ORAL ARGUMENTS ON CALIFORNIA MILK POOLING SYSTEM HELD AT U.S. SUPREME COURT

WASHINGTON D.C. – The Office of the California Attorney General, representing the California Department of Food and Agriculture (CDFA), defended a key provision of California’s milk pooling system in oral arguments today before the United States Supreme Court.

The high court is considering a lawsuit filed by out-of-state dairies objecting to a 1997 amendment to the pool regulations that closed a loophole that had significantly disadvantaged in-state producers. The change was made following a discovery that tanker trucks were hauling California milk out of the state and then bringing a like amount of milk back across the border, thereby exploiting the milk pooling system to get higher prices than other in-state producers. The procedure was known as “round-tripping” and created substantial inequities in the marketplace.

The Supreme Court, in questioning largely from justices Sandra Day O’Connor and Stephen Breyer, sought to learn the impacts of the amendment on the dairy industry.

California attorneys have responded to the plaintiffs’ allegations of prejudice and violation of interstate commerce law by informing the court that the amendment was implemented to protect in-state producers from other in-state producers rather than out-of-state producers.

CDFA Secretary William (Bill) J. Lyons, Jr. attended the historic oral arguments. This is the first time that litigation over California’s milk regulatory system has reached the Supreme Court. “We have already prevailed at the district court and the court of appeal,” said Secretary Lyons, “and I am hopeful that the Supreme Court Justices will see that we provide an equitable system for all dairy producers.”

A decision from the high court is anticipated in June of this year.



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