R v Schmidt: Call them “Cow-Share Agreements”… But You’re Still Just Distributing Unpasteurized Milk

In R v Schmidt, 2014 ONCA 188 [Schmidt], a decision released on March 11, 2014, the Ontario Court of Appeal considered the legality of a milk farmer’s scheme to sell unpasteurized milk and milk products – which can pose a serious health risk – as part of a “cow-share agreement.”

Factual and Judicial Background 

The appellant, Michael Schmidt, is a milk farmer who produces unpasteurized milk. He also advocates for its consumption and has a deeply committed belief in its benefits.

Mr. Schmidt provided the unpasteurized milk that he produced, as well as other unpasteurized milk products, to individuals who paid him anywhere between $300 to $1,200 to acquire a “fractional interest” in a cow; this was referred to by the appellant as a “cow-share agreement.” Members of this cow-share agreement also paid an amount per litre of milk they received to cover the cost of producing the milk and the upkeep of the cow. Members received a handbook outlining the scheme. Included in the handbook was the following description (Schmidt at para 7):

As a cow-share member, you are a part owner of the milk production. In effect, you are paying [the appellant and his wife] to look after the cows and produce the milk…

On the basis of this cow-share agreement, Mr. Schmidt was charged under the Health Protection and Promotion Act, RSO 1990, c H.7 (the “HPPA”). Section 18 of the HPPA prohibits the sale and distribution of unpasteurized milk and milk products. He was also charged under the Milk Act, RSO 1990, c M.12, for operating an unlicensed milk plant contrary to section 15. Finally, Mr. Schmidt was charged with failing to obey an order of the Public Health Inspector.

At trial, the Justice of the Peace acquitted Mr. Schmidt, saying that providing milk to those who had entered into the cow-share agreements was not caught by the legislation, as these were essentially private arrangements. However, on appeal to the Ontario Court of Justice, the appeal judge found that by operating his plant and selling and distributing milk to members of the cow-share agreements, Mr. Schmidt had violated both the HPPA and the Milk Act. The appeal judge also rejected Mr. Schmidt’s argument that the HPPA and the Milk Act violated section 7 of the Charter of Rights and Freedoms (the “Charter”). Mr. Schmidt was found guilty on thirteen counts; his fines totaled almost $10,000 and he received one year of probation.

Primary Issues on Appeal

1. Is Mr. Schmidt’s cow-share plan a violation of the HPPA and the Milk Act?
2. Does either the HPPA or the Milk Act violate section 7 of the Charter?

The Prevention of Harm and the Promotion of Health

The court began its analysis by referring to the purposes of the HPPA and the Milk Act. For example, section 2 of the HPPA states that one of the purposes of the Act is “the prevention of the spread of disease and the promotion and protection of the health of the people of Ontario.” In an attempt to achieve this purpose (as well as a similarly stated purpose in the Milk Act), “the legislature has determined that the consumption of unpasteurized milk poses serious risks to public health” (para 19) and, in turn, has limited its distribution. The government’s concern over unpasteurized milk’s health risks is supported by significant scientific literature, as pasteurization “effectively reduces the risk to public health posed by pathogens to an acceptable level” (para 20). In light of this, the court stated the following (para 21):

… provided that the legislature has acted within the limits imposed by the constitution, the legislature’s decision to ban the sale and distribution of unpasteurized milk to protect and promote public health in Ontario is one that must be respected by this court.

The court quickly dismissed the appellant’s argument that his actions were not subject to the HPPA or the Milk Act. First, the court dismissed Mr. Schmidt’s statutory-based argument, which was unnecessarily complicated for the purpose of this post; indeed, it was a “tortured submission” that “would produce an absurd result” (para 22).

Second, the court dismissed the appellant’s argument that the cow-share arrangement took his activities outside of the scope of the HPPA and the Milk Act. The court stressed the need to resist the creation of private arrangements that will frustrate the purpose of public health legislation; public health legislation should not be given such a narrow reading to allow this to happen. Furthermore, the Milk Act in particular provides for no exceptions for private operations.

The arrangement does not grant in the members an ownership interest in a particular cow or the herd as a whole; they simply acquire a right of access to the milk produced by Mr. Schmidt, which is not derived from any ownership interest in his cows. In short, “the cow-share arrangement is nothing more than a marketing and distribution scheme that is offered to the public at large by the appellant” (para 26). In other words, the cow-share agreement was a way to circumvent the rules. Thus, Mr. Schmidt was engaged in the sale, delivery and distribution of unpasteurized milk (contrary to section 18 of the HPPA), and operated a plant without a licence (contrary to section 15 of the Milk Act).

The Charter

The appellant contended that the HPPA and the Milk Act violated section 7 of the Charter. Such a finding would require the appellant to demonstrate that the impugned legislation interferes with life, liberty, or security of the person in a manner that does not accord with the principles of fundamental justice.

First, Mr. Schmidt argued that the legislation interferes with members of the cow-share agreement and their right to security of the person because it deprives them the ability to acquire a product that they consider beneficial to their health. The court quickly dismissed this argument, stating that a subjective belief in the benefits of unpasteurized milk is not enough to support a finding that the legislation contravenes section 7. This is particularly true in cases where, like this one, there is no medical or scientific evidence that provides any significant level of support to this subjective belief.

Second, Mr. Schmidt argued that the legislation infringes liberty interests by interfering with his freedom to contract and by interfering with members’ ability to make a decision of fundamental importance. The court dismissed this argument, stating that “the proposition that s. 7 protects freedom of contract or the right to engage in the economic activity of one’s choice has been rejected” (ibid at para 38); see Siemens v Manitoba (Attorney General), [2003] 1 SCR 6. Similarly, lifestyle choices regarding food or substances (like marijuana) also do not attract Charter protection, as this would overextend constitutional protection; see Godbout v Longueuil (City), [1997] 3 SCR 844, where the court stated the following at para 66:

… the autonomy protected by the s. 7 right to liberty encompasses only those matters that can properly be characterized as fundamentally or inherently personal such that, by their very nature, they implicate basic choices going to the core of what it means to enjoy individual dignity and independence.

Conclusion

R v Schmidt illustrates a simple, yet critical, point: you can’t always do what you want, and your belief system does not insulate you from the law. The belief shared by Mr. Schmidt and the cow-share agreement members in the virtues of unpasteurized milk did not serve to mitigate the illegality of his actions.

Fortunately for Mr. Schmidt, the HPPA does not prohibit an individual from consuming unpasteurized milk obtained from his or her own cow; he can enjoy his own private consumption of unlimited, ice cold, refreshing, unpasteurized milk.