recommitment by the handler of the original skim milk to a new utilization within the meaning of the exception in OAR 603-66-030 (4)(b).
As I read OAR 603-66-030 (4) (b), the disputed regulation,① the term “used or reused by any handler in another class” means that when bulk raw milk originally committed by the handler to one utilization is recommitted in the handler’s plant to another utilization in a different classification, the regulation requires that it should be reclassified to the new utilization, and not otherwise.
The term “used and reused” in the above regulation is a term of art. As was pointed out in Bailey Farm Dairy Co. v. Anderson, 157 F2d 87, 94, cert *233denied 329 US 788, 67 S Ct 355, 91 L Ed 675 (8th Cir 1946):
“* * * The term ‘use’ or ‘used’ * * * is not required to be read as one of literalness or consumptive ultimacy, but it is entitled to be given a practical regulatory significance in relation to handlers’ processes and the effect of their mode of doing business upon the market problem * *
Similarly, in Queensboro Farms Products, Inc., v. Wickard, 137 F2d 969 (2d Cir 1943), the court considered the meaning of terms “use” and “use classification” of milk under a federal marketing order. There the milk handler shipped cream, which was classified as a class 1 use, from its plant to a purchaser who eventually used it in the manufacture of ice cream, a class 2 use. The court upheld the action of the Secretary of Agriculture in retaining the class 1 classification, holding that the ultimate use by the purchaser was not the criteria but rather the form it was in when disposed of by the handler.
STATUS OF THE SKIM MILK WHEY
Whey results from the manufacture of cottage cheese. It is a residue of the manufacturing process. It is not a reuse of the original slum milk by the handler in a new utilization in his own plant. An example of reuse would be the following: Taking raw whole milk, separating the cream therefrom for ice cream manufacturing, and then using in the handler’s own plant the skim milk remaining in standardizing its fluid bottled milk for sale to grocers. This ivas not the ease here. Plaintiff can no more claim an offset for this than it can for any other residues drained off in the same manufacturing process. The fact that the whey was then sold for animal feed or that some of it had to *234be dumped was not a reuse of milh by the handler in another class in its own plant. This does not and did not change the classification once established.
As in Queensboro Farm Products, Inc. v. Wickard, supra, what a subsequent purchaser used it for is not the basis for classification or reclassification. Suppose the subsequent purchaser had used it to manufacture wine vinegar, to cite a hypothetical example. This still would not have changed the original classification. The plaintiff’s plant is the location where the classification is determined. The plant of a livestock feed manufacturer or hog raiser to whom plaintiff may have sold the whey and returned cottage cheese, for example, is not the location of this bulk skim milk for purposes of this classification. The ultimate use by the purchaser is not the criteria. Queensboro Farm Products, Inc. v. Wickard, supra.
STATUS OF THE OVEBAGKED OE SPOILED COTTAGE CHEESE
The fact that some of the cottage cheese spoiled before it was taken from the grocers’ shelves and had to be returned to the handler and was then sold for animal feed or dumped again did not change the classification once established. It was not a use or reuse at the plant of the original skim milk in a different class.
The majority opinion places great stress on plaintiff’s allegation that the Department had long allowed a reclassification for fluid milk returned from the grocers’ shelves, and thereafter sold for animal feed or dumped. This practice appears on its face to be inconsistent with the Department’s present position in refusing the reclassification as to the returned *235cottage cheese. The record and briefs offer no explanation of the Department’s reason or justification for this asserted difference in treatment. One possible reason could be this: That because this was the long-established practice in the industry under the old two-price system it became a part of the price structure, i.e., it was taken into consideration by the Department in establishing the price for class 1 utilization. In any event in the present posture of the case at bar the fact that the Department has always allowed a credit for returned milk, apparently in conflict with the disputed regulation, would not in my view authorize this court to direct that another exception be made in favor of whey and returned cottage cheese.
Plaintiff’s claim of “lack of equity and fair play” resulting if it is not allowed this reclassification, does not stand up. The dosses,’ if they can be called such, were presumably already taken into account (1) by the Department of Agriculture in establishing a substantially lower producer price for milk used in the class 2 utilization, and (2) by the plaintiff itself in taking these dosses’ into consideration in establishing the retail price for its cottage cheese. Granting the reclassification requested by plaintiff would in effect be giving plaintiff a substantial monetary windfall at the expense of the milk producers to which plaintiff is not legally or equitably entitled.

 OAR 603-66-030 (4)(b):
“* * * [A]ny milk or butterfat classified in one class shall be reclassified if used or reused by any handler in another class * *