Landmark Supreme Court Ruling: West Lynn Creamery vs. Healy BY GARY LATTA
A
s we talk about milestones in this issue of Northeast Dairy magazine, it got me thinking about some of the many legal milestones that have made a real difference in the direction of the dairy industry over the years. So many came to mind, but one that I believe had arguably the greatest impact was the case of West Lynn Creamery, Inc. vs. Healy, Commission of Massachusetts Department of Food and Agriculture. So in the spirit of milestones, let’s take a look back to the mid-1990s and the decisions surrounding this important case. The case of West Lynn Creamery, Inc. vs. Healy was argued before the U.S. Supreme Court on March 2, 1994, and decided on June 17, 1994. The heart of the issue was whether a state could impose economic barriers that benefit in-state dairy interests at the expense of out-of-state dairy interests. The U.S. Supreme Court ruled against the Massachusetts commissioner and the state program. This article will delve into some of the logic argued on both sides. Since I am not an attorney, I will rely heavily on the opinions of the justices and present exactly what they were thinking when they ruled on this case. In the 1980s and 1990s, the state of Massachusetts recognized it was losing dairy farms and market share from what it concluded were lower milk prices of competitor farms in surrounding states. In response, Massachusetts formed a 34 • Northeast Dairy Foods Association, Inc.
special commission to explore solutions to this problem. In January of 1992, Massachusetts Commissioner of Agriculture Jonathan Healy issued a new pricing order that required all licensed dealers who sold milk in that state to pay a monthly premium that would be distributed to in-state dairy farms. Premiums collected were based on a dealers Class I sales, and disbursements were made to producers based on their share of state volume. At issue was the fact that most of the milk supply that was consumed in Massachusetts came from surrounding states like New York, Vermont and Maine. It was estimated at that time that West Lynn purchased over 90% of its milk supply outside of Massachusetts. However, all the premium money collected under the new pricing order was dispensed to just Massachusetts dairy farms. West Lynn Creamery, a Massachusetts buyer, processor and licensed dealer of milk, and LeComte’s Dairy, a West Lynn dealer, sued in state court on the grounds that it violated the Federal Commerce Clause. The state court denied relief. West Lynn Creamery and LeComte’s paid the additional money to the state for two months, contributing nearly $200,000 into the equalization fund. In July 1992, both refused to pay any more into the fund. The state then commenced with license revocation proceedings.