Como Farms v. Foran

• Decision Date: 03 February 1950
• Docket Number: No. A--608,A--608
• Citation: 6 N.J.Super. 306,71 A.2d 201
• Parties: COMO FARMS, Inc. et al v. FORAN, Director, Office of Milk Industry.
• Court: New Jersey Superior Court — Appellate Division

Page 306

6 N.J.Super. 306

71 A.2d 201

COMO FARMS, Inc. et al v. FORAN, Director, Office of Milk Industry.

No. A--608.

Superior Court of New Jersey Appellate Division.

Argued Dec. 19, 1949.

Decided Feb. 3, 1950.

Herbert J. Hannoch, Newark, argued the cause for the petitioners (Hannoch & Lesser, Newark, attorneys).

Joseph Lanigan, Trenton, argued the cause for the defendant (Theodore D. Parsons, Attorney General of New Jersey, attorney).

Before Judges JACOBS, DONGES and BIGELOW.

The opinion of the court was delivered by

JACOBS, S.J.A.D.

The petitioners in this proceeding seek a determination that the Milk Control Act of 1941 (P.L.1941, c. 274), R.S. 4:12A--1 et seq., N.J.S.A., and the Reorganization Act of 1948 (P.L.1948, c. 447). R.S. 4:1--1, 2, 4.1, 24--41, N.J.S.A., which constituted the Department of Agriculture as a principal department in the executive branch of the State Government and transferred milk control functions to the Office of Milk Industry within that Department, are unconstitutional.

In August, 1949 the petitioner, Como Farms, Inc., a dealer engaged in the business of buying and selling milk in New Jersey, filed a petition in the Appellate Division for declaratory judgment under Rule 3:81--10, setting forth that the Director of the Office of Milk Industry, acting pursuant to P.L.1941, c. 274 and P.L.1948, c. 447, had by order number 48-8 suspended minimum prices to consumers, by orders numbers 49-5 and 6 altered minimum prices payable to producers, and by regulations numbers F. 13 to 17, inclusive, imposed restrictions on its business operations, and alleging that the statutes are unconstitutional and the orders and regulations are invalid. Thereafter the Director of the Office of Milk Industry filed his answer which did not question the procedure, admitted the promulgation of the orders and regulations and asserted their validity and the constitutionality of the statutes. In September, 1949 the Port Murray Dairy Co. and other dealers who had taken separate appeals to review the validity of the orders and regulations were permitted to intervene in support of the petition by Como Farms, Inc., and, in accordance with Rule 3:81--11, additional evidence was taken before the Office of Milk Industry and has been made part of the record before this Court.

The petitioners in this proceeding have expressly confined themselves to an attack on the constitutionality of P.L.1941, c. 274 and P.L.1948, c. 447, leaving other issues for determination on the appeals by the Port Murray Dairy Co., et als. Accordingly, this opinion will restrict itself to the petitioners' contentions (1) that the Milk Control Act of 1941 (P.L.1941, c. 274) is unconstitutional because (a) it delegated power without a sufficient legislative standard, and (b) the emergency which caused its passage has terminated and (2) that the Reorganization Act of 1948 (P.L.1948, c. 447) is unconstitutional because (a) its title violated Article IV, Section VII, paragraph 4 of the Constitution of 1947, N.J.S.A., which provides that every law shall embrace but one object expressed in its title and (b) it embodied procedural provisions for judicial review of administrative decision or action which infringe upon the Supreme Court's rule making powers and the right to trial by jury.

I. The Milk Control Act of 1941

A. The Sufficiency of the Legislative Standard.

In the oft cited case of State Board of Milk Control v. Newark Milk Co., 118 N.J.Eq. 504, 179 A. 116 (E. & A. 1935) the Court of Errors and Appeals held that the milk business was affected with a public interest and was subject to regulation either by the legislature or by an administrative agency acting pursuant to a valid delegation of power from the legislature. The delegation to be valid must be accompanied by a sufficient basic standard (State, by Van Riper, v. Traffic Telephone Workers' Federation of New Jersey, 2 N.J. 335, 353, 66 A.2d 616 (1949)) but the Court readily sustained the general standard found in the Milk Control Act of 1933 (P.L.1933, c. 169, p. 357). The petitioners contend that the Newark Milk case may be distinguished on the ground that, unlike the earlier statute, paragraph 22 of the 1941 Act provides that the Director in Fixing prices 'may', rather than 'shall', take into consideration the various grades of milk produced, the varying percentages of butterfat, etc. Where, as here, the public interest so demands, and no clear legislative intent to the contrary appears from the context of the Act, the language used may be construed as mandatory. See Clark v. City of Elizabeth, 61 N.J.L. 565, 581, 40 A. 616, 737 (E. & A. 1898); Fagen v. City of Hoboken, 85 N.J.L. 297, 299, 88 A. 1027 (E. & A. 1913). Indeed, in B. R. Waldron & Sons Co. v. Milk Control Board, 131 N.J.L. 267, 270, 35 A.2d 27, 29 (Sup.Ct.1944) affirmed 131 N.J.L. 388, 36 A.2d 920 (E. & A. 1944) the former Supreme Court in paraphrasing the 1941 Act interpreted paragraph 22 as imposing 'a duty to consider' the elements enumerated therein.

Furthermore, we are satisfied that, independent of paragraph 22, the 1941 Act does not vest unbridled power in the Director but, on the contrary, embodies a legally sufficient standard to guide him. Paragraph 21 expressly authorizes the Director to take such measures including the fixing of prices and the promulgation of regulations as may be 'necessary to control or prevent unfair, unjust, destructive or demoralizing practices which are likely to result in the demoralization of agricultural interests in this State engaged in the production of milk or interfere with the maintenance of a fresh, wholesome supply of sanitary milk for the consumers of this State.' The same standard is clearly expressed elsewhere in the Act (see e.g. the Preamble and paragraph 28) and although it is general in nature it is no more so than similar standards in other enactments approved by our State and Federal Courts. Thus the Board of Public Utility Commissioners has been guided simply by the standard of 'public convenience and necessity' (see e.g. R.S. 48:11--1, N.J.S.A.; Fornarotto v. Board of Public Utility Commissioners, 105 N.J.L. 28, 32, 143 A. 450 (Sup.Ct.1928)) and the Commissioner of Alcoholic Beverage Control with authority to fix prices and promulgate regulations (Gaine v. Burnett, 122 N.J.L. 39, 4 A.2d 37 (Sup.Ct.1939) affirmed 123 N.J.L. 317, 8 A.2d 604 (E. & A. 1939)) has been guided by the legislative pronouncement that the statute shall be administered in 'such a manner as to promote temperance and eliminate the racketeer and bootlegger.' (R.S. 33:1--3, 39, N.J.S.A.).

Standards embodied in Federal enactments and approved by the Supreme Court of the United States are of similar breadth. See American Power & Light Co. v. Securities and Exchange Commission, 329 U.S. 90, 105, 67 S.Ct. 133, 91 L.Ed. 103, 115 (1946); Lichter v. United States, 334 U.S. 742, 786, 68 S.Ct. 1294, 1317, 92 L.Ed. 1694, 1726 (1948). In the Lichter case the Court, in sustaining an 'excessive profits' standard listed other general standards which have been held adequate including 'just and reasonable' (Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591, 600, 64 S.Ct. 28, 88 L.Ed. 333, 344 (1944) prices yielding a 'fair return' (Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381, 397, 60 S.Ct. 907, 84 L.Ed. 1263, 1273 (1940)) and 'unfair methods of competition' (Federal Trade Commission v. Keppel & Bro., 291 U.S. 304, 311, 54 S.Ct. 423, 426, 78 L.Ed. 814, 819 (1934)).

The petitioners have advanced the additional contention that although the legislature may vest in the Director the power to prescribe the specific price to be paid for milk it may, nevertheless, not leave to his judgment the determination of whether or not there shall be any price fixing. We find no merit in this contention. One of the primary public advantages of the administrative process is the flexibility it affords by enabling the administrator to adopt, modify, or repeal regulations expeditiously as the need becomes evident. In this regard regulations fixing prices are not to be differentiated from other regulations which are equally legislative in nature. See State Board of Milk Control v. Newark Milk Co., supra, and Gaine v. Burnett, supra, where our Courts expressly sustained statutes empowering, as does paragraph 21 of the 1941 Milk Control Act, the adoption, in the exercise of the administrator's judgment within the statutory standard, of regulations on diverse subjects including the fixing of prices. See also Rieck-McJunkin Dairy Co. v. Milk Control Commission, 341 Pa. 153, 18 A.2d 868 (Sup.Ct.1941).

We are satisfied that the petitioners' attack on the delegation of power and the adequacy of the standards in the 1941 Act must fail.

B. The alleged Termination of the Emergency.

When the legislature enacted the 1941 Act it found that an emergency existed affecting the milk industry and provided in paragraph 52 that the Act shall remain effective until the legislature declares that the emergency no longer exists and terminates its operation. The legislature has made no such declaration and has not terminated the operation of the Act; on the contrary, by its passage of P.L.1948, c. 447, it continued milk control and transferred it to the Office of Milk Industry in the Department of Agriculture.

The petitioners contend, nevertheless, that this Court may declare the end of the emergency and the effectiveness of the Act citing Hourigan v. North Bergen Township 113 N.J.L. 143, 151, 172 A. 193, 785 (E. & A. 1934) where the Court stated that a law dependent upon the existence of an emergency for its validity may cease to operate when the emergency passes and the Court so determines. It may be doubted whether the doctrine of the Hourigan case would be applicable to milk control legislation generally, the constitutional validity of which presumably would not rest upon the existence of a temporary emergency...