Milk distributor takes challenge of Montana 'freshness' rule to federal appeals court

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HELENA, Montana — A California-based distributor challenging Montana's milk freshness rules as too restrictive is taking its case to a federal appeals court after a district judge rejected the lawsuit.

Core-Mark International filed its appeal to the 9th U.S. Circuit Court of Appeals Friday after U.S. District Judge Sam Haddon ruled the company had no standing to file the lawsuit because it is a distributor, not a milk packager.

Montana requires that milk be removed from store shelves 12 days after pasteurization. Core-Mark argues that the milk it distributes remains safe for at least 21 days after the pasteurization date.

The Montana rules unnecessarily increase costs by forcing the processor to make separate labels and the distributor to make smaller, more frequent deliveries in the state, the company said in its lawsuit.

Core-Mark was seeking to label Dairy Gold milk containers with both Montana's "sell-by" date and a later "use-by" date. That dual-dating system was an arrangement that Dairy Gold and Inland Northwest Dairies had with the state from 2002 until 2008, when the Montana Department of Livestock revoked its exemption.

Core-Mark buys its milk from the Spokane, Washington-based Dairy Gold, which pasteurizes and packages the milk. Core Mark then stores and distributes the milk when orders come in.

The company claims the 12-day rule discriminates against out-of-state producers. State officials have seized and destroyed milk that Core-Mark sold to retailers that passed the 12-day limit, the company said in court filings.

The Livestock Department's rule, passed in 1980, says no milk may be sold after 12 days of pasteurization, and containers must be marked with that sell-by date. Only the packager of the milk may mark the package with a sell-by date.

Haddon ruled that Core-Mark is trying to assert the rights of the milk packager, when it is only the distributor. The company has no capacity to sue, the judge wrote in his Aug. 31 decision.

"Only the milk packager may seek and obtain permission from the Department to deviate from the administrative rules governing milk container labeling," Haddon wrote.

Company officials did not return a call for comment.

Core-Mark also has failed to reinstitute dual labeling through an administrative challenge against the Livestock Department and a lawsuit in state court. A bill that would have replaced Montana's sell-by date with a 21-day "use-by" date died in a Montana House committee earlier this year.

Bill sponsor Rep. Greg Hertz, R-Polson, said then that the change would have led to less waste, lower milk prices and prevented retailers from throwing away "perfectly good milk."

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