Borden Company v. Liddy

Decision Date10 December 1962
Docket NumberNo. 16961.,16961.
PartiesThe BORDEN COMPANY, Appellant, v. L. B. LIDDY, Secretary of Agriculture of the State of Iowa, Appellee.
CourtU.S. Court of Appeals — Eighth Circuit

Samuel G. O'Brien, Des Moines, Iowa, Maxwell A. O'Brien, Des Moines, Iowa, and Joseph A. Greaves and William N. Braun, Chicago, Ill., on the brief, for appellant.

John M. Creger, Asst. Atty. Gen., Des Moines, Iowa, Evan Hultman, Atty. Gen., Iowa and George E. Wright, William J. Yost and David E. Byers, Assts. to Atty. Gen., Des Moines, Iowa, on the brief, for appellee.

Before VOGEL and VAN OOSTERHOUT, Circuit Judges, and VAN PELT, District Judge

VOGEL, Circuit Judge.

The Borden Company, plaintiff-appellant, brought this action against L. B. Liddy, Secretary of Agriculture of the State of Iowa, defendant-appellee, seeking a declaratory judgment. It also asked for a temporary restraining order and preliminary and final injunctions. The controversy arises out of a difference between state and federal laws establishing the milkfat content of ice cream.

Borden is engaged in the manufacturing, processing, sale at wholesale and distribution of ice cream in bulk in interstate commerce through and into various states, including Iowa. Liddy, as Secretary of Agriculture of the State of Iowa, is charged with the duty of administering and enforcing those provisions of the law of Iowa hereinafter referred to.

Prior to July 1, 1961, there was no federal regulation establishing definitions and standards of identity for ice cream and other frozen desserts. The various states and the District of Columbia by legislation or regulation fixed minimum standards for milkfat content in ice cream. Four states and the District of Columbia required a minimum of 8%. Twenty-five states required a minimum of 10%. Fifteen states, including Iowa, required a minimum of 12%. One state required a minimum of 13%, and three states a minimum of 14%. 25 Fed. Reg. 7132 F.F. #44.

On July 1, 1961, following extensive hearings, there went into effect a regulation issued by the Commissioner of Foods and Drugs under authority delegated to him by the Secretary of Health, Education and Welfare in accordance with the Federal Food, Drug and Cosmetic Act, 21 U.S.C.A. §§ 341, 371(e), which regulation provided for a minimum milkfat content in ice cream of 10%1 as opposed to Iowa's requirement of 12%.2

It was stipulated by the parties:

"The defendant, L. B. Liddy, as Secretary of Agriculture, in his official capacity, has made demand upon this plaintiff that it comply with the aforesaid provisions of the Statutes of Iowa, specifically Section 190.1(34), Code of Iowa 1958, and threatens to enforce the provisions of Section 189.19, Code of Iowa 1958, against this plaintiff, its officers and employees unless the plaintiff immediately complies with Section 190.1(34) of the Iowa Statutes aforesaid in regard to ice cream manufactured by The Borden Company outside of the State of Iowa for sale in Iowa and ice cream manufactured by The Borden Company in Iowa for delivery and sale in adjoining states in interstate commerce."

Borden's complaint alleged that:

"* * * to enforce the aforesaid penalties of the Iowa Law against this Plaintiff by reason of its compliance with the Federal Statutes and regulations, is a wrongful interference with the exclusive power of Congress over interstate commerce, illegal, arbitrary, discriminatory and in conflict with the statutes and Constitution of the United States and the aforesaid rules and regulations promulgated thereunder and deny to the Plaintiff the due process and equal protection of the law, in violation of Article I, Section 8 and Amendments V and XIV of the Constitution of the United States." (Emphasis supplied.)

Borden asked the United States District Court for the Southern District of Iowa for a temporary restraining order and a preliminary and permanent injunction "* * * restraining and enjoining them Liddy and all officials, agents, servants and employees from enforcing the provisions of Section 190.1(34) Code of Iowa 1958 and the rules and regulations of the Secretary of Agriculture of the State of Iowa * * *." On July 7, 1961, the District Court granted Borden's request for a temporary restraining order. Subsequently the matter was tried by the District Judge upon an agreed stipulation of facts. On December 16, 1961, the District Judge denied the ultimate relief asked for by Borden because:

"The Iowa statute in question does not discriminate against interstate commerce as such. The court is of the opinion that after considering all the facts and circumstances the provisions of Iowa Code Sec. 189.15, I.C.A., are not so burdensome upon interstate commerce as to be violative of the commerce clause of the federal Constitution."

See Borden Company v. Liddy, D.C.S.D. Ia., 1961, 200 F.Supp. 221.

A three-judge court was not asked for by the parties nor convened by the District Judge in order to pass on the application for the preliminary and permanent injunctions. In failing to call a three-judge court and in passing upon the request for a preliminary and permanent injunction, we believe the District Judge overlooked the provisions of 28 U.S.C.A. § 2281:

"An interlocutory or permanent injunction restraining the enforcement, operation or execution of any State statute by restraining the action of any officer of such State in the enforcement or execution of such statute or of an order made by an administrative board or commission acting under State statutes, shall not be granted by any district court or judge thereof upon the ground of the unconstitutionality of such statute unless the application therefor is heard and determined by a district court of three judges under section 2284 of this title."

Borden's complaint alleges that the United States, by reason of its passing the regulations supra, has "preempted, assumed and exercised its full and complete jurisdiction and control over the manufacture, distribution, labeling and sales in interstate commerce of frozen desserts, including ice cream" and that Liddy's threat to enforce the law of Iowa supra and invoke the penalties provided therefor against Borden is a challenge to both the Supremacy Clause of the Constitution and the Commerce Clause as well.

It is true that some cases have exempted from the operation of § 2281 attacks upon a statute based solely upon federal pre-emption. The reasoning of such cases is that only an unconstitutional result is alleged and not unconstitutionality per se, and that pre-emption involves only the interpretation of a federal statute. See Penagaricano v. Allen Corporation, 1 Cir., 1959, 267 F.2d 550; Board of Trade of City of Chicago v. Illinois Commerce Commission, 7 Cir., 1946, 156 F.2d 33, reversed in part on other grounds (1947), 331 U.S. 247, 67 S.Ct. 1160, 91 L.Ed. 1468; Cloverleaf Butter Co. v. Patterson, 5 Cir., 1941, 116 F.2d 227, reversed on other grounds, 315 U.S. 148, 62 S.Ct. 491, 86 L.Ed. 754; Pennsylvania Greyhound Lines v. Board of Public Utility Com'rs, D.N.J., 1952, 107 F.Supp. 521, 525; Farmers' Gin Co. v. Hayes, W.D.Okl., 1943, 54 F. Supp. 43. The rationale of these cases would seem to be seriously questioned by Justice Frankfurter in Kesler v. Department of Public Safety, etc., of Utah, 1962, 369 U.S. 153, 82 S.Ct. 807, 7 L.Ed. 2d 641, where he states, at page 156 of 369 U.S. at page 810 of 82 S.Ct.:

"* * * This was so heard by a three-judge court and appeal was properly brought directly here, unless invalidation of a state statute by virtue of the Supremacy Clause rests on a different constitutional basis than such invalidation because of conflict with any other clause of the Constitution, at least to the extent of reading such an implied exception into the procedure devised by § 2281. Neither the language of § 2281 nor the purpose which gave rise to it affords the remotest reason for carving out an unfrivolous claim of unconstitutionality because of the Supremacy Clause from the comprehensive language of § 2281." (Emphasis supplied.)

It is unnecessary to determine, however, whether Kesler is now authority for the proposition that where only the Supremacy Clause is involved because of claimed pre-emption, a three-judge court must nevertheless be constituted. Here, in addition to the allegation of pre-emption, Borden has invoked Article I, Section 8, Amendment V and Amendment XIV in contravention of the Iowa statutes.

Campbell v. Hussey, 1961, 368 U.S. 297, 82 S.Ct. 327, 7 L.Ed.2d 299, involved a suit brought by the owners and operators of tobacco warehouses in Georgia to enjoin the Commissioner of Agriculture of the State of Georgia and other state officials from enforcing certain provisions of the Georgia Tobacco Identification Act. Federal regulations required that flue cured tobacco be identified by a blue tag stating the type and grade thereof. Georgia law required Type 14 flue cured tobacco to be identified by a white tag. A three-judge court was convened and in 189 F.Supp. 54 held that the Georgia law burdened interstate commerce and, additionally, that the federal regulation had pre-empted the field. In affirming, the Supreme Court, in a footnote at page 298 of 368 U.S., at page 327 of 82 S.Ct., had this to say with reference to the jurisdictional question of a three-judge court:

"Of the several infirmities which Georgia\'s law is alleged to have, only one was reached by the lower court, namely, the constitutionality of the law in light of the requirements of the Commerce Clause. The complaint also challenged the constitutionality of the law on the grounds that it violated both the Equal Protection and the Due Process Clauses of the Fourteenth Amendment. Plainly the case was one to be heard by a three-judge court. See Florida Lime & Avocado Growers v. Jacobsen, 362 U.S. 73 80 S.Ct. 568, 4 L.Ed.2d 568."

Query v. United States, 1941, 316 U.S. 486, 62 S.Ct....

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