Producer Suiza Dairy scored a major victory for itself in the battle it waged against local milk pricing structures more than five years ago, when the U.S. Court of Appeals in Boston validated a decision by a local judge ordering a revision of prices.
The stateside order released Tuesday should “finally give way to [establishing] a rational and fair regulatory structure for the island’s milk industry,” Suiza Dairy said in a statement issued late Tuesday.
In 2004, Tres Monjitas and Suiza Dairy filed a joint lawsuit against Oril at the U.S. District Court for Puerto Rico. In their claim, the plants objected to what they called an unfair pricing structure that caused them millions in yearly losses.
The plants said Industrias Lecheras de Puerto Rico Inc., which packages UHT milk, received unfair subsidies that allowed it to compete at an advantage.
This is the second time Suiza Dairy has turned to the Boston court in its battle against local milk pricing structures. In February 2008, the court denied an emergency petition Suiza filed to get a subsidy provided to Indulac on an interim basis overturned.
However, in its latest decision, the Boston court upheld a preliminary injunction issued by U.S. Judge Daniel Domínguez in July 2007, ordering the Milk Industry Regulatory Office, known as Oril, and the Agriculture Department to establish “rational, non-discriminatory” parameters for the island’s milk industry.
“We’re pleased with Boston’s decision and we hope it helps to speed up the process that’s taking place at the local court and at Oril, which pursues establishing a fair, rational, predictable and equitable framework for the island’s milk market, which is beneficial to all its components,” said Suiza Dairy President Carmen Laura Marrero.
Oril Administrator Cyndia Irizarry said Tuesday the agency has already been complying with Domínguez’s order, working since February to establish a cost-based pricing structure that includes auditing all of the industry’s components.
She said the agency has already concluded its new pricing structure, which Agriculture Secretary Javier Rivera Aquino should be making public in coming days. The Daily Sun was unable to reach him Tuesday, as he is out of town.
However, Irizarry said “not everyone will like the results, because that’s always the way, but nobody likes the difficult decisions that the government must often make.”
She acknowledged that because Oril has been conducting the price revision as ordered by Domínguez, Boston’s decision may be moot.
Meanwhile, Suiza Dairy said that in its decision, the Boston court acknowledged the merits and constitutional claims it was making and determined that the U.S. District Court in Puerto Rico acted appropriately when requiring Oril to establish regulation that will preserve the financial solvency of dairy processing plants.
Shortly after Judge Domínguez’s injunction, Oril, the Agriculture Department and the Dairy Farmers Association joined to challenge the decision. However, eventually, Oril was left alone in the appeal process.