Code of Massachusetts Regulations 331 CMR - BUREAU OF MILK MARKETING
1. Purpose and Legal Foundation of 331 CMR
331 CMR is the set of regulations issued by the Massachusetts Bureau of Milk Marketing, an agency within the Department of Agricultural Resources. Its core purpose is to:
Stabilize the milk industry
Ensure a fair return to dairy farmers
Prevent destructive price competition
Protect the public interest in a stable milk supply
The Bureau’s authority comes from Massachusetts General Laws, chapter 94A, which explicitly authorizes the state to regulate milk prices despite milk being a private commodity. This is an exception to ordinary free-market principles because milk is considered a vital food product.
2. Regulatory Structure of 331 CMR
331 CMR governs several major areas:
A. Milk Pricing Regulation
The Bureau sets minimum wholesale and retail milk prices. Dealers may charge more, but may not charge less than the regulated minimum.
Prices are determined using:
Cost of production data
Federal milk marketing orders
Market stability considerations
Public hearings and economic studies
B. Licensing and Dealer Obligations
Milk dealers must:
Be licensed by the Bureau
Comply with reporting requirements
Pay producers at or above minimum prices
Maintain accurate records
C. Producer Protections
The regulations are designed to:
Prevent dealers from forcing prices below sustainable levels
Ensure prompt and fair payment to farmers
Avoid market manipulation by large distributors
D. Enforcement Powers
The Bureau may:
Conduct audits and inspections
Hold adjudicatory hearings
Impose civil penalties
Suspend or revoke licenses
Order restitution
3. Constitutional and Legal Challenges (Case Law)
Because 331 CMR interferes with free pricing, it has repeatedly been challenged in court. Massachusetts courts have consistently upheld the Bureau’s authority.
A. Due Process and Economic Liberty Challenges
Key Principle:
Milk price regulation does not violate due process if it is rationally related to a legitimate public purpose.
Leading Case:
West Lynn Creamery, Inc. v. Healy (U.S. Supreme Court)
Although this case ultimately struck down a pricing subsidy scheme, it did not invalidate milk price regulation itself. Instead, the Court recognized that states may regulate milk prices but may not do so in a way that discriminates against interstate commerce.
Impact on 331 CMR:
Massachusetts revised its regulatory approach to ensure neutrality and avoid protectionism, keeping 331 CMR constitutionally valid.
B. Commerce Clause Issues
Milk is often sold across state lines, raising Commerce Clause concerns.
Massachusetts Rule:
331 CMR is lawful so long as:
It applies equally to in-state and out-of-state dealers
It does not create trade barriers
It regulates in-state sales, not interstate transport
Courts have held that price regulation of in-state transactions does not burden interstate commerce merely because out-of-state businesses are affected.
C. Delegation of Legislative Power
Challengers have argued that the Legislature improperly delegated power to the Bureau.
Massachusetts Courts’ Response:
Chapter 94A provides clear standards
The Bureau must follow notice, hearing, and record requirements
Judicial review is available
This satisfies constitutional limits on delegation.
4. Administrative Law Principles Applied to 331 CMR
A. Rulemaking
The Bureau must:
Publish proposed price orders
Hold public hearings
Consider evidence and testimony
Issue written findings
Failure to follow these procedures can invalidate a regulation.
B. Adjudication
When enforcing 331 CMR:
Dealers are entitled to notice
Hearings must be fair and impartial
Decisions must be supported by substantial evidence
Courts reviewing Bureau decisions apply a deferential standard, overturning decisions only if arbitrary, capricious, or unlawful.
5. Judicial Deference to the Bureau
Massachusetts courts give significant deference to the Bureau because:
Milk pricing is highly technical
Economic modeling is involved
The Legislature explicitly entrusted the Bureau with expertise
Courts do not substitute their judgment for the Bureau’s on price levels, only reviewing legality and procedure.
6. Practical Legal Effects of 331 CMR
For Dairy Farmers
Guaranteed price floors
Reduced vulnerability to market collapse
Predictable income streams
For Dealers
Compliance costs
Limited price flexibility
Legal exposure for underpricing or reporting violations
For Consumers
Slightly higher retail prices
Greater supply stability
Reduced risk of shortages
7. Summary Legal Position
331 CMR is legally valid and enforceable because:
It serves a legitimate public purpose
It complies with constitutional limits
It follows proper administrative procedures
It has been consistently upheld by courts
It avoids discriminatory or protectionist effects
Massachusetts courts treat milk regulation as a special, historically justified exception to free-market pricing.
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