For Immediate Release

December 3, 1999

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US COURT OF APPEALS UPHOLDS NORTHEAST DAIRY COMPACT

Click here to read the Court Ruling

BOSTON -- The Northeast Dairy Compact, what it does and how it does it, received an unqualified stamp of approval from the United States Court of Appeals in Boston which unanimously rejected claims by a group of New York state processors that the Compact does not have the right to regulate certain milk.

"We welcome the Court's decision because it is a truly impartial interpretation of an important issue that has been misconstrued and misrepresented to the public," said Ken Becker, executive director of the Northeast Dairy Compact. "We are eager to discuss the merits of the Compact on economic grounds. Now that the Constitutional issues have been answered we can enter that debate."

The plaintiffs include New York State Dairy Foods, Inc., an association of processors, Crowley Foods, Inc., Cumberland Farms, Inc., Elmhurst Dairy, Inc., and Farmland Dairies, Inc

The case, which was filed when the Compact first went into effect, asserted that the Compact violates the Commerce Clause, the Compact Clause and the Due Process provisions of the U.S. Constitution. The court's decision , which was issued Tuesday, uses broad language to strike down each of these claims.

The "Commerce Clause challenge is ultimately based on little more than shifting sand," wrote Senior Circuit Judge Bownes. The appeals court also concluded that "There can be no dispute in this case that Congress expressly consented to the Compact" and that "there is no legal or factual basis for finding a due process violation." The appeals court decision provides unqualified affirmation that the Compact Commission is operating well within the bounds of Constitutional law and Congressional authorization. In short, it is doing what it was designed to do.

The processors claimed the Compact does not have the right to regulate milk produced outside the Compact region but sold within the region. They claimed this violates the Commerce Clause of the Constitution by depriving them of a natural competitive advantage. However, the court found that the Compact's design, or pooling mechanism, which ensures all dairy farmers who supply milk for New England consumers receive the benefit of the Compact payments, whether they farm in New England or outside New England, is clearly authorized by Congress and the Constitution. "The pool payment mechanism does not bar the entry of milk from outside the Compact region," the Court ruled.

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