Mutual Orange Distributors v. Agricultural P. Com'n

• Decision Date: 07 October 1940
• Docket Number: No. 564-J Civil.,564-J Civil.
• Citation: 35 F. Supp. 108
• Court: U.S. District Court — Southern District of California
• Parties: MUTUAL ORANGE DISTRIBUTORS et al. v. AGRICULTURAL PRORATE COMMISSION OF STATE OF CALIFORNIA et al.

35 F. Supp. 108

MUTUAL ORANGE DISTRIBUTORS et al. v. AGRICULTURAL PRORATE COMMISSION OF STATE OF CALIFORNIA et al.

No. 564-J Civil.

District Court, S. D. California, Central Division.

October 7, 1940.

Crump & Rogers, Guy Richards Crump, Maurice Rogers, and Emmet H. Wilson, Jr., all of Los Angeles, Cal., for plaintiffs.

Earl Warren, Atty. Gen., of California, Walter L. Bowers, Deputy Atty. Gen., and George E. Farrand, Edward E. Tuttle, and Stephen M. Farrand, all of Los Angeles, Cal., for defendants.

Before STEPHENS, Circuit Judge, and HOLLZER and A. F. ST. SURE, District Judges.

STEPHENS, Circuit Judge.

Plaintiffs, lemon growers in and shippers from the State of California, seek to restrain permanently the enforcement of a prorate lemon marketing program prescribed under the authority of the California Agricultural Prorate Act, Chap. 754, p. 1969, Cal. Stats. 1933, as amended, St. 1935, pp. 1526, 2087, hereinafter called the Act. They claim that the enforcement of the program would irreparably damage them and submit them to penalties should they violate it and would violate the commerce clause of the United States Constitution, article 1, § 8, cl. 3, and would deprive them of the equal protection of the laws as guaranteed by the United States Constitution, Amendment 14, and would violate the Sherman Anti-Trust Act, Act of July 2, 1890, c. 647, 26 Stat. 209, 15 U.S. C.A. §§ 1-7, 15 note.

The Prorate Act has been before the Supreme Court of California twice (Agricultural Prorate Commission of California v. Superior Court, 5 Cal.2d 550, 55 P.2d 495 and Whittier Mut. Orange & Lemon Ass'n v. Agricultural Prorate Commission, 11 Cal.2d 470, 80 P.2d 983), and this Court refused to hold the issues of this cause res judicata by reason of these decisions in its opinion reported in 30 F.Supp. 937.

The case was tried as to both facts and the law before Judges Stephens, C. J. and James and Hollzer, D. Js., under the authority of 28 U.S.C.A. § 380, and before decision Judge James met with a fatal accident. The case was subsequently submitted upon the record by stipulation to Judges Stephens, Hollzer and St. Sure, the latter a District Judge of the Northern District of California.

Since the Prorate Act is not assailed but the program only, it will not be necessary to discuss the Act beyond saying that its avowed purpose is to prevent "The unreasonable waste of agricultural wealth occasioned by the harvesting, preparation for market and delivery to market of greater quantities of agricultural commodities than are reasonably necessary to supply the demands of the market * * *". St.Cal. 1935, p. 1527, § 1. Each violation of the Act and the program constitutes a misdemeanor. In April, 1935, the program complained of was provided whereby the quantity of lemons to be marketed in "primary trade channels"¹ at any given time is prorated among all growers of the State as one zone on the percentage that the lemons in storage of each grower bears to the total storage of lemons of all growers. The program does not purport to be a production control measure and it does not limit the production, harvesting or storing of lemons or the enlargement of lemon orchard acreage. No provision of the program affects the lemon except and until the fixing of the prorate percentage of the storage which shall go into the market as shall be determined under the authority of the program.

There is no profitable outlet for the sale of approximately 80 to 90% of the lemons produced in California and disposed of in fresh fruit trade channels, except in the other states of the Union and abroad, and practically all of the lemons used in the United States are grown in California.

It is claimed by plaintiffs and not denied by the defendants that the enforcement of the program would affect interstate and foreign commerce, and the issue between the parties is whether or not this effect is direct or indirect.

The principles underlying the cleavage between the parties here are succinctly put in Simpson v. Shepard, 230 U.S. 352, 399, 33 S.Ct. 729, 740, 57 L.Ed. 1511, 48 L.R.A.,N.S., 1151, Ann.Cas.1916A, 18: "The grant in the Constitution the commerce clause of the Federal Constitution of its own force, that is, without action by Congress, established the essential immunity of interstate commercial intercourse from the direct control of the states with respect to those subjects embraced within the grant which are of such a nature as to demand that, if regulated at all, their regulation should be prescribed by a single authority. It has repeatedly been declared by this court that as to those subjects which require a general system or uniformity of regulation, the power of Congress is exclusive." The opinion then discusses, upon principle, matters which affect interstate commerce in an indirect or unintentional manner: "In other matters, admitting of diversity of treatment according to the special requirements of local conditions, the states may act within their respective jurisdictions until Congress sees fit to act; * * *."

To sustain the position of defendants it must be determined that every point of the program which touches interstate commerce is one "admitting of diversity of treatment according to the special requirements of local conditions".

Upon pages 402 et seq. of 230 U.S., pages 741 et seq. of 33 S.Ct., 57 L.Ed. 1511, 48 L.R.A.,N.S., 1151, Ann.Cas.1916A, 18, of the cited case, Mr. Justice Hughes thoroughly treats of this subject and recites a long list of "local" regulations which do affect interstate commerce but which nevertheless are indirect in their effect upon it. Within this list appear local pilotage and quarantine regulations which do not conflict with federal regulations, and which we refer to only as showing the general character of such permissible indirect regulation affecting interstate commerce. Many recent decisions relating to the enforcement of the National Labor Relations Act, 29 U.S.C.A. § 151 et seq., while not decisive of any issue in this case, do strikingly illustrate the point that, notwithstanding the local character of regulations and their indirect effect upon interstate commerce, the federal government can properly occupy this field.

The point of contact between the program and interstate commerce does not concern quantity of production or of harvesting or quality or grade or deceptive packaging of fruit or fruit pest control, all of which we perceive would be arguable as local and as "admitting of diversity of treatment". The contact point is not one of these...