Karpinski v. Collins

John Karpinski (plaintiff) was a small dairyman who could only get low-paying Grade B milk contracts. Gene Collins (defendant), president of Santa Clara Creamery, offered Karpinski a Grade A contract rate only if Karpinski secretly kicked back 4.5 cents per gallon, a rebate illegal under the Milk Stabilization Act. With no other Grade A options, Karpinski agreed and paid the rebate (disguised as a fake "feeding charge") for over a year, later reducing it to 3 cents per gallon in exchange for a $6,500 loan to Collins. When Karpinski could no longer pay, Collins terminated the contract. Karpinski sued to recover the loan and the rebate payments, and the trial court awarded him $10,677.72. Collins appealed, arguing Karpinski was equally at fault in the illegal scheme.