Great Atlantic and Pacific Tea Company, Inc v. Cottrell

• Decision Date: 25 February 1976
• Docket Number: No. 74-1148,74-1148
• Citation: 96 S.Ct. 923,47 L.Ed.2d 55,424 U.S. 366
• Parties: The GREAT ATLANTIC AND PACIFIC TEA COMPANY, INC., Appellant, v. Hugh B. COTTRELL, Health Officer, State of Mississippi
• Court: U.S. Supreme Court

424 U.S. 366

96 S.Ct. 923

47 L.Ed.2d 55

The GREAT ATLANTIC AND PACIFIC TEA COMPANY, INC., Appellant,

v Hugh B. COTTRELL, Health Officer, State of Mississippi.

No. 74-1148.

Argued Dec. 1, 1975.

Decided Feb. 25, 1976.

Syllabus

A Mississippi regulation provides that milk and milk products from another State may be sold in Mississippi only if the other State accepts milk or milk products produced and processed in Mississippi on a reciprocal basis. Appellant's application for a permit to distribute for sale at its retail outlets in Mississippi milk and milk products from its Louisiana processing plant was denied solely on the ground that Louisiana had not signed a reciprocity agreement with Mississippi as required by the regulation. Appellant then brought suit claiming that the regulation violated the Commerce Clause, but a three-judge District Court upheld the regulation as a valid exercise of state police powers, even though it incidentally burdened interstate commerce. Held: The mandatory character of the regulation's reciprocity requirement unduly burdens the free flow of interstate commerce in violation of the Commerce Clause and cannot be justified as a permissible exercise of any state power. Pp. 370-381.

(a) Only state interests of substantial importance can save the regulation in the face of its devastating effect upon the free flow of interstate milk by in practical effect, though not in absolute terms, excluding from Mississippi wholesome milk produced in Louisiana. Cf. Dean Milk Co. v. Madison, 340 U.S. 349, 71 S.Ct. 295, 95 L.Ed. 329. Pp. 372-375.

(b) The reciprocity requirement cannot be justified as serving Mississippi's vital interests in maintaining the State's health standards, for even if Louisiana's standards were lower than Mississippi's, such requirement if met permits Louisiana milk to be admitted to Mississippi if Louisiana enters into a reciprocity agreement. And even if the requirement enables Mississippi to assure itself that the reciprocating State's health standards are the "substantial equivalent" of its own, Mississippi has available for accomplishing that objective the alternative, substantially less burdensome on commerce, of applying its own inspection standards to milk shipments from a nonreciprocating State. Pp. 375-378.

(c) Nor can the reciprocity requirement be justified as an economic "free trade" measure, since it is "precisely the kind of hindrance to the introduction of milk from other states . . . condemned as an 'unreasonable clog upon the mobility of commerce' " and " 'hostile in conception as well as burdensome in result.' " Polar Ice Cream & Creamery Co. v. Andrews, 375 U.S. 361, 377, 84 S.Ct. 378, 387, 11 L.Ed.2d 389. Pp. 378-381.

D.C., 383 F.Supp. 569, reversed and remanded.

Walter W. Christy, for appellant.

Heber A. Ladner, Jr., Jackson, Miss., for appellee.

Mr. Justice BRENNAN delivered the opinion of the Court.

Section 11 of Mississippi's Regulation Governing the Production and Sale of Milk and Milk Products in Mississippi, promulgated by the Mississippi State Board of Health (1967), provides, among other things, that "(m)ilk and milk products from . . . (another State) may be sold in . . . Mississippi . . . provided . . . that the regulatory agency (of the other State that) has jurisdiction accepts Grade A milk and milk products produced and processed in Mississippi on a reciprocal basis." ¹ The question presented by this case is whether Mississippi, consistently with the Commerce Clause, Art. I, § 8, cl. 3, of the Constitution,² may, pursuant to this regulation, constitutionally deny a Louisiana milk producer the right to sell in Mississippi milk satisfying Mississippi's health standards solely because the State of Louisiana has not signed a reciprocity agreement with the State of Mississippi as required by the regulation. A three-judge District Court in the Southern District of Mississippi rejected appellant's Commerce Clause challenge, holding that "section 11 is within the permissible limits of state police powers even though it incidentally or indirectly involves or burdens interstate commerce." 383 F.Supp. 569, 575 (1974). We noted probable jurisdiction of appellant's appeal, 421 U.S. 961, 95 S.Ct. 1949, 44 L.Ed.2d 448 (1975). We reverse.³

I

Appellant, The Great Atlantic & Pacific Tea Co., Inc. (A&P), a Maryland corporation, owns and operates 38 outlets in Mississippi that engage in the retail sale of milk and milk products. A&P also operates at Kentwood, La., a plant for the processing of raw milk into milk and milk products for delivery to its retail outlets. A&P invested over $1 million in the Kentwood processing facilities, intending that part of the dairy products produced at the facility would supply its retail outlets in Mississippi. However, A&P's application on August 28, 1972, to the Mississippi State Board of Health for a permit to distribute the products from its Kentwood facility for sale in Mississippi was denied by the Board because A&P failed to submit the reciprocal agreement between Louisiana and Mississippi required by § 11.⁴ Appellant thereupon brought this action.

Evidence was stipulated before the District Court which conclusively established that the milk produced at the Kentwood plant fully complied with the requirements of § 11 in all respects save the required reciprocity agreement. The Kentwood plant had received milk sanitation-compliance ratings in excess of 90% In all respects following each inspection by Louisiana officials. These sanitation-compliance ratings were published in the Sanitation Compliance and Enforcement Ratings of Interstate Milk Shippers, a list compiled by the Public Health Service and the Food and Drug Administration of the United States Department of Health, Education, and Welfare (HEW), which includes only processors receiving compliance ratings from state officials who have been certified by the Public Health Serv- ice. Further, the parties stipulated that the Supervisor of the Milk Control Program of the Mississippi State Board of Health testified, on the basis of an inspection by Louisiana officials of the Kentwood plant reported on an HEW form, that Kentwood milk would be acceptable in Mississippi as the Louisiana regulations were substantially equivalent to Mississippi's within the meaning of § 11. Thus only the lack of a reciprocity agreement between the two States prevented appellant from marketing its Kentwood milk at its Mississippi retail outlets. ⁵

II

Mississippi's answer to appellant's Commerce Clause challenge is that the reciprocity requirement of § 11 is a reasonable exercise of its police power over local affairs, designed to assure the distribution of healthful milk products to the people of its State. We begin our analysis by again emphasizing that "(t)he very purpose of the Commerce Clause was to create an area of free trade among the several States." McLeod v. J. E. Dilworth Co., 322 U.S. 327, 330, 64 S.Ct. 1023, 1026, 88 L.Ed. 1304 (1944). And at least since Cooley v. Board of Wardens, 12 How. 299, 13 L.Ed. 996 (1852), it has been clear that "the Commerce Clause was not merely an authorization to Congress to enact laws for the protection and encouragement of commerce among the States, but by its own force created an area of trade free from interference by the States. . . . (T)he Commerce Clause even without implementing legislation by Congress is a limitation upon the power of the States." Freeman v. Hewit, 329 U.S. 249, 252, 67 S.Ct. 274, 276, 91 L.Ed. 265 (1946). It is no less true, of course, that under our constitutional scheme the States retain "broad power" to legislate protection for their citizens in matters of local concern such as public health, H. P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 531-532, 69 S.Ct. 657, 661-662, 93 L.Ed. 865 (1949), and that not every exercise of local power is invalid merely because it affects in some way the flow of commerce between the States. Freeman v. Hewit, supra, 329 U.S., at 253, 67 S.Ct., at 277; Milk Control Board v. Eisenberg Farm Products, 306 U.S. 346, 351-352, 59 S.Ct. 528, 530-531, 83 L.Ed. 752 (1939). Rather, in areas where activities of legitimate local concern overlap with the national interests expressed by the Commerce Clause where local and national powers are concurrent the Court in the absence of congressional guidance is called upon to make "delicate adjustment of the conflicting state and federal claims," H. P. Hood & Sons, Inc. v. Du Mond, supra, 336 U.S. at 553, 69 S.Ct. at 679 (Black, J., dissenting), thereby attempting "the necessary accommodation between local needs and the overriding requirement of freedom for the national commerce." Freeman v. Hewit, supra, 329 U.S., at 253, 67 S.Ct., at 277. In undertaking this task the Court, if it finds that a challenged exercise of local power serves to further a legitimate local interest but simultaneously burdens interstate commerce, is confronted with a problem of balance:

"Although the criteria for determining the validity of state statutes affecting interstate commerce have been variously stated, the general rule that emerges can be phrased as follows: Where the statute regulates even-handedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. Huron Cement Co. v. Detroit, 362 U.S. 440, 443, 80 S.Ct. 813, 816, 4 L.Ed.2d 852. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities." Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 847, 25 L.Ed.2d 174 (1970).⁶

Adjudication of Commerce Clause challenges to the validity of local...