Full opinion text
AMENDED OPINION AND ORDER NUNC PRO TUNC DANIEL R. DOMÍNGUEZ, District Judge. Pending before the Court are: (a) Post-Hearing Memorandum In Support Of The Imposition Of A Specific Remedy As A Result Of Non-Compliance And In Support Of Petition For Contempt filed by Suiza Dairy, Inc. (hereinafter “Suiza’s Post-Hearing Memorandum”), Docket No. 2225; (b) Vaquería Tres Monjitas, Inc.’s Memorandum On Compliance Of Amended Preliminary Injunction Order (hereinafter “VTM’s Memorandum”), Docket No. 2228; (c) Defendants’ Opening Compliance Hearing Brief (hereinafter “Defendants’ Brief’), Docket No. 2227; (d) Memorandum In Response To Docket No. 2227 filed by Suiza (hereinafter “Suiza’s Opposition to Defendants’ Brief’), Docket No. 2229; (e) Reply Memorandum To Defendants’ Compliance Hearing Brief (Dkt. 2227) filed by VTM (hereinafter “VTM’s reply to Defendants’ Brief’), Docket No. 2234; (f) Defendants’ Reply Brief, Docket No. 2232; (g) Motion for Leave to File Amendment to Dkt. No. 2225 and Include Appendix 1 filed by Suiza on March 5, 2013, Docket No. 2248. Introduction On August 13, 2004, the fresh milk processors, Suiza Dairy, Inc. (“Suiza”) and Vaquería Tres Monjitas, Inc. (“VTM”), filed the instant action to challenge the constitutionality of the existing regulation issued by the Office of the Milk Industry Regulatory Administration for the Commonwealth of Puerto Rico (“ORIL”) to determine the milk price. The challenge is based on constitutional grounds, as well as timely scientific, rationale grounds, and non-discriminatory parameters within the formula used in the year 2004 and, henceforth, completely obsolete. See Vaquería Tres Monjitas, Inc., Suiza Dairy, Inc. v. Irizarry, et al., 587 F.3d 464, 482-484 (1st Cir.2009), citing Duquesne Light & Co. v. Barasch, 488 U.S. 299, 307, 109 S.Ct. 609, 102 L.Ed.2d 646 (1989), and Tenoco Oil Co. v. Department of Consumer Affairs, 876 F.2d 1013, 1026-1029 (1st Cir.1989). On July 13, 2007, 2007 WL 7733665, the Court entered an Amended Opinion And Order Granting Preliminary Injunction (hereinafter the “Injunction Order ”), Docket No. 480. After several appeals to the United States Court of Appeals for the First Circuit (hereinafter the “First Circuit”), and a certiorari request denied by the United States Supreme Court (“Supreme Court”), this Court was forced to return to the compliance hearings stage, as to examining the new parameters and the unexpected eliminations as to former parameters and authorized expenses accounts relating to potential constitutional violations of due process, equal protection and takings. Vaquería Tres Monjitas, Inc., 587 F.3d at 482-484. The compliance hearings finalized on December 1, 2012, now the Court must determine whether the defendants have indeed failed to comply with the Court’s Injunction Order of July 13, 2007, Docket No. 480, based on the evidence submitted by the parties, as well as the prior orders entered by the Court, which are critical to this matter. Significant events have transpired since the Injunction Order was entered on July 13, 2007, which are worth mentioning, to wit: (a) after the general elections of November 8, 2008, Puerto Rico underwent another change of administration effective January 2009; (b) Puerto Rico, since at least 2006, until today is still severely affected by the worldwide economic crisis, which has had an adverse impact both in the United States’ and Puerto Rico’s economy; (c) the inflation and the staggering costs of doing business in Puerto Rico are also determinative, as it results in a higher price of fresh milk; and (d) the consumers’ declining demand for fresh milk, amongst others. When considering the parties’ legal memorandums, the Court has decided to address the issues under the following topics: (a) the Experts’ Agreement, Docket No. 1003, and the proposed formula agreed as to critical parameters to be included in the formula as to the price of the fresh milk, the ROE, return on equity, the regulatory accrual, the existence of an unsystematic risk applicable to Puerto Rico, amortization of regulatory accrual, and regulatory accounts based on a document prepared on February 25, 2008, the agreement of the experiment had a wide scope, the Court reiterates its related opinions as to the Experts’ Agreement, amongst others; (b) the Court also reiterates opinions excluding certain parameters which the Court has ordered to be stricken; (c) the proposed Regulation No. 12, which is intertwined with the milk price formula, and the procedure on how the formula will be implemented amongst the farmers, the milk processors, Indulac, the advertisers, the vendors, intermediaries, agents, and the consumers, amongst others; (d) whether the defendants should be found in contempt for failure to comply with the Injunction Order of July 13, 2007; and (e) whether the Court has the inherent power to enforce the Injunction Order, by establishing a formula and the implementation procedure through the adoption of a regulation, which is a task traditionally delegated to the states, and used as a last resource remedial solution by this Court, if necessary, based on the defendants consistent lack of compliance with the terms and conditions of the Injunction Order of July 13, 2007. At the outset, the Court finds that, at this time, the Court will not establish the price fixing formula nor the corresponding regulation to implement the formula, see discussion infra. Except that matters that are directly contrary to law as to a potential discretionary matter or because the parties have stipulated a matter and one party, ORIL, is attempting to extricate itself from the Experts’ Agreement signed by their experts as to the parameters to establish the factors to determine the return on equity (ROE), and other matters relating to the equity formula, and to the establishment of the price of the milk, which is determined by ORIL. See Docket entries No. 1697 and 1804, for a more detailed analysis. The parties shall bear in mind that a reported non-compliance at this critical stage of the proceedings may result in a finding of contempt, fines, and if continued potential findings of criminal contempt. See discussion infra. The Court, however, refuses to continue with the “games” staged by the defendant ORIL and its expert. ORIL, as explained infra is simply not in compliance and consequently, “cannot expect a trial court to do his homework for him.” McCoy v. Massachusetts Institute of Technology, 950 F.2d 13, 22 (1st Cir.1991); Cruz-Báez, et als. v. Negrón-Irizarry, 220 F.Supp.2d 77, 79 n. 3 (D.P.R.2002), citing McCoy v. Massachusetts Institute of Technology, 950 F.2d at 22. Rather, the parties have an affirmative responsibility to put their best foot forward in an effort to present a legal theory that will support their claim, which is in compliance with the Court’s injunctive relief, as affirmed by the First Circuit. Cruz-Báez, 220 F.Supp.2d at 79, citing McCoy, 950 F.2d at 23. Likewise, the Court will not tolerate the “games” being played by the defendants to evade compliance with the Injunction Order and/or to try to extricate without showing manifest injustice from the Experts’ Agreement, a matter that will be discussed below. See Docket entries No. 1907, 1965. The Court has also determined that ORIL is barred from alleging economic facts as to the economic crisis that Puerto Rico is undergoing as the Government has prevailed in the First Circuit, in the Supreme Court of Puerto Rico, as well as the United States Supreme Court, alleging exactly the contrary as alleged by ORIL and its expert, in the instant case. See Patriot Cinemas, Inc. v. General Cinemas Corp., et al., 834 F.2d 208, 212 (1st Cir.1987) (“playing fast and loose with the courts”). Factual and Procedural Background As stated above, the instant case was filed on August 13, 2004 by the fresh milk processors, Suiza and VTM on the grounds of violations of their civil rights, 42 U.S.C. § 1983, as the milk price formula used by ORIL at the time of the filing of the Complaint was discriminatory, and was predicated on factors no longer applicable to the Puerto Rico economy. Suiza and VTM also challenged the constitutionality of the milk regulation existing at the time based on due process, equal protection and the takings clause. Vaquería Tres Monjitas, Inc., 587 F.3d at 482-483. On July 13, 2007, the Court issued an Injunction Order, Docket No. 480, granting a preliminary injunction to the fresh milk processors, and directing the defendants to comply with the terms and conditions set forth in the Injunction Order to remedy the challenges presented by the plaintiffs. In a nutshell, on July 13, 2007, the Court granted the preliminary injunction to the milk processors and ordered the following remedies: (1) “Effective immediately, both the fresh milk processors and Indulac will begin paying the amount of $0.55 per quart of raw milk to the dairy farmers. When the Administrator eventually determines to change the price to be paid to said dairy farmers, all market participants using raw milk to process fluid milk will pay the same amount for the milk. Under no circumstances will the fresh milk processors be required to pay more for their raw milk or carry additional costs for the purpose of allowing Indulac’s access to raw milk for UHT or fluid milk manufacturing at a lower cost than the cost at which plaintiffs can acquire raw milk from fresh or fluid milk processing. The Administrator [ORIL] may set at his discretion the prices for raw milk for non fluid milk use.” (Emphasis ours). See Docket No. 480, page 94. (2) “In a period of no more than thirty (30) days, the Administrator will put into effect non-discriminatory, rational and scientific regulatory standards that will allow him to determine costs and fair profits return for all the participants in the Puerto Rico regulated milk market. Those standards will set the reasonable rate of return that each participant should receive.” (Emphasis ours). See Docket No. 480, page 94. (3) “The Administrator shall perform a study as to the economic realities of doing business in Puerto Rico and the particular ‘fit* of Puerto Rico into any economic model which may be used from other jurisdictions. Any economic figures used from the regulated parties from other jurisdictions are not to be stale but are to be ‘for the year in question.’ Tenoco Oil Co. [Tenoco Oil Co., Inc. v. Department of Consumer Affairs, 876 F.2d 1013 (1st Cir.1989) (granting injunctive relief under Due Process, Equal Protection and Taking Clause) ]. The Administrator is to establish a system or incorporate a system or provide for mitigation for regulator accrual for losses properly supported that occur between periods of yearly reviews. The price structure of the fresh milk processors will be reviewed immediately under those parameters. The methodology of the parameters is to be consistent with this Opinion and Order.” (Emphasis ours). See Docket No. 480, page 94. (4) “The Administrator is ordered to adopt a temporary mechanism that will allow the processors to recover the rate of return they are entitled to (whatever that may be) for the year 2003 (base cost year of the present structure) and up to the day when they begin to recover said rate based on the new regulatory standards and corresponding order. The Administrator may so act through regulatory accruals, special temporary rates of return or any other available mechanism of his choosing. The Administrator will hold hearings for this purpose with the participation of plaintiffs, and all parties within the milk industry, within a period of thirty (30) days of this Opinion and Order. A decision by the Administrator shall follow promptly. (Emphasis ours). See Docket No. 480, pages 94-95. In view of the fact that, as of December 1, 2012, the remedial solutions presented by the defendants are: (a) not satisfactory to the plaintiffs; (b) the parties have been unable to reach an agreement to settle this case and/or an agreement on how to implement the agreed formula, and (c) the defendants have yet to enact and approve a regulation to implement the agreed formula. Based on these premises, the Court has decided to rule on this matter based on the evidence submitted during almost two years of having presided several lengthy compliance hearings, as well as the economic reality of Puerto Rico from on or around the year 2006 to 2013. The current economic scenario in Puerto Rico is indeed a critical factor, and it is directly affected by yet another change in the Government’s administration. The sole purpose of the Court is to: (a) reach a final solution to the ever changing dilemma of implementing the formula agreed by the experts in the Experts’ Agreement, Docket No. 1003; (b) determine the values of the factors of the agreed formula to be used when determining the milk price on a regular basis and/or when warranted by exigent circumstances and emergency situations, as well as, (c) approve, amend or return for further evaluation to ORIL, the proposed regulation to be used to implement the formula. After the compliance hearings finalized on December 1, 2012, the Court allowed the parties to file their legal memorandums. The Court is now faced with the twofold task to make a final determination on: (a) the values of the factors of the agreed formula to determine the price of the milk, and (b) the regulation to implement the formula, notwithstanding that the Court has made clear in the past that it will not sit as a regulatory court expert under a reiterated temerarious, uncontested consent by the Administrator of ORIL. See discussion infra. The Court is cognizant that the analysis and the implementation of the formula is subject to the daily variables of our uncertain economy which is also directly impacted by the global economy. The formula, however, will remain subject to future changes, as the values of each factor of the formula will undoubtedly change frequently, a reality that is out,of the control of the Court and the parties, unless the formula is later modified through a new and/or amended experts’ agreement. The Experts’ Agreement Formula Introduction With the purpose of refreshing certain important dates, it is necessary to review the chronology of the case to facilitate the Court’s analysis. 1. The instant action was filed on August 13, 2004 for the reasons set forth above. 2. After 51 preliminary injunction hearings presided by the undersigned, the Court issued an Injunction Order on July 13, 2007, Docket No. 480, page 2. This opinion triggered several appeals, including a petition for certiorari before the United States Supreme Court, which was eventually denied, upon the recommendation of the United States Attorney General. 3. On August 26, 2008, the parties’ experts’ witnesses signed a document entitled “Experts’ Agreement,” Docket No. 1003, which is now the core of the instant case, at this stage of the proceedings. The Experts’ Agreement has also triggered much litigation after the issuance of the Injunction Order, as it is instrumental for compliance of the Injunction Order. History and reality of the different changes in politics and economy have been detrimental in implementing the agreed formula, as the agreement covered only up to the year 2007, the year 2008 was left “to be discussed later.” Notwithstanding, there was a methodology approved as to regulatory accrual, and the return on equity (“ROE”). Amortization of the regulatory accrual was also agreed, as well as the establishment of regulatory accounts pursuant to the referenced documents dated August 26, 2008. Hence, there are significant parts of the Experts’ Agreement that are pellucid as to the acceptance of a measuring of the Puerto Rico risk within the ROE. Since the changes in politics and the economy are not controlled by the parties nor the Court, the effort to enforce the Experts’ Agreement has been a steep uphill task. The Court acknowledges the hard work and dedication of counsel, but the reality is that the Court still has: (a) an Injunction Order that has not been fully complied with by the defendants; (b) an Experts’ Agreement that it is today, except for some recognized exceptions, in the same status that it was at the time of its execution back in August 26, 2008, and (c) the fact that the defendants have refused to enact a regulation to implement the formula agreed under the Experts’ Agreement. 4.On December 1, 2012, the compliance hearings finally came to an end, after 75 evidentiary and compliance hearings presided by the undersigned, triggered by the defendants’ failure to comply with the Injunction Order of July 13, 2007. The Court further notes that it has been: (a) almost nine years since the filing of the instant complaint; (b) six years after the issuance of the Injunction Order on July 13, 2007, as well as several appeals during the course of the proceedings, including a writ for certiorari filed by the defendants with the United States Supreme Court, and (c) more than five years since the Experts’ Agreement was executed on August 26, 2008, and the parties and their experts have yet to agree on the validity and effect of the formula and its implementation. The Experts’ Agreement and the Procedural Aftermath As stated above, the parties’ experts agreed to meet without counsel with the sole purpose of designing a new formula to determine the price of fresh milk, as the one currently used by the defendant ORIL at the time of the filing of the instant complaint, had been determined by the District Court as obsolete and unconstitutional. Hence, on August 26, 2008, the parties’ experts signed the Experts’ Agreement, Docket No. 1003, which includes the experts’ formula to determine the regulatory accrual and the return of equity. The Experts’ Agreement was handed to the Court by the attorneys and duly docketed at 2:45 p.m., pursuant to the Computerized Electronic Piling System of the Court. The defendants’ formulas, as expressed in the Experts’ Agreement, had not been implemented because at the beginning, after the implementation the parties refused to accept the “regulatory accrual,” notwithstanding that the Injunction Order specifically so ordered, and defendants refused to accept the ROE (return on equity) formula, and the “measure of Puerto Rico risk or unsystematic risk.” The defendants practically instantly attempted to extricate themselves from accepting practically all of the agreement except those provisions that were in their favor, such as, the “Exclusivities,” which are excluded from the regulatory accrual. See Docket No. 1003, page 1, ¶ l.d. “The actual net income must be adjusted by adding back any payments for “Exclusivities. Dr. Freyre will provide that information .... ” The Court reminds the parties that the formula agreed by the experts is valid and enforceable since August 26, 2008, and shall be applied retroactively, as agreed in the Experts’ Agreement, regardless of the economic circumstances at the time, and the current and most critical economic circumstances that Puerto Rico is undergoing. That is why, the formula is flexible and the values of its factors shall be adjusted according to the important changing factors, such as, the economy, unemployment rate, the percentage of islanders moving to the United States, the rating and performance of the bonds with a maturity of 20 and 30 years, issued by the public corporations of the Government of Puerto Rico, to wit, the Puerto Rico Electric Power Authority (PREPA) and the Puerto Rico Aqueduct and Sewer Authority (PRASA), the 20-year GO and 30 year Revenue Bonds Bond Buyer Indexes, as well as the Puerto Rico risk factor, also known as “unsystematic risk.” At the end of the year 2008, the Government of Puerto Rico was on the brink of bankruptcy. This critical situation triggered the enactment of the well known “Act No. 7” by then Governor Luis Fortuño, immediately after taking office in the year 2009 to avoid bankruptcy. The Court is cognizant that “Act No. 7” passed constitutional muster both by the local and federal courts. See Amended Opinion and Order of September 22, 2010, Docket No. 1697; Opinion and Order of January 3, 2011, Docket No. 1804; Order to Show Cause of March 24, 2011, Docket No. 1907; Opinion and Order of June 28, 2011, Docket No. 1965. But, notwithstanding the dire economic position of the Government, the ORIL’s Administrator and its expert insisted that the Milk Industry was insulated from the crisis. However, the economic figures of the sales of milk, which is the most critical indicator, showed that the fresh milk sales were severely decreasing. See infra. The values of the factors of the formula will vary according the constant economic changes in the market. The agreed formula, as well as the proposed mechanism to implement the formula, that is, the proposed Regulation No. 12 submitted by ORIL, has yet to receive the final approval by the parties before it can be registered with the Puerto Rico Department of State, and it becomes enforceable. These subjects will be addressed below in detail. The Court will now reinstate the procedural background since the signing of the Experts’ Agreement on August 26, 2008 until the end of the compliance hearings. Several opinions have been issued by the Court addressing the Experts’ Agreement, as well as the defendants’ non-compliance with the Injunction Order of July 13, 2007, which are worth revisiting at this time to promote proper background to the reader. 1. Amended Opinion and Order of September 22, 2010, Docket No. 1697. In this Opinion and Order, the Court addressed several issues, including the fact that, as of September 22, 2010, “ORIL has yet to act and supplement the formula that is to be adopted. ORIL continues to procrastinate by not producing a formula for a return of equity not for a regulatory accrual.” Docket No. 1697, page 9. “Two years have elapsed since the Experts’ Agreement was executed, and no results have been produced, as the defendant ORIL has yet to determine the ‘Puerto Rico risk factor’ in order to establish a value to the factors of the CAPM formula and proceed with the corresponding calculation to enforce the formula.” Id. Moreover, the “experts’ disagreement seems to stem from the words ‘plus a measure of Puerto Rico risk,’ used in the interpretation either under the CAPM method or under the Jonathan Lesser’s ROE formula.” Id. “Much has been written, yet the language is clear, ‘a measure of Puerto Rico risk’ was to be established within the now agreed upon CAPM formula. But ‘plus a measure’ does not signify ‘no measure.’ ” Docket No. 1697, pages 9-10. “The measure is not to be decided by the Court, the measure must be reasonably, rationally and scientifically structured, and to be determined by ORIL.” Id. at page 10. (Emphasis ours). “The Court then reviews in a limited fashion for compliance under due process, equal protection or under a scientifically based reasonable and/or rationale parameters.” Id. “A regulation takes property without due process of law only if “ ‘arbitrary, discriminatory or demonstrably irrelevant to the policy the Legislature is free to adopt____’ ” Tenoco Oil Company, Inc. v. Department of Consumer Affairs, et al., 876 F.2d at 1021, (quoting Pennell v. City of San José, 485 U.S. 1, 11, 108 S.Ct. 849, 99 L.Ed.2d 1 (1988) (citations omitted), cited at the Injunction Order (Docket No. 480), p.p. 57-59.” “In the instant case, the parties agreed on a specific component of a parameter. ORIL, however, understands that no agreement was reached and/or that the economics from August 26, 2008 until the present, do not warrant the ‘risk.” Id. The Court further reminded the parties the repercussions of entering into a stipulation, citing Christian Legal Society Chapter of the University of California, Hastings College of the Law a/k/a Hastings Christian Fellowship v. Martínez, et al., 561 U.S. 661, 130 S.Ct. 2971, 2983, 177 L.Ed.2d 838 (2010); Chao v. Hotel Oasis, Inc., et al., 493 F.3d 26, 31-32 (1st Cir.2007) (the court refused to disregard the stipulation reached by counsel “based on the general principle that ‘stipulations of attorneys made during a trial may not be disregarded or set aside at will’ ”). See Docket No. 1697, page 11. In Chao, the Court held that the stipulations are highly regarded in our judicial system and “[o]nce entered, parties are ‘not generally free to extricate themselves ... [unless] ‘it becomes apparent that it may inflict a manifest injustice upon one of the contracting parties.’ ” 493 F.3d at pages 31-32. Id. The Court further reminded the parties that their respective economists have agreed, and counsel constructively also agreed [to the formula] by counsel’s filing of the stipulation. Docket No. 1697, page 12. In order to “extricate” from the Experts’ Agreement, ORIL has the burden of proof of showing that “it becomes apparent that it may inflict a manifest injustice upon one of the contracting parties.” Chao, 493 F.3d at 31-32. “The Court has not been impressed by ORIL’s proffer, and con-eludes that the reason adduced are purely pretextual in nature.” See Docket No. 1697, page 12. “The defendants’ experts now claim that ‘there is no need to add an additional risk premium to the reasonable rate of return in order to compensate fresh milk processors.’ ” Id. The Court found that the “economic factors produced as of August 2008, simply do not show that the threshold level of ‘manifest injustice’ pursuant to Chao, 493 F.3d at 31-32, has been met in a ‘manifestly’ fashion.” Id. The Court concluded that “ORIL has simply not shown to the Court that the Puerto Rican economy had improved in the year 2008 not warranting relief from the Experts’ Agreement that the parties entered.” Id. “The application of the formula to other subsequent years will depend on the economics of the Island, as applied to the regulated industry.” Id. “That is, the formula for subsequent years can be increased/decreased or even eliminated, if there is a reasonable, rational, and scientific basis.” Id. (Emphasis ours). The Court further reiterates notes 4 and 5 of its Amended Opinion and Order, Docket No. 1697, page 12. “ORIL’s expert attributes the difference to ‘ORIL price regulation,’ but does not point out to specific data.” See Docket No. 1697, pages 12-13. “Because the onus is with the party that wishes to “extricate” itself, ORIL is ordered to calculate a rational, reasonable risk premium within the formula, [denominated in the Experts’ Agreement as a] “plus a measure of risk” ... agreed by [all experts], on August 26, 2008, see Docket No. 1003.” Id. at page 13, Fn. 6. Note 6: The “measure of ... risk” is not a permanent fixture, as the ROE formula indeed was originally agreed to calculate the initial “return of equity” to be established in the year 2007. The fixture based on scientific economic data can be technically increased or decreased. The problem is that ORIL simply has ignored the impact of its Experts’ Agreement and simply unilaterally attempts to withdraw from the effects of the agreement. The Court reiterates its findings in the Amended Opinion and Order of September 22, 2010, Docket No. 1697, page 13, Fn. 7: ORIL and its expert, Dr. Cotterill, have lost track of the fact that the rate of return on equity (“ROE”) to be calculated, is not merely for the year 2008, but it is to be calculated for, at the very least, from the date of the filing of the instant complaint, if not retroactive to potentially December 31, 2002. According to Dr. Cotterill, newly surfaced economic data does not now require any “measure of Puerto Rico risk,” “because of the operations of the ORIL pricing system under the 1957 MSlk Pricing Law,” see Docket No. 1676-1. (Emphasis supplied). However, the ROE is to be established using the data available then in the years 2007 and 2008, when the stipulation was agreed for a determination on the return on equity for a formula to begin on December 81, 2002. The Court explained in Note 8, that the defendants’ expert has stated that the “[e]conomic theory does not include these factors in the analysis of the demand for a good such as milk. Also they do not contribute to the economic analysis of the industry based risk in a regulated industry such as fresh milk in Puerto Rico. Municipal bond rates’ lack of applicability is discussed in this report.” See Docket No. 1676-1, p. 10, n. 1.” Docket No. 1697, page 15, Fn. 8. The experts for plaintiffs, Dr. Freyre and Dr. Giacchino, disagreed as well as the Court. The Court notes that the economic factors stated at Fn. 6 and Fn. 7 cited in the instant opinion fully justified the experts’ opinion to include within the CAPM formula or the Lesser’s formula method, which includes an “unsystematic risk” parameter. The Court further held the parties shall not use Dean Foods, Inc. (“Dean Foods”) as part of the Beta coefficient. See Docket No. 1697, page 15. The parties shall use an entity comparable in size and milk production to that of Suiza and VTM. Id. at pages 15-17. The Court is cognizant that after the completion of the compliance hearings both Suiza and VTM agreed not to use negative Betas in the formula. But negative betas were insisted upon during the hearings until almost the very end of the procedure. See Post-Hearing Memorandum In Support Of The Imposition Of A Specific Remedy As A Result Of NonCompliance And In Support Of Petition For Contempt, as amended, Docket No. 2248 (hereinafter “Suiza’s Post Hearing Memorandum”), and Vaquería Tres Monjitas, Inc. ’s Memorandum On Compliance Of Amended Preliminary Injunction Order, Docket No. 2228 (hereinafter “VTM’s Memorandum”). “The Court understands that it cannot order a specific company to be placed within the ROE formula, as our power is limited to striking actions by the Regulator that violate due process, equal protection, constitute a potential taking, or setting unscientific parameters that are irrational.” Docket No. 1697, page 17. “Therefore, the Court strikes Dean Foods or any other company that is not reasonably comparable market to that of Suiza and VTM, and is not doing business in a reasonably comparable market to that of Puerto Rico.” Id. “ORIL is, thus, ordered to use as part of the Beta Factors reasonably comparable companies, and not a company that is to assuredly from the very start to decrease unreasonably the risk factor at the Beta coefficient.” Id. The Court further held: The Court cannot order a specific Beta Factor of 0.38 nor a determined unsystematic risk of 1. 69, as urged by Suiza and/or VTM at Docket No. 1194, pp. 4-8; the unsystematic risk of 1.69 constitutes a “settlement” proposed by VTM, see Docket No. 1192, p. 19. The Court understands that this is a matter for the Administrator to originally determine and not the Court. The Court reiterates that ORIL is ordered to calculate Suiza’s and VTM’s capital base reconstructing the same through separate regulatory accrual accounts. (Unchallenged Finding of Fact number 54 of the Injunction Order at Docket No. 480, pp. 37-38). A payment schedule should be presented for examination by the plaintiffs, containing fixed and variable interest (ORIL has created a reserve recognizing the potential debt to the two fresh milk .processors). See Docket No. 1697, page 18. The Court granted ORIL until November 3, 2010 to comply with the requirements set forth in the Amended Opinion and Order of September 22, 2010, Docket No. 1697. The Court also listed the costs and expenses to be included in the amendments to ORIL’s Regulation No. 12, and ordered ORIL to incorporate said amendments to the proposed Regulation No. 12. The Court set a hearing for October 20, 2010 at 9:00 a.m. to determine the date of publication and implementation of the amendments to ORÍL’s Regulation No. 12. See Docket No. 1697, pages 18-20. An evidentiary hearing was held on October 20, 2010, see Docket No. 1749. 2. Opinion and Order of January 3, 2011, Docket No. 1804. In response to several motions filed by the parties, the Court issued the Opinion and Order of January 3, 2011. Once again, the Court summarized and reinstated its prior holdings; emphasized on the formula agreed by the parties’ experts and formalized in the Experts’ Agreement of August 26, 2008, Docket No. 1003, and the duty of the parties to comply with the terms of the Experts’ Agreement. The Court also emphasized on the significance of determining the value of the Puerto Rico risk, the unsystematic risk, a critical and most important factor of the agreed formula. The Court flatly rejected, once again, that the measure of the Puerto Rico risk cannot be zero, as suggested by the defendants. In the use of the CAPMROE formula, the Court emphasized that the comparable surrogate companies to be used must be commercial entities similar in size and production to Suiza and VTM, specifically excluding the use of Dean Foods, Inc., which is one of the largest milk processors of continental United States. “According to Suiza, [and further not challenged by the Administrator of ORIL], Dean Foods has a capital of $6,759 Billion, representing 96.3 percent of the capital of the [total] sample used to calculate the Beta, and is ‘close to 100 times the reconstructed capital of the fresh milk processors in Puerto Rico.’ See Docket No. 1194, pp. 2-3 referring to Suiza’s Exhibits No. 14 and 15, admitted by the Court.” See Amended Opinion and Order, Docket No. 1697, page 16. A lengthy and detailed analysis made by the Court followed, leading to the defendants’ noncompliance of the Injunction Order of July 13, 2007, Docket No. 480. See Opinion and Order of January 3, 2011, Docket No. 1804, pages 1-10. The Court further held that the burden of compliance with the Injunction Order of July 13, 2007, rests on defendant ORIL not on plaintiffs. See Docket No. 1804, page 13. For example, “[a]s to the ‘unsystematic risk’ incorporated into the Experts’ Agreement relating to the ‘measure of risk,’ the argument made by ORIL is purely conclusive in nature.” See Docket No. 1804, page 13. “But, the problem was not mitigated by ORIL’s fixed price of raw milk since said price to Indulac was determined to be seriously constitutionally deficient, since the ‘fixed price’ was marked up by the Administrator in order to authorize Indulac to purchase raw milk at much cheaper prices to produce UHT milk, which not only competed with fresh milk, but also slowly but surely usurped the market from fresh milk. Vaquería Tres Monjitas, Inc., et al. v. Irizarry, 587 F.3d at 469-470 (“Indulac purchased the surplus raw milk from [the] processors at a price significantly below the price that the processors paid the dairy farmers for their non-surplus raw milk ... ”), unlike the other milk processors, the price at which Indulac may sell its milk to consumers is not regulated.” See Docket No. 1804, page 14. “This lack of regulation as to Indulac’s retail price for milk, coupled with the relatively low price at which it could purchase surplus raw milk from plaintiffs, allowed Indulac’s profit margin to soar, while the processors struggled.” Id. at pages 14-15. “And, since Indulac was able to purchase its raw milk at a deflated price, UHT milk became significantly less expensive than fresh milk—a phenomenon unique to Puerto Rico—causing Indulac’s UHT milk to begin to dominate the Puerto Rican market.” (Emphasis ours). Id. at page 15. “Therefore, the price of milk set forth by ORIL was not a mitigating factor for the years 2002 until months after the Injunction Order in July 2007.” (Emphasis ours). “Further, the price of raw milk constituted an aggravating factor to the milk processor who had to compete with Indulac, also enjoining the benefit of cheap raw milk.” Id. “Hence, Indulac competed favorably with both milk processors to the extreme that it ‘beg[an] to dominate the Puerto Rican milk market.’ Vaquería Tres Monjitas, 587 F.3d at 470.” “The price of raw milk reached in fact the threshold of a ‘taking.’ Vaquería Tres Monjitas, 587 F.3d at 483. “The [district] court is of the opinion that defendant ORIL et al. cannot now shift gears and allege new reasons as to the inclusion of Dean Foods in the Beta factor nor allege new reasons than those previously alleged in its Compliance Memorandum, Docket No. 1193, as reconsideration standards under Fed.R.Civ.P. 59(e) in the First Circuit eschews the parties on reconsideration to ‘advance new arguments that could or should been presented prior to [the District Court’s resolution] judgment.’ Marks 3 Zet-Ernst Marks GmBh & Co. KG v. Presstek, Inc., 455 F.3d 7, 15-16 (1st Cir.2006).” See Docket No. 1804, page 15. One of ORIL’s arguments is that the Experts’ Agreement is not final, nor a binding contractual agreement, or a “joint stipulation of facts between the parties as to any particular measure of risk.... But the parties here did not agree on the existence, term, or measure of risk premium. See Docket No. 1715, p.p. 2-3.” See Docket No. 1804, page 16. As to ORIL’s new argument regarding the non-existence of the Experts’ Agreement, the Court held: The court has previously set forth that the Experts’ Agreement does not constitute a “sécula seculorum ” type of agreement in terms of time frame going retroactively to 2004 (or 2002) or forward prospectively from August 26, 2008. But, the phrase “plus a measure of Puerto Rican Risk” does not mean “no measure” of Puerto Rican Risk. (Emphasis ours). [Emphasis in the original]. The specific number within the “measure of risk” is to be determined by the Administrator considering P.R. economic factors then present on August 26, 2008. The court has interpreted that the unsystematic risk factor, future or past, does not constitute a permanent feature, as the original number could be going retroactively or forward, increase, decrease or disappear. But the Administrator does not enjoy unbridled discretion, as the matter of unsystematic risk must be rational, reasonable, and based on scientific data. The court understands that the Experts’ Agreement on an original measure of unsystematic risk as the economic factors included in our clarification Order, Docket No. 1699 at footnotes no. 6 and 7, certainly warranted the Experts’ Agreement to agree on “measure of Puerto Rican Risk.” The court does not interpret the measure as a permanent fixture in the formula as the economic conditions in prior years 2004-2008, could warrant either an increase or a decrease or even an elimination; the same analysis applies going prospectively from August 26, 2008 forward. The court is of the opinion that at least covering the first initial computation, the parties agreed to a risk factor (for example, on the consideration of the Regulatory Accrual, the first period of analysis was set “to be performed until December 31, 2007, and 2008 is to be discussed later”). See Experts’ Agreement, Docket No. 1003, at ¶ 1(b). From the original date prospectively and retrospectively, the determination could depend on a rational, scientific method to increase, decrease, or eliminate the unsystematic risk. The court interprets the original date to be as to the ROE from December 31, 2007 to December 31, 2008. See analysis, infra. The Court further addressed the point of “no agreement” as to the unsystematic risk. At the outset, the Court stated in the Opinion and Order that the position of ORIL’s counsel and its expert witness are different. ORIL’s expert insists that “there is no measure of risk, because Regulation No. 12 ‘true ups’ disposition eliminates the risk as Regulation No. 12 signed on July 22, 2008, and effective sometime thereafter, (after publication by the State Department of Puerto Rico pursuant to law), is not retroactive in nature.” See Docket No. 1804, page 25. “Regulation No. 12 of July 22, 2008 is purely prospective, hence, could not be applied to the ROE (Reasonable Rate of Return or to the Regulatory Accrual also expressly contemplated by the Experts’ Agreement).” Id. “Dr. Cotterill, after being cross-examined by counsel and asked by the court as to the potential retroactivity of Regulation No. 12, then, as a fall back position, claimed that there was no risk retroactively and prospectively, because the major and most recurring cost expense of Suiza and VTM was the price of raw milk, which was set by Regulation. See Docket No. 1799, pp. 112-121, wherein Dr. Cotterill described the milk prices as a ‘constant.’ ” See Docket No. 1804, page 26. But “true Ups” an automatic increase or decrease have never been placed in effect as admitted by Dr. Cotterill, which the Court now adds, up to the daté of the signing of this Opinion cmd Order. The Court vehemently disagreed with Dr. Cotterill’s position, and held that “the raw milk price constituted a ‘taking’ banned by the United States Constitution. Vaquería Tres Monjitas, 587 F.3d at 484.” See Docket No. 1804, page 26. “Hence, the price of raw milk paid by the milk processors did not constitute a mitigating measure of risk but on the contrary, constituted an aggravating factor.” Id. at pages 26-27. “It is the court’s opinion that the price of milk paid by the milk processors was precisely one of the most severe constitutional deficiencies established by the predecessors Administrator.” Id. at page 27. The Court further held that it “rejects as out-off bounds, and being tardy, the claim that the Experts’ Agreement was no agreement a ‘recent vintage’ argument being made after the holding of eleven compliance hearings, wherein the court stated that the agreement would be enforced. See Docket No. 1737, p. 5.” See Docket No. 1804, page 27. Lastly, the Court “rejected the claims of a ‘no agreement’ as to the unsystematic risk.” Id. As to the Court’s position of non-inclusion of Dean Foods under the CAPM formula, the Court reiterated the above analysis that “there is no rational, reasonable nor any analysis whatsoever fitting Dean Foods to the regional calid temperature milk and expensive market of Puerto Rico nor by including such a large company (forty-five time'the size in volume of business of the sum of VTM and Suiza), into the Puerto Rican market.” See Docket No. 1804, pages 27-28. “Contrary to ORIL’s argument the court is not improperly substituting ORIL’s discretion of an economic standard.” Id. at page 28. “In Tenoco, supra, [Tenoco Oil Co., Inc. v. Department of Consumer Affairs, 876 F.2d at 1026-1027], as stated above the court struck a state federal economic standard not only as stale but also because the standard could not rationally be applied to ‘Puerto Rico alone.’ ” On September 22, 2010, the court ordered that another comparable company be added or Dean Foods would be stricken, and the Beta component would then be limited to the other four surrogate companies.” See Docket No. 1804, page 28. 3. Order To Show Cause of March 24, 2011, Docket No. 1907. After several evidentiary hearings and Opinions and Orders, the Court issued an Order To Show Cause on March 24, 2011, triggered by the defendants’ resistance to comply with the Injunction Order, Docket No. 480, and the Opinions and Orders that followed. In the Order To Show Cause, the Court emphasized on the defendants’ “inconsistent position relating to negating the effect of their own expert’s acceptance in recognizing a risk of doing business in Puerto Rico because of dire economic reasons.” See Docket No. 1907, page 2. “Defendants in the instant case are steadfastly negating that there exists an economic crisis in the island, notwithstanding in various cases the government has moved the federal and/or local courts to accept that the island is suffering from the “worst financial crisis in its history.’ United Automobile, Aerospace, Agricultural Implement Workers of America International Union, et al. v. Luis Fortuño, et al., 633 F.3d 37 (1st Cir.2011) (concurring opinion Boudin, C.J.).” See Docket No. 1907, page 2. The Court explained that plaintiff UAAIWAIU challenged Governor Fortuño’s commonly known as “Act 7,” enacted as the “Law Declaring a Fiscal State of Emergency and Establishing a Comprehensive Fiscal Stabilization Plan to Save Puerto Rico Credit.” Id. According to the legislative intent, “Act No. 7 was intended to eliminate Puerto Rico’s $3.2 billion structural deficit.” Id. Prior to United Automobile, Aerospace, Agricultural Implement Workers of America International Union, et al., 633 F.3d 37, the constitutionality of Act No. 7 had been challenged in the local courts, and the Puerto Rico Supreme Court upheld the constitutionality of Act No. 7. See Olga Dominguez Castro, et al. v. The Commonwealth of Puerto Rico, et al., 2010 TSPR 11, 178 D.P.R. 1 (2010). See also Docket No. 1907, page 4. In Dominguez Castro, the constitutionality of Act No. 7 was challenged by the government employees that were terminated by the implementation of Act No. 7, which was geared to reduce the size of the government, as an emergency fiscal measure under Act No. 7. See Docket No. 1907, page 4. Dominguez Castro appealed the ruling of the Puerto Rico Supreme Court to the United States Supreme Court. See Dominguez Castro, et al. v. Government of the Commonwealth of Puerto Rico, et al, 2010 WL 4220510 (On Petition for a Writ of Certiorari to the Supreme Court of Puerto Rico, Brief in Opposition of August 5, 2010). In its Brief in Opposition, the Commonwealth of Puerto Rico (the “Government”), was specific as to the dire economic situation of Puerto Rico since the year 2006, which forced the enactment of Act No. 7, and accepted that Puerto Rico was undergoing “a grave fiscal emergency’ ... “existing since at least 2006 in Puerto Rico.” See Docket No. 1907, page 7. The Government specifically argued in its brief: The legislature of the Commonwealth of Puerto Rico passed Act No. 7 in March 2009 in response to an unprecedented “fiscal crisis.” Pet. App. 291a. In the law’s extensive Statement of Motives (id. 295a-324a), the legislature explained that the Commonwealth was facing a serious $3.2 billion structural deficit equal to 42 percent of estimated revenues. That deficit resulted from, among other things, negative economic growth since early 2006. The Commonwealth’s Planning Board, however, had consistently projected positive economic growth. Thus, tax revenues had fallen far short of what the Commonwealth had anticipated and expenditures had far exceeded revenues. Id. 295a-301a. The resulting structural deficit exposed the Commonwealth to a potentially disastrous downgrade in its credit rating. Although bonds issued by the fifty States have credit ratings of A1 or higher, Puerto Rico bonds had fallen from a rating of Baal/A-in 2004 to Baa3/BBB-in 2009. That rating left Puerto Rico government debt just a single step above “junk” status. The downgrading of Puerto Rico’s credit to junk status would have reduced the value of its outstanding obligations by 30 to 50 percent. The impact on the island of such a destruction in wealth would have been devastating, as local owners hold more than $10 billion in Puerto Rico government obligations. The Commonwealth and other government bondholders also would have been required immediately to post almost $900 million in additional collateral to secure their obligations. Pet. App. 302a-304a. A downgrade to junk status would also have, severely impaired Puerto Rico’s ability to carry out its governmental operations. Investors who had traditionally acquired Puerto Rico bonds but who áre required to maintain assets in safe investments could not have continued to invest in those bonds. Without recourse to public financing, the government could not have paid employee salaries or provided citizens with essential services. Those consequences would have had a crippling effect on Puerto Rico’s economy, leading to the loss of 130,000 jobs in a jurisdiction whose total population is just four million people. According to the Planning Board’s estimates, unemployment could have reached 25 percent. Pet. App. 304a-306a. (Emphasis ours). See 2010 WL 4220510, **3-4 (U.S.)(August 5, 2010). The United States Supreme Court denied the petition for certiorari, — U.S. -, 131 S.Ct. 152, 178 L.Ed.2d 38 (2010). The Court emphasized in the Order To Show Cause that the dire economic crisis in Puerto Rico is acknowledged by both the First Circuit and the Supreme Court, at the request of the Commonwealth of Puerto Rico, constitutes yet another reason that warrants the legitimacy of the agreement, as the Experts’ Agreement’s inclusion of an unsystematic risk (a measure of “Puerto Rico risk” within the ROE factors) does not warrant that the Experts’ Agreement be disregarded and set aside. See Docket No. 1907, pages 8-13. Hence, the Government of Puerto Rico was barred from alleging that there was no economic crisis in Puerto Rico. It is potentially clear that the expert’s opinion [defendants] was a recognition to the depressed status of the world economic crisis which the government of Puerto Rico has correctly used to persuade courts to enter favorable determinations by the Circuit Court of Appeals, the Supreme Court of Puerto Rico and the Supreme Court of the United States. The defendants in the instant case are part of the government of Puerto Rico as they remain in the instant case strictly in their official government capacities. Hence, this court now adds simply that the defendants are barred, pursuant to the estoppel principles, from alleging contrary reasoning in this case when the government has prevailed in other cases using precisely on contrary arguments. Patriot Cinemas, Inc. v. General Cinemas Corp., 834 F.2d 208, 211-212 (1st Cir.1987). The court reiterates its limited holding as to “a measure of Puerto Rican risk” that the coinage used by the experts was ill stated as the court recognized since its inception that the risk should have been denominated related to the world economic crisis and not merely referring to Puerto Rico.” “The court had also clarified [in prior decisions on this subject matter] that the ‘measure of Puerto Rico risk was ill denominated by the experts of ORIL [and that of the industrial] milk processors and did not constitute a coinage by the district court.’ ” (Docket 1804 reiterating Docket 1697). The court further clarified that the inclusion of “a measure of unsystematic risk” was not a permanent fixture (emphasis supplied at Docket 1804) and Docket 1697 [and] could vary potentially “from year to year” depending on the economic scientific data of Puerto Rico each year. Much to the chagrin of the court, notwithstanding an economic depressed world economic scenario urged at the behest of local government which .has persuaded the Court of Appeals of the First Circuit court, the Supreme Court of Puerto Rico and the Supreme Court of the United States, all in cases where the government has prevailed, the defendants in the instant case insist on refusing to accept that Puerto Rico has undergone a critical economic scenario since mid June 2005 (the economic vacations forced on government employees) until at least 2010. The court makes no prediction as to 2011 although the court notes an increase in the bond rating of Puerto Rican Bonds to BBB/A-2 effective on January 27, 2011, and later a decrease in unemployment in the United States which may affirmatively affect the Puerto Rican economy this year including a positive stimulus to the unemployment rate in Puerto Rico. See Docket No. 1907, pages 9-10. The Court ordered the defendants to show cause within the next ten working days, “why they, in their official capacities, should not be totally barred from continuing to reject ‘a measure of unsystematic business risk’ to be integrated with the CAPM formula to determine plaintiffs’ return of investment (ROE), by the estoppel doctrine of ‘preclusive inconsistent positions’ as expressed in the ease of Patriot Cinemas, Inc. v. General Cinemas Corp., 834 F.2d at 211-212.” See Docket No. 1907, page 12. “Further, the defendants are to produce as requested herein within the same ten (10) working days the scientific economic data together with a full scientific rational explanation as to how the unsystematic business risk was calculated after the court struck the inclusion of Dean Foods as to Return of Investment (ROE) calculation also on a year to year basis.” See Docket No. 1907, pages 12-13. As of the date of the drafting of the instant Opinion and Order, the Court notes that whatever improvements were reflected in the Puerto Rican economy when the Court entered its Order To Show Cause of March 24, 2011, Docket No. 1907, no longer exists, as the current economic data is once again grim, and with a negative outlook. 4. Opinion and Order of June 28, 2011, Docket No. 1965. This Opinion and Order follows the parties’ responses to the Court’s Order To Show Cause, Docket No. 1907. Once again the Court found that the defendants have failed to comply with the Injunction Order of July 13, 2007. The Court proceed to make an analysis on why the defendants have yet to comply with the Injunction Order, and establishes the rules to be followed by the parties in the compliance hearings. The Court notes that the compliance hearings came to an end on December 1, 2012. The first ruling was that the Court “will not authorize or consider any proposal or compliance scenario by defendant ORIL that does not fully comply with the Orders of the Court at Docket entries No. 1697, 1698 and/or 1804.” See Docket No. 1965, page 2. The “defendants will not be authorized to unilaterally ‘extricate themselves,’ see Chao v. Hotel Oasis, 493 F.3d 26, 31-32 (1st Cir.2007), from the clear stipulation entered by all experts on August 26, 2008, including defendants, the Secretary of Agriculture and ORIL’s expert at Docket No. 1003, wherein the parties adopted the ‘CAPM methodology,’ which is the Capital Asset Price Model (CAPM) authored by Ibbotson to calculate the rate of equity of the two processing plants, see Docket No. 1003, page 1, Article 2(a).” Id. See also Christian Legal Society Chapter of the University of California, Hastings College of the Law a/k/a Hastings Christian Fellowship v. Martinez, et al., 561 U.S. 661, 130 S.Ct. at 2983. The second Order was that the Court “will not authorize any unilateral change of the Experts’ Agreement, Docket No. 1003, specifically as to significant alterations to the CAPM methodology, which the parties explicitly accepted.” See Docket No. 1965, page 3. “The Court will only allow the exception timely requested by VTM and Suiza, as to the fact that certain parameters are ‘not fit as to Puerto Rico alone,’ are to be excluded pursuant to the clear precedent established at Tenoco Oil Company, Inc. v. Department Of Consumer Affairs, 876 F.2d 1013, 1024 (1st Cir.1984 [1989]) (Torruella, J.).” Id. “That is, that some limited parameters within the CAPM methodology may be ‘locally inapplicable.’ ” Id. “The Court refers to the use of Dean Foods, Inc. (“Dean Foods”), as a surrogate company to be used within the beta coefficient component amongst the four or five companies to determine the beta coefficient of the CAPM methodology, to determine the ROE (return of equity).” Id. The third Order was that the Court “will not authorize any tampering with the CAPM formula as originally accepted by the Regulation Number 12, except of course as to the unsystematic “measure of Puerto Rico risk,” as expressed by the Administrator. ROE = Rf + b (Rm - Rf) + Rmc.” See Docket No. 1965, page 4. “ ‘ROE’ means return of equity; ‘Rf means risk free rate; ‘beta (b)’ means unlevered beta for manufacturing of dairy products; ‘Rm’ means equity risk premium; ‘me’ means microscopic risk premium.” Id. After the Court analyzed the parties’ positions, and advised the parties that it will not, “at this stage of the proceedings, authorize the alteration of the ROE coefficients as originally conceived and proposed under Regulation Number 12 by the then Administrator of ORIL.” See Docket No. 1965, pages 4-5. The Court, once again reminded the parties that since September 22, 2010, the parties were ordered “to include in the CAPM formula the ‘unsystematic risk of conducting fresh milk fresh milk processing business locally,’ all based on a stipulation that specifically incorporated this risk within the CAPM formula, see Docket No. 1003 at pages 1-8. The Court further stated that “it cannot accept any proposal of defendant ORIL that does not have within the proposal an unsystematic risk of conduction the milk operations locally under the specific agreement with the agreement of the experts. Docket No. 1003, page 1, § 2(a).” See Docket No. 1965, pages 5-6. Furthermore, the Court will “reject any proposal that does not have an unsystematic risk dated from at least December 31, 2002” [date subject to be adjusted by the Court depending on the proof to be rendered at the permanent injunction hearing], as the defendants have failed to comply with the proof requirements set forth in Christian Legal Society Chapter of the University of California, Hastings College of the Law a/k/a Hastings Christian Fellowship v. Martínez, et al, 561 U.S. 661, 130 S.Ct. at 2983. “The Martinez’ case, supra, requires the defendants to carry ‘the burden’ to attempt to extricate themselves from a stipulation. The test is one of ‘manifest justice’ as specifically required under Chao, 493 F.3d at 31-32. See also Board of Regents of the University of Wisconsin System v. Southworth, 529 U.S. 2217 [217], 226 [120 S.Ct. 1346, 146 L.Ed.2d 193] (2000).” See Docket No. 1965, page 6. The Court also reiterated that the defendants “have also failed to calculate the regulatory accrual, which must be calculated to establish plaintiffs’ equity, by using the correct dates.” See Docket No. 1965, page 7. “Further, defendants have arbitrarily adjusted the regulatory accrual beginning in December 2002 up to this date.” Id. “As of this date, the defendants [have] yet to make whole, as to a fair rate of return, to be granted to plaintiffs, which commences with the calculation of the ROE, return of equity, which was ordered to include the yearly regulatory accrual.” Id. “VTM had prior thereto proposed similar arguments at Docket No. 1896 in Dr. Freyre’s Report, see Docket No. 1896-1,. pages 24 to 26.” Id. The Court reminded the defendants all the times during the course of the instant case, that the defendants have been warned, “when admonishing them [the defendants] that ‘every day that goes by without Suiza receiving its constitutionally mandated revenue requirement only increases Suiza’s, (and VTM’s), amount of regulatory accrual,’ see Docket No. 1891 at page 11.” See Docket No. 1965, page 8. “But even without the inclusion of the regulatory accrual, which constitutes an equitable redress, ORIL has failed to comply.” Id. The Court further notes in the Opinion and Order, that as of June 28, 2011, ORIL has also “failed to correct the beta factor as required by this Court [the exclusion of Dean Foods as a coefficient factor “locally inapplicable].” See Docket No. 1965, page 8. Likewise, the Court distinguished each incident wherein Dr. Cotterill’s report is different from the conclusions reached by the plaintiffs’ experts, particularly the reports rendered by Dr. Freyre. One important item that Dr. Cotterill failed to consider “without any authorization from the Court, [is] the marketing and advertisements of both Suiza and VTM while at the same time accepting that of Indulac, and further leaving Indulac’s unaffected marketing and advertisement costs not regulated as a competitor in the fresh milk industry in the local market. (Emphasis in the original).” See Docket No. 1965, pages 8-9. “In sum, $5.92 million were unwarrantedly excluded notwithstanding specific language by the Court to the contrary at the Injunction Order, Docket No. 480, and