Johnson v. Mich. Milk Mktg. Bd.

• Decision Date: 10 December 1940
• Docket Number: Nos. 1-3.,s. 1-3.
• Citation: 295 N.W. 346,295 Mich. 644
• Parties: JOHNSON v. MICHIGAN MILK MARKETING BOARD (two cases). MICHIGAN MILK MARKETING BOARD v. JOHNSON.
• Court: Michigan Supreme Court

295 Mich. 644

295 N.W. 346

JOHNSON

v.MICHIGAN MILK MARKETING BOARD (two cases).

MICHIGAN MILK MARKETING BOARD

v.JOHNSON.

Nos. 1-3.

Supreme Court of Michigan.

Dec. 10, 1940.

Appeals from Michigan Milk Marketing Board's Orders Nos. 3 and 4.

George A. Johnson, doing business as Johnson Milk Company, was granted a writ of certiorari to review orders 3 and 4 of the Michigan Milk Marketing Board determining the existence of an emergency and fixing wholesale and retail prices of milk within the Detroit Milk Marketing Area. After the entry of order No. 3, the Michigan Milk Marketing Board filed a bill of complaint seeking to restrain George A. Johnson and his agents from violating amendedorder No. 2. From an adverse decree, George A. Johnson appeals.

Decree reversed, bill of complaint of the Michigan Milk Marketing Board dismissed, and all orders of the Michigan Milk Marketing Board vacated.

McALLISTER and NORTH, JJ., dissenting in part.Appeal from Circuit Court, Wayne County; Robert M. Toms, judge.

Argued before the Entire Bench.

Harold Goodman, of Detroit, and Hoffius & Van Kovering, of Grand Rapids, for appellant.

Thomas Read, Atty. Gen., and Edmund E. Shepherd and Robert L. Arnold, Asst. Attys. Gen. (Donald I. Albaugh, of Detroit, of counsel), for appellee.

David E. McLaughlin, of Saginaw, and Carl H. Smith, of Bay City, amici curiae.

BUSHNELL, Chief Justice.

Plaintiff Johnson was granted a writ of certiorari review Orders 3 and 4 of the Michigan Milk Marketing Board, which determined the existence of an emergency and fixed wholesale and retail prices of milk within the Detroit Milk Marketing Area.

After the entry of Order No. 3, the Board filed a bill of complaint in Wayne circuit seeking to restrain Johnson and his agents from violating Amended Order No. 2. During the hearing on the chancery matter, Johnson agreed to submit to the licensing provisions of the Milk Marketing Act, Act No. 146, Pub.Acts 1939, Stat.Ann. § 12.805(1)-(56), and that question is eliminated from the case.

For a number of years, many of the milk producers in Michigan have been organized as the Michigan Milk Producers Association, with market sales committees in various counties. This Association has current and invested assets of over $200,000, and trust assets of $135,000. The trust assets are to guarantee payments to producers and provide for a quarantine fund, etc. The amount of milk sold in the Detroit Marketing Area is about 2,000,000 lbs. daily, some 80 per cent. of which is supplied by members of the Association. Formerly, the Association was financed by dues from its members. Under the act, the Board authorized a check-off of four cents per hundredweight on milk handled in the area, which is used in part of finance the Association.

Johnson is the fourth largest milk distributor in the Detroit area. He purchases milk from producers and distributes at retail though a chain of milk depots on a cash and carry plan. He claims to be able to pay more for milk, seel it for substantially less than others, and still make a profit. However, he ignores the factors of base and surplus and does not carry his share of the burden of this necessary element of cost of milk.

After the publication of notice and informal hearings without the swearing of witnesses, certain orders were issued by the Board. Order No. 1, made July 17, 1939, designated the extent of the Detroit Milk Marketing Area. Order No. 2, entered August 8, 1938, is quite inclusive and regulatory. Its main purpose is to establish minimum prices to be paid producers by distributors. The minimum price on Class 1 milk was established at $1.90 per hundredweight. This order was amended in considerable detail on August 28th, the minimum on Class I being fixed at $2.08.

Following publication of notice and hearings at which all witnesses were sworn, Order No. 3 was entered on September 29, 1939. This order fixed in detail the munimum prices at which milk of various grades could be sold to the consumer, setting the retail price of 3 1/2 to 4 per cent. milk from vehicles at 11 cents per quart in containers, and from retail stores at 9 cents. Other prices were fixed for varying grades and quantities.

Order No. 4, dated March 27, 1940, amended Order No. 3 in certain respects, without changing the differential of 2 cents between the price of milk sold from stores and that retailed through wagon deliveries.

The trial judge filed a comprehensive opinion in the chancery cause, denied Johnson's claim of unconstitutionality of the act, and authorized a decree granting the relief prayed for in plaintiff's bill of complaint.

The constitutional objections raised by Johnson in the chancery cause were summarized by the trial judge as follows:

‘(1) The Michigan Milk Marketing Board (hereafter referred to as the Board) is prohibited by reason of the personal interest ot is members in its orders and regulations from acting lawfully

‘(2) The check-off provisions of the statute (Sect. 24(d) violate the due process of law provisions of the Federal and State constitutions, and the price-fixing orders based thereon constitute a fraud against producers and distributors.

‘(3) The notice of hearing provided by Sect. 19 is so inadequate, both as to contentand time, as to amount to a violation of the due process of law provision.

‘(4) The limitation upon judicial review prescribed in Sect. 53 violates the due process of law provisions of the Constitution.

‘(5) The delegation of the power to fix price of milk by the use of base and surplus plan constitutes an unlawful delegation of legislative power.’

These objections are renewed on appeal, with enough change to conform to the joint review, of the orders, by certiorari, and of the decree, by appeal. It is also claimed that the title of the act is insufficient. Appellant urges that we should declare the statute unconstitutional and, if such determination is not available, that Order 2, 3, and 4, as amended, should be held invalid.

Milk marketing acts have been considered by several courts of last resort. The acts of Connecticut, Maryland, New Hampshire, and Utah have been declared unconstitutional, and the acts of Alabama, California, Florida, Georgia, Indiana, Iowa, New Jersey, New York, Oregon, Pennsylvania, Virginia, and Wisconsin have been held good. The authorities may be found collected in Baldwin v. G. A. F. Seelig, Inc., 294 U.S. 511, 55 S.Ct. 497, 79 L.Ed. 1032,101 A.L.R. 64; 110 A.L.R. 644;Carolene Products v. Harter, 329 Pa. 49, 197 A. 627,119 A.L.R. 243; and Colteryahn Sanitary Dairy v. Milk Control Comm., 332 Pa. 15, 1 A.2d 775,122 A.L.R. 1062. The more recently decided cases are Savage v. Martin, 161 Or. 660, 91 P.2d 273;Jersey Maid Milk Products Co. v. Brock, 13 Cal.2d 620, 91 P.2d 577;Rowell v. State Board of Agriculture, 98 Utah 353, 99 P.2d 1; and State v. Stoddard, 126 Conn. 623, 13 A.2d 586.

The leading case is Nebbia v. People of State of New York, 291 U.S. 502, 54 S.Ct. 505, 78 L.Ed. 940, 89 A.L.R. 1469, an appeal from People v. Nebbia, 262 N.Y. 259, 186 N.E. 694. It is the basis on which various milk marketing acts have been held constitutional. We refrain from repeating what Mr. Justice Roberts there said regarding the importance of an adequate supply of milk and the need for regulation of prices so as to insure a continuous flow to the congested centers of population.

Although determination of the constitutionality of our act will be made upon the single question of the composition of the Board as tested by the principle of due process, we deem it advisable to discuss other phases in the event that re-enactment is sought.

Is the act constitutional and did the Board comply with it in issuing its orders?

The argument is advanced that the Legislature could not delegate its authority to fix prices. Where this same argument was made in other states a complete answer was found in the Nebbia case. Within proper limits, legislative power may be delegated, as was the power of altering and fixing rates for public service corporations in Traverse City v. Railroad Commission, 202 Mich. 575, 168 N.W. 481. See also Argo Oil Corporation v. Atwood, 274 Mich. 47, 264 N.W. 285;Smith v. Wayne County Sheriff, 278 Mich. 91, 270 N.W. 227; and Warnshuis v. State Board of Registration in Medicine, 285 Mich. 699, 281 N.W. 410. As stated in the Argo Oil case [274 Mich. 47, 264 N.W. 286]: ‘It is too well settled to need the citation of supporting authorities that the Legislature, within limits defined in the law, may confer authority on an administrative officer or board to make rules as to details, to find facts, and to exercise some discretion, in the administration of a statute. The difficulty is in determining whether the limits are sufficiently defined to avoid delegation of legislative powers. Exhaustive annotations of the general subject will be found in 12 A.L.R. 1435; 54 A.L.R. 1104; 92 A.L.R. 400.’

The act under consideration sets up sufficiently definite standards for the guidance of the Board. In this respect, it can be distinguished from the Connecticut and New Hampshire acts, discussed in State v. Stoddard, 126 Conn. 623, 13 A.2d 586, decided May 1, 1940.

The title of the act reads: ‘An Act relative to the production and distribution of milk; to create a milk marketing board, and define its powers and duties; to provide for the licensing of milk dealers; to prescribe penalties for the violation of the provisions of this act; and to declare the effect of this act.’

Appellant contends that this title is inadequate because it fails to indicate the provision for an assessment upon milk production. The court has spoken many times on this subject, the general rule being recently stated: ‘The title to an enactment is required to be expressive of the purpose and scope of the enactment. If the enactment comes fairly within and is reasonably a component part of the purpose expressed in the title it is not an interloper but a part thereof and so proper...