Dairylea Cooperative, Inc. v. Gerace

[905] OPINION OF THE COURT Memorandum. The order of the Appellate Division, insofar as appealed from, should be reversed, with costs, and that portion of the determination of the Commissioner of the Department of Agriculture and Markets reinstated. In reviewing the claim of respondent, Dairylea Cooperative, Inc. (as a producer) against the milk producers’ security fund for milk sold by Dairylea to Glen & Mohawk Milk Association (a defaulting dealer), the Commissioner applied as offsets both the value of milk and the value of milk packaging that Dairylea (as a dealer) had purchased from Glen & Mohawk and its subsidiary. Dairylea does not dispute the Commissioner’s authority to make offsets for milk purchased from Glen & Mohawk but does dispute the right to offset amounts owed for packaging. The Appellate Division, in modifying the Commissioner’s determination, limited the offsets to milk, reasoning that, because Dairylea’s claim against the fund was statutorily restricted to "the appropriate uniform price of the milk” (Agriculture and Markets Law § 258-b [5] [b]), offsets should be limited accordingly. While the statute does not expressly settle the issue one way or the other, we conclude that in offsetting Dairylea’s indebtedness to Glen & Mohawk both for milk and for milk packaging, the Commissioner acted within his authority and charge to maintain the integrity of the fund. The Commissioner’s determination was, moreover, reasonable in light of the legislative policy that engendered this limited fund to protect, producers against undue credit risk in their sales to dealers (see, L 1975, ch 526, § 1; see also, Matter of Eastern Milk Producers Coop. Assn. v State of New York Dept. of Agric. & Mkts., 58 NY2d 1097, 1100), and was supported by evidence in the record. There is no assertion that the Commissioner’s determination was discriminatory. Chief Judge Wachtler and Judges Meyer, Simons, Kaye, Alexander, Titone and Hancock, Jr., concur in memorandum. On review of submissions pursuant to section 500.4 of the Rules of the Court of Appeals (22 NYCRR 500.4), order insofar as appealed from reversed, etc.