Meadowsweet Dairy, New York

Case-Meadowsweet-600x626By Pete Kennedy, Esq.

Update, Winter 2008

On November 18, 2008, Albany County Supreme Court Judge John C. Egan, Jr. dismissed the petition of Meadowsweet Dairy, LLC, for a declaratory judgment that the LLC’s distribution of raw dairy products to its members was not subject to state regulation [see updates below for background on this case]. In holding that the dairy was under the regulatory authority of New York State Department of Agriculture and Markets (NYS-DAM), the judge also denied Meadowsweet Dairy’s motion for a preliminary injunction to prohibit NYSDAM from “conducting any further inspections, issuing any further search warrants, and taking any further administrative, civil or criminal actions against the plaintiffs” during the course of the litigation between the two parties.

The case turned primarily on whether the LLC members were to be considered as “consumers” under the law. Under state regulation anyone who sells, offers for sale or “otherwise makes available raw milk for consumption by consumers” is required to get a permit. The definition of “consumer” that Judge Egan adopted was so broad that even someone keeping a family cow would be required to obtain a permit. In ruling that the LLC members were “consumers,” the judge found that Steve and Barbara Smith (the farmers and member-managers of the LLC) were required to obtain a raw milk permit. In addition, the judge found that the Smiths were required to obtain a milk plant permit if they wanted to sell dairy products other than milk. The milk plant permit would do the Smiths little good because it only allows the sale of pasteurized dairy products.

The judge’s ruling is ominous for those in New York who want to produce raw milk for a living. Inspectors for NYSDAM have been open about the department’s desire to get rid of raw milk. The good news is there is a move underway to introduce a bill that would legalize the unlicensed, unregulated sale of raw milk by farmers direct to consumers.

Update, Fall 2008

On May 16, hearing officer Susan Weber issued her long-awaited report on the January 17 hearing concerning a motion by the New York State Department of Agriculture and Markets (NYSDAM) asking Meadowsweet Dairy, LLC to show cause why the dairy should not be shut down for operating a milk plant (referring to the sale of raw dairy products other than milk) and selling raw milk without all the necessary permits (see Winter 2007 and Spring 2008 updates below for background on the case). As expected, Weber sided with the agency.

The major issue at stake between the two parties was whether the LLC was selling milk under state law which, if so, would require the dairy to obtain a permit. Under the state dairy code, “every person who sells, offers for sale, or otherwise makes available raw milk for consumption by consumers shall hold a permit to sell raw milk issued by the commissioner . . . .”

Weber found that the LLC members were “consumers” under the law and that in distributing raw milk to the LLC members the dairy was “making available” raw milk. The hearing officer also found that in processing raw milk into other raw dairy products the LLC was operating a dairy plant and needed a dairy plant permit in addition to being required to obtain a milk dealer’s license to distribute any products manufactured at the dairy plant. Under state law the only raw product a dairy plant can legally manufacture and sell is cheese aged more than sixty days.

Weber’s recommendations at the end of her report were that the New York Commissioner of Agriculture, Patrick Hooker, give the LLC thirty days to apply for the raw milk, dairy plant, and milk dealer’s permits with the Commissioner to issue a cease and desist order to the dairy if this was not done. In addition, the hearing officer recommended that the Commissioner fine the LLC $1000 for “manufacturing, producing, possessing, selling and offering or exposing for sale raw milk and raw milk products under insanitary conditions.” Weber found that the conditions at Meadowsweet “were not sanitary” and that the products produced there may have been “injurious to health.”

The report failed to account for the fact that none of the LLC’s members had ever become sick from consuming the dairy’s products and did not mention that all the members had a chance to the see the farm’s production area themselves and evidently weren’t bothered by any of the conditions they observed there.

On July 23 Commissioner Hooker issued to the LLC an order adopting Weber’s recommendations except that instead of allowing a thirty-day grace period for the dairy to file licensing applications, the order to cease and desist the production and distribution of raw milk and raw milk products went into effect immediately. The commissioner forbade the dairy from selling milk until it obtained a raw milk permit and prohibited Meadowsweet Dairy LLC from ever selling dairy products again, holding that even with a dairy plant license they can only produce pasteurized dairy products other than raw cheese aged at least sixty days.

Meadowsweet’s attorney, Gary Cox, has appealed the Commissioner’s order to the Albany County Supreme Court—the same court scheduled to hear the LLC’s declaratory judgment suit against NYSDAM. That suit asks the court to rule that the LLC and its operations are beyond the jurisdiction of the agency; NYSDAM has filed a motion to dismiss the complaint and the court is likely to rule on that motion sometime this fall.

Update, Summer 2008

The hearing on Meadowsweet Dairy LLC’s petition for a permanent injunction against the New York Department of Agriculture and Markets (NYDAM) should be taking place sometime this summer in the Albany County Supreme Court [see Winter 2007 and Spring 2008 updates below for background on this case]. The LLC’s shareholders are asking the court to rule that NYDAM has no jurisdiction over the distribution of raw dairy products to the shareholders and that the agency should be prohibited from interfering with the LLC’s operations. On March 10, Judge Egan of the Albany County Supreme Court stayed a motion by NYDAM to show cause why the Smiths should not be held in contempt of court for refusing to unlock the doors of the production facility on their farm when the inspectors from the department were executing a warrant to search the Smiths’ premises. Judge Egan, who will be hearing the LLC’s suit for the injunction, ruled that he will only consider the show cause motion if he determines at that hearing that NYDAM does have jurisdiction over the LLC’s distribution of raw dairy products.

In response to the Meadowsweet case, legislation has been introduced into both the New York Senate (S06827) and Assembly (A10870) that would legalize the sale of raw milk off the farm premises (texts of the bills can be found at www.assembly.state.ny.us/leg/). The reason the Smiths had dropped their retail raw milk license was that under it they could sell raw milk only on the farm, depriving them of customers who would not travel to their location to pick it up. The bills, if passed into the law, would put Meadowsweet Dairy under NYDAM’s jurisdiction regardless of how Judge Egan rules. Both bills state that “every person engaged in the production of raw, untreated milk for human consumption shall hold a permit issued by the commissioner.”

Update, Spring 2008

The dispute between Meadowsweet Dairy LLC and the New York Department of Agriculture and Markets (NYDAM) has escalated into a war that is now being fought on three fronts.  (See Winter 2007 update below for background on the case.)

In November the Commissioner of NYDAM issued an order for the destruction of dairy products that the agency had placed under seizure a month earlier.

On December 11, the LLC and its 121 owners filed suit against NYDAM in Seneca County Supreme Court asking that the court issue a permanent injunction prohibiting the agency from interfering with the LLC’s operations.

On December 13, NYDAM struck back by filing an administrative complaint asking farmers Steve and Barbara Smith (the majority owners of the LLC) to show cause why Meadowsweet Dairy should not be shut down for, among other things, selling raw milk without a permit. Shortly after filing the suit, the agency sent inspectors to the Smiths’ farm with a warrant to destroy those dairy products under seizure.  During their visit, the inspectors noticed other dairy products and asked to inspect them.

The Smiths responded by calling their local sheriff who, upon arrival at the farm, told the inspectors that they did not have a warrant to inspect other products and should leave.  Inspectors showed up again on December 19, this time with a warrant to inspect the Smiths’ entire premises.  When the inspectors got to the farm’s processing facility, they found that locks had been installed on its doors.  The inspectors asked the Smiths to unlock the doors.  The Smiths called their attorney, Gary Cox, and read the warrant to him.  The warrant did not contain any provision authorizing the use of whatever force to gain access to a facility; so, Gary therefore advised the Smiths not to unlock the doors.  After consulting with their boss at NYDAM’s Division of Milk Control and Dairy Services, the milk inspectors eventually left without getting into the processing facility.  They returned nine days later with the same warrant but were denied access a third time and again went home empty handed.

NYDAM retaliated for the Smiths’ refusal to let it inspect the farm’s processing facility.  On February 1, pursuant the request of the agency, Judge Egan of the Albany County Supreme Court issued an order requiring the Smiths to show cause why they should not be held in contempt for refusing to let the agency into their dairy processing facility when the inspectors had a warrant.  (Egan was the judge who signed the warrant.)  On February 28, a hearing was held on the judge’s show cause order.  At the end of the hearing the judge did not issue a ruling but instead told the parties that he would be taking the matter under advisement. The agency’s December 13 motion to show cause had been heard earlier by an administrative officer on January 17 and 18.

As of this writing, the officer had not issued a ruling but was expected to do so shortly. The Smiths’ lawsuit for an injunction against NYDAM was heard before the Seneca County Supreme Court on January 22.  The judge in that case did not issue a ruling but instead, under a state procedural law, transferred the case to Albany County Supreme Court where it will probably be heard by Judge Egan sometime this summer.

The Meadowsweet Dairy case shows the lengths to which NYDAM will go to maintain jurisdiction over cow share or farm share programs like the one the Smiths operate.  The battle between the two parties is shaping into a typical war of attrition where the bureaucracy tries to prevail by depleting the resources of its opponent. For updates on the Smiths’ situation as well for other news about the raw milk movement, please go to David Gumpert’s blog, www.thecompletepatient.com.

Update, Winter 2007

A potentially significant case is underway in New York. Until March of this year, Steve and Barbara Smith had held a permit to sell raw milk. Under state law, those holding a permit can sell raw milk only on the farm. The Smiths do not live near a population center and this restriction limited the growth of their customer base. On March 10, the Smiths gave up their permit and started a new business model. They deeded their cows to a limited liability company, Meadowsweet Dairy LLC, and sold membership interests in the LLC to those who wanted to obtain raw dairy products. The Smiths began deliveries to LLC members and their business grew rapidly—by October there were 115 members and thirty more on the waiting list.

When the Smiths returned their permit to the New York Department of Agriculture and Markets (NYDAM), they informed the agency of their plans to start Meadowsweet Dairy LLC. NYDAM contended the LLC was still subject to the permit requirement and continued to inspect the dairy. Tensions between the Smiths and NYDAM escalated over the next seven months until October 11, when the agency executed a seizure order on 260 pounds of raw dairy products at the Smiths’ farm.

The Smiths intend to respond to the seizure by filing suit to obtain a court ruling confirming the fact that Meadowsweet Dairy LLC is not under the jurisdiction of the state. The Smiths are members of the Farm-to-Consumer Legal Defense Fund and the Fund has hired Gary Cox to represent them. A favorable ruling would considerably improve the prospects of raw milk farmers in New York; there are fewer than twenty licensed farmers and the restriction to on-farm sales limits opportunities for licensees. A ruling that Meadowsweet Dairy LLC is not under the state‘s jurisdiction could enable New York raw milk producers to recover much of the business that is lost to the neighboring states of Connecticut and Pennsylvania.

Pete Kennedy

Pete Kennedy is an attorney from Sarasota, Florida and president of the Farm-to-Consumer Legal Defense Fund (farmtoconsumer.org). He compiled the state milk laws posted at realmilk.com. He advises many farmers and members about legal issues surrounding raw milk.

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