People v. Nebbia

• Decision Date: 11 July 1933
• Citation: 186 N.E. 694,262 N.Y. 259
• Parties: PEOPLE v. NEBBIA.
• Court: New York Court of Appeals Court of Appeals

262 N.Y. 259

186 N.E. 694

PEOPLE

v.NEBBIA.

Court of Appeals of New York.

July 11, 1933.

Leo Nebbia was convicted of violating an order of the Milk Control Board. From a judgment of the County Court affirming the judgment of conviction in the City Court of Rochester, the defendant appeals.

Judgment affirmed.

O'BRIEN, J., dissenting.

Appeal from Monroe County Court.

Arthur E. Sutherland, Jr., of Rochester, for appellant.

John J. Bennett, Jr., Atty. Gen. (Henry S. Manley, of Albany, Henry Epstein, of New York City, and Smith O'Brien, of Rochester, of counsel), for respondent.

POUND, Chief Judge.

This case comes before the Court of Appeals on appeal from a judgment of the Monroe County Court which affirmed a conviction of the defendant-appellant, Leo Nebbia, in the City Court of Rochester, Criminal Branch. Code Criminal Procedure § 520. The offense charged in the information was a sale by Mr. Nebbia of two one-quart bottles of milk and a loaf of ‘Italian bread’ for 18 cents, which is conceded to be a violation of section 312, subdivision (e), of the Agriculture and Markets Law (Consol. Laws, c. 69), inasmuch as the Milk Control Board had fixed a minimum price for milk of 9 cents per quart.

This act (Laws of 1933, c. 158) was adopted after a thorough legislative investigation of the conditions under which milk was produced in this state. It begins with a statement to the effect that the milk business is one affecting the public health and interest, and that an emergency exists. It provides as follows:

‘§ 300. Legislative finding; statement of policy. This article is enacted in the exercise of the police power of the state, and its purposes generally are to protect the public health and public welfare. It is hereby declared that unhealthful, unfair, unjust, destructive, demoralizing and uneconomic trade practices have been and are now carried on in the production, sale and distribution of milk and milk products in this state, whereby the dairy industry in the state and the constant supply of pure milk to inhabitants of the state are imperiled. That such condition constitute a menace to the health, welfare and reasonable comfort of the inhabitants of the state. That in order to protect the well-being of our citizens and promote the public welfare, and in order to preserve the strength and vigor of the race, the production,transportation, manufacture, storage, distribution and sale of milk in the state of New York is hereby declared to be a business affecting the public health and interest. That the production and distribution of milk is a paramount industry upon which the prosperity of the state in large measure depends. That the present acute economic emergency, being in part the consequence of a severe and increasing disparity between the prices of milk and other commodities, which disparity has largely destroyed the purchasing power of milk producers for industrial products, has broken down the orderly production and marketing of milk and has seriously impaired the agricultural assets supporting the credit structure of the state and its local governmental subdivisions. That the danger to the public health and welfare is immediate and impending, the necessity urgent and such as will not admit of delay in public supervision and control in accord with proper standards of production, sanitation and marketing. The foregoing statements of fact, policy and application of this article are hereby declared as a matter of legislative determination.’

The act then (section 301) defines the classes of persons with whose conduct it deals; principally as follows:

“Milk dealer' means any person who purchases or handles milk within the state, for sale in this state, or sells milk within the state except when consumed on the premises where sold.

“Producer' means a person producing milk within the state of New York.'

Section 302 of the act then creates a milk control board of three members, the commissioner of agriculture and markets, the commissioner of health, and the director of the milk control board. Of these, the first two may designate deputies to perform their functions. A majority of the members of the board carries the power to decide any question before the board.

This board is granted great powers by the act, which ends, however (section 319), on March 31, 1934, and is avowedly a mere temporary measure to meet an existing emergency.

Section 312. The board must fix by order the minimum wholesale and retail prices for milk handled within the state for fluid consumption, including the prices on sales by milk dealers to consumers; this includes dealers who run stores (unless the milk is consumed on the premises). In fixing the prices it must take into consideration the amount necessary to yield a ‘reasonable return’ to the producer and the milk dealer.

It may similarly fix maximum prices if it sees fit. Section 304 gives rulings of the board the force and effect of law.

Section 308. The board has power to issue or withhold a license, as a condition of continuance in business, to or from any milk dealer in the state. Certain classes it may or may not exempt from the license requirements, such as small dealers and ‘carry away’ stores. No unlicensed dealer (unless exempted) may sell or buy milk, or handle milk previously handled in violation of the act.

Section 308, subd. 3. The milk control board may refuse, suspend, or revoke a license (thereby putting the dealer out of business) if a dealer (a) has been receiving from a producer shipments of milk in a course of dealing and then rejects a shipment ‘without reasonable cause’; (b) has failed ‘without reasonable cause’ to pay a milk bill to a producer; (c) where the dealer has done an act ‘in demoralization of the price structure of pure milk’; (d) where the dealer assigns for creditors, goes through bankruptcy, or has an execution returned unsatisfied against him; (h) where the dealer fails to furnish information or keep records required by the board; (k) where the licensee has violated any of the provisions of this article.

Section 306 gives the board sweeping powers to examine all books and records to enable the board to administer the act.

Besides the power given to the board (by section 308) to enforce the act by barring from the milk business any person who fails to comply, there is provided by section 307 an additional criminal sanction. A violation of the article, or of a rule or order of the board lawfully made, is made a misdemeanor, punishable by not more than a year's imprisonment, or not more than $100 fine or both. The board may also proceed civilly at law, or may enjoin, without proof that a remedy at law does not exist.

The appellant not unfairly summarizes this law by saying that it first declares that milk has been selling too cheaply in the state of New York, and has thus created a temporary emergency; this emergency is remedied by making the sale of milk at a low price a crime; the question of what is a low price is determined by the majority vote of three officials. As an aid in enforcing the rate regulation, the milk industry in the state of New York is made a business affecting the public health and interest until March 31, 1934, and the board can exclude from the milk business any violator of the statute or the board's orders.

The fixing of minimum prices is one of the main features of the act. The question is whether the act, so far as it provides for fixing minimum prices for milk, is unconstitutional under New York Constitution, article 1, § 6, and United States Constitution, Fourteenth Amendment, in that it interferes with the right of the milk dealer to carry on his business in such manner as suits his convenience, without state interference as to the price at which he shall sell his milk. The power thus to regulate private business can be invoked only under special circumstances. It may be so invoked when the Legislature is dealing with a paramount industry upon which the prosperity of the entire state in large measure depends. It may not be invoked when we are dealing with an ordinary business, essentially private in its nature. This is the vital distinction pointed out in New State Ice Co. v. Liebmann, 285 U. S. 262, 277, 52 S. Ct. 371, 76 L. Ed. 747.

It is argued that the Supreme Court of the United States has definitely excluded the production and sale of food from the field of price regulation. This is not so. Wolff Packing Co. v. Court of Industrial Relations of State of Kansas, 262 U. S. 522, 538, 43 S. Ct. 630, 67 L. Ed. 1103, 27 A. L. R. 1280. Even if it were true under normal conditions, the same might have been said of the regulation by law of rents. Yet, when an emergency arose after the war, resulting in burdensome rental conditions, emergency rent laws, temporary in their nature, were upheld. Block v. Hirsh, 256 U. S. 135, 41 S. Ct. 458, 65 L. Ed. 865, 16 A. L. R. 165. The court in regard thereto held: (1) That the legislative declaration of facts affording the ground for the regulation was entitled to great respect and was confirmed by common knowledge; (2) that the exigency existing clothed the letting of buildings with a public interest so great as to justify regulation by law, while such exigency lasted; (3) that such regulation was justified as a temporary measure, even though it might not be a permanent change; (4) that, the end being legitimateand the means reasonably related to it, the wisdom of the means was not for the courts to pass upon.

As is conceded in the Liebmann Case, supra, all businesses are subject to some measure of public regulation. This is true in an exceptional degree of the milk business. People v. Teuscher, 248 N. Y. 454, 162 N. E. 484. The question is as to whether the business justifies the particular restriction, or whether the nature of the business is such that any competent person may, conformably to reasonable regulation, engage therein.

The production of milk is, on account of...