Opinion
June 5, 1973.
Editorial Note:
This case has been marked 'not for publication' by the court.
Joseph R. Marranzino, Leo Gemma, Jr., Denver, for plaintiff-appellant.
Holme, Roberts & Owen, Richard L. Schrepferman, John L. Kane, Jr., Denver, for defendant-appellee.
PIERCE, Judge.
Plaintiff brought this action seeking to enjoin the Mountain Empire Dairymen's Association (MEDA) from the enforcement of several regulations of the Association. MEDA is a milk marketing association established pursuant to C.R.S.1963, 30--3--1 et seq. Its principal function is to aid its members in the marketing of their product. Each member has a share of MEDA's total market, which is referred to as that member's base. Plaintiff's contention is that although it is perfectly proper for him to transfer his base to other members, certain rules and regulations of the Association have 'imposed cumbersome burdens upon the mode and mechanics of transfer of base, (and have) thereby . . . eliminated simple legal transfer of base according to recognized legal and business practice.'
After a hearing for permanent injunction, the trial court entered judgment for MEDA, ruling that each of the challenged rules was reasonable and that plaintiff had failed to exhaust his remedies before the Association. Plaintiff appeals. We affirm.
Four specific rules of MEDA were put into issue by plaintiff's action. They are:
1) That MEDA will only keep records of total transfers of base between members, and not leases, although leasing is a recognized transaction among members;
2) That MEDA has limited the use of powers of attorney in connection with transfers of base to emergency situations only;
3) That MEDA requires that all base-transfer documents be notarized by MEDA designated notaries;
4) That MEDA imposes a five-year covenant not to compete on members who sell their base.
Plaintiff offered evidence to the effect that these rules arbitrarily inhibited his ability lawfully to transfer his base. MEDA countered this contention with evidence to the effect that the disputed regulations are sound business practice, born of the experience of many years. On the basis of the evidence developed at the hearing, the trial court determined that no showing had been made that these regulations were not reasonable. We concur in the determination that none of the regulations has been shown to be an arbitrary or capricious restriction on transfers.
It would be improper for this court or the trial court to engage in the internal affairs of rule-making of MEDA. Capra v. Lodge No. 273, 102 Colo. 63, 76 P.2d 738. For either court to interfere, plaintiff would have to establish fraud, or an arbitrary or capricious act such as discrimination by the Association. Olympia Milk Producers' Association v. Herman, 176 Wash. 338, 29 P.2d 676. This was not done. Therefore, plaintiff's remedy must be sought not through the courts but through the internal processes within the Association. Allander v. Carpenters District Council, 145 Colo. 164, 358 P.2d 8.
Judgment affirmed.
ENOCH and SMITH, JJ., concur.