| Posted March 15,
2007: Judge Jonathan P. Hein of Ohio’s Darke
County Court of Common Pleas issued a decision on December
29, 2006, in the case of Carol Schmitmeyer, a Versailles,
Ohio dairy producer who had been operating a herdshare program
in order to make raw milk legally available to people who
wanted to consume it.
Judge Hein’s decision vacated an earlier decision of
the Director of Agriculture that revoked Ms. Schmitmeyer’s
dairy producer’s license because Director Dailey believed
Ms. Schmitmeyer’s herdshare operation constituted an
illegal “sale” of raw milk. In his decision, however,
Judge Hein stated that there are “various deficiencies”
in the law which are “fundamental to a correct interpretation
of the law” and that the Director’s decision to
revoke Ms. Schmitmeyer’s license was “similarly
deficient.”
A herdshare operates on the principle that persons (usually
city dwellers) buy an ownership interest in a herd of dairy
cows; they board those cows at a farmer’s farm; and
they pay a periodic boarding fee to the farmer in exchange
for the farmer taking care of, tending to and providing feed
to the herd. The herdshare owners in essence become “shareholders”
in the dairy farm and receive as a dividend on their investment
the raw milk that comes from their share.
The farmer earns extra income by receiving the boarding
fee and the purchase price of the “shares” in
the herd, while the shareholders receive raw milk in accordance
with the law and have the satisfaction of knowing where their
milk comes from and how it is produced. It is an arrangement
that pleases everyone involved.
Everyone, that is, except the Ohio Department of Agriculture
(ODA). In 2006, the ODA relentlessly and ruthlessly pursued
herdshare operators throughout the state, claiming they were
illegally selling raw milk and putting the entire public’s
health at risk. For example, just in 2006 alone, ODA revoked
the license of an Amish farmer who took a $2 donation for
one gallon of raw milk; arrested in conjunction with federal
authorities a farmer in Cincinnati who was delivering raw
milk to his shareholders (and who was carried away in an ambulance
because he suffered a mild heart attack); attempted to revoke
the commercial feed registration of two Washington County
women who use raw milk as an ingredient in their pet food
products; and attempted to conduct a secret investigation
into a herdshare program operated by a married couple in Butler
County.
And in September, ODA revoked the producer’s license
of Carol Schmitmeyer which could have put her out of business
because her family derived 87 percent of its economic livelihood
from her producer’s license.
Ms. Schmitmeyer argued in her appeal that because the law
was so vague, i.e., “sale” or “sold”
were not defined, that there was no way to determine whether
ODA’s interpretation and application of the law was
reasonable, arbitrary or capricious. ODA had gone on record
in the past as allowing a farmer and his family to consume
raw milk from the family farm’s cows, but insisted that
shareholders in a herdshare did not have similar rights.
Judge Hein in his decision stated that “if the herd
share agreement is a circumvention of the law, so is the Department’s
inexact practice of allowing owners and their families, etc.
to consume raw milk.” Consequently, too much subjectivity
results from the “Department’s practice of allowing
some as yet undefined persons (owners, family members, etc.)
to consume raw milk at as yet undefined locations (on farm,
etc.).”
Ms. Schmitmeyer also argued that before her license could
be revoked, ODA was required by law to provide her with “a
reasonable amount of time” to correct the alleged violations.
Indeed, and as a precautionary measure, Ms. Schmitmeyer had
sent two letters to ODA in the spring of 2006 requesting assistance
and guidance from ODA on what her herdshare operation needed
to do to comply with the law, yet both letters were ignored
by ODA.
As it turned out, the first time Ms. Schmitmeyer had a hint
that something was wrong was when she received a letter in
the mail from ODA proposing to revoke her license. Judge Hein
stated in his decision that “the Department avoided
its duty to [Ms. Schmitmeyer] by not engaging in discussion
with her (and other herdshare owners) regarding the issues
now before this Court. Due to the failure of the Department
to articulate specific problems with the herdshare agreement,”
ODA failed to provide Ms. Schmitmeyer with an opportunity
to correct the alleged violations.
In essence, Judge Hein’s decision vindicates Ms. Schmitmeyer
in her ordeal. Judge Hein’s decision also validates
herdshare agreements in Ohio when they are drafted in a manner
consistent with contract law and when they provide for a transfer
of ownership in the herd, whether partial or complete transfer,
from the farmer to the shareholder. Therefore, unless and
until the statute is changed or administrative regulations
are issued to provide clarity on the issue, herdshare agreements
appear to be legal in Ohio.
Ms. Schmitmeyer has filed with Judge Hein a motion to recover
her attorney’s fees and costs from ODA. She hopes for
a favorable ruling given the facts of this case. 
Editor's
Note: Atty. Cox reported in late February that
the ODA is appealing Judge Hein's decision. The department
also submitted to Schmitmeyer what was termed a settlement
offer, and she is preparing a counter offer. Briefs on the
appeal are due by both sides by the end of April.
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