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In Re Petition of Marcus Dairy, Inc. )

) Docket Number: HEP-97-003

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I. Findings of Fact:

The Northeast Dairy Compact Commission, having received and considered the Original Proposed Findings of Fact, Conclusions of Law and Decision of the hearing panel, Petitioner’s Response of September 19, 1997, the panel’s Final Proposed Findings of Fact, Conclusions of Law and Decision, and the record developed in the proceedings, finds the following facts:

II. Conclusions of Law

At the outset, as the hearing the Commission noted in its Conclusions of Law In re Petition of Crowley Foods, Inc. et. al., HEP-97-001, it finds the presentation of petitioner’s legal claims and the alleged facts upon which those claims are based to be confusing, repetitive, overgeneralized, conclusory and speculative. The petitioner’s use of word processing technology has served neither the petitioner, the panel, nor the Commission well. Notwithstanding the petitioner’s failure broadly to meet its burdens of production and persuasion, the Commission will go forward to decision in the interest of administrative justice. To the degree necessary and possible, the Commission has interpreted and clarified the petitioner’s claims based on its submissions, and expects petitioner will respond as necessary in its responsive comments.

Petitioner relies on the common response filed by the other petitioners in In re Petition of Crowley Foods, et. al., HEP-97-001. That filing offers little clarification or assistance to the Commission in understanding arguments specific to petitioner’s claims. Although it outlines "objections" to the panel’s Proposed Findings, it suggests no specific modifications, alterations, or amendments. The continuing lack of specificity has been particularly difficult for the panel and the Commission to deal with in light of the stipulated time frame for an expedited decision.

On this basis, the Commission considered each of petitioner’s stated "Grounds on Which the Regulation and its Application are Challenged As Not Being In Accordance With Law." The Commission’s Conclusions of Law with regard to the petitioner’s Grounds are set forth below, in the same order as presented by petitioner. The format of petitioner’s presentation of legal claims is followed with the exception of Sections 2E where the Commission has separately responded to petitioner’s claims of economic harm gleaned from its submissions.

Petitioner does not operate a plant located outside the region and does not indicate in any way how the regulation on the operation of such a plant is adverse or affects operation of petitioner’s processing facility. The Commission thereby concludes that the petitioner lacks standing or legal ground to contest such authority.

Petitioner contests the Commission’s authority to regulate Class I milk produced outside of New England but packaged and processed in New England. Petitioner operates such a plant and comes directly under application of the Commission’s price regulation.

Petitioner claims that the exercise of the Compact over-order price regulation as applied to milk produced outside of New England but packaged and processed in New England violates the Commerce Clause, Article I, § 8 of the United States Constitution. It similarly claims that the authority of the Commission to impose its over-order regulation on milk produced outside of New England was not consented to by Congress. As the Commission found at Finding #23, Congress expressly approved the text of the Compact relied upon by the Commission in imposing and administering its price regulation. The introductory paragraph of the Consent declares that:

As discussed below, petitioner’s claims contradict the statutory language. See, e.g.: §§ 9(d) and 10(7); subparts B and C, infra. In addition, petitioner’s claims misapprehend the basic constitutional function of the Compact.

The Compact’s Statement of Purpose and Declaration of Policy expressly contemplates formal, cooperative, interstate regulation of the entire relevant, regional, milk market by the participating states, to cure the problem inherent in the historic pattern of limited, individual, state market regulation. That historic pattern of limited, individual state regulation is outlined in the Statement of Purpose at § 1 of the Compact:

The Commission interprets petitioner’s unclear characterization of the Compact’s regulatory pattern as strikingly similar to that utilized historically by individual states and as described by this cited paragraph from the Compact’s Statement of Purpose. Under petitioner’s model, the New England region is made to resemble an individual state, such that the regulatory authority stops at the line demarcated by the territorial boundaries of the six states much as the authority of an individual state may reach only to its state borders, by operation of the Commerce Clause. See: Baldwin v. G.A.F. Seelig, 294 U.S. 511 (1935) and West Lynn Creamery v. Healy, 512 U.S. 186 (1994). Under petitioner’s model, just as an individual state can regulate the flow of milk within the state but cannot regulate the flow of milk into the state, so the Commission can regulate the flow of milk within New England but not regulate the flow of milk into New England.

Yet immediately after the above-cited paragraph, the Statement of Purpose contrasts the Compact’s interstate, regional regulatory pattern with the historic, single-state pattern:

The New England marketplace is configured regionally in precisely the manner contemplated by the Statement of Purpose. New England’s traditional milkshed and milk market are not demarcated by state borders – they are regional. The function of regulation for a market with such regional character, within the meaning of the Compact’s Statement of Purpose, can only be made effective by application to the market’s supply in total. To configure the Compact price regulation so as to allow one traditional component of the market’s raw supply of product to participate unregulated in the marketplace, in the manner asserted by petitioner, would be simply to render the regulatory scheme inoperative and therefore absurd within the meaning of this Statement of Purpose.

Were farm milk from outside of the region allowed to enter the market unregulated to supply pool plants, such milk would be able to undercut the regulated price imposed upon the regulated competition. A substantial amount of farm milk currently moves into the New England area. As the Commission found in Finding #2, New York farms provide approximately 27 % of the market’s supply. This indicates that the New England region is already a deficit supply region. The amount of out-of-region farm milk could, consequently, quickly increase if were left unregulated against its competition. The net result would thereby be to provide the unregulated milk a competitive advantage in the marketplace solely on the basis of operation of the regulation. This would be irrational market regulation.

To reinforce the Commission’s reading of the language of the Congressional Consent, the Commission also takes note that the Compact’s legislative history contains two express descriptions of the Compact’s authority to regulate farm milk produced outside the New England market. As set forth in the Finding #23, the Congressional Record includes a colloquy of key Senators on this precise point. Senator Leahy, Compact sponsor and Farm Bill conferee, first explained, generally, that:

Senator Leahy and Senator Lugar also emphasized that the Congressional conditions of consent do not "limit the compact commission’s authority to establish a compact over-over price regulation for all fluid milk marketed into the compact region in any form, packaged or bulk, produced in another production region in the United States." 142 Cong. Rec. S3057 (Mar. 28, 1996) [Emphasis added].

A plain reading of the Compact’s provisions as reinforced by the relevant legislative history answers any question of constitutional infirmity raised by the petitioner. Absent express conditions of Congressional consent, as a creature of federal law, the Compact’s authority to regulate milk produced outside the New England states and marketed in those states is immune from challenge under the Interstate Commerce Clause, in the manner asserted by petitioner. Northeast Bancorp, Inc. v. Board of Governors of the Federal Reserve System, 472 U.S. 159, 174 (1985).

Petitioner appears to claim that the Commission’s authority is limited in Congressional Consent to the territorial region of New England. Based on the plain language of the Compact as reinforced by the legislative history quoted above from Senators Leahy and Lugar at 142 Cong. Rec. S3056 and S3057 (Mar. 28, 1996), the Commission concludes otherwise. There the Senators emphasized that "[t]he regulation may apply to any class milk sold in the New England States but produced elsewhere, as well as to such milk produced by New England farmers. The Senators also stated that the Congressional conditions of consent do not "limit the compact commission’s authority to establish a compact over-order price regulation for all fluid milk marketed into the compact region in any form, packaged or bulk, produced in another production region in the United States."

The Commission has found in Finding #2 that the traditional New England milk market or milkshed has historically been supplied by milk produced outside the physical boundaries of the six New England states. The Congress, in approving the text of the Compact, authorized the Commission to regulate Class I milk sold in New England regardless of where it was produced. See: 142 Cong. Rec. S3056. In addition to being contrary to the apparent statements of Congressional intent, to conclude that Congress intended otherwise would make the regulatory scheme unworkable and would thwart the purposes of the Compact.

The petitioner also asserts that the extension of the Compact over-order price regulation to Class I milk produced outside of New England violates "the regional limitations in the Secretary of Agriculture’s determinations of public interest." The Commission rejects this claim for the reasons outlined above. The Commission notes that the Secretary’s authority to make the finding has been exercised and upheld by the Federal District Court in the case of Milk Industry Foundation v. Glickman, 949 F. Supp. 882 (D.D.C. 1996) and Milk Industry Foundation v. Glickman, 967 F. Supp. 564 (D.D.C. 1997).

The Commission concludes that there is no geographical limitation in either the Congressional Consent or Secretary Glickman’s authority or finding of compelling public interest.

Petitioner further asserts that Condition of Consent #7 limits such regulatory authority. Petitioner asserts that such authority, "violates the express mandate of § 147(7) of the Farm Bill that the Commission shall take no action which will ‘in any way limit the marketing in [New England]... of any milk or milk product produced...’ outside of New England." Petitioner’s reading of § 147(7) is overly restrictive, as well as inconsistent with the overall statutory design of the Compact as expressly approved by Congress.

The first sentence cited by petitioners must be read in context with the entire subsection. 7 U.S.C. 7256(7), in its entirety, reads as follows:

The fourth, or last, sentence of Condition of Consent #7 makes clear that the imposition of price regulation upon farm milk brought in from outside the Compact region, "in itself," does not constitute a limitation or prohibition of the marketing of such milk. This sentence directly contradicts petitioner’s reading of the condition of consent.

Rather than mandating a blanket prohibition of regulation as argued by petitioner, the Commission reads Condition of Consent #7, including the first sentence, as instead reinforcing a most basic principle of milk market regulation. This principle establishes that any regulated market must remain open to competition from outside the market in all respects except for operation of the regulation.

More particularly, price regulation uniformly applied to all market participants ensures the regulation creates neither competitive advantage nor disadvantage. In this manner, the regulation, "in itself", creates neither limitation nor prohibition on the marketing of milk in the regulated area. Under the Commission’s regulation, therefore, the New England marketing area remains open to competition by farmers from outside the region in all respects except operation of the regulation.

Petitioner’s selective and restrictive reading of Condition of Consent #7 is also inconsistent with the essential regulatory provisions contained in the Compact and approved without condition by Congress. These provisions provide express authority to regulate farm milk brought in from beyond the New England regulated area.

§ 9(d) of the Compact authorizes the Compact to establish a minimum price for milk to be paid by pool plants. § 2(6) defines a pool plant as a "any milk plant located in a regulated area." Such "pool plants" are the fundamental "regulatory technique historically associated with milk marketing." They provide the basic regulatory tool for establishing uniform price regulation on the prevailing supply for a particular marketing area. For the New England marketing area, pool plants supply no less than 95 percent of the packaged milk product. See Commission’s Finding #13.

Further, § 9(d) recognizes the equally fundamental principle that market regulation applies uniformly to all supply provided to a pool plant, without regard to location of the supplying farm. Accordingly, § 9(d) establishes that

Petitioner claims that "the Compact Rules, as written or as applied to establish and directly regulate an "over-order" Class I plant price for milk received from producers other than those ‘located in a regulated area,’ are not authorized by and violate Compact § 9(d)." This legal claim is more fully developed in petitioner’s Statement of the Facts, #1 which asserts that the Commission’s authority under §9(d) of the Compact is "limited to plants and ‘other handlers receiving milk from producers located in a regulated area.’" (Emphasis by petitioners)

In its entirety, the pertinent first sentence of § 9(d) is as follows:

Petitioner apparently reads the last clause of the sentence – "receiving milk from producers located in a regulated area" - as modifying each of the preceding "pool plants" and "partially regulated plants" along with, generally, "all other handlers…". Petitioner’s construction is inconsistent with basic "regulatory techniques historically associated with milk marketing" and "commonly understood general meanings" of milk marketing under Section 3 of the Compact.

Consistent with the most logical reading of the statutory language and within commonly understood usage and intended purposes of milk market regulation, the language underlined by petitioner modifies only "all other handlers", and thereby defines a third, distinct, class of regulated entity. Accordingly, the Commission concludes that § 9(d) authorizes the Commission to establish compact over-order price regulation for three classes of regulated entities:

The third class of such "other handlers receiving milk from producers located in a regulated area" includes cooperatives, or formal organizations of farmers. As farmer organizations for assembling and marketing milk, this class is distinguished from the processing facilities which make up the other two classes of regulated entities - pool plants and partially regulated plants.

As set forth in Finding #18, most of the farmers comprising the New England milkshed are organized in such cooperatives. The remainder is understood as comprised of "independent" producers. Within commonly understood terms of milk market regulation, processing facilities "receive" milk from independent producers and cooperatives. In the latter case, it is the cooperative which "receives" the milk from its producer members, within the meaning of § 9(d), and then markets the milk to the processing facility.

The Commission concludes that the language in § 9(d) of the Compact "receiving milk from producers located in a regulated area" modifies only "all other handlers" as a separate category and does not apply to or limit the scope of the Commission’s authority for regulating pool plants. On the basis of this plain reading of the statutory language as reinforced by the legislative history where Senator Leahy and Senator Lugar expressly indicated that "[t]he regulation may apply to any class milk sold in the New England States but produced elsewhere, as well as to such milk produced by New England farmers." 142 Cong. Rec. S3057 (Mar. 28, 1996), the Commission rejects the petitioner’s claim.

Petitioner further argues that price regulation of milk produced, processed and packaged outside of New England and marketed in New England "violates the express prohibition in §147(7) of the Farm Bill against use of ‘compensatory payments under §10(6) of the Compact…for any…purpose’". Petitioner’s apparent construction of this third sentence of Condition of Consent #7 is to preclude completely the Commission’s authority to regulate any milk brought in from outside the territorial boundaries of New England. The thrust of petitioner’s apparent argument is that any regulation of such milk constitutes imposition of a compensatory payment prohibited by Condition of Consent #7.

In part for the reasons set forth in subsections 1 and 3, above, the Commission rejects this construction of Condition of Consent #7 as establishing such a blanket prohibition of the regulation of milk brought in from outside the New England states. Petitioner’s construction is also, again, too restrictive with regard to the condition’s overall treatment of compensatory payments. Furthermore, petitioner’s construction is inconsistent with the Compact’s inclusion of another provision, left unconditioned by Congress, which provides an explicit methodology for pricing of such outside milk and which is distinct from the compensatory payment approach.

Again, petitioner’s selective citation to Condition of Consent #7must be read in context:

The third and fourth sentences of the condition clearly must be read together. The express statement of the fourth sentence – that price regulation, by itself, shall not be considered a compensatory payment – strongly infers, if it does not establish, that use of the remainder of the Compact’s unconditioned regulatory provisions should not be construed as involving the use of "compensatory payments." In any event, the Commission concludes the last sentence establishes that petitioner’s reading of the condition’s intent is overbroad.

Most significantly, the condition in no way limits the additional, express, authority of the Commission to regulate "partially regulated plants", as provided by Compact § 10(7). As previously discussed, such plants as are those "being not located in a regulated area but having Class I distribution within such area…". § 10(7) expressly authorizes the "pricing and pooling of milk handled by" such plants.

The express inclusion of the one pricing mechanism of compensatory payments under §10(6), along with another, distinct, mechanism of "pricing and pooling of milk" immediately following under §10(7), establishes that the Compact as originally conceived contained two separate means to regulate milk brought into the regulated area from beyond the area. The phrasing of the second mechanism, premised upon the "pooling" of milk, establishes the critical distinction. Under §10(6), "persons who bring Class I milk into the regulated area" must "make compensatory payments to the extent necessary to equalize the cost of milk…" (Emphasis added) By contrast, under §10(7), "partially regulated plants" are made subject to provisions of "pricing and pooling". (Emphasis added)

Under §§ 9(6) and 10(7), partially regulated plants and pool plants can be made subject to the same regulatory provisions of pricing and pooling of milk with regard to the cost of all milk marketed in the regulated area. This is the precise pattern of the Compact Over-order Price Regulation adopted by the Commission. As the Commission has found in Finding #20, both pool plants and partially regulated plants are subject to the identical compact over-order price obligation to the pool, and receive the identical compact over-order price credit from the pool, for milk marketed in the regulated area.

As set forth in Finding #20, for example, all pool plants and partially regulated plants were subject on August 18 to the identical $3.00 over-order obligation for their route distributions in the New England regulated area for July milk. Pool plants and partially regulated plants also received the same disbursement of the $1.28 over-order producer price on August 20. Similarly, all pool plants and partially regulated plants will be subject on October 18 to the (estimated) identical $1.63 over-order obligation for their route distributions in the New England regulated area for September milk. Pool plants and partially regulated plants will also receive the same disbursement of the (estimated) $0.72 over-order producer price on August 20.

This pattern of regulation is distinct from the compensatory payment pattern of regulation described by petitioner’s Statement of Facts, and as authorized by § 10(6) of the Compact. Such a pattern requires persons bringing milk into the regulated area to make a payment into the pool designed to "equalize" the cost for such milk against the cost paid by pool plants. As simply making an equalization payment, furthermore, such a person receives no credit from the pool for disbursement to supplying farmers. For example, such an equalization payment would have required petitioners on August 18 to make payment in some amount resembling $1.72 ($3.00 - $1.28 (debit – credit paid by and to pool plants)). According to this regulatory pattern, furthermore, petitioners would have received no over-order credit for disbursement to producers.

In sum, the Commission’s regulatory pattern based on the full pooling of milk under §§ 9(d) and 10(7) of the Compact regulates milk marketed by partially regulated plants into the regulated area in the same manner as that marketed by pool plants. In both cases, all plants make full payment into the pool and receive payment back for that volume. Rather than being in the regulated posture of a "person bringing milk into the regulated area", plants outside the market are "partially regulated" under the Compact, for the volume of milk marketed in the area.

The distinction in the Compact as originally drafted between these two regulatory mechanisms may be a subtle one, but it is no less vital for that subtlety. Congress expressed its recognition of this original, two-fold, regulatory pattern in the manner by which it consented to the Compact. In condition of consent (7), Congress at once disallowed the provision for use of compensatory payments provided by Compact §10(6) but left undisturbed the succeeding authority under §10(7) to price and pool milk by partially regulated pool plants.

For these reasons, the Commission rejects petitioner’s contention that its regulation of milk produced outside of New England, but packaged and processed in New England is an unlawful form of compensatory payment.

Petitioner has alleged that it will suffer economic harm as a result of the imposition of the Compact over-order price regulation on farm milk produced outside of the New England regulated area for processing and marketed by petitioner in the regulated area. The mere assertions of harm are too general and are not substantiated with any specific evidence in petitioner’s presentation.

Moreover, petitioner’s allegations are merely predictions of what might happen in the future. See e.g. petitioner’s Statement of Fact # 22: the "pricing rules will have the adverse impact of increased milk prices and other direct charges to processors…; Statement of Fact # 25: "Higher consumer milk prices in New England will result in lower sales for processors…". (Emphasis added) These predictions are wholly conclusory and are not substantiated beyond the mere assertions. There are no actual facts presented in support of the conclusory assertions..

The Commission further notes that petitioner’s alleged Statement of Fact # 22 is not a certainty. Because the regulated price is uniform across the market, traditional principles of milk market regulation provide at least in some measure for the market adjusting so as to allow regulated processors to recapture increases (and absorb decreases) in the regulated price. The speculative nature of petitioner’s alleged Statement of Fact #25 regarding lost sales attributable to higher prices is underscored by petitioner’s failure to account for changes in the level of the over-order price regulation, over time. As found by the Commission in Finding # 10, the over-order obligation will be reduced from $3.00 to $1.63 between July and October, 1997. Petitioner’s own experts indicate the speculative nature of the elasticity of consumer demand for milk, highlighting the need for a more detailed presentation of factual data and analysis.

For these reasons, the Commission concludes the nature of petitioner’s alleged claims of economic harm are not substantiated, are too speculative, and are too general to warrant granting relief. As a fundamental principle of law, petitioner, as the moving party, has the burden of producing evidence beyond the mere assertion of a fact, to prove the fact asserted. The petitioner has not met that burden and the claim is rejected.

3. Authority to Regulate Producer Milk Outside of Regulated Area

The Commission rejects petitioner’s claim that the Compact Rules, as written or as applied to establish and directly regulate an "over-order" Class I plant price for milk received by petitioner from producers other than those "located in a regulated area," are not authorized by and violate Compact § 9(d). For the reasons outlined in the Conclusions of Law at p. 13 above, the Commission concludes that its authority to regulate milk from out-of-region producers is not limited in § 9(d) as applied to pool plants in the manner argued by petitioner. The Commission’s over-order price regulation can therefore be applied to New York milk supply procured by petitioner for processing and sale in the New England area.

Petitioner further argues that "the Compact Rules, as written or as applied to establish and distribute proceeds of a Compact over-order revenue pool applied to producers located without the regulated area, violates the limits of pooling authority contained in Compact Sec. 10(5)(A)." Petitioner apparently alleges that it will suffer economic harm as a result of such disbursement to farm milk produced outside of the New England market. As an initial matter, the Commission notes that it is not readily apparent how petitioner could suffer such harm. Petitioner provides, and is in the position of offering, the over-order price payments to New York farmers. The Commission concludes that petitioner is not in the position of being vulnerable to the loss of farm supply in New York in the manner described. The Commission concludes that petitioner has no standing to raise this objection and, therefore, rejects the claim.

The Commission found in Finding #24 that petitioner was assessed for start-up costs. Petitioner first challenges application of the start-up assessment on the grounds that it was imposed on milk received from producers outside the regulated area, and that the assessment was imposed only on Class I milk.

Petitioner’s reading of the start-up assessment as excluding milk produced beyond the region is inconsistent with traditional principles of milk market regulation for much the same reasons identified in Parts 2through 4, above. Petitioner operates and is regulated as a "pool plant". The milk marketed into the regulated area, in total, is the subject of the price regulation. As such, such milk, in total, is also the subject of the start-up assessment.

The Commission construes the clause of §18(a) of the Compact, which authorizes the assessment on "each handler who purchases milk from producers within the region", as defining only the class of handler subject to the assessment rather than limiting the category of milk subject to the assessment. Such is the construction most consistent with "regulatory techniques historically associated with milk marketing" under of §3(b) of the Compact.

The Commission incorporates by reference Sections 6 through 10 of its Final Proposed Conclusions of Law adopted in In re Petition of Crowley Foods, Inc., et. al., HEP-97-001 to deal with the remaining legal claims of the petitioner.

III. Based on the above findings of fact and conclusions of law, the Commission orders the following:

A. Petitioner’s prayer that the Commission find and declare that its milk pricing Rules, applied to persons who bring packaged Class I milk into New England, by exacting a charge on such packaged Class I milk produced on non-New England dairy farms, and processed in non-New England milk plants:

is denied.

B. Petitioner’s prayer that the Commission find and declare that its milk pricing Rules, as applied to persons who bring bulk Class milk into New England, by exacting charges on such milk produced on non-New England dairy farms:

is denied.

C. The petitioner’s prayer that the Commission find and declare that its milk pricing Rules, as applied to milk received from producers located without the regulated area and to persons who bring such milk as packaged or bulk Class I milk into New England, by direct imposition of a "compact over-order price" on such persons, is not authorized by § 9(d) of the Compact which limits such over-order price regulation to milk received "from producers located in a regulated area" is denied.

D. The petitioner’s prayer that the Commission find and declare that its milk price pooling and equalization rules, as applied to extend distribution of equalization pool proceeds to milk received from producers located without the regulated area and required to be paid through persons who bring such milk as packaged or bulk Class I milk into New England, is not authorized by § 10(5)(A) of the Compact which limits distribution of any Compact over-order price revenue to "producers throughout the regulated area" is denied.

E. The petitioner’s prayer that the Commission find and declare that the Compact rules assessing charges for costs of administration and for start-up costs, as applied to milk purchased from producers located outside of the regulated area is not authorized by § 18(a) of the Compact which limits such assessments to milk purchased by handlers "from producers within the region" is denied.

F. The petitioner’s prayer that the Commission find and declare that the Compact rules assessing charges for cost of administration and for start-up costs, as applied to exclude or exempt New England handlers as to milk used for Class II, III or III-A purposes, violates § 18(a) of the Compact which provides for a uniform assessment collected from "each handler who purchases milk from producers within the region", not just Class I handlers and not just for Class I milk is denied.

G. Petitioner’s prayer that the Commission find and declare that the Compact rules assessing charges for costs of administration and for start-up costs, as applied to exclude or exempt New England handlers as to milk used for Class II, III, or III-A purposes, violates equal protection guarantees of the United States Constitution and of the Constitutions of each of the several New England states is denied.

H. Petitioner’s prayer that the Commission find and declare § 4 of the Compact, or its application by the Compact participating states, creating or providing for a Commission with many dairy farmer members, and other persons with substantial pecuniary, personal or political interest in the establishment of an over-order pricing order, renders the Compact procedure and resulting Compact Rules in conflict with requirements of due process mandated by the Fifth Amendment to the United States Constitution and applicable to states pursuant to the Fourteenth Amendment to the United States Constitution, and/or as required by due process provisions of the Constitutions of the several Compact participating states is denied.

I. The petitioner’s prayer that the Commission cease applying and/or enforcing each of the foregoing Compact rules and provisions as to milk from outside the region is denied.

J. Petitioner’s prayer that it be reimbursed for any payments made pursuant to any obligation found to be unlawful or unauthorized is denied since the obligation is found to be lawful and authorized.

K. The petitioner’s further prayer that pursuant to 7 CFR § 1381.4, the Chair select from the Commission members a panel to adjudicate this matter, members of which:

L. Petitioner further request that no member, employee, staff or other person who participated in the deliberations concerning, and writing or promulgation of, the over-order price regulation be involved in advising or contacting the panel adjudicating this petition. The request was denied by the panel on August 25, 1997 and that denial is confirmed by the Commission.

M. Petitioner’s request that members of the panel and any person participating in or advising the panel fully comply with the adjudicatory requirements of the federal Administrative Procedure Act and comparable state administrative procedure requirements was denied on August 25, 1997 and that denial is confirmed by the Commission.