Ohio dairy sues Wisconsin for freezing out its butters

Madison, Wisconsin; April 20, 2017:  Minerva, Ohio-based Minerva Dairy, America’s oldest family owned cheese and butter dairy, today sued Wisconsin over its newly enforced ban on the sale of ungraded butter – an unjustified, anti-competitive restriction that protects large Wisconsin-based dairies, while blocking 123-year-old Minerva from selling its artisanal butters to Dairy State consumers, and as well as freezing out most other dairies across the country.

In filing the constitutional challenge in U.S. District Court for the Western District of Wisconsin, Minerva Dairy and its fifth-generation owner, Adam Mueller, are represented, free of charge, by Pacific Legal Foundation. PLF litigates nationwide for limited government, property rights, and economic liberty.

At issue is a 40-year-old law — Wis. Stat. § 97.176 — that the state only recently began enforcing. It prohibits the sale of butter that has not gone through a costly grading process, administered by either the USDA or the state of Wisconsin (which grades only Wisconsin butters). Most butters in the United States are ungraded. Indeed, Wisconsin is alone in requiring that butters sold within its borders be graded. Minerva Dairy, which produces handcrafted butters that exceed grading-system standards for quality and taste, sold its butters in Wisconsin stores for decades, but was recently told by officials that it could no longer do so because its butters are ungraded.

“Wisconsin’s butter-grading mandate scores a failing grade for being unnecessary, unreasonable, and unconstitutional,” said PLF Senior Attorney Joshua Thompson. “It amounts to illegal economic protectionism. It is an unnecessary procedure that only the big dairies in Wisconsin can afford, so it freezes out smaller or specialized dairies, like Minerva. The proper purpose of economic regulations is to protect public health and safety. In contrast, Wisconsin’s grading mandate serves to shield favored businesses, while harming competitors and the general public by restricting consumer choice. Because these are not legitimate regulatory purposes, our lawsuit challenges the law as a violation of constitutional protections for economic liberty.”

A failing grade for a protectionist law

Minerva Dairy has sold its dairy products across the Midwest for well over a century. Since the 1930s it has been selling Amish churned butters, which are made out of farm fresh milk from pasture-raised cows and hand churned in small batches to ensure the highest quality and flavor. Today, under the fifth and sixth generations of family ownership, Minerva Dairy still produces its Batch Churned Amish Butter as well as a wide variety of cheese.

Minerva makes its butters in USDA-approved facilities, and it has all of the proper licenses to make and sell butter in the United States. However, Minerva Dairy’s butters – along with most butters sold in the United States – are not graded. It has graded its butter in the past, always earning AA (the highest grade), but the process is cost prohibitive. Indeed, outside of Wisconsin, grading is solely a marketing tool for those few, mainly large, businesses that choose to pay for this unnecessary process.

In order to sell graded butter, each batch of butter produced must be graded independently. To accommodate the process, Minerva would have to store up to a weeks worth of butter, and then fly someone out to grade the whole week. Because the Wisconsin butter graders are not allowed to leave the state, a USDA grader would have to be flown in from Chicago on a weekly basis.

Butter grading means mass-produced, government-dictated taste, unlike Minerva’s custom, quality flavors

In addition to the cost concerns, Minerva Dairy does not want a “graded butter” designation because such a label does not reflect the superior quality of Minerva’s butter.

“Wisconsin’s butter-grading requirement is designed to make sure that everybody makes butter in exactly the same, mass-commodity way,” said Adam Mueller. “But Minerva Dairy does not produce commodity butter. We are a unique, artisanal product. We want to remain unique, and therefore we can’t comply to the grading standards that they want to enforce.

“Not all butters are created equal,” he continued. “Just like you have artisanal cheeses, you also have artisanal butters. Consumers are starting to look at labels, read about the history, read about how they’re made, and be selective on what they purchase. We appeal to those discerning consumers. The butter that we make is the same recipe that we’ve made since the beginning, with a unique flavor. It’s batch churned butter, traditionally made in slow churns, using milk from small family farms with pasture-raised cows.

“We are an artisanal butter that has a higher butter fat, different salt contents, different types of texture, different types of flavor profiles,” he said. “I don’t want to pass the commodity standards that Wisconsin is enforcing, because I am above the commodity standards. We are able to sell our butter in every other state. Wisconsin is unique in its restrictions, and that is blocking interstate commerce.”

The lawsuit challenges Wis. Stat. § 97.176 as a violation of the United States Constitution’s Commerce Clause, the Due Process and Equal Protection Clauses of the Fourteenth Amendment.