Seelig v. Baldwin

• Decision Date: 02 August 1934
• Citation: 7 F. Supp. 776
• Parties: SEELIG v. BALDWIN, Commissioner of Agriculture and Markets, et al.
• Court: U.S. District Court — Southern District of New York

7 F. Supp. 776

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

District Court, S. D. New York.

August 2, 1934.

Before L. HAND, Circuit Judge, and BONDY and PATTERSON, District Judges.

J. J. O'Connor, of New York City, for plaintiff.

Henry S. Manley, of Albany, N. Y., and Henry Epstein, of New York City, for defendants.

L. HAND, Circuit Judge.

This case comes up before a special court constituted under section 380, of title 28, of the U. S. Code (28 USCA § 380), to enjoin the defendants from enforcing section 258-m (4) of article 21-A of the Agriculture and Markets Law of the state of New York (Consol. Laws, c. 69), enacted April 1, 1934, and an order of the Milk Control Board of the State issued July 1, 1933, under an earlier act of the same purport. The plaintiff is a milk dealer who buys its supplies in Fairhaven, Vermont, principally from the Seelig Creamery Company. The majority of the shares of the two companies are owned by the same persons, although the companies themselves are separate. The creamery buys its milk of Vermont farmers, and sells it to the plaintiff in Vermont in cans, which the plaintiff ships by rail to the City of New York. Some of the milk the plaintiff sells direct in the cans delivered to it by the creamery company; some it bottles and distributes to its customers in that form. The State of New York has created a system of price control over the sale of milk, in pursuance of which it has provided that, so far as such a prohibition is constitutionally lawful, no milk shall be sold within the state which is bought outside at prices less than those fixed for the purchase of milk from farmers within the state. This is section 258-m (4) and is quoted in the margin.¹ Under an identical section, viz., section 312 (g) of article 25, enacted in the year 1933 (Laws 1933, c. 158), the Milk Control Board of New York on July 1, 1933, passed an order construing this language by forbidding the continuous purchase of milk outside the state, followed by its use within the state, if the milk was bought for less than the minimum price fixed for purchase within the state. This order is likewise quoted in the margin;² and remained in force after the passage of the law of 1934. The defendant Baldwin is Commissioner of Agriculture & Markets, and the successor in function to the Milk Control Board; he has refused to issue a license to the plaintiff to sell milk in New York, unless it agrees to obey all orders of the former board and of himself, including that just mentioned. The plaintiff has refused, asserting among other things that the act and the order in conjunction are an unconstitutional interference with interstate commerce. It now moves for an injunction pendente lite, to which the defendants counter with a motion to dismiss the bill. The defendants, other than Baldwin, are the Director of the Division of Milk Control; the Attorney General and the District Attorney of the County of New York. The first is alleged to be acting in conjunction with the commissioner, and the others to be threatening to prosecute the defendant for selling milk without a license.

The jurisdiction of this court is conceded and indubitable, except that a question is raised whether the constitutionality of the act is at stake as contrasted with its interpretation. The argument is, that since it expressly confines its ambit to such subject matter as is constitutionally within the state's power, there cannot be a conflict between it and the Constitution; ex vi termini the legislature stops exactly where, if it went further, its action would be forbidden. We should doubt whether this could avoid the issue of constitutionality; since the act professes to go as far as it can, its interpretation involves the meaning of the Constitution. Be that as it may, such a statute, strictly speaking, enacts nothing but a hypothesis, and is necessarily brutum fulmen until some official supplies the condition by enforcing it in a concrete instance. When as here he does so by a regulation, the constitutionality of his act must be passed on by a court organized under section 380 of title 28, U. S. Code (28 USCA § 380). Then at any rate the issue becomes one of the constitutionality of the regulation. We proceed to the merits.

The doctrine was not a priori inevitable that, even though Congress had not exercised its paramount power, the states might not in the management of their internal affairs impinge upon interstate commerce. Cf. License Cases, 5 How. 504, 12 L. Ed. 256. Section 8 of article 1, merely conferred powers on Congress; it forbade nothing; it was section 10 alone that took away the states' powers, and though part of it did indeed deal with the same subject-matter, it was very limited in scope. It might have been held that this was the measure of the states' incapacity until Congress chose to act. But the contrary is now so thoroughly established as to need little citation, and the question is always whether the state has "directly" regulated interstate commerce. The Minnesota Rate Cases, 230 U. S. 352, 396, 33 S. Ct. 729, 57 L. Ed. 1511, 48 L. R. A. (N. S.) 1151, Ann. Cas. 1916A, 18; State of Missouri v. Kansas Gas Co., 265 U. S. 298, 44 S. Ct. 544, 68 L. Ed. 1027. Section 258-m (4) does not forbid the importation of milk into New York from outside; it merely prevents its sale when it gets there, unless it has been bought at the price which must be paid for similar milk in New York. Conceivably such a regulation might have been held to touch interstate commerce only "indirectly," and thus to be lawful until Congress stepped in. But again the opposite view prevailed; it is a "direct" restraint to forbid sale after the goods arrive, provided they are still a part of interstate commerce. Brown v. Maryland, 12 Wheat. 419, 447, 6 L. Ed. 678; Leisy v. Hardin, 135 U. S. 100, 111, 10 S. Ct. 681, 34 L. Ed. 128; Schollenberger v. Pennsylvania, 171 U. S. 1, 22, 18 S. Ct. 757, 43 L. Ed. 49; Savage v. Jones, 225 U. S. 501, 520, 32 S. Ct. 715, 56 L. Ed. 1182; State of Missouri v. Kansas Gas Co., supra, 265 U. S. 298, 44 S. Ct. 544, 68 L. Ed. 1027. Moreover, although for fiscal purposes the doctrine of the unbroken package no longer fixes the term of interstate commerce (Sonneborn Bros. v. Cureton, 262 U. S. 506, 43 S. Ct. 643, 67 L. Ed. 1095), when the issue is of the state's general municipal power over goods going to, or coming from, another state, we understand that the doctrine of Brown v. Maryland, supra, 12 Wheat. 419, 6 L. Ed. 678, still obtains. Leisy v. Hardin, supra, 135 U. S. 100, 10 S. Ct. 681, 34 L. Ed. 128; Schollenberger v. Pennsylvania, supra, 171 U. S. 1, 18 S. Ct. 757, 43 L. Ed. 49; Austin v. Tennessee, 179 U. S. 343, 348, 21 S. Ct. 132, 45 L. Ed. 224; Price v. Illinois, 238 U. S. 446, 454, 455, 35 S. Ct. 892, 59 L. Ed. 1400; Hebe Co. v. Shaw, 248 U. S. 297, 304, 39 S. Ct. 125, 63 L. Ed. 255. Whatever may be thought of so accidental a measure for the distribution of governmental powers, in view of the recent approval of the doctrine, it does not seem to us that an inferior court is free to treat it as open to debate. So far as we are to have a more realistic canon, it must be worked out step by step by the Supreme Court. It is true that in Austin v. Tennessee, supra, that court refused to accept the doctrine with verbal rigidity. Moreover, if the goods do not come in packages at all, there may be a substitute step by which they pass into the domestic stock of goods. Public Utilities Commission v. Landon, 249 U. S. 236, 39 S. Ct. 268, 63 L. Ed. 577; Pennsylvania Gas Co. v. Public Service Commission, 252 U. S. 23, 40 S. Ct. 279, 64 L. Ed. 434; State of Missouri v. Kansas Gas Co., supra, 265 U. S. 298, 44 S. Ct. 544, 68 L. Ed. 1027. For instance in the case of moving picture films, though not boxed, the critical event is their exhibition. Mutual Film Corporation v. Ohio Industrial Co., 236 U. S. 230, 241, 35 S. Ct. 387, 59 L. Ed. 552. None of the exceptions need, however, concern us here as to the milk sold by the plaintiff in the original cans; these are bona fide unbroken packages; they are still a part of interstate commerce, and the state has no power to forbid their sale unless by virtue of some excuse, of which more in a moment. As to the bottled milk, the opposite is true; the state may control it at its pleasure; it is part of the mass of its domestic goods; and although in so doing the state in effect fixes the price at which the milk shall be bought elsewhere, the sanction is local, and it is otherwise unobjectionable. Save for her federal duties, New York might forbid the entry of Vermont milk altogether, if she thought such milk likely to break down her policy of protecting her farmers or of securing a steady supply for her people.

Generally the power of the states has been said to rest solely upon the two questions we have already mentioned; that is, whether the goods are still in interstate commerce and whether the statute "directly" affects it. The accepted theory certainly is that the power does not depend upon the purposes which the state may have in mind; the concept is morphological rather than functional. But there are some decisions which it is very hard to fit into that pattern, which seem to turn not so much upon where the statute intervenes in the economic history of the goods, or how diffuse its effect may be when it does, as upon what is the justification for any intervention at all. One of these is Silz v. Hesterberg, 211 U. S. 31, 43, 29 S. Ct. 10, 53 L. Ed. 75; where the entry of game from elsewhere was prohibited as an incident to the protection of the local game supply. Certainly the act impinged as directly as possible upon the movement of foreign game which entered in its original wrappings; we can see no other explanation than that the purpose justified the power. It is possible to explain Geer v. Connecticut, 161 U. S. 519, 16 S. Ct. 600, 40 L. Ed. 793, on...