Petition for Writ of Certiorari — Old Orchard Brands, Inc. v. Michigan Department of Agriculture

In The

October Term, 1986

OLD ORCHARD BRANDS, INC., and

R.V. SAUR AND SONS ORCHARDS, INC.,

Petitioner,

Vv.

STATE OF MICHIGAN, DEPARTMENT OF

AGRICULTURE, and 63RD JUDICIAL

DISTRICT COURT,

Respondents.

ra

Vv

PETITION FOR WRIT OF CERTIORARI

TO THE SUPREME COURT OF THE

STATE OF MICHIGAN

ra’

Vv

H. James Starr (P20915)*

Attorney for Petitioner

Starr, Bissett & Hackett

1020 Long Blvd., Ste. 10

Lansing, MI 48911

(517) 694-7770

*Counsel of Record

Supreme Court of the United States

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

or call collect (402) 342-2831

QUESTIONS PRESENTED FOR REVIEW

Do the mandatory assessment and participation pro-

visions of the Michigan Agricultural Commodities Market-

ing Act, MCL 290.651, et seq.; MSA 12.94(21), et seq.;

conflict with the free choice provisions of the Federal Ag-

ricultural Fair Practices Act (AFPA), 7 USC Section

2301, et seq., so as to make the state provisions invalic on

the basis of preemption because they ‘‘stand as an ob-

stacle to the accomplishment and execution of the full pur-

poses and objectives of Congress?”’

Does 7 USC 2305(d) preserve the validity of state

statutory provisions which are in conflict with and ‘‘stand

as an obstacle to the accomplishment and execution of the

full purposes and objectives of Congress’’?

as

il

TABLE OF CONTENTS

Page

OPINIONS OF COURTS BELOW 1

STATEMENT OF JURISDICTION 1

CONSTITUTIONAL AND STATUTORY PROVI-

NINE oases ks dentiniecosectnea ld sata aaa ana ae aera 1

rare?) OFT THE CARE wn. a 2

ARGUMENT

7 USC 2305(d) was intended to promote the pur-

poses of AFPA by preserving existing consistent

state statutory provisions which might otherwise

have been invalidated by an apparent intent to

occupy the entire field of regulation. It was not

intended to deprive the producer of the rights of

freedom of choice provided in AFPA. wu 3

PON AM RII osncoshoniensseniininiciesigonsnaceonadel asa oe |

APPENDIX ..... cane abaiiipaisiulaindsinaicahian aaa App. 1

ill

TABLE OF AUTHORITITES

CASES

Cleveland, C.C. and St. L.R. Co. v Backus, 133 Ind

013, 33 NE 421, Affd 154 US 439, 38 L Ed 1041,

ig ACES Pe nO

Commercial Banking and T. Co. v Citizens Trust

and G. Co., 153 Ky 566, 156 SW 160

Michigan Camnmers and Freezers Association v

Agricultural Marketing and Bargaining Board,

— US —, 1048S Ct 2518, 81 L Ed 2d 399 (1984)... &

Old Orchard Brands, Inc., v Department of Agri-

culture, 152 Mich App 274 (1986) eee ca

CONSTITUTIONAL PROVISIONS

UnItTED States CoNnstTIruTION

Article VI, Clause 2 ...................... ae a

STATUTES— FEDERAL

AGRICULTURAL Farr Practices Act or 1967

i naenennasecemas

SESS

OT

Teen cceaecnenoreneeuios

SraTUTES—-MICHIGAN

AGRICULTURE CoMMODITIES MARKETING AcT

NCL i

EE

Page

2.

—~

3

oreewe +e e

TABLE OF AUTHORITIES—Continued

Page

OTHER AUTHORITIES

Section 2/8, 73 Am.Jur 2a p. 443 7

OPINIONS OF COURTS BELOW

The Michigan Supreme Court did not issue an opin-

ion. It simply denied leave to appeal the decision of the

Michigan Court of Appeals. The Michigan Court of Ap-

peals issued an opinion, and the Ingham County Circuit

Court issued an opinion. Copies of these opinions are in

the appendix.

STATEMENT OF JUKISDICTION

The Order of the Michigan Supreme Court denying

leave to appeal was filed October 29, 1986. Jurisdiction

of this Court is invoked pursuant to 28 USC § 1257(3)

and Rules of the Supreme Court of the United States,

rule 17.1(C).

CONSTITUTIONAL AND STATUTORY PROVISIONS

United States Constitution, Article VI, cl.2. states:

This Constitution, and the Laws of the United States

which shall be made in Pursuance thereof; and all

Treaties made, or which shal! be made, under the

Authority of the United States, shall be the supreme

Law of the Land; and the Judges in every State shall

be bound thereby, any Thing in the Constitution or

Laws of any State to the Contrary notwithstanding.

The federal ‘‘ Agricultural Fair Practices Act of 1967’’

being Title 7, Sections 2301 et seq. a copy of this Act ts

found in the appendix.

The Michigan ‘‘ Agricultural Commodities Marketing

Act’’, MCL 290.651, et seq. a copy of this Act is found

in the appendix.

jo)

STATEMENT OF THE CASE

Petitioner seeks certiorari from the decision of the

Michigan Supreme Court denying leave to appeal from

the decision of the Michigan Court of Appeals.

Ingham County Cireuit Judge Jack Warren had ruled

that the Michigan Apple Committee formed pursuant to

the Michigan ‘‘Agricultural Commodities Marketing Act’’

constituted an ‘‘association of producers’? under 7 USC

2302(c). He further ruled that their actions in forcing

all apple producers to belong to and to pay assessments

for the Apple Committee contravened one of the primary

purposes of the federal ‘‘Agricultural Fair Practices Act

of 1967’’ (hereinafter referred to as AFPA). That pur-

pose was to preserve the free choice of producers to join

associations or to remain independent.

Judge Warren ruled that the Michigan ‘‘Agricul-

tural Commodities Marketing Act’’ is preempted to tne

extent that it allows producers associations such as the

Apple Committee to fail to provide exemptions for non-

participating producers. (see page 5 of opinion)

The Michigan Court of Appeals held that because of

the fifth section of AFPA, 7 USC 2305(d) that the federal

act had no preemptive effect because it was ‘‘existing

‘

OUST

3

state law’’. Old Orchard Brands, Inc. v. Department of

Agriculture, 152 Mich. App. 274.

The Michigan Supreme Court cenied leave to ap-

peal 426 Mich. 872 (1986).

ARGUMENT

7 USC 2305(d) was intended to promote the pur-

poses of AFPA by preserving existing consistent

state statutory provisions which might otherwise

have been invalidated by an apparent intent to

occupy the entire field of regulation. It was not

intended to deprive the producer of the rights of

freedom of choice provided in AFPA.

The United States Supreme Court unanimously struck

down the mandatory provisions for participation and as-

sessments of the Michigan Agricultural Marketing and

Bargaining Act in the case of Michigan Canners and

Freezers Association v Agricultural Marketing and Bar-

gaimmg Board, — US —, 104.S Ct 2518; 81 L Ed 2d 399

(1984). The Michigan Agricultural Marketing and Bar-

gaining Act, MCL 290.710(2) which was the subject of

the Michigan Canners and Freezers Association v Agri-

cultural Marketing and Bargaining Board, supra and the

Michigan Agricultural Commodities Marketing Act, MCL

290.651(1) which is the subject of this action both pro-

vide that if more than 50% of the producers who pro-

duce more than 50% of the volume of the affected com-

modity vote to participate then all producers are deemed

to have assented to the proposal and are assessed for

the costs. All producers of the given commodity are re-

quired t» participate and pay assessments. There is no

free choice.

It would appear that the mandatory participation and

assessment provisions of the act here involved deprive the

producer of the right of free choice provided in AFPA

just as much as the Michigan Act which was the subject

of the Michigan Canners ease.

The Michigan Court of Appeals’ decision raises sev-

eral questions which need answers which can only be given

by this Court.

1. WHAT WAS THE CONGRESSIONAL PUR-

POSE OF 7 USC 2305(d) ?

2. Was it to preserve consistent state legislation, and

avoid total preemption of the entire field of reguia-

tion, or was it intended to preserve al] existing state

law even if such laws were in direct conflict with the

main purposes of Congress and deprived producers

of the right of free choice provided in the Federal

Act?

3. Do producers in some states have the benefits of

free choice which may be denied in other states de-

pending solely upon the date of passage of the state

legislation?

4. Would the United States Supreme Court decision

in the Michigan Canners and Freezers Association v

Agricultural Marketing and Bargaining Board, supra

have been different had the Michigan Agricultural

Marketing and Bargaining Act been enacted before

1967?

The interpretation of 7 USC 2305(d) by the Michigan

Court of Appeals would appear to violate certain rules of

statutory construction. Federal statutes are to be con-

strued so as to give them a uniform application through-

4)

out the nation. Commercial Banking and T. Co. v Citizens

Trust and G. Co., 153 Ky 566, 156 SW 160; Cleveland,

C.C. and St. L.R. Co. v. Backus, 133 Ind 513, 33 NE 421,

affd 154 US 439, 38 L Ed 1041, 14 S Ct 1122. It has been

said that nothing but clear and unmistakable Inuguage will

warrant a court in interpreting a federal ac. in such a way

as to produce unequal operation of the statute.

The interpretation of statutory provisions requires

looking at congressional intent, and the history and pur-

poses of the statute. The United States Supreme Court

has already ruled that one of the main purposes of AFPA

7 USC 2301 et seq. was to protect the free choice of the

producer to remain independent. See Michigan Canners

and Freezers v Agricultural Bargaining Board, supra.

The interpretation given to APPA by the Michigan

Court of Appeals would lead to very undesirable results.

Laws of one state would be struck down while identical

laws in another state would be valid depending on the date

of passage.

Producers in one state would have free choice pro-

tected by fea ral law while producers in another would not.

The key phrase relied upon by the Court of Appeals

is a part of 7 USC 2305, the enforcement provision, and

is part of Subsection (d) which states as follows:

(d) The district courts of the United States shall

have jurisdiction of proceedings instituted pursuant

to this section and shall exercise the same without

regard to whether the aggrieved party shall have ex-

hausted any administrative or other remedies that

may be provided by law.

The provisions of this chapter shall not be con-

strued to change or modify existing State law nor

to deprive the proper State courts of jurisdiction.

The legislative history of this section found in the

US Code Congressional and Administrative News begin-

ning on Page 1867 gives us an insight into the probable

purpose of the critical phrase. This is found on Page

1876 in a letter from Orville L. Freeman, Secretary of

Agriculture, to the Honorable Allen J. Ellender. The

language in the bill that speaks about preserving existing

State laws, ete., came as part of Mr. Freeman’s recom-

mendation which was as follows:

Since some forms of conduct declared unlawful by sec-

tion 4 of the bill would also violate existing statutes,

we are suggesting the addition of a new section to

make it clear that the bill is not intended to place

exclusive jurisdiction in the Department of Agricul-

ture.

‘Fhe purpose of the language about existing State laws

and State courts was to avoid a preemption which would

invalidate State laws which were consistent with the pur-

poses of the AFPA. This language was added to pro-

mote not destroy the policv of the AFPA which was to

outlaw unfair trade practices, as defined by the Act, af-

fecting producers of agricultral products. The purpose

of this language was to permit State enforcement action

in State courts against practices which Congress had de-

termined should be unlawful.

The purposes of the language about State law and

State courts found in 7 USC 2305(d) was to promote en-

forcement of the purposes of the AFPA. The interpreta-

tion given to 7 USC 2305(d) by the Court of Appeals would

work against the purposes of the AFPA and create a

very inconsistent result.

OS eT aE TN Te

AFPA is clearly remedial in nature whose main pur-

pose was to protect the free choice of the producer to

join or not to join in producer associations. Such statutes

are to be given a liberal construction in favor of those

entitled to the benefits of the statute. See Statutes, Re-

medial Statutes, Section 278, 73 Am Jur 2d p. 443.

‘‘The construction should be consistent with, and

promote, preserve, and effect, the object of the stat-

ute, so as effectually to meet the beneficial end in

view, and not one which would defeat the manifest pur-

pose of the statute.’’

The interpretation given to 7 USC 2305(d) by the

Michigan Court of Appeals would appear to also violate

the US Constitution Act VI, el.2.

Where the Congressional intent is to declare and pro-

tect a right it would appear that any state statutory pro-

vision which ‘‘stands as an obstacle to the accomplishment

and execution of the full purpose and objectives of Con-

gress’? would be invalid. This type of preemption is con-

stitutionally mandated.

©

CONCLUSION

The published opinion of the Michigan Court of Ap-

peals brings into serious question the application of the

Federal Agricultural Fair Practices Act (AFPA) and

the extent of the protection of the right of free choice of

agricultural producers so clearly set forth in the Michi-

gan Camners and Freezers Association v Agriculture

Board, supra. A ruling by this Court on the effect of 7

USC 2305(d) is a necessary guide for courts around the

United-Sfates.

For the foregoing reasons, the Petitioner respect-

fully requests the issuance of a Writ of Certiorari to re-

view the judgment and opinion of the Michigan Supreme

Court and Michigan Court of Appeals.

Respectfully submitted,

H. James STARR

Attorney for Petitioner

DATED: January 26, 1987

CONTENTS OF APPENDIX

Michigan Supreme Court Decision denying appli-

ontion for leave to eppesl. App.

Michigan Court of Appeals Decision and Opinion

Old Orchard Brands, Ine. v Department of Ag-

riculture, 152 Mich App 274 (1986) 0. App.

Ingham County Cireuit Court Opinion, File No.

84-52178-AA of the Honorable Jack Warren,

NE I i Se ee App.

Michigan Agricultural Commodities Marketing

ey ea nO GI iiss App.

Federal Agricultural Fair Practices Act of 1967

I I IIR cciinscisceniiinhncin societies chshtansiiichopsla App.

11

18

34

App. 1

AT A SESSION OF THE SUPREME COURT OF THE

STATE OF MICHIGAN, Held at the Supreme Court

Room, in the City of Lansing, on the 29th day of October

in the year of our Lord one thousand nine hundred and

eighty-six.

Present the Honorable

G. MENNEN WILLIAMS,

Chief Justice

CHARLES L. LEVIN,

JAMES H. BRICKLEY,

78923 MICHAEL F. CAVANAGH,

PATRICIA J. BOYLE,

DOROTHY COMSTOCK RILEY,

DENNIS W. ARCHER,

Associate Justices

OLD ORCHARD BRANDS, ING.,

and R.V. SAUR AND SONS OR-

CHARDS, ING.,

Plaintiffs-Appellants,

v SC: 78923

COA: 84733

STATE OF MICHIGAN, DEPART- LC: 84-52178-AA

MENT OF AGRICULTURE, AND

63rd JUDICIAL DISTRICT COURT

Defendants-Appellees.

On order of the Court, the application for leave to ap-

peal is considered, and it is DENIED, because we are not

persuaded that the questions presented should be reviewed

by this Court.

STATE OF MICHIGAN—ss.

I, CORBIN R. DAVIS, Clerk of the Supreme Court of

the State of Michigan, do hereby certify that the foregoing

is a true and correct copy of an order entered in said court

in said cause; that I have compared the same with the or-

App. 2

iginal, and that it is a true transcript therefrom, and the

whole of said original order.

IN TESTIM )NY WHEREOF, I have hereun-

to set my hand and affixed the seal of said

(SEAL) Supreme Court at Lansing, this 29th day

of Uctober in the year of our Lord one

thousand nine hundred and eighty-six.

/s/ Corbin R. Davis

Clerk.

App. 3

OLD ORCHARD BRANDS, INC v. DEPARTMENT OF

AGRICULTURE

Docket No. 84733. Submitted March 6, 1986, at Lansing.

Decided June 2, 1986. Leave to appeal applied

for.

Plaintiffs, Old Orchard Brands, Inc., and R. V. Saur and

Sons Orchards, Inec., brought an action in the Ing-

ham Cireuit Court against the Department of Ag-

riculture and the 63rd Judicial District Court to

enjoin the collection of assessments made by the

Department on behalf of the Michigan Apple Com-

mittee. They also sought a declaratory judgment

that the act requiring the payment of the assess-

ments was either not applicable to plaintiffs or was

unlawful. The Michigan Apple Committee was

established under the Agricultural Commodities

Marketing Act to administer a marketing program

the Michigan Apple Growers initiated and ap-

proved by referendum vote. Prior to plaintiffs’

filing suit, the department brought an action

against plaintiffs to enforce collection of the as-

sessments in the 63rd Judicial District Court. The

Cireuit court, Jack W. Warren, J., granted plain-

tiffs a declaratory judgment, holding that the Fed-

eral Agricultural Fair Practices Act preempted

state regulation. The Department of Agriculture

appealed. Held:

The Agricultural Coinmodities Marketing Act

was not preempted by the Federal Agricultural

Fair Practices Act.

Reversed.

AGRICULTURE—AGRICULTURAL COMMODITIES MARKETING AcT

—AGRICULTURAL Farr Practices Act.

The Agricultural Commodities Marketing Act was not

preempted by the I*ederal Agricultural Fair Prac-

tices Act (7 USC 2301 et seg.; MCL 290.651 et seq.;

MSA 12.94[21] et seq.).

App. 4

H. James Starr, for plaintitfs.

Frank J. Kelley, Attorney General, Lowis J. Caruso,

Solicitor General, and Charles D. Hackney and David W.

Silver, Assistant Attorneys General, for defendant.

Amici Curiae:

Foster, Swift, Collms € Coey, P.C. (by James A. White

and Michael J. Schmedlen), for Michigan Farm Bureau and

Michigau Milk Producers Association.

dtoccy M. De Francesco (by John M. Cannon, Susan W.

Wanat and Ann Plunkett Sheldon, of counsel), for Mid-

Michigan Legal Foundation.

Before: SHEPHERD, P.J., and M. J. Ketiy and R. L.

TAHVONEN,* JJ.

SuepHerp, P.J. Defendant Michigan Department of

Agriculture appeals as of right from an order of declara-

tory judgment entered on I*ebruary 25, 1985, by the Ing-

ham Cireuit Court. The cireuit court held that the federal

Agricultural Fair Practices Act, 7 USC 2301 et seq., (here-

after the arpa) preempts Michigan’s Agricultural Com-

modities Marketing Act, MCL 290.651 ef sey.; MSA

12.94(21) et seg. We reverse and hold that the federal act

does not preempt the Agriculture Commodities Marketing

Act.

REFERENCES

Am Jur 2d, Agriculture §§ 58-64.

See a annotations in the ALR3d/4th Quick Index under Agri-

culture.

* Circuit judge, sitting on the Court of Appeals by assignment.

App. 5

The Agricultural Commodities Marketing Act author-

izes Michigan producers of agricultural commodities to

form marketing programs to promote their products. Such

marketing programs may establish advertising and market-

development programs, conduct research, disseminate mar-

ket information, set quality standards, inspect and grade

commodities, institute surplus controls, and provide for

payment to producers according to established grades.

Finally, under the terms of the statute, a marketing pro-

gram, if it chooses, may exempt nonparticipating producers.

MCL 290.653; MSA 12.94(238).

In 1968, Michigan ayple growers initiated and ap-

proved by referendum vote a marketing program pursuant

to the Agricultural Commodities Marketing Act. The Mich-

igan Apple Committee was formed to administer the pro-

gram. The committee provides producers with market in-

formation and conducts advertising, promotion, publicity,

and research programs in accordance with MCL 290.653 ;

MSA 12.94(23). The program is funded by assessments

levied against each producer. The apple committee has

made no provision to exempt producers who do not wish to

participate. However, MCL 290.663; MSA 12.94(33) does

provide a procedure for producers to petition the director

of the Department of Agriculture to call a vote to terminate

the program.

R. V. Saur and Sons Orchards, Ine., an apple proces-

sor, and Old Orchard Brands, Inc., an apple grower, re-

fused to pay assessments levied for the 1982-1983 growing

season, ending June 30, 1983.' In an unrelated proceeding,

1Under the Agricultural Commodities Marketing Act, pro-

cessors may be required to collect and remit producer assess-

ments. MCL 290.655; MSA 12.94(25).

App. 6

pursuant to MCL 290.669; MSA 12.94(39), the director of

the Department of Agriculture instituted actions against

the above parties in the district court, seeking to collect the

unpaid assessments plus interest, penalties, and costs.

Thereafter, on May 18, 1984, R. V. Saur and Sons Or-

chards, Ine., and Old Orchards Brands, Inc., (hereinafter

plaintiffs) filed the instant action in the circuit court

against the Department of Agriculture and the 63rd Judi-

cial District, seeking to enjoin the enforeeinent action in

the district court and a declaratory judgment that the Agri-

cultural Commodities Marketing Act was not applicable to

apples. On July 11, 1984, plaintiffs amended their com-

plaint and alleged that the federal Agricultural Fair Prac-

tices Act prohibited mandatory participation in the Michi-

gan Apple Committee program and that the federal act

preempted Michigan's Agricultural Commodities Market-

ing Act. As authority, plaintiffs relied principally upon a

June 11, 1984, decision by the United States Supreme Court,

Michigan Canners & Freezers Ass'n, Inc v Agricultural

Marketing € Bargaining Bd, 467 US 461; 104 S Ct 2518;

81 L Ed 2c 399 (1984). Both parties moved for summary

judgment. The circuit court agreed with plaintiffs’ posi-

tion and ruled that th. AF PA preempted the Agricultural

Commodities Marketing Act ‘‘to the extent that it allows

producers’ associations such as the apple committee to fail

to provide exemption for nonparticipating producers.”’

The sole issue before this Court on appeal is whether

the federal AF PA preempts Michigan’s Agricultural Com-

modities Marketing Act. The AIPA is a federal agricul-

tural statute that was the object of interpretation by the

United States Supreme Court in Michigan Canners &

Freezers Ass’n v Agricultural Marketing & Bargaining Bd,

eB

App. 7

supra. In that decision, the Supreme Court concluded

that the AF PA preempted Michigan’s Agricultural Mar

keting and Bargaining Act, MCL 290.701 et seg.; MSA

12.94(101) et seq. The latter act established a state admin-

istered system by which a majority of the producers of a

particular commodity could organize a producers’ associa-

tion and then certify that association as the exclusive bar-

gaining agent for all the producers of that particular com-

modity in the state. Pursuant to that authority, the Michi-

gan Agricultural Cooperative Marketing Association, Inc.,

(hereafter MACMA), was formed and accredited as the sole

sales and bargaining representative for all asparagus pro-

ducers in the state. Thus, a producer who objected to a

contract negotiated by MACMA would nevertheless be

bound by the terms (including price), be precluded from

marketing his produce himself, and be forced to pay fees

to the association for the services rendered. The Supreme

Court held that the Michigan act was in clear violation of

7 USC 2303(c) because it had the effect of coercing a pro-

ducer to ‘‘enter into [or] maintain ...a marketing econ act

with an association of producers or a contract with a han-

dler.’’ 467 US 478. Unlike the Agricultural Marketing

and Bargaining Act, the Agriculture Commodities Market-

ing Act, which is the subject of this appeal, does not em-

power producers’ association to act as a sales and bar-

gaining agent to producers.

The United States Supreme Court in Michigan Can-

ners explained the three ways federal law may preempt

state law:

Federal law may pre-empt state law in any of

three ways. First, in enacting the federal law, Con-

gress may explicitly define the extent to which it in-

App. 8

tends to pre-empt state law. Second, even in the ab-

sence of express pre-emptive language, Congress may

indicate an intent to oceupy an entire field of regula-

tion, in which case the States must leave all regulatory

activity in that area to the Federal Government. F1-

nally, if Congress has not displaced state regulation

entirely, it may nonetheless pre-empt state law to the

extent that the state law actually conflicts with federal

law. Such a conflict .rises when compliance with both

state and federal law is impossible, or when the state

law ‘‘stands as an obstacle to the accomplishment and

execution of the full purposes and objectives of Con-

gress.’’ [Citations omitted. 467 US 469.]

The Supreme Court concluded that the Al'PA neither

contains preemptive language nor reflects a congressional

intent to oceupy tiie entire field. Jd. In fact, the AF PA

contains express language eliminating its preemptive ef-

fect on existing state law. The fifth section of the Al'PA,

7 USC 2305(d), states in part:

The provisions of this chapter shall not be con-

strued to change or modify existing State law nor to

deprive the proper State courts of jurisdiction. [| im-

phasis added. |

The Agricultural Commodities Marketing Act was

enacted by 1965 PA 232, effective March 31, 1966. The

AFPA was enacted by Pub L 90-288 on April 16, 1968.

Since the Agricultural Commodities Marketing Act was

‘existing State law,’’ the Al'PA, by its own terms has no

preemptive effect. The trial court's opinion does not men-

tion § 2305(d) and thus fails to explain how its clear im-

port may be ignored. Plaintiffs without elaboration argue

?The Supreme Court followed the third alternative in hold-

ing that the Agricultural Marketing and Bargaining Act was in

actual conflict with the AFPA.

ee Me

App. 9

that the same argument was made and rejected in Michi-

gan Canners. However, § 2305(d) was not a bar to the

Supreme Court’s decision in Miehigan Canners, because,

as the Supreme Court noted, the Michigan act under seru-

tiny there, unlike the subject act of this appeal, was en-

acted after the AF PA was enacted.

We conclude that the Agricultural Commodities Mar-

keting Act was ‘‘existing State law’’ and, accordingly, the

AIPA, by its clear language, has no preemptive effect. We

reverse the contrary declaratory judgment of the circuit

court.

Reversed.

DZIERWA v MICHIGAN OIL COMPANY

Docket No. 86190. Submitted March 11, 1986, at Lansing.

Decided June 2, 1986.

Plaintiff, David J. Dzierwa, brought an action in the

Jackson Cireuit Court against defendants, Michi-

gan Oil Company (moc) and John J. Smith, the

president and a director of moc, following the

termination of plaintiff’s employment with moc.

Plaintiff’s complaint specified four claims: Count

1, discharge by moc without good or just cause;

Count LI, unjustifiable inducement by Smith, caus-

ing Moc to breach its agreement with plaintiff;

Count ILI, unjustifiable interference by Smith with

the agreement between plaintiff and moc; and

Count IV, ‘‘publication by Smith of objectionable

material which tended to place plaintiff in a false

light, causing plaintiff embarrassment, humilia-

tion and emotional stress. Defendants filed a mo-

tion for summary judgment and, before the motion

was heard, the parties agreed that plaintiff would

file a first amended complaint. Although defen-

dants’ motion was prepared in response to plain-

App. 10

tiff’s original complaint, the trial court, Russell E.

Noble, J., granted summary disposition as to all

eounts of plaintiff’s first amended complaint.

Plaintiff appeals from the opinion and order

granting summary disposition. Held:

1. The trial court properly ruled, after reviewing

plaintiff’s amended complaint and all available

depositions and affidavits, that plaintiff’s wrong-

ful discharge claim (Count I) was unsupportable

since his employment was terminable at will.

2. Summary disposition on Counts II and III

was proper. ‘To maintain a cause of action for

tortious inference with a contract, a plaintiff must

establish a breach of contract caused by the defen-

dant and that the defendant was a third party to

the

REFERENCES

Am Jur 2d, Labor and Labor Relations §§ 1070, 1071.

Am Jur 2d, Pleading §§ 71 et seq.

Am Jur 2d, Summary Judgment §§ 12 et seq.

Validity and enforceability of provision that employer shall be

liable for stipulated damages on breach of employment con-

tract. 40 ALR4th 285.

See also the annotations in the ALR3rd/4th Quick Index under

Judgments.

nN A

App. 11

STATE OF MICHIGAN

IN THE CIRCUIT COURT FOR THE

COUNTY OF INGHAM

Docket No. 84-52178-AA

OLD ORCHARD BRANDS, INC., and

R.V. SAUR AND SONS ORCHARDS, INC.,

Plaintiffs,

Vv

STATE OF MICHIGAN, DEPARTMENT OF

AGRICULTURE, and 63rd JUDICIAL

DISTRICT COURT,

Defendants.

OPINION

The Plaintiffs brought this civil action seeking an

injunction against the collection of unpaid apple assess-

ments and a declaratory judgment that the act requiring

the payment of assessments is either not applicable to the

Plaintiffs or is unlawful. The request for injunctive re-

lief was previously denied by this Court. The Plaintiffs

now move for summary judgment as to the declaratory

judgment claim pursuant to GCR 1963, 117.2(3). Defen-

dant Michigan Department of Agriculture also requests

summary judgment.

The facts of this case are not in dispute. The Michi-

gan Apple Committee was established by a referendum

vote pursuant to the agricultural commodities marketing

act, MCL 290.651 et seq; MSA 12.94(21) et seq. Under

the act, an organization established by referendum may

provide an exemption for non-participating producers.

App. 12

The Apple Committee does not provide such an exemp-

tion, and therefore all affected producers are required to

pay assessment fees to support the Committee’s activities.

The Committee is engaged in research, advertising, pro-

motion, and publicity programs to create new markets

for apples and apple products. The Committee does not

sell or negotiate sales of apples for the apple producers.

Neither the act nor the Committee requires individual

producers to own stock or to vote on any Committee ac-

tivities, but the producers are, in effect, required to ac-

cept the Committee’s representation in an overall mar-

keting and promotional campaign and to support all Com-

mittee activities through fee assessments.

\ Plaintiff Old Orchard Brands is engaged in the bus-

iness of selling apples and apple products. Plaintiff R.V.

Saner and Sons Orchards is engaged in the business of

eold storage and the packing of apples. The Plaintiffs

have refused to pay the apple assessments and seek a

declaratory judgment that they cannct be forced to pay

the assessments based on the following arguments:

1) The Baldwin apple act, 1939 PA 87; MCL 290.51

(Repealed, 1984 PA 161, effective June 27, 1984), which

allowed exemptions for non-participating producers, re-

mained in effect and governed apple producers during the

time period in question,

2) The agricultural commodities marketing act vio-

lates Article 4, §1 of the Michigan Constitution of 1963,

3) The agricultural commodities marketing act vio-

lates Article 4, § 25 of the Michigan Constitution of 1963,

and

App. 13

4) The provision of the agricultural commodities

marketing act allowing the Apple Committee to not pro-

vide exemptions for non-participating producers is pre-

empted by certain provisions of the agricultural fair prac-

tices act, 7 USC 2301 et seq (the AFPA).

The first argument is not persuasive, Section 20 of

the commodities marketing act, MCL 290.670; MSA 12.94

(40), expressly provides for the suspension of marketing

programs operated under specific statutes where a pro-

gram is in effect under the act. Here the formation of

the Committee suspended the operation of the Baldwin

act.

Plaintiffs next argue that the establishment of the

Committee constitutes an improper delegation of legis-

lative power under Article 4, 41 of the Michigan Consti-

tution. This argument was previously addressed and re-

jected in Dukesherer Farms, Inc v Dept of Agriculture,

405 Mich 1; 273 NW2d 877 (1979). Nothing that has been

presented to this Court compels a different conclusion in

this case.

Plaintiffs next argue that the provision suspending

operation of the Baldwin act violates Article 4, § 25 of

the Michigan Constitution by failing to reenact and re-

publish the altered or amended provisions of the Baldwin

act. However, the Baldwin act was not actually altered

or amended in any way. The commodities marketing act

merely provided an alternative method of organization

for agricultural producers. If this alternative had not

been chosen by a referendum vote, the Baldwin act would

have remained in effect. This later creation of an al-

ternative and separate form of organization did not consti-

tute an alteration of or an amendment to the earlier statute.

App. 14

Finally, the Plaintiffs argue that the provision allow-

ing the Committee to require all producers to pay fee as-

sessments has been pre-empted by the AFPA, 7 USA

2301 et seq. The Plaintiffs cite as controlling the case of

Michigan Canners and Freezers Association v Agricul-

tural Marketing and Bargaining Board, — US —; 104

S Ct 2518; 81 LEd2d 399 (1984).

In Michigan Canners and Freezers, a producers as-

sociation was formed to be the sales and bargaining rep-

resentative for asparagus producers in Michigan. The

association was established under the agricultural market-

ing and bargaining act, MCL 290.701 et seq; MSA 12.94

(101) et seq.' The association of asparagus producers did

not allow for exemptions for non-participating producers,

and virtually all asparagus producers were thus required

to pay service fees and to adhere to association-negotiated

marketing contracts. The United States Supreme Court

held that the Michigan statute’s allowance of such a re-

quirement was pre-empted by § 2303 of the Ai'PA, 7 USC

2303, which forbids handlers (a term that includes associa-

tions of producers for purposes of the AFPA) to ‘‘co-

erece any producer in the exercise of his right to join and

belong to or to refrain from joining or belonging to an

association of producers’’ or to coerce producers to enter

into or to refrain from entering into marketing contracts.

The State concedes that the Michigan Canners and

Freezers decision would apply if the Apple Committee

was a ‘‘true’’ producers’ association, that is, a group of

'The requirements for establishing an association under

this act are similar to the requirements under the commodities

marketing act.

App. 15

producers organized for the purpose of selling their ag-

ricultural products. The State instead argues that the

Apple Committee is not an association of producers under

the AFPA. The State points out that the Apple Commit-

tee was formed under a different statute, that its activ-

ities are limited to advertising, promotion, market develop-

me) t, research and the like, and that it does not enter into

sales agreements on behalf of producers or in any way

limit individual producers in the sale of their products.

However, a careful reading of the Supreme Court’s

opinion indicates thai the holding was not as limited as

the State contends. The Court held that Michigan pro-

ducers’ associations could not coerce producers to join

the associations or to effectively force them to join such

associations by requiring them to be bound by sales agree-

ments and to pay service fees to support the association.

The underlying reason for the Supreme Court’s decision

and the theme of the entire opinion was the intent of Con-

gress to preserve the free choice of producers to join as-

sociations formed for their mutual benefit or to remain

independent. Nothing in the opinion or in the discussion

of the intent of Congress suggests that that theme nar-

rowly applies only to associations empowered to enter into

buy and seli agreements. In fact, the Supreme Court’s

opinion placed nearly as much emphasis on the manda-

tory nature of the service fees as on the association’s

ability to bind the producers to sales agreements. In light

of the opinion and the emphasis placed on voluntariness

by both Congress and the Supreme Court, the State’s

decision to narrowly interpret the statutory definition of

what constitutes an association of producers seems un-

likely.

App. 16

Section 2302 of the AFPA, 7 USC 2302, defines an

association of producers as an association of agricultural

producers ‘‘engaged in marketing, bargaining, shipping,

or processing as defined in [12 USC 1141j(a)]...’’ 12

USC 1141)j(a) includes in the definition ‘‘ . . . processing,

preparing for market, handling, and/or marketing the

farm products of persons so engaged, ... Provided, how-

ever, that such associations ave operated for the mutual

benefit of the members thereof as such producers or pur-

chasers ...’’ There can be little dispute that the Apple

Committee was formed (or caused to be formed) by pro-

ducers oi an agricultural product, or that it was formed

for the purpose of providing benefits to those producers.”

The issue here is whether the Apple Committee is engaged

in one or more of the listed activities on behalf of those

producers.

Both definitions include organizations engaged in

marketing. It is this Court’s opinion that the term ‘‘mar-

keting’’, in the context of the broad emphasis on voluntari-

ness discussed earlier, cannot be so narrowly construed

as to include in the definition of producers’ associations

only those organizations empowered to bind its members

to sales agreements. In this context the term ‘‘market-

ing’? must also include activities commonly associated

with the overall marketing of a product such as research,

2Although the apple producers are not necessarily Commit-

tee members themselves, the Committee represents apple pro-

ducers in much the same way that the marketing association

in Michigan Canners and Freezers represented asparagus pro-

ducers. The asparagus producers association merely conducted

different activities. The key is whether all producers of a com-

modity are effectively coerced into accepting the representation

and supporting the representative.

App. 17

advertising, promotion, and the implementation of public-

ity programs.

As the Apple Committee was formed by a vote of ag-

ricultural producers of apples for the mutual benefit of

those producers, and as it is engaged in the activities listed

in the AFPA, it is an association of producers for pur-

poses of the AFPA. Therefore, the agricultural commod-

ities marketing act is pre-empted to the extent that it

allows producers’ associations such as the Apple Com-

mittee to .ail to provide exemptions for non-participating

producers.

In conclusion, the Plaintiffs’ three claims based on

the Baldwin act and the Michigan Constitution are with-

out merit. However, the Plaintiffs are entitled to a dec-

laratory judgment based solely on the pre-emption of the

commodities marketing act by the AFPA. The Plaintiffs’

motion for summary judgment should be granted on that

basis.

An appropriate order may enter.

Dated: FEBRUARY 4, 1985.

/s/ Jack W. Warren, Circuit Judge

3The Court notes from the title of the act in question that

the Michigan legislature also apparently considers the term

“marketing” to include these activities.

App. 18

AGRICULTURAL COMMODITIES MARKETING ACT

Michigan Administrative Code

For Rules and Regulations, see Rule 285.301.1 et seq.,

Michigan Administrative Code.

Library References

Agriculture 2 et seq.

C.J.S. Agriculture §$ 8 et seq., 51, 67, 96, 100, 184, 175,

P.A.1965, No. 232, Eff. Mareh 51, 1966

AN ACT relating to the marketing of agricultural com-

modities; to provide for marketing programs, agreements,

referendums by producers, assessments on producers, and

commodity committees; and to prescribe the functions of

the department of agriculture relative thereto including

powers of enforcement of this act; and to prescribe penal-

ties. Amended by P.A.1974, No. 324, § 1, Imd. Eff. Dec. 15.

The People of the Stute of Michigan enact:

290.651. Short title

See. 1. This act shall be known and may be cited as the

‘agricultural commodities marketing act’’.

990.652. Definitions

Sec. 2. As used in this act:

(a) ‘‘Agricultural commodity’? means all agricul-

tural, horticultural, floricultural or vineyard products, live-

stock or livestock products, poultry or poultry products,

Christmas trees, bees, maple syrup and honey, produced

in this state, either in their natural state or as processed

App. 19

by the producer thereof. The kinds, types, and subtypes

of products to be classed together as an agricultural com-

modity for the purposes of this act shall be determined on

the basis of common usage and practice.

(b) ‘‘Producer’’ means a person engaged in the busi-

ness of producing, or causing to be produced for any mar-

ket, an agricultural commodity in quantity beyond that

person’s own family us’, and having a value at first point

of sale of more than $800.00 for the agricultural commodity

in any 1 growing and marketing season within the last

3 years.

(c) ‘‘Handler’’ means a person engaged in the opera-

tion of packing, grading, selling, offering for sale or mar-

keting a marketable agricultural commodity in commercial

quantities as defined in a marketing program, who as

owner, agent, or otherwise, ships or causes an agricultural

commodity to be shipped.

(d) ‘‘Processor’’ means a person engaged in canning,

freezing, dehydrating, fermenting, distilling, extracting,

preserving, grinding, crushing, or otherwise preserving or

changing the form of an agricultural commodity for the

purpose of marketing it.

(e) ‘Distributor’? means a person engaged in selling,

offering for sale, marketing, or distributing an agricultural

commodity which he has purchased or acquired from a pro-

ducer or which that person is marketing on behalf of a

producer, whether as owner, agent, employee, broker, or

otherwise, but shall not include a retailer, except a retailer

who purchases or acquires from, or handles on behalf of

a producer, an agricultural commodity not previously sub-

App. 20

jected to regulations by the marketing program covering

the commodity.

(f) ‘*‘Department’’ means the state department of

agriculture.

(g) ‘‘Director’’ means the director of the depart-

ment of agriculture.

(h) ‘‘Marketing agreement’’ means an agreement en-

tered into, with the director, by producers, distributors,

processors, or handlers pursuant to this act and binding

only on those signing.

(i) ‘‘Marketing program’’ means a program estab-

lished by order of the director pursuant to this act, pre-

scribing rules and regulations governing the marketing

for processing, distributing, selling, or handling an agri-

cultural commodity produced in this state during a speci-

fied period and which the director determines would be in

the public interest.

(j) ‘‘Committee’’ means the commodity committee or

advisory board established under a marketing program.

290.653. Marketing agreements; provisions allowed

Sec. 3. Any marketing agreement or program issued

pursuant to this act may contain one or more of the fol-

lowing:

(a) Provisions for establishing advertising and pro-

motional programs.

(b) Provisions for establishing market development

programs.

(c) Provisions for establishing and supporting sup-

plemental research programs designed to improve the mar-

App. 21

ket acceptability of the specific commodity and contribute

to the effectiveness of the program.

(d) Provisions for development and dissemination

of market information.

(e) Provision for contracting with organizations,

agencies or individuals for carrying out any of tlie above

activities.

(f) Provisions for:

(1) Establishing standards for quality, condition or

size for agricultural commodities sold as fresh products

for resale or processing and standards for pack and/or con-

tainer for commodities solc for use as fresh products.

(2) Inspection and grading of the fresh commodity

in accordance with the grading standards so established.

(g) Provision for determining the existence and ex-

tent of any surplus in any marketing period, for any com-

modity or product, or of any grade, size, or quality thereof,

and providing for handling and equitably sharing the cost

of such surplus handling among tle producers of the com-

modity. Before provisions under this paragraph are in-

cluded in any marketing program, particular attention

shall be given to determining that Michigan producers af-

fected by the provisions produce a sutficient proportion

of the product covered by the provisions for the program

to be effective in the particular market toward which the

provisions would be applicable.

(h) Provision for payment for all usable products

purchased from producers according to established grades.

App. 22

(i) Provision for exemption of nonparticipating pro-

ducers.

290.654. Inspection; approved inspectors

See. 4. For the purpose of this act, all inspection and

grading shall be performed by or under the supervision of

competently trained inspectors approved by the director

or by inspectors supplied under cooperative agreement be-

tween the department and the United States department of

agriculture.

290.655. Assessments; collection, maximum

See. 5. (a) Assessments shall be collected from each

producer of a marketable agricultural commodity produced

in this state and directly affected by a marketing program

issued for the commodity to defray all program and ad-

ministrative costs except as provided under section 3(i).'

(b) Each program shall specify the maximum assess-

iuent to be collected to cover program and administrative

costs.

(c) For convenience the processors, distributors, or

handlers of the commodity may be required to collect and

remit producer assessments at no cost to the marketing

program. Processors, distributors, or handlers paying the

assessments for a producer may deduct the amount from

any money which they owe to the producers.

(d) Each program shall specify the date when the |

assessment, whether collected by the producers, processors,

distributors, or handlers of the commodity, is due in the

7

account of the program on that production. ! oducers,

Section 290.653(i).

en a eS

App. 23

processors, distributors, or handlers of the affected com-

modity shall be given reasonable notice of the due date.

290.656. Marketing program; temporary suspension, dur-

ation

Sec. 6. The operation of a marketing program, or any

part thereof, may be temporarily suspended by the director

upon recommendation by the committee for a period of not

longer than 1 growing and marketing season if the program

or part is deemed undesirable during such season.

290.657. Commodity committee; membership, appoint-

ment, expenses, duties

See. 7. (1) A marketing program shall provide for

the establishment of a commodity committee to consist of

an odd number of members which shall be not less than 5

nor more than 15.

(2) The members of the committee shall be appointed

by the governor with the advice and consent of the senate

from nominations received from the producers and handlers

or processors of the commodity for which the marketing

program is established. Nominating procedures, qualifica-

. tions, representation, term of office, and size of the com-

mittee shall be prescribed in the marketing program for

which the committee is appointed. Each committee shall be

composed of producers and handlers or processors who

are directly affected by the marketing program in the pro-

portion of representation as prescribed by the program.

(3) A member of a committee shal! be entitled to

reimbursement for actual expenses, and a per diem pay-

ment not to exceed $75.00 per day while attending meetings

of the committee or while engaged in the performance of

official responsibilities delegated by the committee.

App. 24

(4) The duties and responsibilities of a committee

shall be prescribed in the order establishing the program

and to the extent applicable shall include the following

duties and responsibilities :

(a) Developing administrative procedures relating

to the marketing program.

(b) Recommending amendments to the marketing

program as are considered advisable.

(c) Preparing the estimated budget required for the

proper operation of the marketing program.

(d) Developing methods for assessing producers and

methods for collecting the necessary funds.

(e) Collecting and assembling information and data

necessary for proper administration of the program.

(f) Performing other duties necessary for the opera-

tion of the marketing program as agreed upon with the

director.

(5) The business which a committee may perform

shall be conducted at a public meeting of the committee held

in compliance with Act. No. 267 of the Public Acts of 1976,

as amended, being sections 15.261 to 15.275 of the Michigan

Compiled Laws. Public notice of the time, date, and place

of the meeting shall be given in the manner required by

Act No. 267 of the Public Acts of 1976 as amended.

(6) The writing prepared, owned, used in possession

of, or retained by a committee in the performance of an

official function shall be made available to the public in

compliance with Act No. 442 of the Publie Acts of 1976,

as amended, being sections 15.231 to 15.246 of the Michigan

Compiled Laws.

App. 25

290.658. Deposit of moneys collected; expenditures

Sec. 8. (a) Any moneys collected pursuant to this

act shall not be state funds and shall be deposited in a bank

or other depository in this state, allocated to the marketing

program under which they are collected, and disbursed only

for the necessary expenses incurred with respect to each

such separate marketing program, in accordance with the

rules established under the program.

(b) All expenditures shall be audited by the state

auditor general, or by a certified public accountant at least

annually, and within 30 days after completion thereof the

state auditor general or certified public accountant shall

give copies thereof to the members of the committee and

the director. An activity and financial report shall be pub-

lished annually and made available to interested parties.

290.659. Refunds

Sec. 9. Any moneys remaining from the assessments

collected under a marketing program may be refunded at

the close of any marketing season upon a pro rata basis to

all persons from whom assessments were collected, or when-

ever the committee finds that the moneys may be necessary

to defray the cost of operating this marketing program in

succeeding marketing seasons, all or any portion of the

moneys may be carried over into succeeding seasons. Upon

. termination of any marketing program, all moneys remain-

ing and not required to defray the expenses of operating

the marketing program shall be refunded on a pro rata

basis to persons from whom assessments were collected.

If the committee finds that the amounts so refundable are

so small as to make impracticable the computation and

refunding of the refunds, the moneys may be used to defray

the expenses incurred by the department in the formula-

App. 26

tion, adoption, administration or enforcement of any sub-

sequent marketing program for the commodity or for agri-

cultural research for that commodity.

290.660. Petition for program or amendment; notice, hear-

ing, decision by director

Sec. 10. (a) Whenever the director has received a

petition signed by 25%, or 200, of the producers of an agri-

cultural commodity, whichever is less, for the adoption of

a marketing program or amendments to an existing mar-

keting program, he shall give notice of a public hearing on

the proposed marketing program it is or the proposed

amendments to an existing marketing program. After re-

ceiving a petition for the establishment of a marketing

program, the director may appoint a temporary producer

committee to develop the proposed program to be con-

sidered at the public hearing.

(b) The director may require all handlers or proces-

sors of the agricultural commodity as individuals or

through their trade associations to file with him within

30 days a report, properly certified, showing the correct

names and addresses of all producers of the agricultural

commodity from whom such handler or processor received

such agricultural commodity in the marketing season next

preceding the filing of such report.

The information contained in the individual reports

of handlers or processors filed with the director pursuant

to provisions of this section shall not be made public by the

director, nor available to anyone for private use.

(c) The director shall issue a decision within 45 days

after the close of the hearing based upon his findings, and

deliver, by mail or otherwise, copies of the findings and

App. 27

recommendation, approving or disapproving of the pro-

posed program to all parties of record appearing at the

hearing and any other interested parties. The recommen-

dation shall contain the text in full of any proposed pro-

gram or amendment of an existing program. The recom-

mendation shall be substantially within the purview of the

notice of hearings and shall be supported by evidence

taken at the hearing or by documents of which the director

is authorized to take official notice.

290.661. Referendum, conditions for assent

Sec. 11. (1) After recommending the adoption or

amendment of a marketing program, the director shall de-

termine by a referendum whether the affected producers

assent to the proposed action. If provisions prescribed in

section 3(g)' are part of the proposed program, the direc-

tor shall also determine by a referendum if processors as-

sent to the proposed action. The director shall conduct

the referendum within 45 days after the issuance of the

recommendation. The affected producers shall be eon-

sidered to have assented to the proposal if more than 50%

by number of those voting representing more than 50% of

the volume of the affected commodity produced by those

voting assent to the proposal. The affected processors, if

provisions prescribed in section 3(g) are in the program,

shall be considered to have assented to the proposal if

more than 50% by number of those voting representing

more than 50% of the volume of the affected commodity

processed by those voting assent to the proposal.

~/ (2) A program involving provisions prescribed in

section 3(g) shall not be instituted without assent of both

the atfected producers and the affected processors.

1Section 290.653(g).

tl

App. 28

290.662. Director to establish procedures for determination

oi volume

Sec. 12. The director shall establish procedures for

determination of volume for the conduct of referendums

and other necessary procedures. For the purpose of refer-

endums under this act, a producer is entitled to 1 vote rep-

resenting a single firm, individual proprietorship, corpora-

tion, company, association, partnership, husband-wife or

family ownership.

290.663. Termination of program; petition, hearing, recom-

mendation, referendum

Sec. 13 (a) Upon written petition duly signed by

25%, or 200, of the producers affected by the program,

whichever is less, the director shall, within 30 days, give

10 days’ notice and hold a hearing on termination of a

program.

(b) Within 30 days after the close of the hearings,

the director, after consulting with the committee, shall is-

sue a recommendation, give public notice, and notify all

producers of record, all parties appearing at the hearing

and any other interested parties.

(c) The director, upon recommending termination of

a marketing program, shall, within 30 days, conduct a refer-

endum to determine whether the affected producers assent

to the proposed action. The affected producers shall be

deemed to have assented to the termination of the program

if 51% or more by number of tliose voting, represents 51 7%

or more of the volume of those voting, vote in favor of its

termination.

ili te.

App. 29

290.644. Program approved by referendum; duties of

director

Sec. 14. If a program has been approved in referen-

dum, the director shall:

(a) Insure that the program is self-supporting.

(b) Supervise all committee activities to assure pro-

gram operations are in accord with the rules established

under the program as approved by the referendum.

(c) Coordinate administrative activities between the

committee and the department.

(d) Confer and cooperate with the legally constituted

authorities of other states and the United States.

290.665. Proposed programs; necessary provisions

Sec. 15. Any proposed marketing program adopted

pursuant to this act shall include definition of terms, pur-

pose of the program, the maximum rate of assessment,

method of collection, nominating procedure, qualifications,

representation and size of the committee, and other neces-

sary provisions.

290.666. Deposit of funds for expenses, reimbursement

Sec. 16. Prior to the adoption of a marketing pro-

gram, the director may require the applicants therefor to

deposit with him such funds as he deems necessary to de-

fray the expenses of preparing and establishing the narket-

ing program. The funds shali be received, deposited and

disbursed by the director in the same manner as other fees

received by him under this act. The applicants shall be

reimbursed in the amount of the deposit from fees received

under such program, if established.

App. 30

290.667. Marketing agreements with producers, handlers

and others; effect

Sec. 17. The director may enter into marketing agree-

iuents with producers, handlers or other parties where such

agreements will tend to supplement or aid in the accom-

plishment of the objectives of a marketing program.

The exeeution of a marketing agreement shall not af-

fect the adoption, administration or enforcement of any

marketing program under this act. The director may hold

a concurrent hearing upon a proposed marketing agreement

and a proposed marketing program in the manner provided

in this aet, giving due notice and opportunity for hearing

for a marketing agreement. When a marketing agreement

is proposed for any commodity, the director shall call a

public hearing, and the decision to enter into or not enter

into a marketing agreement shall be subject to the same

requirements for justification on the basis of factual evi-

dence introduced at the hearing. A marketing agreement, if

recommended by the direeter, shall become effective when

signed by the director and the other parties to the agree-

ment.

290.668. Rules and regulations; director to promulgate

Sec. 18. The director may make and promulgate such

rules and regulations as may be necessary to effectuate the

provisions and intent of this act, in accordance with the

provisions of Act No. 88 of the Public Acts of 1943, as

amended, being sections 24.71 to 24.80 of the Compiled

Laws of 1948, and subject to Act No. 197 of the Public Acts

of 1952. as amended, being sections 24.101 to 24.110 of the

Compiled Laws of 1948.

et li

App. 31

290.669. Actions by director

See. 19. (1) Except as provided in subsections (2)

and (3), the director may institute an action necessary to

enforce compliance with this act, a rule promulgated under

this act, or a marketing agreement or program, adopted

under this act and committed to his or her adininistration.

In addition to any other remedy provided by law, the diree-

tor may apply for relief by injunction to protect the public

interest without being compelled to allege or prove that an

adequate remedy at law does not exist. The application

may be made to tle cireuit court in any county.

(2) A violation of section 7(5) shall be enforced in

the manner provided for enforcement of a violation of Act

No. 267 of the Public Acts of 1976, as amended.

(3) <A violation of section 7(6) shal! be enforced in

the manner provided for enforcement of a violation of Act

No. 442 of the Public Acts of 1976, as amended.

Amended by P.A.1980, No. 196, § 1, Imd. Eff. July 8.

290.670. Suspension of statute where marketing program

approved; exception

See. 20. (a) If a marketing program is approved for

a commodity for which there is a state commission or

council operating pursuant to a statute, such statute is

suspended during the period of operation of the marketing

program under this act, except that the appointed members

of an existing commission or council shall be members of

the commodity committee for the duration of the terms for

which they were appointed, and no fees or assessments shall

he eolleeted under such act while it is suspended.

App. 32

(b) If the producers of an agricultural commodity for

which there is a state commission or council pursuant to a

statute, vote for discontinuance of a marketing program,

ihen the provisions of such commission or council shall be

reinstated, and the appointed members on the commodity

committee shall be members of the commission or council

for the duration of the terms for which they were appointed

on the committee.

(c) Voluntary commodity organizations may be as-

signed duties which are necessary for the effective opera-

tion of a marketing program aud allowed expenses to cover

such duties. Organizations to be assigned such responsi-

bilities shall be named and their duties defined in the pro-

gram.

290.671. Referendum; required each fifth year

Sec. 21. All marketing programs under this act shall

be resubmitted to a referndum of the producers during each

fifth year of operation.

290.672. Interest on unpaid assessment

Sec. 22. If the assessment is not paid by the date spe-

cified by a program as permitted under section 5(d),' the

unpaid assessment shall be subject to an interest charge of

1% per month.

990.673. Violations; fines and penalties

See. 23. (1) Except as provided in subsections (2)

and (3), a person who violates this act shall be subject to a

fine of up to $100.00 a day.

1Sec tion 290.655(d).

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(2) A member of the board who intentionally violates

section 7(5) shall be subject to the penalties prescribed

in Act No. 267 of the Public Acts of 1976, as amended.

(3) If the board arbitrarily and eapriciously violates

section 7(6), the board shall be subject to the penalties

prescribed in Act. No. 442 of the Publie Acts of 1976, as

amended.

290.674. Venue of prosecution; enforcement

. See. 24. (1) Except as provided in subsections (2)

and (3), prosecution for violation of this act may be insti-

tuted in any county in which any of the defendants reside,

or in which the violation was committed, or in which any

of the defendants have a principal place of business. State

and county law enforcement officers shall enforce this act.

(2) A prosecution for a violation of section 7(5)

shall be instituted in the manner provided for in Act No.

267 of the Public Acts of 1976, as amended.

(3) <A prosecution for a violation of section 7(6) shall

be instituted in the manner provided for in Act No. 442 of

the Public Acts of 1976, as amended.

App. 34

CHAPTER 56—UNFAIR TRADE PRACTICES

AFFECTING PRODUCERS OF

AGRICULTURAL PRODUCTS

See.

2301. Congressional findings and declaration of policy.

2302. Definitions.

2303. Prohibited practices.

2304. Disclaimer of intention to prohibit normal dealing.

2305. Enforcement provisions.

(a) Civil actions by persons aggrieved; preven-

tive relief; attorneys’ fees; security.

(b) Civil actions by Attorney General; federal

jurisdiction; complaint; preventive relief.

(c) Suits by persons injured; federal jurisdic-

tion; amount of recovery; attorneys’ fees;

limitation of actions.

(d) Federal jurisdiction; exhaustion of other

remedies; State laws and jurisdiction unaf-

fected.

2306. Separability of provisions.

§ 2301. Congressional findings and declaration of policy

Agricultural products are produced in the United

States by many individual farmers and ranchers scat-

tered throughout the various States of the Nation. Such

products in fresh or processed form move in large part in

the channels of interstate and foreign commerce, and such

products which do not move in these channels directly bur-

den or affect interstate commerce. The efficient produc-

tion and marketing of agricultural products by farmers

and ranchers is of vital concern to their welfare and to

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App. 35

the general economy of the Nation. Because agricultural

products are produced by numerous individual farmers

will be adversely affected unless they are free to join

together voluntarily in cooperative organizations as au-

thorized by law. Interference with this right is contrary

to the public interest and adversely affects the free and

orderly flow of goods in interstate and foreign commerce.

It is therefore, declared to be the policy of Congress

and the purpose of this chapter to establish standards of

fair practices required of handlers in their dealings in

agricultural products.

Pub.L. 90-288, ¢ 2, Apr. 16, 1968, 82 Stat. 93.

§ 2302. Definitions

When used in this chapter--

(a) The term ‘‘handler’’ means any person engaged

in the business or practice of (1) acquiring agricultural

products from producers or associations of producers for

processiug or sale; or (2) grading, packaging, handling,

storing, or processing agricultural products received from

producers or associations of producers; or (3) contract-

ing or negotiating contracts or other arrangements, writ-

ten or oral, with or on behalf of producers or associations

of producers with respect to the production or market-

ing of any agricultural product; or (4) acting as an agent

Historical Note

Short Title. Section 1 of Pub.L. 90-288 provided: ‘That this

Act [which enacted this chapter] shall be known as the ‘Agri-

cultural Fair Practices Act of 19677.”

Legislative History. For legislative history and purpose of

Pub.L. 90-288, see 1968 U.S.Code Cong. and Adm.News, p. 1867.

App. 36

or broker for a handler in the performance of any function

or act specified in clause (1), (2), or (3) of this para-

graph.

(b) The term ‘‘producer’’ means a person engaged

in the production of agricultural products as a farmer,

planter, rancher, dairyman, fruit, vegetable, or nut grower.

(c) The term ‘‘association of producers’’ means any

association of producers of agricultural products engaged

in marketing, bargaining, shipping, or processing as de-

fined in section 1141j(a) of Title 12, or in section 291

of this title.

(d) The term ‘‘person’’ includes individuals, part-

nerships, corporations, and associations.

(e) The term ‘‘agricultural products’’ shall not in-

clude cotton or tobacco or their products.

Pub.L. 90-288, § 3, Apr. 16, 1968, 82 Stat. 94.

§ 2303. Prohibited practices

It shail be unlawful for any handler knowingly to

engage or permit any employee or agent to engage in the

following practices:

(a) To coerce any producer in the exercise of his

right to join and belong to or to refrain from joining or

belonging to an association of producers, or to refuse to

deal with any producer because of the exercise of his right

to join and belong to such an association ; or

(b) To discriminate against any producer with re-

spect to price, quantity, quality, or other terms of pur-

chase, acquisition, or other handling of agricultural prod-

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App. 37

ucts because of his membership in or contract with an

association of producers ; or

(c) To coerce or intimidate any producer to enter

into, maintain, breach, cancel, or terminate a membership

agreement or marketing contract with an association of

producers or a contract with a handler; or

(d) To pay or loan money, give any thing of value,

or offer any other inducement or reward to a producer

for refusing to or ceasing to belon., to an association of

producers ; or

(e) ‘To make false reports about the finances, man-

agement, or activities of associations of producers or hand-

lers; or

(f) To conspire, combine, agree, or arrange with any

other person to do, or aid or abet the doing of, any act

made unlawful by this chapter.

Pub.L. 90-288, § 4, Apr. 16, 1968, 82 Stat. 94.

§ 2304. Disclaimer of intention to prohibit normal dealing

Nothing in this chapter shall prevent handlers and

producers from selecting their customers and suppliers

for any reason other than a producer’s membership in or

contract with an association of producers, nor require a

handler to deal with an association of producers.

Pub.L. 90-288, § 5, Apr. 16, 1968, 82 Stat. 95.

App. 38

§ 2305. Enforcement provisions—Civil actions by persons

aggrieved; preventive relief; attorneys’ fees; security

(a) Whenever any handler has engaged or there are

reasonable grounds to believe that any handler is about

to engage in any act or practice prohibited by section 2303

of this title, a civil action for preventive relief, including

an application for a permanent or temporary injunction,

restraining order, or other order, may be instituted by the

person aggrieved. In any action commenced pursuant

hereto, the court, in its discretion, may allow the prevail-

ing party a reasonable attorney’s fee as part of the costs.

The court may provide that no restraining order or pre-

liminary injunction shall issue except upon the giving of

security by the applicant, in such sum as the court deems

proper, for the payment of such costs and damages as may

be incurred or suffered by any party who is found to have

been wrongfully enjoined or restrained.

Civil actions by Attorney General; federal jurisdiction ;

complaint; preventive relief

(b) Whenever the Secretary of Agriculture has rea-

sonable cause to believe that any handler, or group of

handlers, has engaged in any act or practice prohibited

by section 2303 of this title, ne may request the Attorney

General to bring civil action in his behalf in the appropri-

ate district court of the United States by filing with it a

complaint (1) setting forth facts pertaining to such act

or practice, and (2) requesting such preventive relief, in-

cluding an application for a permanent or temporary in-

junction, restraining order, or other order against the

handler, or handlers, responsible for such acts or practices.

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App. 39

Upon receipt of such request, the Attorney General is

authorized to file such complaint.

Suits by persons injured; federal jurisdiction ;

amount of recovery; attorneys’ fees; limitation

of actions

(c) Any person injured in his business or property

by reason of any violation of, or combination or conspir-

acy to violate, any provision of section 2303 of this title

may sue therefor in the appropriate district court of the

United States without respect to the amount in contro-

versy, and shall recover damagvs sustained. In any action

commenced pursuant to this subsection, the court may

allow the prevailing party a reasonable attorney’s fee as

a part of the costs. Any action to enforce any cause of

action under this subsection shall be forever barred unless

commenced within two years after the cause of action ac-

crued.

Federal jurisdiction ; exhaustion of other remedies ;

State laws and jurisdiction unaffected

(d) ‘The district courts of the United States shall

have jurisdiction of proceedings instituted pursuant to this

section and shall exercise the same without regard to

whether the aggrieved party shall have exhausted any

administrative or other remedies that may be provided

by law.

The provisions of this chapter shall not be construed

to change or modify existing State law nor to deprive the

proper State courts of jurisdiction.

Pub.L. 90-288, § 6, Apr. 16, 1968, 82 Stat. 95.

App. 40

§ 2306. Separability of provisions

If any provision of this chapter or the application

thereof to any person or circumstances is held invalid, the

validity of the remainder of the chapter and of the appli-

cation of such provision to other persons and circum-

stances shall not be affected thereby.

Pub.L. 90-288, § 7, Apr. 16, 1968, 82 Stat. 95.

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