Carlin v. DairyAmerica, Inc.
705 F.3d 856
| 9th Cir. | 2012Background
- Milk pricing is governed by the Agricultural Marketing Agreement Act of 1937 (AMAA) and the Dairy Marketing Act (DMEA), which authorize Federal Milk Marketing Orders (FMMOs) setting minimum prices for raw milk.
- FMMOs compute prices via formulas using NASS pricing data, make allowances, and yields, with blended prices paid to producers within marketing areas.
- DairyAmerica and California Dairies allegedly misreported nonfat dry milk (NFDM) prices, including forward contracts, causing inflated input data and lower minimum prices for producers.
- The misreporting was revealed in 2007; the USDA AMS subsequently revised prices and enacted oversight amendments to prevent recurrences.
- Plaintiffs, dairy farmers nationwide, asserted state-law claims (negligent misrepresentation, unfair competition, unjust enrichment) seeking monetary and injunctive relief against DairyAmerica and California Dairies.
- The district court dismissed monetary claims as barred by the filed rate doctrine; plaintiffs appealed seeking to preserve state-law claims and potential injunctive relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the filed rate doctrine applies to AMAA minimum milk prices set under FMMOs | Pls contend the doctrine does not bar state claims due to misreporting by DairyAmerica. | Defs contend the doctrine prevents challenges to agency-set rates. | The doctrine generally applies; but exception exists here due to USDA rejection of rates. |
| Whether the district court erred by applying the doctrine to bar state-law claims | Pls argue misreporting and agency rejection undermine the bar. | Defs assert the three doctrinal justifications support preclusion. | District court erred in precluding state-law claims; judgment reversed and remanded. |
| Whether the USDA’s acknowledgment that FMMO rates were incorrect due to misreporting allows a carve-out from the doctrine | USDA recognized misreporting and recalculated prices, suggesting a non-barred remedy. | Agency review and recalculation do not automatically nullify the filed rate defense. | USDA’s rejection/recognition of incorrect rates supports not applying the doctrine to bar claims. |
| Whether damages can be calculated without impermissibly second-guessing agency decisions | Damages can be proven from the effect of misreporting, not a hypothetical rate. | Damages would require recalculation of prices that could be inherently speculative. | Damages warranted by misreporting are measurable and not barred by the doctrine. |
Key Cases Cited
- Gallo, E. & J. Winery v. Encana Corp., 503 F.3d 1027 (9th Cir. 2007) (establishes framework for the filed rate doctrine and agency-set rates)
- Ark. La. Gas Co. v. Hall, 453 U.S. 571 (1981) (origin of the doctrine’s rationale to ensure uniform rates and prevent discrimination)
- New York, New Haven & Hartford R.R. Co. v. ICC, 200 U.S. 361 (1906) (publication of tariffs and prohibition of secret departures from tariffs)
- Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 476 U.S. 409 (1986) (applies the doctrine to rates merely filed with a regulatory body)
- Maislin Indus., U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116 (1990) (limits of retroactive rejection of filed rates and remedies for unreasonable rates)
- Keogh v. Chi. & Nw. Ry. Co., 260 U.S. 156 (1922) (early articulation of the doctrine and its remedial scope)
- American Trucking Associations v. City of Groton, 467 U.S. 354 (1984) (agency discretion and retroactive tariff considerations)
- Ice Cream Liquidation, Inc. v. Land O’Lakes, Inc., 253 F. Supp. 2d 262 (D. Conn. 2003) (noting exceptions to the doctrine in certain milk pricing challenges)