No Crying Over Spilled Milk In Ohio -- Milk Processing Fees Survive Commerce Clause Challenge

In a recent decision, the Ohio Supreme Court held that a monthly assessment on Ohio milk processors did not violate the Dormant Commerce Clause. Diehl, Inc. v. Ohio Dept. of Agriculture, 102 Ohio St.3d 50, 2004-Ohio- 1870 (April, 2004). Diehl, Inc. argued that the assessment violated the Commerce Clause because it was based on the total amount of milk received by the processor, including milk from out of state, but was used to fund inspections on in-state producers — a situation which Diehl viewed as effectively subsidizing in-state milk production.

The costs of the Dairy Division of the Ohio Department of Agriculture are paid in part by fees on certain dairy industry participants, including a monthly fee on milk processors based on the amount of milk received each month. A significant component of Dairy Division costs go to fund inspections of Ohio milk producers, who themselves do not pay any fee.