Magazine article Reason

Spilled Milk: A Brief History of the Dairy Lobby's Unwholesome Influence on the U.S. Supreme Court

Magazine article Reason

Spilled Milk: A Brief History of the Dairy Lobby's Unwholesome Influence on the U.S. Supreme Court

Article excerpt

IN DECEMBER 2006 The Washington Post profiled an upstart Arizona dairy farmer named Hein Hettinga. His claim to fame was developing a clever business plan that allowed his farms to lawfully bottle and sell their own milk for as much as 20 cents less per gallon than the minimum price set by a federal law that has been in place since the New Deal. Not surprisingly, Hettinga's low-priced milk was a big hit with consumers. It practically flew off the shelves at Costco.

That's when things turned sour. As the Post put it, "a coalition of giant milk companies and dairies, along with their congressional allies, decided to crush Hettinga's initiative. For three years, the milk lobby spent millions of dollars on lobbying and campaign contributions and made deals with lawmakers, including incoming Senate Majority Leader Harry M. Reid (D-Nev.)."

Those lobbying efforts bore fruit in the form of the Milk Regulation Equity Act. Among other things, this federal statute imposed new minimum milk pricing rules on all producer-handlers operating out of Arizona that distribute at least 3 million pounds of fluid milk per month. In practical terms, Hettinga's operation, Sarah Farms, was the only outfit in the entire state fitting that description. Uncle Sam effectively singled out Sarah Farms for abuse.

In response, Hettinga filed suit in federal court, charging the federal government with violating his constitutional right to earn a living. In April 2012 a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit upheld the law, requiring the upstart dairy farmer to impose a federal price hike on his unlucky customers.

But there was a twist. Though the judges ruled unanimously that "longstanding Supreme Court precedent readily dispenses with [Hettinga's] argument," two of the three judges who voted against Hettinga filed a separate concurring opinion in which they denounced the very legal precedents that forced their hands. This case "reveals an ugly truth," wrote Judge Janice Rogers Brown, joined by Chief Judge David Sentelle: "America's cowboy capitalism was long ago disarmed by a democratic process increasingly dominated by powerful groups with economic interests antithetical to competitors and consumers. And the courts, from which the victims of burdensome regulation sought protection, have been negotiating the terms of surrender since the 1930s." Still, because she was only a lower court judge, Brown concluded, she was duty-bound to follow the Supreme Court's noxious precedents.

Hettinga v. United States was a revealing case in more ways than one. Not only did the key legal precedents cited by Brown involve judicial surrender to special-interest legislation, but those cases--just like Hettinga's--also involved an established industry triumphing over an upstart competitor who sought to entice consumers with an attractive and affordable alternative.

In other words, if you want to understand the unsavory state of economic liberty in America today, look no further than the dairy lobby's unwholesome winning streak in federal court.

I Can't Believe It's Not Butter

Our distasteful story begins back in 1869, when a French chemist named Hippolyte Mege-Mouries invented an affordable butter substitute called oleomargarine. By using vegetable oil instead of milkfat, he created a cheap, butter-like substance that proved surprisingly popular with French eaters. Better known to us today as margarine, the new product became something of a sensation in late 19th century Europe and America. But while consumers liked it, U.S. dairy farmers were less than pleased at the prospects of a new competitor. In fact, it wasn't long before the industry began demanding that the "unhealthy" new product be outlawed altogether.

The Pennsylvania state legislature dutifully followed suit, passing several laws banning the manufacture and sale of margarine, including one 1883 statute specifically enacted "for the protection of dairymen. …

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