Mayflower Farms v. Ten Eyck

• Decision Date: 10 February 1936
• Docket Number: No. 349,349
• Citation: 297 U.S. 266,80 L.Ed. 675,56 S.Ct. 457
• Parties: MAYFLOWER FARMS, Inc., v. TEN EYCK, Com'r of Department of Agriculture and Markets of New York, et al
• Court: U.S. Supreme Court

297 U.S. 266

56 S.Ct. 457

80 L.Ed. 675

MAYFLOWER FARMS, Inc.,

v TEN EYCK, Com'r of Department of Agriculture and Markets of New York, et al.

No. 349.

Argued Jan. 15, 1936.

Decided Feb. 10, 1936.

Mr. Seymour Ellenbogen, of Albany, N.Y. (Messrs. Bernard Ellenbogen, of Albany, N.Y., and Max Cohen, of Rochester, N.Y., on the brief), for appellant.

[Argument of Counsel from page 267 intentionally omitted] Mr. Henry S. Manley, of Albany, N.Y., for appellees.

[Argument of Counsel from pages 268-269 intentionally omitted] Mr. Justice ROBERTS delivered the opinion of the Court.

The appellant is a corporation formed under the laws of New York, pursuing the business of a milk dealer in Brooklyn. It did not enter the business until the autumn of 1933, when it applied for, and was granted a license under the Milk Control Act of March 31, 1933. The statute having been re-enacted for the year commencing April 1, 1934, the company, on April 16, 1934, sought a license under the new act. After a hearing the application was denied. The Supreme Court granted a certiorari order, and upon that order and the return the Appellate Division confirmed the order of the Department of Agriculture and Markets refusing a license (Mayflower Farms, Inc., v. Baldwin, 242 App.Div. 881, 275 N.Y.S. 669) and this action was affirmed by the Court of Appeals (Id., 195 N.E. 532).

The Milk Control Act of 1933,¹ authorized a board to fix minimum prices for sales of fluid milk in bottles by dealers to stores in cities of more than one million inhabitants, with a differential of one cent per quart in favor of dealers 'not having a well advertised trade name.'² The term of the act was one year. An amended act, effective April 1, 1934,³ which placed milk control under the jurisdiction of a division of the Department of Agriculture and Markets, contained a similar provision with respect to the differential. The pertinent section, as it stood at the time of the appellant's application for a license, follows; the words in brackets having been in the original act, but eliminated when the statute was revised in 1934, those in italics having been added by the later act: 'It shall not be unlawful for any milk dealer who (at the time this act shall take effect, is) since April tenth, nineteen hundred thirty-three has been engaged continuously in the business of purchasing and handling milk not having a well advertised trade name in a city of more than one million inhabitants to sell fluid milk in bottles to stores in such city at a price not more than one cent per quart below the price of such milk sold to stores under a well advertised trade name, and such lower price shall also apply on sales from stores to consumers; provided that in no event shall the price of such milk not having a well advertised trade name, be more than one cent per quart below the minimum price fixed (by the board) for such sales to stores in such a city.'⁴

The appellant had not a well-advertised trade-name. The reason for refusing it a license was that though it had not been continuously in the business of dealing in milk since April 10, 1933, it had sold and was selling to stores milk at a price a cent below the established minimum price. The question is whether the provision denying the benefit of the differential to all who embark in the business after April 10, 1933, works a discrimination which has no foundation in the circumstances of those engaging in the milk business in New York City, and is therefore so unreasonable as to deny appellant the equal protection of the laws in violation of the Fourteenth Amendment.

The record discloses no reason for the discrimination. The report of the committee, pursuant to which the Milk Control Act was adopted, is silent on the subject. While the legislative history indicates that the differential provision was intended to preserve competitive conditions affecting the store trade in milk, it affords no clue to the genesis of the clause denying the benefit of the differential to those entering the business after April 10, 1933.

The Court of Appeals thought a possible reason for the time limitation might be that, without it, the companies having well-advertised names could, through subsidiaries, sell milk not bearing their names in competition with unadvertised dealers and thus drive some of the latter out of the field with consequent injury to the farmers who sell them milk. This view ignores the fact that the purchase price to the farmer is fixed and that the introduction of new unadvertised brands of bottled milk would not reduce the total demand for fluid milk in the metropolitan area. The appellees do not attempt now to support the provision on this ground.

Another suggested reason for the discrimination is that the Legislature believed an equal price basis for all dealers would cause most of the business of selling milk through stores to pass into the hands of the large and well-known dealers; the differential provision was designed to prevent this result, and save existing businesses of the independent dealers, but was limited in its scope by the reason for it; the Legislature did not wish to increase the lower price competition against well advertised dealers by permitting new independent dealers to go into the business, and so required persons or corporations desiring to make investments in the milk business after April 10, 1933, to attach themselves to the higher price group. This is but another way of saying the Legislature determined that during the life of the law no person or corporation might enter the business of a milk dealer in New York City. The very reason for the differential was the belief that no one could successfully market an unadvertised brand on an even price basis with the seller of a well-advertised brand. One coming fresh into the field would not possess such a brand and clearly could not meet the competition of those having an established trade-name and good will, unless he were allowed the same differential as others in his class. By denying him this advantage the law effectually barred him from the business.

We are referred to a host of decisions to the effect that a regulatory law may be prospective in operation and may except from its sweep those presently engaged in the calling or activity to which it is directed. Examples are stat- utes licensing physicians and dentists, which apply only to those entering the profession subsequent to the passage of the act and exempt those then in practice, or zoning laws which exempt existing buildings, or laws forbidding slaughterhouses within certain areas, but excepting existing establishm nts. The challenged provision is unlike such laws, since, on its face, it is not a regulation of a business or an activity in the interest of, or for the protection of, the public, but an attempt to give an economic advantage to those engaged in a given business at an arbitrary date as against all those who enter the industry after that date. The appellees do not intimate that the classification bears any relation to the public health or welfare generally; that the provision will discourage monopoly; or that it was aimed at any abuse, cognizable by law, in the milk business. In the absence of any such showing, we have no right to conjure up possible situations which might justify the discrimination. The classification is arbitrary and unreasonable and denies the appellant the equal protection of the law.

At the argument we were asked to hold that if the time limitation be bad, it is severable, and the provision for the differential, shorn of it, remains in force; and we were referred to a section of the act claimed to show the Legislature so intended. While we have jurisdiction to decide the question, it is one which may appropriately be left for adjudication by the courts of New York, Dorchy v. Kansas, 264 U.S. 286, 290, 291, 44 S.Ct. 323, 68 L.Ed. 686; Fox Film Corporation v. Muller, 296 U.S. 207, 209, 210, 56 S.Ct. 183, 80 L.Ed. 158.

The judgment is reversed and the cause remanded for further proceedings not inconsistent with this opinion.

So ordered.

Mr. Justice CARDOZO (dissenting).

The judgment just announced is irreconcilable in principle with the judgment in Borden's Case, 297 U.S. 251, 56 S.Ct. 453, 80 L.Ed. 669, announced a minute or so earlier.

A minimum price for fluid milk was fixed by law in April, 1933. At that time, 'independents' were underselling their competitors, the dealers in well-advertised brands, by approximately a cent a quart. There was reason to believe that unless that...