Wisconsin, where dairy producers hold great political sway, maintains a uniquely onerous scheme of butter grading that “has nothing to do with public health or nutrition” but does serve to restrict the sale of butter made in other states, including high-end artisanal butter. Representing Ohio’s Minerva Dairy, the Pacific Legal Foundation has sued to overturn the regulation on Commerce Clause, Due Process, and Equal Protection theories, and Cato has now filed a pun-strewn amicus supporting the due process and equal protection claims [Ilya Shapiro and Matt Larosiere]
28 Comments
The brief is funny—but it’s also sad–the Wisconsin experts know their scheme is full of it, and yet they persist in enforcing it. How is that ok?
A well designed and executed test could show if the grading process is valid or just a sham to restrict access to the market..
Buy a couple of hundred samples of Wisconsin butter, all grades, all producers. Mix in samples of ungraded butter.
Randomize, and have 10 or more Certified Butter Graders grade every sample and see how consistent the grading is and how the ungraded butter samples fare…
Recalls Wisconsin’s doomed battle to ban the sale of colored oleomargarine in the state, and the state legislator who gave an impassioned speech defending “the divine right of butter to be yellow!”
What do you mean by doomed? The ban on colored margarine in Wisconsin was in effect from 1895 to 1967
http://host.madison.com/wsj/news/local/govt-and-politics/wisconsin-ban-on-margarine-targeted-for-repeal/article_e7cc94be-e2e7-11e0-ac81-001cc4c002e0.html
And, despite the headline of the article you linked, Wisconsin statute 97.18(4) is still on the books.
Punishable by up to 3 months in jail for a first offense, and up to a year for the second offense.
True, but not the specific law I was referring to which banned retail sale of colored margarine and was repealed in 1967 after being on the books for more than 70 years.
So the Wisconsin regulations boil down to Salt and Buttery.
From the brief:
I find it hard to believe that someone from Ohio cannot make a living without selling in Wisconsin of all places. It’s not like this state has a butter shortage and we need to truck in more.
Also, although the brief mocks Wisconsin for grading butter based on flavor, the federal government appears to do the same thing. This page from the USDA lists the butter grades, and it even lists the same “utensil” flavor that the brief mocked, and the standards include the same distinctive names like “ragged-boring”. So it’s not like Wisconsin just made this butter flavor stuff up on its own like the brief insinuates.
In fact, according to Wisconsin law, “United States AA, A, and B grades shall be accepted in lieu of the corresponding Wisconsin AA, A, and B grades”. So the argument that they must hire a Wisconsin-licensed grader also seems to be false; they could just use a USDA grader.
If the federal government has the same or similar grading standards, doesn’t that rather weaken the argument that there is no rational basis for the standards, especially when the federal government cannot plausibly have the same supposed ulterior motivation of protecting Wisconsin? Heck, the federal government was even hostile to Wisconsin dairy for a long time – they had a policy of giving dairy farmers lower milk prices the closer they were to Eau Claire, until that was overturned by the courts in the 1990s.
“they can go make a living in Ohio”–the issue is the burden. Your snark reveals ignorance.
“the issue is the burden.”
USDA grading is generally acceptable under the Wisconsin law.
While there may be a significant burden on an importer of ungraded artisanal butter from a foreign country, when it comes to a dairy in another US state, what burden?
MattS,
The burden is having to label a product on arbitrary standards that someone set that imply quality when that is not the case.
It doesn’t matter that the USDA has the same standards or that Wisconsin allows those standards. The issue is “what benefit from the grading does the public receive?”
You’re right in the sense that a dairy may have to use the USDA standards and that Wisconsin can apply those ratings.
All that says to me is that the USDA rating is as bad as the Wisconsin one.
Get rid of them both.
“The issue is “what benefit from the grading does the public receive?””
1. In my opinion, that is a policy issue that should be beyond the purview of the courts to decide. Go talk to Congress and the Wisconsin Legislature.
2. In my opinion, the public would receive far more benefit from this kind of flavor based grading than it would from anything lab based.
3. The burden that matters (for commerce clause purposes) is the burden placed on interstate commerce as a whole, not individual dairies. USDA grading is available to all dairies in the US, and the Wisconsin law treats ungraded Wisconsin butter the same as ungraded butter from out of state. There is NO burden on interstate commerce.
MattS,
1. When the legislature oversteps its boundaries, the Courts are the remedy. Here we have a legislative act that imposes recurring costs on dairies that are passed onto the public that have no benefit to the public.
2) Not sure why you would feel this way. Meat is graded on a scientific basis and there doesn’t seem to be an issue there with the general consumer understanding what is being said. Furthermore, the grades imply a level of quality rather than a taste. (“AA” is better than “A” which is better than “B,” etc.)
3) Sorry, but that’s the “they did it too!” excuse. I am not willing to buy the idea that a burden that has no benefit to the consumer is viable because it is a burden placed on all dairies who want to sell across state lines or in a particular state. The burden has to or at least should have some basis in the public interest rather than just in the interest of dairy cabals and or larger governments.
Gitcarver,
1. Just because a given law is irrational or just bad policy, that in and of itself does not mean that the legislature has overstepped it’s bounds in a way that the courts are authorized to correct.
Almost every business regulation imposes recurring costs that are passed on to the public. There are many in other industries that the courts have already upheld that have no benefit to the public.
3. “I am not willing to buy the idea that a burden that has no benefit to the consumer is viable because it is a burden placed on all dairies who want to sell across state lines or in a particular state.”
Perhaps you are correct on a policy basis, but without a differential burden between in and out of state dairies, there is no commerce clause or equal protection violation for the courts to remedy.
MattS,
1) I agree that whether a law is irrational or bad policy is not the only way of determining whether the legislature has overstepped its boundaries. It is, however, a start and something that should be looked at.
It should not be up to the people to prove that the legislature has overstepped its limits. The legislators themselves should have to prove that they have not overstepped the boundaries and are in the interest of the public.
“Because we can” is not a legal standard for the legislature. Furthermore, if the legislature wants to try and sell that standard, it is the place of the courts to slap them back into the lines.
In this case, the ratings serve no legitimate public interest and therefore the legislature has overstepped the lines.
3) In responses below, we see that the USDA standards are voluntary. They are not required in any state of the union. Wisconsin allows the USDA ratings but Wisconsin and only Wisconsin requires the testing and labeling of the butter. In other words, it is a burden between states and state lines as the rating has no value to consumers. None. Wisconsin is simply saying “if you want to sell butter here, you have to follow our arbitrary, burdensome rules that do not benefit anyone.”
Once again, “because we make the rules” is not a good standard for burdens placed on consumers and businesses.
What you admit, then, is that your throwaway about being able to do business in Ohio, was just wrong and you rely solely on the USDA issue. Fine.
With respect to national vs. state grading, you do realize that the Constitutional standards are different. Second, some of the quoted testimony shows precious little rational basis. Third, you don’t even bother to mention the issue that Wisconsin doesn’t have inspectors in many states.
The “burden” of course is the obvious purpose of the law–to protect home state producers,
“Third, you don’t even bother to mention the issue that Wisconsin doesn’t have inspectors in many states. ”
True, but the USDA has inspectors in every state. and Wisconsin accepts USDA grading, so I don’t see how that’s relevant.
MattS, not really all that relevant–those who forego USDA (in WIsconsin and without Wisconsin) are subject to a different (as a practical matter) scheme.
That’s really all that is necessary.
So Wisconsin dairy farmers are milking the system?
I could say the same about the brief. They appear to be ignorant about the federal standards, or else they wouldn’t have made many of the comments that they did, like stating that “Wisconsin’s dairy czars” made all this up, or that Wisconsin graders can’t be found in Ohio (which may be true, but seems to be not all that relevant.)
Is there a burden? Yes. But the disparity in the burden between in-state and out-of-state butter is nowhere close to the degree the brief suggests (and this matters if you’re making an equal protection claim.) Yes, grading the butter incurs a cost, but it’s a cost for Wisconsin manufacturers too. Perhaps it’s easier for large manufacturers to scale the cost better, but that’s not quite the same problem, and is probably true for all sorts of regulations.
(Unless, of course, I understand all of this wrong. I’m not a lawyer or a dairy farmer or a butter grader.)
And if there’s no rational basis for the law and it’s all a ploy by Wisconsin (perhaps Wisconsin lobbied for the federal standards too), then why does Canada also have butter grades? Seems like an awful lot of governments are being irrational, if there’s no rational basis to grade butter. Even if you think the law should be repealed, that doesn’t necessarily mean that it should be repealed via the courts instead of via the legislative process.
I don’t even really understand the due process claim in the brief. It seems to be arguing that the butter grades are arbitrary. Even if this is true, what does this have to do with due process? The law says the butter has to be graded; it doesn’t say it needs to be grade AA to be sold, unless I missed something. So what additional process are Minerva Dairy due?
People from other states: out of curiosity, if you look in your refrigerator, is your butter graded? It would have an AA, A, or B letter on the outside packaging.
Land o’Lakes has a grade of AA–USDA.
I think the point is that: the feds get to put artisans at a disadvantage, but the state does not get to do it in a manner that discriminates against out of state producers. Here–with respect to picking up those who don’t go through the USDA route, they are forced to submit to Wisconsin’s inspectors who, it appears, are there to retard out of state entrants into that market.
Remember the whole Obamacare mandatory insurance argument—it is plain that the states can require liability insurance as a condition of driving–far less clear that the federal government can require insurance simply because you breathe.
In re the comparison to beef grading.
Note that in the beef market, there are two inspections systems.
The mandatory inspection is for wholesomeness, cleanliness and purity. This is paid for by general taxes.
There is the VOLUNTARY grading inspection paid for by the producer – it is the latter that gives the “prime”, “choice”, “select”, etc grades. A producer of superior product would willingly pay for the latter so as to be able to command the higher price that a “prime” grade would command, versus ungraded meat (as a consumer, would you pay more for, a prime rib roast, or a rib roast?)
As far as I’m concerned, the quality grading in butter should follow this model. If a producer feels its value added, so be it. Else, who cares? Let the consumer decide. So long as the butter in question is pure, clean and wholesome, and labeled truthfully as to grading or lack thereof, then it’s up to the person parting with the dollars to decide.
I’m regularly impressed at what a knowledgeable group of readers and commenters we have here at Overlawyered, and this discussion has been no exception. Now Joshua Thompson at Pacific Legal Foundation, which filed the suit, has written a piece responding to some of the points made above:
https://pacificlegal.org/answering-the-minerva-dairy-questions-at-overlawyered/
That’s an interesting piece. It confirms that the federal standards are optional, while the Wisconsin ones are required, and that’s obviously important. And, according to their linked preliminary injunction motion, hiring a USDA grader is more expensive than hiring a Wisconsin one. If that’s the case, then it may indeed be more burdensome for out of state manufacturers (unless there’s a way for someone from Ohio to get a Wisconsin grader’s license and grade Ohio butter with it, in which case the problem is easily solved by having a random staff member get a license.)
I still think Cato’s mocking of Wisconsin was uncalled for; either they were ignorant of the federal standards, or decided to ignore them to get some cheap shots in.
Very interesting discussion. I respond to some of the comments in this post on Pacific Legal Foundation’s blog.
Illuminating.
Seems to me that the “grades” reflect adherence to a platonic ideal of “normal butter” rather than true quality. In other words, Wisconsin is saying that all butter sold in the state has to be rated based on its conformance to the platonic ideal. That’s nonsense on stilts.
“The government uses 32 criteria to grade butter (utensil, mealy, ragged-boring, flat, etc.). No consumer understands what these terms mean (indeed in discovery we unveiled that even the government’s experts did not understand what they mean). ”
I thoroughly enjoy butter and I have no idea what these criteria mean.
If the artisanal products are not comprised of 100% milk, cream, or both- they no longer meet the 21 U.S.C. 321a definition of butter, and therefore would not be subject to the legal requirements for grading of butter. The next step is figuring out how to label a “non-butter” product as “butter” for the consumer. If only there were some precedent… like a product called “I can’t believe it’s not BUTTER”…