294 U.S. 511 (1935), 604, Baldwin v. G.A.F. Seelig, Inc.

Docket Nº:No. 604
Citation:294 U.S. 511, 55 S.Ct. 497, 79 L.Ed. 1032
Party Name:Baldwin v. G.A.F. Seelig, Inc.
Case Date:March 04, 1935
Court:United States Supreme Court
 
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Page 511

294 U.S. 511 (1935)

55 S.Ct. 497, 79 L.Ed. 1032

Baldwin

v.

G.A.F. Seelig, Inc.

No. 604

United States Supreme Court

March 4, 1935

Argued February 11, 12, 1935

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES

FOR THE SOUTHERN DISTRICT OF NEW YORK

Syllabus

1. A law or regulation of a State which prohibits the sale of milk imported from another State unless the price paid in that other to the producer was up to the minimum prescribed by the first State for purchases from local producers is a direct and unconstitutional burden on interstate commerce, whether applied to milk sold by the importer in the cans in which it was imported or to milk sold by him in bottles in which it was put after importation. Pp. 521, 526.

2. Such a regulation cannot be sustained as an exercise of police power upon the ground that economic security of the dairyman works for the sanitary security of the community by insuring both an adequate supply and a wholesome quality of a necessary food. P. 522.

District Court reversed in part; affirmed in part.

CROSS-APPEAL to review a decree of the District Court, of three judges, in a suit brought by Seelig, Inc., a milk dealer, to restrain Baldwin and other state officials from prosecuting it for selling without a license in New York

Page 512

milk imported from Vermont. The decree was for the plaintiff in respect of milk sold in the original packages, but, in respect of milk sold in bottles filled from those cans, relief was denied. See 7 F.Supp. 776, opinion on the application for interlocutory injunction.

Page 518

CARDOZO, J., lead opinion

MR. JUSTICE CARDOZO delivered the opinion of the Court.

Whether and to what extent the New York Milk Control Act (N.Y.Laws of 1933, c. 158; Laws of 1934, c. 126) 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, Vermont, 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 forty-quart cans, the daily shipment amounting to about 200 cans of milk and 20 cans of cream. Upon arrival in New York, about 90% is sold to customers in the original cans, the buyers being chiefly hotels, restaurants and stores. About 10% 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, Vermont. For convenience, the one company will be referred to as the Creamery and the other as Seelig.

Page 519

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 support in our decisions. Nebbia v. New York, 291 U.S. 502; Hegeman Farms Corp. v. Baldwin, 293 U.S. 163. Cf. Borden's Farm Products Co. v. Baldwin, 293 U.S. 194. 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% 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 [55 S.Ct. 499] of the supply (about 30%) 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

Page 520

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 Constitution,

Page 521

Art. I, § 8, clause 3; Fourteenth Amendment, § 1. A District Court of three judges, organized in accordance with § 266 of the Judicial Code (28 U.S.C. § 380), has granted a final decree restraining the enforcement of the Act insofar 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. The case is here on cross-appeals. 28 U.S.C. § 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 [55 S.Ct. 500] 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 inspection

Page 522

laws." Constitution, Art. I, § 10, clause 2; Woodruff v. Parham, 8 Wall. 123. 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. I, § 8, clause 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, and see Brennan v. Titusville, 153 U.S. 289; Brown v. Houston, 114 U.S. 622; Weber v. Virginia, 103 U.S. 344, 351; Kansas City Southern Ry. Co. v. Kaw Valley Drainage District, 233 U.S. 75, 79. 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 reminded 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

Page 523

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...

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