Coffee-Rich, Inc. v. Wisconsin Dept. of Agriculture, COFFEE-RIC

• Decision Date: 28 October 1975
• Docket Number: No. 72,COFFEE-RIC,INC,72
• Citation: 234 N.W.2d 270,70 Wis.2d 265
• Parties: , a Delaware Corporation, and Crandall's Restaurant, Inc., a Wisconsin Corporation, Respondents, v. WISCONSIN DEPARTMENT OF AGRICULTURE and Donald E. Wilkinson, its Secretary, Appellants. (1974).
• Court: Wisconsin Supreme Court

Page 270

234 N.W.2d 270

70 Wis.2d 265

COFFEE-RICH, INC., a Delaware Corporation, and Crandall's Restaurant, Inc., a Wisconsin Corporation, Respondents, v. WISCONSIN DEPARTMENT OF AGRICULTURE and Donald E. Wilkinson its Secretary, Appellants.

No. 72 (1974).

Supreme Court of Wisconsin.

Oct. 28, 1975.

Robert W. Warren, Atty. Gen., Theodore L. Priebe, and Linda M. Clifford, Asst. Attys. Gen., Madison, of counsel, for appellants.

Geisler & Kay, Robert J. Kay, Madison (Arnall, Golden & Gregory, Ellis G. Arnall, Elliott H. Levitas and John C. Gray, Atlanta, Ga., of counsel), for respondents.

WILKIE, Chief Justice.

This appeal involves the constitutionality of sec. 97.48(4), Stats., enacted as part of the Laws of 1971, ch. 212, which law prohibits the 'sale or serving of any product for use as a coffee cream or whitener in any restaurant or public eating establishment, other than cream, half and half or lighter varieties of cream' and further provides:

'. . . This subsection shall not apply to coffee whitener sold or dispensed by a vending machine provided such machine bears a prominently affixed label or legend stating that the coffee whitener sold or dispensed is not a dairy product or is an imitation dairy product.'

We affirm the trial court in holding ch. 212 unconstitutional.

Plaintiff-respondent Coffee-Rich, Inc., is a Delaware corporation with its principal place of business in Buffalo, New York. It exports and sells in Wisconsin its product known as Coffee-Rich. Coffee-Rich is a nondairy creamer used mainly as a whitener in coffee and tea, but also used on breakfast cereals, fruits, and desserts. It is sold for resale at supermarkets and other retail stores, and is also sold to restaurants and institutional users like hospitals and schools. It comes in retail pint cartons, and in quart cartons, which is the form most commonly used by restaurants. It is also available in one-half ounce containers of liquid and in three-gram packages of powder, both of which are carefully labeled.

Coffee-Rich differs from cream in that it consists of vegetable-derived ingredients, rather than of animal fats. It is a wholesome, nutritious food. In content it is a product sui generis, and not merely an imitation of cow's cream. However, it is, for all practical purposes, indistinguishable to the average person when mixed with and served in coffee. Compared to cream and cream derivatives, Coffee-Rich enjoys advantages in terms of resistance to spoilage, price, storability, and less tendency to 'feather' or 'oil off' in coffee and tea.

Plaintiff-respondent Crandall's Restaurant, Inc., is located in Madison, Wisconsin, and has been serving Coffee-Rich to its patrons for seven years, both as a creamer for coffee and tea and for use on cereals, fruits, and desserts. The record does not show the form in which Crandall's serves Coffee-Rich. However, since sales to restaurants are commonly in quart containers, a substantial part of this service must either by by direct mixing with coffee in the kitchen or at a service stand or through the provision of unlabeled pitchers of Coffee-Rich.

After receiving notice by mail from the Secretary of Agriculture that it was in violation of sec. 97.48(4), Stats., Crandall's began an action on April 12, 1972, to enjoin the Wisconsin Department of Agriculture from enforcing this statute. The state appeals from the court's order granting a permanent injunction against enforcement of ch. 212.

The sole issue on this appeal is whether sec. 97.48(4), Stats., is unconstitutional because either (1) it is a deprivation of due process; or (2) it is a burden on interstate commerce. We conclude that this statute is not an unconstitutional deprivation of due process but that it does constitute an excessive burden on interstate commerce in violation of art. I, sec. 8 of the federal constitution.

Presumption of Constitutionality of Legislation.

Every legislative enactment which regulatos economic activity, and does not infringe upon fundamental freedoms, enjoys a strong presumption of constitutionality, and one who seeks to overcome this presumption must bear the heavy burden of proving beyond a reasonable doubt that the statute in question is unconstitutional. ¹ Not only is the burden of the challenger heavy in this regard, but the task of this court in passing upon the constitutionality of laws is limited and restrained. This court does not sit as a superlegislature debating and deciding upon the relative merits of legislation. It looks for a reasonable basis upon which the legislature might have acted, and assumes that the legislature had such a purpose in mind when it enacted the law in question. ²

Purpose to Prevent Consumer Deception.

Prevention of consumer confusion and deception is the reasonable basis advanced by the attorney general in support of the law. He argues that, since Crandall's has been serving Coffee-Rich directly mixed with coffee or in unlabeled pitchers for seven years, consumers have been misled into thinking they were getting real cream or some derivative thereof. Instead of 'coffee with cream' as they presumably requested, they received a blend of water, vegetable fat, corn syrup solids, vegetable protein, polyglycerol esters of fatty acids, polysorbate 60, dipotassium phosphate, disodium phosphate, carrageenan, and beta carotene. The attorney general argues that the legislature could reasonably believe that this factual situation exists, and that it forms a reasonable basis upon which the legislature could act. Thus, the attorney general asserts that the purpose of the legislation was not to protect the state's dairy industry, but to prevent fraud and deception in the sale and service of coffee with cream in restaurants.

In a line of cases this court has consistently concluded that the legislature could constitutionally enact legislation with such a purpose of preventing fraud and deception in the sale of products.

Nearly fifty years ago, in Day-Bergwall Co. v. State, ³ this court recognized that consumers might be confused by the sale of an imitation vanilla product, and that the legislature could act upon the factual basis to protect the public from fraud. A few years earlier, in Hebe Co. v. Shaw, ⁴ the United States Supreme Court found that the circumstances of sale of evaporated milk created a risk of fraudulent substitution for whole milk, and that this danger was a sufficient factual basis for an outright prohibition on the sale of evaporated milk. In 1944, the Supreme Court also decided, in Carolene Products Co. v. United States, ⁵ that the likelihood of confusion, deception, and substitution in the sale of filled milk products was enough to sustain constitutionality of the federal Filled Milk Act.

Although these cases are from an earlier era, there is today an even greater concern for protection of consumer rights, which reasonably includes the right to be served what one expects in a public restaurant. This concern has been reflected in more recent cases involving the deceptive sale of new foods closely resembling other foods. For example, in Aeration Processes, Inc. v. Commissioner of Public Health, ⁶ the Massachusetts Supreme Court was faced with a product called Instantblend, which was a nondairy creamer similar to Coffee-Rich. In that case the court found that there was a substantial risk of consumer mistake and deception in the sale of a product so similar to cream. This danger was even greater in light of the fact that Instantblend was being served at restaurants and other public eating establishments. The court conceded that the intent of the manufacturer of this product might have been to make an entirely new product, but pointed out that this was not inconsistent with the intent to make that new product resemble cream, and that this innovative intent, however laudable, was irrelevant to the question of whether there was confusion and mistake among consumers. The court concluded that a total prohibition upon the sale of Instantblend did not constitute an unconstitutional deprivation of due process. In Coffee-Rich, Inc. v. Commissioner of Public Health, ⁷ the Massachusetts Supreme Court had before it a similar case involving the sale of Coffee-Rich. The holding of that case was that a total prohibition in the sale of Coffee-Rich was constitutionally unjustified because the evidence showed that most of the sales were made from the frozen foods sections of supermarkets, and thus there was less risk of consumer mistake and deception than there might be in other circumstances. Aeration Processes, with its reasoning about a higher risk of deception in restaurant sales, was not overruled, as plaintiffs suggest. On the contrary, the court found that Coffee-Rich was indistinguishable from cream in coffee, and that the danger of consumer confusion was present, although it was not substantial in the context of supermarket sales.

Plaintiffs argue that there is no factual basis to support this law because the Secretary of Agriculture has never received a consumer complaint about service of Coffee-Rich in restaurants. Yet consumers can hardly be said to be aware of the deception given the fact that Coffee-Rich is indistinguishable from cream when mixed with coffee, and the fact that it is frequently so mixed out of the sight of the consumer. Even if restaurant patrons were aware of the substitution, this is hardly a matter which would provoke them to complain to the proper authorities. It is rather the cumulative effect of this deceptive substitution which may be said to have triggered the action of the legislature.

We conclude that the basic purpose of preventing deception is an underlying and constitutional purpose of the legislation.

The trial court brushed aside this claim that prevention of deception was the purpose of the legislation. Instead, it examined the legislative history of sec. 97.48(4), Stats., and found therein a clear intent to ban...