Oyarzo v. Maryland Department of Health & Mental Hygiene

MEREDITH, J. In common parlance, Kevin Oyarzo, the appellant, might be referred to as a dairy farmer. When a dairy farmer provides services such as boarding and milking a herd of dairy cows owned by others, he acts as an agister and provides agistment services. The term “agister” is defined in Black’s Law Dictionary (8th ed.2004) at 73 as: “One who takes and pastures grazing animals for a fee; a person engaged in the business of agistment. An agister is a type of bailee for hire.

Also spelled agistor.” Similarly, “agistment” is defined as: “A type of bailment in which a person, for a fee, allows animals to graze on his or her pasture; the taking in of cattle or other livestock to feed at a per-animal rate.” Id. Oyarzo wished to offer agistment services to people who might want to own a fractional interest in a herd of dairy cattle. The belief that there is an unmet demand for such services is based upon the fact that there are persons who wish to drink raw milk (rather than pasteurized milk), and in Maryland, it is illegal to sell raw milk to consumers. Maryland Code (1982, 2000 Repl.Vol., 2008 Supp.), Health-General Article (“HG”), § 21-434 (“Except for sale of raw milk by a holder of a milk producer permit to a holder of a milk processor permit, a person may not sell raw milk for human consumption.”).

But it is not illegal in Maryland for an owner of cows to drink the raw milk those cows produce. Oyarzo’s plan was to sell fractional ownership interests in a herd of dairy cattle, after which he would board and care for the cows, and then provide the raw milk produced by those cows to the ²⁶⁸ owners of the herd in accordance with their percentages of ownership. Oyarzo sought a declaratory judgment in the Circuit Court for Frederick County to confirm that the proposed contract for cattle syndication and agistment services he wanted to offer was not in violation of the Maryland laws governing the sale of raw milk. Oyarzo also asked the court to declare unenforceable a regulation that had been promulgated by the Secretary of the Maryland Department of Health and Mental Hygiene (“the Department”), appellee, purporting to preclude Oyarzo and others from offering such services.

The circuit court ruled contrary to Oyarzo’s requests; it declared that COMAR 10.15.06.06(F)(1), as amended August 1, 2006, does preclude him from entering into the proposed cow-sharing agreement, and further, that that regulation does not exceed the authority given to the Maryland Department of Health and Mental Hygiene to carry out the statutory prohibition on the sale of unpasteurized milk in this State. Oyarzo appealed and presents the following issues for our review: 1. Whether the trial court erred by construing the Act as conferring on the Secretary the regulatory power to define the unambiguous words “sale” and “sell” in a way that “adds to, extends, or enlarges ... the [A]ct being administered”!.] 2. Whether the trial court erred by construing the Agreement as one in which the syndicated owners of the herd acquire, by a “transfer for consideration” (i.e., by a “sale”), title to the raw milk that they already own[.] 3.

Whether the trial court erred by sua sponte dismissing Count II as having been mooted by the dismissal of Count I[J We agree with Oyarzo that: (a) it is not illegal in Maryland for the owner of a dairy cow to drink the raw milk which that cow produces; (b) it is not illegal in- Maryland to sell a fractional interest in a herd of dairy cattle; and (c) it is not illegal in Maryland for an agister to provide agistment services by boarding and caring for dairy cows owned by others. ²⁶⁹ Nevertheless, we agree with the Department that the transactions proposed by Oyarzo, pursuant to which persons who wish to consume raw milk pay him fees and he provides them unpasteurized milk as long as they pay the fees, is a transaction within the scope of the Department’s regulatory purview. Accordingly, the August 2006 amendment to COMAR 10.15.06.06(F)(1) was a permissible exercise of the authority of the Department to regulate transactions involving the distribution of milk in Maryland. Therefore, we answer Oyarzo’s first two questions “no.” We agree with Oyarzo, however, that his second count, challenging the delegation of legislative power as unconstitutional, was not moot. We shall remand the case for further proceedings consistent with this opinion.

Facts and Procedural History Kevin Oyarzo is a farmer residing in Buckeystown, Maryland, in Frederick County. He wishes to market fractional ownership interests in a herd of dairy cattle for which he would provide agistment services. Oyarzo’s counsel drafted a proposed “Bovine Sale and Agistment Agreement” that would permit individuals to purchase a percentage ownership interest in a herd. The agreement also calls for Oyarzo to act as the agister; ie., the agreement specifies that Oyarzo would board and care for the herd, and would milk the cows.

The proposed agreement provides that the fractional owners would be “entitled to receive the [herd’s] production [(ie., raw milk) ]” in proportion to their ownership interest in the herd. Because HG § 21-434 prohibits the sale of raw milk for human consumption, except for transactions in which the seller has a milk producer permit and the buyer has a milk processor permit, Oyarzo contacted the Department in 2006, requesting advance approval of his proposed agreement. The Department is the agency tasked with enforcing the milk statute. HG § 21-406 states: “The Secretary [of the Department] shall adopt rules and regulations to carry out the provisions of this subtitle [ie., HG Title 21 (‘Food, Drugs, and Cosmetics’), Subtitle 4 (‘Milk Products’), herein sometimes referred to as ‘the milk statute’].” ²⁷⁰ After reviewing Oyarzo’s request, the Department not only declined to approve the proposed agreement, but the Department also promulgated COMAR 10.15.06.06(F)(1), effective August 28, 2006, as an “emergency” measure in order to “resolve current ambiguity regarding whether cow-sharing or agistment arrangements, whereby the investor buys a share in a cow or cows, or provides funding to feed or care for a cow or cows, and obtains raw milk in return, are included in [the] prohibition [of HG § 21-434].” 33 Md. Reg. 809 (April 28, 2006).

The regulation purported to redefine the terms “sale” and “sell” in the context of transactions that involve the right to acquire raw milk. As amended in August 2006, COMAR 10.15.06.06F provides: F. Sale of Raw Milk. (1) In this section, “sale” or “sell” means a transaction that involves the: (a) Transfer or dispensing of milk and milk products; or (b) Right to acquire milk and milk products: (i) Through barter or contractual arrangement; or (ii) In exchange for any other form of compensation including, but not limited to, an agistment agreement, which is the sale of shares or interest in a cow, goat, or other lactating hooved mammal or herd of cows, goats, or other lactating hooved mammals. (4) Except [for a sale by a milk producer to a milk processor, receiving station or transfer station], a person may not sell raw milk or raw milk products for human consumption.

According to the statement of purpose published in the Maryland Register, this broadened definition of the statute’s words “sale” and “sell” was intended to “prevent [cow-sharing or agistment] arrangements from being utilized to circumvent the existing prohibition on the sale of raw milk for direct human consumption.” 33 Md. Reg. 809 . ²⁷¹ In response to the action of the Department, Oyarzo filed a complaint in the Circuit Court for Frederick County, requesting (a) a declaratory judgment that the new regulation is invalid as and if applied to his proposed Bovine Sale and Agistment Agreement, and (b) an injunction preventing enforcement of the new regulation. The defendants, now appellees, were the Department; S. Anthony McCann, in his capacity as the Secretary of the Department; the Milk Control Division of the Department; and Theodore Elkin, in his capacity as the Chief of the Milk Control Division. Count one of the complaint alleged that the regulation exceeds the authority that was delegated to the Department by the General Assembly when it enacted the milk statute, HG §§ 21-401 through 21-436. Count two alleged, in the alternative, that “if in enacting § 21-406 of the Act the General Assembly somehow purported actually to authorize the Secretary to adopt regulations that change the meanings of ‘milk products,’ ‘sale,’ and ‘agistment,’ as described in” COMAR 10.15.06.06F(1), as amended in August 2006, then the statute is an unconstitutional delegation of legislative power in violation of Article 8 of the Maryland Declaration of Rights.

Oyarzo and the defendants filed cross-motions for partial summary judgment, with accompanying affidavits, requesting summary judgment as to Count one. The circuit court held a hearing on the motions, and then issued a written opinion and order that (1) denied Oyarzo’s motion for summary judgment as to Count one, (2) granted the defendants’ motion for summary judgment as to that count, and (3) dismissed Count two as moot. Oyarzo timely noted this appeal. Analysis A. Justiciability As a preliminary matter, the appellees have raised an issue as to the justiciability of Oyarzo’s claims, noting that Oyarzo’s proposed contract is incomplete because it does not contain a price term or the number of cows, and further noting that Oyarzo has not yet identified specific parties willing to enter ²⁷² into the contract.

As a result, appellees contend, the dispute between Oyarzo and the Department—over whether the new regulation precludes him from entering into such a contract— is not ripe for disposition. Maryland Code (1973, 2006 Repl.Vol.), Courts and Judicial Proceedings Article (“CJP”), § 3-409(a), permits a court, in the absence of certain exceptions not applicable here, to: grant a declaratory judgment or decree in a civil case, if it ■will serve to terminate the uncertainty or controversy giving rise to the proceeding, and if: (1) An actual controversy exists between contending parties; (2) Antagonistic claims are present between the parties involved which indicate imminent and inevitable litigation; or (3) A party asserts a legal relation, status, right, or privilege and this is challenged or denied by an adversary party, who also has or asserts a concrete interest in it. “[T]he Maryland version of the Uniform Declaratory Judgments Act ... is remedial ... [and] ‘shall be liberally construed and administered.’ ” Boyds Civic Ass’n v. Montgomery County Council, 309 Md. 683, 688 , 526 A.2d 598 (1987) (quoting CJP § 3-402). In addition, Maryland Code (1984, 2004 Repl.Vol.), State Government Article (“SG”), § 10-125(b), specifically permits a court to “determine the validity of any regulation [in a declaratory judgment action] if it appears to the court that the regulation or its threatened application interferes with or impairs or threatens to interfere with or impair a legal right or privilege of the petitioner.” (Emphasis added.) This latter provision, cited by the circuit court as authority for considering Oyarzo’s complaint, makes clear that a party is not required to wait until a regulation is enforced against it to seek a declaratory judgment that the regulation is invalid. See Medstar Health v. Md. Health Care Commission, 376 Md. 1, 17, 20 , 827 A.2d 83 (2003). ²⁷³ Nevertheless, the controversy must be ripe for adjudication, because “the existence of a justiciable controversy is an absolute prerequisite to the maintenance of a declaratory judgment action.” Hatt v. Anderson, 297 Md. 42, 45 , 464 A.2d 1076 (1983).

The Court of Appeals discussed the issue of ripeness in the context of a declaratory judgment action in Hickory Point v. Anne Arundel County, 316 Md. 118, 129-31 , 557 A.2d 626 (1989), stating: A controversy is ripe when “there are interested parties asserting adverse claims upon a state of facts which must have accrued wherein a legal decision is sought or demanded.” See Boyds Civic Ass’n v. Montgomery County Council, 309 Md. 683, 690 , 526 A.2d 598, 601 (1987).... To address issues which are non-justiciable because they are not ripe “would place courts in the position of rendering purely advisory opinions, a long forbidden practice in this State.” Hatt v. Anderson, 297 Md. 42, 46 , 464 A.2d 1076, 1078 (1983). “Generally, an action for declaratory relief lacks ripeness if it involves a request that the court declare the rights of parties upon a state of facts which has not yet arisen, [or] upon a matter which is future, contingent and uncertain.” Boyds Civic Ass’n, 309 Md. at 690 , 526 A.2d at 602 .... The purpose of the ripeness doctrine “is to prevent premature judicial interference with government action and to avoid entanglement in abstract, poorly defined disputes. The mature, focused conflict not only affords the Court an informing perspective on the actual working or impact of laws, a view not available in the legislative process, but also provides the Court with greater choice among the grounds for decision, an opportunity thus to decide in the narrowest compass.” Albert, Justiciability and Theories of Judicial Review: A Remote Relationship, 50 S.Cal.L.Rev. 1139, 1155 (1977). “The disagreement” over which declaratory relief is sought “must not be nebulous or contingent but must have taken on fixed and final shape so that a court can see what legal issues it is deciding, what effect its decision will have on the adversaries, and some useful purpose to be achieved ²⁷⁴ in deciding them.” Public Serv.

Comm’n v. Wycoff Co., 344 U.S. 237, 244 , 73 S.Ct. 236, 240 , 97 L.Ed. 291, 296 (1952). In Hickory Point , the parties sought a declaration of what the homeowners’ rights would be in the event that the rest of the planned subdivision was built in such a way as to conflict with the restrictive covenants in the existing homeowners’ deeds. Id. at 121, 129 , 557 A.2d 626 . Because a new subdivision plan had not yet been approved, it was unclear if the potential conflict would ever actually occur, and the Court held that the issue was not ripe.

Id. The Court distinguished the controversy that was not ripe in Hickory Point from the issue that was held to be ripe in Boyds Civic Ass’n, supra. In Boyds Civic Ass’n, 309 Md. at 697 , 526 A.2d 598 , the Court explained why the controversy before it was ripe: [T]he challenged plan amendment was initiated, approved, and adopted in furtherance of an actual, pending application to amend the local zoning map. Moreover, the designation of an area on the applicable master plan as suitable for a Mineral Resource Recovery Zone was a condition precedent to the granting of an application for zoning of an area as a Mineral Resource Recovery Zone.

In Count I of the complaint filed in the circuit court petitioners claimed that hearings—spanning some four days—on the application to amend the local zoning map would not have gone forward if the master plan had not been amended. In Count II petitioners alleged that the actions of the Commission and District Council with respect to the plan amendment forced petitioners to hire counsel and land consultants in order to participate in the local zoning map amendment proceedings. The prospect of a controversy, therefore, lay well beyond the realm of matters “future, contingent and uncertain.” ... [T]his case presents a practical rather than a theoretical question. Accord County Commissioners of Queen Anne’s County v. Days Cove Reclamation Co., 122 Md.App. 505, 517 , 713 A.2d 351 (1998) (“the Court of Appeals in Boyds stated that, ‘if a ²⁷⁵ court is satisfied that the “ripening seeds” of an actual controversy exist, the facts are not too contingent or speculative for declaratory relief.’ 309 Md. at 691 , 526 A.2d 598 (citation omitted).”).

In the present case, the right Oyarzo seeks to protect is the right to pursue a business opportunity. He asserts that the challenged regulation restricts his right to pursue his chosen profession by prohibiting him from entering into the proposed syndication and agistment contract. The Department takes the position that the proposed contract violates the statutory prohibition on the sale of raw milk; indeed, the Department’s regulation expanding the definition of “sale” was promulgated as a direct response to Oyarzo’s proposal, and the new definition of “sale” and “sell” specifically mentions a right to acquire milk pursuant to an “agistment agreement.” This is not a case in which the event triggering the controversy is remote and contingent. There is no need for Oyarzo to violate the challenged regulation in order for us to consider whether it was within the scope of the Department’s authority to adopt the expanded definitions of “sale” and “sell.” The controversy is present and existing, and is ripe for review.

B. Standard of Review This case comes to us following a grant of summary judgment. “Our standard of review of [aj declaratory judgment entered as the result of the grant of a motion for summary judgment is whether that declaration was correct as a matter of law.” South Easton v. Easton, 387 Md. 468, 487 , 876 A.2d 58 (2005) (citation omitted). Neither side contends that there is any genuine dispute of material facts. We review the legal issues de novo. C. The Raw Milk Versus Pasteurized Milk Controversy In support of its motion for summary judgment, the Department filed an affidavit of Ted Elkin, the Chief of Milk Control for the State of Maryland.

Elkin stated in his affidavit that he holds a Master of Science degree in Environmental Engineering, as well as a Master of Public Administration degree. ²⁷⁶ Elkin explained in his affidavit why the Department takes the position that raw milk is dangerous, noting: “Because of the dangers of raw milk, the federal government prohibits transporting raw milk across state lines.” Elkin described some of the perceived dangers as follows: 8. Raw milk is inherently dangerous and may contain a whole host of pathogens including Enterotoxigenic Staphylococcus aureus, Campylobacter jejuni (C. jejuni), Salmonella species, Escherichia coli (E. coli 0157H:7, Enterohemorrhagic E. coli—EHEC, Enterotoxigenic E. coli— ETEC), Listeria monocytogenes, Mycobacterium tuberculosis, Mycobacterium bovis (M.bovis), Brucella species (B. abortus being mainly associated with cattle and B. melitensis being mainly associated with goats), Coxiella burnetii and Yersinia enterocolitica to name but a few. These organisms are potentially fatal to humans especially those with weakened immune systems such as children, the elderly, people who have had transplants or people who have cancer. These organisms can exist in milk even if a farmer keeps his or her farm in a fastidious condition because the cows themselves house bacteria including ecoli in and on their bodies. * * * 12. ...

Pasteurization simply means that the milk is heated to a certain temperature for a period of time in order to destroy pathogenic organisms.... The pasteurization process does not kill all the pathogens but kills most of the pathogens so that they are incapable of reproducing to harmful levels. The pasteurization process does not destroy the beneficial properties of milk.... Because of the enormous and demonstrated benefits of pasteurization, Maryland law prohibits the sale of raw milk to a consumer. 13.

There have been infectious outbreaks from drinking raw milk. In general, the Centers for Disease Control (“CDC”) for the week of March 2, 2007 reported that from 1998 to May 2005, 45 outbreaks of food borne illness implicated unpasteurized milk, or cheese made from unpasteurized milk. Those outbreaks accounted for 1,007 illnesses, ²⁷⁷ 104 hospitalizations, and two deaths. The CDC also noted that between 1973-1992, 87% of the milk outbreaks were attributed to raw milk and occurred in those states which allowed raw milk sales to consumers.

Notably, in States that allowed sales of raw milk, raw milk sales constituted less than 1 % of the total milk sold. 14. In particular, very recently the State of Washington and the FDA traced an outbreak of food borne illness caused by E. coli to raw milk distributed from a farm that engaged in “cow sharing” agreements. There were eighteen victims identified in that outbreak. Unfortunately, the median age of the victims was just 9 years.

Five of these victims, aged between 1-13 years, were hospitalized and four of these unfortunate children had HUS [Hemolytic Uremic Syndrome]. Seventeen of the victims were farm “shareholders” or the children of “shareholders” and one other victim, a child of ten years of age, was a friend of a “shareholder.” The Centers for Disease Control and Prevention (CDC) just issued, on March 2, 2007, a report on this outbreak in its Morbidity and Mortality Weekly Report (MMWR). Pasteurization would have killed the e. coli implicated in the outbreak. The debate regarding the degree to which the increased health risks posed by raw milk, in comparison to pasteurized milk, outweigh the positive attributes that cause some consumers to prefer raw milk has been going on for at least thirty-five years.

See Public Citizen v. Heckler, 653 F.Supp. 1229, 1231 (D.D.C.1986) (describing a 1973 regulation of the federal Food and Drug Administration that “in effect prohibited the sale of all unpasteurized milk in interstate commerce.”). See generally Damian C. Adams, Michael T. Olexa, Tracey L. Owens & Joshua A. Cossey, Deja Moo: Is the Return to Public Sale of Raw Milk Udder Nonsense?, 13 Drake J. Agrio. L. 305 (2008). The Public Citizen litigation was initiated by several public interest organizations seeking to end a partial stay of the 1973 ban on interstate sales of raw milk.

The ban had been stayed only as to “certified raw milk,” which “is unpasteurized milk ²⁷⁸ produced by methods which comport with the standards established by the American Association of Medical Milk Commissions.” 653 F.Supp. at 1232 . The Secretary of Health and Human Services had refused to lift the partial stay. The United States District Court for the District of Columbia reviewed a variety of evidence before coming to the conclusion that “[i]t is undisputed that all types of raw milk are unsafe for human consumption and pose a significant health risk.” Id. at 1241 . In support of that conclusion, the court noted, id. at 1232: From 1974 to 1982 the FDA collected and evaluated scientific and medical information to determine if the outbreak of certain diseases was associated with the consumption of certified raw milk.

The FDA worked closely with the Center for Disease Control (“CDC”), a branch of HHS, and encouraged the states to test milk and milk products for bacteria or microorganisms and to report outbreaks of milk-borne disease to the CDC. The process of collecting and reviewing data and information led the FDA to conclude that the consumption of certified raw milk and all forms of raw milk and raw milk products was linked to the outbreak of serious disease. (Footnote omitted.) The court also pointed to the position of the CDC, stating, id. at 1233: [I]n May 1983, the Director of the Center for Disease Control stated that “because the accumulated evidence indicates that unpasteurized [raw] milk is inherently unsafe, the Center for Disease Control supports pasteurization of milk and other dairy products.” The Director of CDC further indicated that CDC can conceive of no practical way raw milk can assuredly be safely marketed. (Citations omitted.) The court noted that “proponents of raw milk testified that raw milk offers nutritional benefits that are destroyed by pasteurization and that raw milk tastes better than pasteurized milk.” Id. at 1234 .

Such contentions were outweighed, in ²⁷⁹ the view of the court, by evidence from the FDA and the CDC, as well as witnesses from the following organizations that contended “the risks associated with the consumption of raw milk, even certified raw milk, heavily outweigh any benefits from its consumption,” id.: The American Academy of Pediatrics, the National Association of State Departments of Agriculture, the Association of State and Territorial Health Officials, the United States Conference of Local Officials, the National Conference for Food Protection, the American Veterinarians Medical Association, the National Milk Producers Association, the National Conference on Interstate Milk Shipments, the Association of Food and Drug Officials, the National Dairy Counsel, the American Society for Microbiology, the Milk Industry Foundation, the Mid-American Dairymen’s Association, and others, all supported the pasteurization requirement. The court concluded: “The appropriate remedy in this case ... is an order compelling the agency to promulgate a regulation prohibiting the interstate sale of certified raw milk and certified raw milk products, and non-certified raw milk and raw milk products.” Id. at 1241 . In 1‘esponse to the order issued in the Public Citizen case, the FDA promulgated the regulation that appears at 21 C.F.R. § 1240.61 , providing, in pertinent part: No person shall cause to be delivered into interstate commerce or shall sell, otherwise distribute, or hold for sale or other distribution after shipment in interstate commerce any milk or milk product in final package form for direct human consumption unless the product has been pasteurized or is made from dairy ingredients (milk or milk products) that have all been pasteurized.... The notice of the adoption of 21 C.F.R. § 1240.61 appeared in the Federal Register at 52 FR 29509 (August 10, 1987), and stated, among other things: “Raw milk, no matter how carefully produced, may be unsafe.” “The theoretical health benefits of raw milk have never withstood scientific scrutiny.” ²⁸⁰ The Court of Appeal of California issued what appears to be the only other reported case addressing the health concerns associated with raw milk: Consumers Union v. Alta-Dena Certified Dairy, 4 Cal.App.4th 963 , 6 Cal.Rptr.2d 193 (1st App.Dist.1992).

Sales of raw milk are legal within the state of California, and Alta-Dena Certified Dairy sells both pasteurized milk and certified raw milk. According to the California Court of Appeal, “Alta-Dena operates what is estimated by some to be the world’s largest dairy.” Approximately 15% of the dairy’s production involves certified raw milk and raw milk products. The suit charged Alta-Dena with false and misleading advertising regarding its raw certified milk products, and the plaintiffs sought injunctive relief preventing Alta-Dena from falsely advertising the alleged benefits of its raw certified milk. The court noted, 4 Cal.App.4th at 966 , 6 Cal.Rptr.2d 193 : Since the 1950’s, Alta-Dena has promoted its raw certified milk and raw certified milk products (hereafter collectively referred to as RCM) as possessing various health and safety attributes.

Printed brochures distributed by Alta-Dena touted its RCM as the “safest” and “purest” milk available; “ideal” for infants and a “basic food” for invalids. The non-jury trial of the case continued for 54 days, during which 44 witnesses testified, and the court received approximately 40,000 pages of written evidence. Summarizing that evidence, the appellate court stated, 4 Cal.App.4th at 967 , 6 Cal.Rptr.2d 193 : The evidence at trial overwhelmingly established that, contrary to the claims made in Alta-Dena’s advertisements, RCM: (1) can contain highly dangerous organisms, (2) is less safe than pasteurized milk, (3) does not possess superi- or health and nutritional benefits, and (4) is not produced under the strictest health standards in the industry. The appellate court recounted a portion of the evidence introduced at the trial, id. at 967-68 , 6 Cal.Rptr.2d 193 : Alta-Dena’s RCM has frequently been found to contain disease-causing organisms.

From 1974 to the time of trial, ²⁸¹ pathogens were found in Alta-Dena’s RCM approximately 250 times by various public and private laboratories. The pathogen found most frequently was a particularly dangerous type of salmonella known as salmonella