CDFA REACHES AGREEMENT WITH PLAINTIFFS IN HILLSIDE-PONDEROSA “ROUND TRIPPING” CASE

SACRAMENTO – Following seven years of litigation and more than seven months of mediation, the California Department of Food and Agriculture has reached an agreement with the plaintiffs in the Hillside/Ponderosa v. Kawamura case, which challenged a provision of CDFA’s milk pooling system designed to discourage a practice known as “round tripping”.

The contested provision came about in 1997, when CDFA made an amendment to pool regulations closing a loophole that had significantly disadvantaged in-state producers. The loophole encouraged round tripping by allowing for the circumvention of the milk pool in cases where tanker trucks hauling California milk out of state brought a like amount back into the state.          

Under the terms of the agreement, CDFA will drop its appeal of the case before the Ninth Circuit Court of Appeals in exchange for a modified injunction allowing CDFA to regulate round tripped milk originating in California. The parties believe a modified injunction would permit CDFA to regulate consistent with the Commerce Clause. Under the agreement the plaintiffs will receive payments for approximately two years.  The impact of the payments in the retail marketplace would be zero.  

Modification of the injunction will be subject to the review and approval of federal district court Judge Garland E. Burrell, Jr.

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