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Minerva Dairy, Inc. v. Brancel

United States District Court, W.D. Wisconsin

February 5, 2018


          OPINION & ORDER

          JAMES D. PETERSON District Judge.

         Plaintiff Minerva Dairy, Inc., under its president, plaintiff Adam Mueller, produces Amish butter and cheese in small, artisanal batches at its Ohio dairy. It filed this lawsuit challenging the constitutionality of Wis.Stat. § 97.176, which requires all butter offered for sale within Wisconsin to be graded by the U.S. Department of Agriculture or a Wisconsin-licensed butter grader. Minerva Dairy alleges that this statute violates the Commerce Clause, Equal Protection Clause, and Due Process Clause of the U.S. Constitution. Defendants, several Wisconsin officials whom the court will refer to as the state, disagree. Both sides move for summary judgment. Dkt. 25 and Dkt. 33. Because the statute is rationally related to Wisconsin's legitimate interest in helping its citizens make informed butter purchases, the court will grant summary judgment to the state and dismiss Minerva Dairy's claims.


         Except where noted, the following facts are undisputed.

         A. The butter-grading law

         In 1953, the Wisconsin legislature enacted a butter-grading law now codified at Wisconsin Statute section 97.176. The law requires butter offered for retail sale within the state to be labeled with a grade: either a Wisconsin grade or a USDA grade. The grade must be determined through an “examination for flavor and aroma, body and texture, color, salt, package and . . . other tests or procedures . . . for ascertaining the quality of butter.” 97.176(3).

         The Wisconsin Department of Agriculture, Trade, and Consumer Protection (DATCP) provides standards for the Wisconsin butter grading system. Wis.Stat. § ATCP Ch. 85. These standards mirror the USDA standards. U.S. Dep't of Agric., U.S. Standards for Grades of Butter.[1]For example, Grade AA butter must “be made from sweet cream of low natural acid, ” “possess a fine and highly pleasing butter flavor, ” have no more than a “slight” “feed or culture flavor, ” and have no more than a one-half “disrating[] in body, color and salt characteristics.” § ATCP 85.03(1).

         Butter that bears a Wisconsin grade label must be graded by a Wisconsin-licensed butter grader, who must sample each batch. To obtain a license, an individual must send the DATCP $75 and a written form listing, among other things, “the location where the grading is to be done.” § ATCP 85.07. The individual must then appear at “a location in Wisconsin, as convenient to the applicant as possible, ” to take written and practical examinations to demonstrate proper grading of butter. Dkt. 48, ¶ 78. The individual must answer at least 70 percent of the written examination correctly and perform at least 70 percent of the practical examination correctly (as measured against the examiner's grading of the same samples) to obtain a license. Once licensed, the individual must “pay a biennial license fee of $75.” § ATCP 85.07(2). Before April 2017, the DATCP did not have an official policy about whether Wisconsin-licensed butter graders could grade butter at out-of-state facilities, but it had “a nonwritten understanding” that they could not do so. Dkt. 42 (Haase Depo. at 28:24-29:2). It now allows that practice.

         The DATCP ensures compliance with the butter-grading law in several ways. If the DATCP learns of a retail store offering ungraded butter for sale, it sends a warning letter to the store. Stores generally comply with the law by removing the ungraded butter from their shelves after receiving a warning letter. The DATCP's sanitarians also randomly sample butter at manufacturing plants and stores within the state to confirm that the labeled grade is correct. If there is a discrepancy between the grade assigned by the sanitarian and the labeled grade, the DATCP sends a warning letter to the butter manufacturer. Because of the “inherently subjective” nature of butter grading, the DATCP allows for arbitration of discrepancies by a panel of graders. Dkt. 50, ¶ 19.

         B. Minerva Dairy

         Minerva Dairy is a family-owned dairy company that has been operating since 1884, when it first opened in Wisconsin. It moved operations to Ohio in 1935. Today, its 75 employees produce Amish butter and cheeses. It produces butter in “small, slow-churned batches using fresh milk supplied by pasture-raised cows.” Dkt. 50, ¶ 4.

         Minerva Dairy sold its butter in Wisconsin without incident until early 2017, when the DATCP received an anonymous complaint about ungraded Minerva Dairy butter being sold at a Wisconsin retail store, Stinebrink's Lake Geneva Foods. A DATCP sanitarian went to Stinebrink's, verified that ungraded butter was being offered for sale, and asked that it be removed. On February 28, 2017, the DATCP followed up with a warning letter to Stinebrink's and Minerva Dairy notifying them of the butter-grading law and asking for “your future compliance with the State of Wisconsin related to butter grade labeling requirements.” Dkt. 19-1. As a result, Minerva Dairy stopped selling its butter at retail stores in Wisconsin. A few months later, Minerva Dairy filed this lawsuit, alleging that Wisconsin's butter-grading law violates its rights under the Commerce Clause, Equal Protection Clause, and Due Process Clause. The court has subject matter jurisdiction over Minerva Dairy's claims under 28 U.S.C. § 1331 because they arise under federal law.


         Both sides move for summary judgment on all three of Minerva Dairy's claims. Summary judgment is appropriate if a moving party “shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). When, as here, the parties have filed cross-motions for summary judgment, the court “look[s] to the burden of proof that each party would bear on an issue of trial; [and] then require[s] that party to go beyond the pleadings and affirmatively to establish a genuine issue of material fact.” Santaella v. Metro. Life Ins. Co., 123 F.3d 456, 461 (7th Cir. 1997). If either party “fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden at trial, ” summary judgment against that party is appropriate. Mid Am. Title Co. v. Kirk, 59 F.3d 719, 721 (7th Cir. 1995) (quoting Tatalovich v. City of Superior, 904 F.2d 1135, 1139 (7th Cir. 1990)). “As with any summary judgment motion, this [c]ourt reviews these cross-motions ‘construing all ...

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