[Kreider] does not have to produce enough milk to satisfy its customers' needs in the period of short production, because, during the period of short production, [Kreider] can count on Ahava's other suppliers to supply pool milk to meet the needs of the firms ultimately buying [Kreider's] milk. If a producer-handler could turn over its distribution function to a subdealer, it could achieve the same result as if it were permitted to receive milk from other sources. That is, during the period of short production, it could meet the needs of its (ultimate) customers by means of the subdealer getting pool milk from other handlers during the period of short production. Id. at *31. In other words, Kreider receives an unearned economic benefit unavailable to handlers who do not enjoy producer-handler status: Unlike other handlers, Kreider does not need to pay into the producer-settlement fund, and, unlike other handlers, Kreider has no surplus-milk concerns because it never has to produce an over-supply to satisfy its customers during times when cows produce less milk. This court finds that this purported economic benefit is not supported by the record before it. In its Amicus brief, Ahava states that in order for Kreider's milk to receive Ahava's certification that the milk is kosher, there must be "direct and daily supervision and control over the production and processing facilities by appropriate rabbinical authorities" and that such supervision is "extensive." (Amicus Ahava's Mem. Supp. Pl.'s Mot. Summ. J. at 3 & 3 n. 2.) Because of Ahava's special requirements, it is not apparent from the record that Kreider can depend on other handlers from the pool to supply Ahava's needs in the period of short production.* If the record cannot support the economic justification behind the Defendant's action, then it appears arbitrary, especially since, as noted previously, the language of Order 2 is ambiguous and the MA's action is not clearly supported by the promulgation history of Order 2 or departmental interpretation. "If the court determines that [a] ruling [by the Secretary] is not in accordance with law, it shall remand such proceedings to the Secretary with directions either (1) to make such ruling as the court shall determine to be in *For example, Ahava has determined that "Farmland Dairies, a major fluid milk processor in the Northern New Jersey-New York area, although entirely owned by a family of the Jewish faith... was unacceptable as a source of kosher milk" to New York's ultra-orthodox Jewish community, which makes up Ahava's customer base. (Amicus Ahava's Mem. Supp. Pl.'s Mot. Summ. J. at 5.) 55 Agric. Dec. 749 accordance with law, or (2) to take such further proceedings as, in its opinion, the law requires." 7 U.S.C. § 608c(15)(B), see also Minnesota Milk Producers Ass'n v. Yeutter, 851 F. Supp. 1389, 1398 (D. Minn. 1994) (finding that the Secretary's final decision did not provide sufficient explanation so that it could be determined that it meets the requirements of the AMAA and remanding to the Secretary for additional findings of fact and explanation); Oak Tree Farm Dairy, Inc. v. Butz, 390 F. Supp. 852, 857 (E.D.N.Y. 1975) (remanding the case for "further administrative exploration of the contentions raised here"); In re: County Line Cheese Co., Inc., 44 Agric. Dec. 63, at *1 (1985) ("If the Secretary had failed to engage in reasoned agency decisionmaking, it would have been appropriate to remand the proceeding to the Secretary for the purpose of issuing revised findings. "). Therefore, this action is remanded to the Secretary to hold such further proceedings necessary to determine whether in fact Kreider is "riding the pool." To this end, the Secretary must determine whether it is in fact feasible for Ahava to turn to other handlers in a period of short production. II. APPROPRIATE RELIEF ... Kreider asserts that it is entitled to a judgment declaring that the application of the Order 2 producer-handler regulation to "its sales in Order 2 is not in accordance with law; that further enforcement of the regulations in this manner should be permanently enjoined; that the Market Administrator should refund to Kreider the payments made pursuant to the invalid application of the regulations; and that reasonable interest should be added to the refunds." (Pl.'s Br. Supp. Mot. Summ. J. at 28-29.) For the reasons stated below, this court finds that Kreider is entitled to a refund and interest should it be found that Kreider qualifies for the status of a producerhandler. In his Decision and Order, the JO ruled that Kreider would not be entitled to a return of the principal amount paid into Order 2 even if it were to prevail in this case: In fact, if I were to conclude that Petitioner meets the criteria in 7 C.F.R.sec. 1002.12(b)(1) of a producer-handler, I would hold that there would be no retroactive relief even as to the principal. That is because under the definition of producer-handler, a producer-handler is not a person who meets the requirements of paragraph (b), but, rather, is a person who "has been so designated by the market administrator upon determination that the requirements of paragraph (b) of this section have been met. In re: Kreider, 1995 WL 598331 at *35 (citations omitted). It is undisputed that Kreider never received producer-handler designation under Order 2. However, at issue in the instant case is whether the MA erroneously denied Kreider's application for such a designation. In In re Yasgur Farms, Inc., 33 Agric. Dec. 389 (1974), the JO discussed the propriety of lump sum refund payments for money previously paid into the producer-settlement fund by those later claiming producer-handler status, and stated that "[s]uch a lump sum payment must be made, at times, where it is determined that the Market Administrator erroneously imposed an obligation upon a handler during a prior period." Id. at 407 n. 5. Therefore, if it is determined that the MA's failure to designate Kreider as a producer-handler is erroneous, a refund is in order. This court also finds that interest should accompany this refund. See SaniDairy v. Yeutter, Civ. A. No. 90-222J, 1995 WL 848950, at *2 (W.D. Pa. Mar. 27, 1995) (finding it appropriate that interest be allowed on a refund from the producer-settlement fund), aff'd, No. 95-3304, 1996 WL 427870 (3d Cir. July 31, 1996); see also Kinnett Dairies, Inc. v. Madigan, 796 F. Supp. 515, 516 (M.D. Ga. 1992) (ordering refunds from producer-settlement funds and interest on the refunds); Cumberland Farms, Inc., CIV. No. 88-2406(CSF) 1989 WL 85062, at *2 (D.N.J. July 18, 1989) (stating that "[i]t is well settled that a reviewing court may award monetary damages under the AMAA... and that a reviewing court may award interest on these amounts") (citations omitted).5 "This court finds Defendant's argument against awarding interest unpersuasive. First, Defendant cites In re Defiance Milk Products Co., 44 Agric. Dec. 11, 59-60 (1985), aff'd, No. 857179 (N.D. Ohio, Dec. 12, 1986), aff'd 857 F.2d 1065 (6th Cir. 1988), and In re M.H. Renken Dairy Co., 14 Agric. Dec. 794, 807 (1955), for the proposition that "section 8c(15)(A) of the [AMAA] does not contain any language authorizing an award of interest to a handler who prevails in a 8c(15)(A) proceeding." (Def.'s Resp. Pl.'s Br. Supp. Mot. Summ. J. & Br. Supp. Cross-Mot. Summ. J. at 49.) These cases are clearly contradicted by the more recent cases cited in this memorandum. Second, Defendant's citation of In re Lawson Milk Co., 22 Agric. Dec. 126, 22 Agric. Dec. 455 (1963), aff'd, 358 F.2d 647 (6th Cir. 1966), is inapposite. The Lawson court determined not that interest on an overpayment was inappropriate generally, but that by the terms of that particular milk marketing order the refund was not yet overdue and therefore interest had not yet accrued on it. Lawson, 358 F.2d at 650. Third, Defendant cites to several Supreme Court cases. However, these cases are distinguishable from the instant cases in that (continued...) 55 Agric. Dec. 749 Therefore, should it be determined that a refund is due to Kreider, such a refund should be awarded with interest based on the average monthly prime lending rate prevailing from the date Kreider first paid into the producersettlement fund until the date Kreider is refunded in full. See Sani-Dairy, 1995 WL 848950 at *3 (ordering interest based on the average monthly prime lending rate prevailing from the date payment was first made into the producer-settlement fund "until the date that payment of damages to plaintiffs is made in full"). The Secretary of Agriculture is directed to calculate and award the interest due. Therefore, if Kreider is eligible for producer-handler status, this court finds that the appropriate remedy is to direct the Secretary to apply the producerhandler status to Kreider and to provide Kreider with a refund plus interest on the sum of $543,864.68,which Kreider has paid into producer-settlement and/or administrative funds. CONCLUSION This court finds that neither the plain language of Order 2 nor its promulgation history supports a finding that Kreider should be denied. producer-handler status without further factual findings that Kreider is "riding the pool" in this factual context. Thus, the refusal to designate Kreider as a producer-handler appears arbitrary on the record before this court. Therefore, this action is remanded to the Secretary for further factual findings and a decision in accordance with this memorandum. ORDER AND NOW, this day of August, 1996, upon consideration of Plaintiff's Motion for Summary Judgment and Defendant's Cross-Motion for Summary Judgment, the responses thereto and the on-record hearing, it is hereby ORDERED that these motions are DENIED. The case is remanded to the Secretary of Agriculture for further factual findings and a decision consistent "(...continued) they pertain to the awarding of interest in contract or tort actions against the United States as opposed to the award of interest in connection with the refund of an overpayment. Finally, Defendant cites Alaska Airlines, Inc. v. Johnson, 8 F.3d 791,798 (Fed. Cir. 1993) which this court finds unpersuasive, particularly in light of the fact that Sani-Dairy was recently affirmed by the Third Circuit. |