Baldwin v. Seelig Seelig v. Baldwin

• Citation: 294 U.S. 511,79 L.Ed. 1032,101 A.L.R. 55,55 S.Ct. 497
• Decision Date: 04 March 1935
• Docket Number: Nos. 604 and 605,s. 604 and 605
• Parties: BALDWIN, Commissioner of Agriculture and Markets, et al. v. G. A. F. SEELIG, Inc. G. A. F. SEELIG, Inc., v. BALDWIN, Commissioner of Agriculture and Markets, et al
• Court: United States Supreme Court

294 U.S. 511

55 S.Ct. 497

79 L.Ed. 1032

BALDWIN, Commissioner of Agriculture and Markets, et al.

v G. A. F. SEELIG, Inc.

G. A. F. SEELIG, Inc.,

v. BALDWIN, Commissioner of Agriculture and Markets, et al.

Nos. 604 and 605.

Argued Feb. 11, 12, 1935.

Decided March 4, 1935.

Mr. Henry S. Manley, of Albany, N.Y., for Baldwin and others.

[Argument of Counsel from pages 512-515 intentionally omitted] Messrs. J. Daniel Dougherty and John J. O'Connor, both of New York, for G. A. F. Seelig, Inc.

[Argument of Counsel from pages 516-518 intentionally omitted] Mr. Justice CARDOZO delivered the opinion of the Court.

Whether and to what extent the New York Milk Control Act (N. Y. Laws 1933, c. 158; Laws 1934, c. 126 (Agriculture and Markets Law N.Y., Consol. Laws, c. 69, §§ 252—258-r)) may be applied against a dealer who has acquired title to the milk as the result of a transaction in interstate commerce is the question here to be determined.

G. A. F. Seelig, Inc. (appellee in No. 604 and appellant in No. 605) is engaged in business as a milk dealer in the city of New York. It buys its milk, including cream, in Fair Haven, Vt., from the Seelig Creamery Corporation, which in turn buys from the producers on the neighboring farms. The milk is transported to New York by rail in 40-quart cans; the daily shipment amounting to about 200 cans of milk and 20 cans of cream. Upon arrival in New York about 90 per cent. is sold to customers in the original cans; the buyers being chiefly hotels, restaurants, and stores. About 10 per cent. is bottled in New York, and sold to customers in bottles. By concession title passes from the Seelig Creamery to G. A. F. Seelig, Inc., at Fair Haven, Vt. For convenience the one company will be referred to as the Creamery and the other as Seelig.

The New York Milk Control Act, with the aid of regulations made thereunder, has set up a system of minimum prices to be paid by dealers to producers. The validity of that system in its application to producers doing business in New York state has supported in our decisions. Nebbia v. New York, 291 U.S. 502, 54 S.Ct. 505, 78 L.Ed. 940, 89 A.L.R. 1469; Hegeman Farms Corporation v. Baldwin, 293 U.S. 163, 55 S.Ct. 7, 79 L.Ed. 259. Cf. Borden's Farm Products Co., Inc., v. Baldwin, 293 U.S. 194, 55 S.Ct. 187, 79 L.Ed. 281. From the farms of New York the inhabitants of the so-called Metropolitan milk district, comprising the city of New York and certain neighboring communities, derive about 70 per cent. of the milk requisite for their use. To keep the system unimpaired by competition from afar, the act has a provision whereby the protective prices are extended to that part of the supply (about 30 per cent.) which comes from other states. The substance of the provision is that, so far as such a prohibition is permitted by the Constitution, there shall be no sale within the state of milk bought outside unless the price paid to the producers was one that would be lawful upon a like transaction within the state. The statute, so far as pertinent, is quoted in the margin, together with supplementary regulations by the Board of Milk Control.¹

Seelig buys its milk from the Creamery in Vermont at prices lower than the minimum payable to producers in New York. The Commissioner of Farms and Markets refuses to license the transaction of its business unless it signs an agreement to conform to the New York statute and regulations in the sale of the imported product.² This the applicant declines to do. Because of that refusal other public officers, parties to these appeals, announce a purpose to prosecute for trading without a license and to recover heavy penalties. This suit has been brought to restrain the enforcement of the act in its application to the complainant; repugnancy being charged between its provisions when so applied and limitations imposed by the Constitution of the United States. United States Consti- tution, art. 1, § 8, cl. 3; Fourteenth Amendment, § 1. A District Court of three judges, organized in accordance with section 266 of the Judicial Code (28 U.S.C. § 380 (28 USCA § 380)), has granted a final decree restraining the enforcement of the act in so far as sales are made by the complainant while the milk is in the cans or other original packages in which it was brought into New York, but refusing an injunction as to milk taken out of the cans for bottling, and thereafter sold in bottles. See opinion on application for interlocutory injunction, 7 F.Supp. 776; and cf. 293 U.S. 522, 55 S.Ct. 120, 79 L.Ed. —-, October 15, 1934. The case is here on cross-appeals. 28 U.S.C. § 380 (28 USCA § 380).

First. An injunction was properly granted restraining the enforcement of the act in its application to sales in the original packages.

New York has no power to project its legislation into Vermont by regulating the price to be paid in that state for milk acquired there. So much is not disputed. New York is equally without power to prohibit the introduction within her territory of milk of wholesome quality acquired in Vermont, whether at high prices or at low ones. This again is not disputed. Accepting those postulates, New York asserts her power to outlaw milk so introduced by prohibiting its sale thereafter if the price that has been paid for it to the farmers of Vermont is less than would be owing in like circumstances to farmers in New York. The importer in that view may keep his milk or drink it, but sell it he may not.

Such a power, if exerted, will set a barrier to traffic between one state and another as effective as if customs duties, equal to the price differential, had been laid upon the thing transported. Imposts or duties upon commerce with other countries are placed, by an express prohibition of the Constitution, beyond the power of a state, 'except what may be absolutely necessary for executing its inspec- tion Laws.' Constitution, art. 1, § 10, cl. 2; Woodruff v. Parham, 8 Wall. 123, 19 L.Ed. 382. Imposts and duties upon interstate commerce are placed beyond the power of a state, without the mention of an exception, by the provision committing commerce of that order to the power of the Congress. Constitution, art. 1, § 8, cl. 3. 'It is the established doctrine of this court that a state may not, in any form or under any guise, directly burden the prosecution of interstate business.' International Textbook Co. v. Pigg, 217 U.S. 91, 112, 30 S.Ct. 481, 487, 54 L.Ed. 678, 27 L.R.A.(N.S.) 493, 18 Ann.Cas. 1103; and see Brennan v. Titusville, 153 U.S. 289, 14 S.Ct. 829, 38 L.Ed. 719; Brown v. Houston, 114 U.S. 622, 5 S.Ct. 1091, 29 L.Ed. 257; Webber v. Virginia, 103 U.S. 344, 351, 26 L.Ed. 565; Kansas City Southern R. Co. v. Kaw Valley Drainage District, 233 U.S. 75, 79, 34 S.Ct. 564, 58 L.Ed. 857. Nice distinctions have been made at times between direct and indirect burdens. They are irrelevant when the avowed purpose of the obstruction, as well as its necessary tendency, is to suppress or mitigate the consequences of competition between the states. Such an obstruction is direct by the very terms of the hypothesis. We are remainded in the opinion below that a chief occasion of the commerce clauses was 'the mutual jealousies and aggressions of the States, taking form in customs barriers and other economic retaliation.' Farrand, Records of the Federal Convention, vol. II, p. 308; vol. III, pp. 478, 547, 548; the Federalist, No. XLII; Curtis, History of the Constitution, vol. 1, p. 502; Story on the Constitution, § 259. If New York, in order to promote the economic welfare of her farmers, may guard them against competition with the cheaper prices of Vermont, the door has been opened to rivalries and reprisals that were meant to be averted by subjecting commerce between the states to the power of the nation.

The argument is pressed upon us, however, that the end to be served by the Milk Control Act is something more than the economic welfare of the farmers or of any other class or classes. The end to be served is the maintenance of a regular and adequate supply of pure and wholesome milk; the supply being put in jeopardy when the farmers of the state are unable to earn a living income. Nebbia v. New York, supra. Price security, we are told, is only a special form of sanitary security; the economic motive is secondary and subordinate; the state intervenes to make its inhabitants healthy, and not to make them rich. On that assumption we are asked to say that intervention will be upheld as a valid exercise by the state of its internal police power, though there is an incidental obstruction to commerce between one state and another. This would be to eat up the rule under the guise of an exception. Economic welfare is always related to health, for there can be no health if men are starving. Let such an exception be admitted, and all that a state will have to do in times of stress and strain is to say that its farmers and merchants and workmen must be protected against competition from without, lest they go upon the poor relief lists or perish altogether. To give entrance to that excuse would be to invite a speedy end of our national solidarity. The Constitution was framed under the dominion of a political philosophy less parochial in range. It was framed upon the theory that the peoples of the several states must sink or swim together, and that in the long run prosperity and salvation are in union and not division.

We have dwelt up to this point upon the argument of the state that economic security for farmers in the milk shed may be a means of assuring to consumers a steady supply of a food of prime necessity. There is, however, another argument which seeks to establish a relation between the well-being of the producer and the quality of the product. We are told that farmers who are underpaid will be tempted to save the expense or sanitary precautions. This temptation will affect the farmers outside New York as well as those within it. For that reason,...