Ness Produce Co. v. Short, Civ. No. 65-405.

• Citation: 263 F. Supp. 586
• Decision Date: 25 July 1966
• Docket Number: Civ. No. 65-405.
• Parties: NESS PRODUCE CO., an Oregon corporation, Plaintiff, v. James F. SHORT, Director of Agriculture of the State of Oregon, State Department of Agriculture of the State of Oregon, Mark O. Hatfield, Governor of the State of Oregon, Robert Y. Thornton, Attorney General of the State of Oregon, and their respective successors in office and servants, agents, employees and representatives of their departments, and all others acting on their behalf or in concert with them, Defendants.
• Court: U.S. District Court — District of Oregon

263 F. Supp. 586

NESS PRODUCE CO., an Oregon corporation, Plaintiff, v. James F. SHORT, Director of Agriculture of the State of Oregon, State Department of Agriculture of the State of Oregon, Mark O. Hatfield, Governor of the State of Oregon, Robert Y. Thornton, Attorney General of the State of Oregon, and their respective successors in office and servants, agents, employees and representatives of their departments, and all others acting on their behalf or in concert with them, Defendants.

Civ. No. 65-405.

United States District Court D. Oregon.

July 25, 1966.

Robert Y. Thornton, Atty. Gen., and Harold E. Burke, Asst. Atty. Gen., Salem, Or., for the State.

Theodore B. Jensen and Donald J. DeFrancq, of Davis, Jensen, Martin & Robertson, Portland, Or., for Ness Produce Co.

Before ELY, Circuit Judge, and SOLOMON and TAYLOR, District Judges.

OPINION

PER CURIAM:

Plaintiff, Ness Produce Co., filed this action to enjoin defendants from enforcing Chapter 150, Oregon Laws 1965, which requires the labeling of imported meat. Defendants are the officials and agency of the State of Oregon charged with enforcing the statute.

Chapter 150 was enacted on April 7, 1965, and became law on August 13, 1965. Upon stipulation of the parties, a preliminary injunction was granted, pending our disposition of this case.

Chapter 150 proscribes the wholesale and retail sale of fresh or frozen meat¹ produced in a foreign country unless the seller (1) displays a sign upon his premises indicating that he sells imported meat and (2) labels each package, cut, and carcass of meat with the country of origin. It requires sellers to keep accurate records of all sales of imported meat and delegates enforcement and rule-making to the State Department of Agriculture. Violation of the act is a misdemeanor.²

Administrative regulations require every seller of imported meat to post signs containing the following wording:

(a) FOREIGN MEAT SOLD HERE (or)

(b) IMPORTED MEAT SOLD HERE.

The lettering on such signs must be at least four inches high, of a heavy, positive block style, and of a color easily read. Retailers must post one sign for every 27 running feet of customer meat counter; other sellers must post at least one sign in the main office where it can and will be most conveniently read by customers.

The regulations require that packages of meat be conspicuously labeled:

(a) IMPORTED FROM (name of foreign country) (or)

(b) PRODUCED IN (name of foreign country).

This label must appear on top of the package if other wording is on top. The lettering must be in heavy, block-faced type at least three-eighth inches high, but not less than one-half the size of the largest lettering on the package. Carcasses and wholesale cuts of meat must be labeled or branded in similar fashion.

The regulations also require that sellers keep separate records showing the kind, amount, and source or destination of all imported meat purchased or sold, except that retailers need not record the names and addresses of ultimate consumers.³

Plaintiff distributes in the Portland area, boned and frozen lean beef imported primarily from Australia. It imports this beef in 60-pound packages and resells it to meat processors and retailers in the same packages. This lean beef is not suitable for use as table beef (roasts and steaks) because of its low fat content. It is chiefly used in conjunction with table beef trimmings to make hamburger and sausage products.

Imported meat is inspected twice under federal supervision, once in the country of origin and again on its arrival in this country. 19 U.S.C. § 1306(b); 21 U.S.C. §§ 71-91; 9 C.F.R. §§ 27.1-27.21. Defendants concede that plaintiff's imported meat is healthful, wholesome, and fit for human consumption.

Plaintiff contends that Chapter 150 constitutes an effective embargo against the importation into Oregon of fresh and frozen meat produced in foreign countries, because it imposes discriminatory costs on sellers of imported meat and because it carries the unwarranted connotation that imported meat is inferior to domestic meat. Plaintiff asserts that Chapter 150 is void and unenforceable because (a) it is not a valid exercise of the police power; (b) it conflicts with the laws and treaties of the United States; (c) it violates the Commerce Clause of the United States Constitution; and (d) it violates the equal protection clause of the Fourteenth Amendment.

Preliminarily, defendants contend that this case is not properly before a three-judge court, since it presents an issue under the Supremacy Clause. Standing alone, a Supremacy Clause issue will not sustain the jurisdiction of a three-judge court. Swift & Co. v. Wickham, 382 U.S. 111, 86 S.Ct. 258, 15 L.Ed. 2d 194 (1965). Where there is a substantial challenge to the constitutionality of a state statute, a three-judge court is necessary, 28 U.S.C. § 2281, and the court has jurisdiction over non-constitutional issues as well. Florida Lime & Avocado Growers, Inc. v. Jacobsen, 362 U.S. 73, 80 S.Ct. 568, 4 L.Ed.2d 568 (1960). In our view, plaintiff has raised significant constitutional issues, and our jurisdiction is proper.

We hold that Chapter 150 unreasonably discriminates against imported meat in violation of the Commerce Clause. We need not decide whether the labeling required by the Act will discourage ultimate consumer purchases of imported meat. The substantial costs of labeling and record-keeping which the Act imposes on sellers of imported meat have an obvious and direct impact on interstate commerce.

State-imposed burdens on interstate commerce are valid, if at all, only where the State acts under its inherent police power to protect the life, liberty, health or property of its citizens. Huron Portland Cement Co. v. City of Detroit, 362 U.S. 440, 80 S.Ct. 813, 4 L.Ed.2d 852 (1960). Defendants argue that Chapter 150 is necessary to protect the consuming public from "deception, unfair trade practices, and fraud." However, defendants concede that imported meat is wholesome, and that it is neither organically nor qualitatively different from domestic meat. Nothing in the record indicates that sellers of imported meat are pawning off an inferior product. Even if they were, the labeling requirements of Chapter 150 do not relate to the quality of the product, but only to its place of origin.⁴

Chapter 150 is one of seventeen similar statutes enacted primarily in beef producing states in the last three years. The legislative history of Chapter 150 clearly shows that it was enacted in response to the growing volume of beef imports and was designed primarily to provide economic protection to Oregon cattlemen. The statute reflects the draftsmen's purpose, for it operates primarily, if not exclusively, to burden and make difficult the sale of imported meat. The administrative regulations, while not controlling here, confirm the true purpose of the statute.

We hold that a State exceeds the limits of its police power when it acts to insulate its citizens from outside competition. Baldwin v. G. A. F. Seelig, Inc., 294 U.S. 511, 55 S.Ct. 497, 79 L.Ed. 1032 (1934); Brimmer v. Rebman, 138 U.S. 78, 11 S.Ct. 213, 34 L.Ed. 862 (1891). Chapter 150, Oregon Laws 1965, is void and unenforceable because it conflicts with Article I, Section 8, of the United States Constitution. In arriving at this conclusion, we have been influenced by the opinion in Tupman Thurlow Co. v. Moss, 252 F.Supp. 641 (M.D.Tenn.1966). There, the Court held that Tennessee's substantially similar labeling act ran afoul of the Commerce Clause.⁵

Because we base our decision upon the Commerce Clause, we do not consider the other grounds upon which plaintiff attacks Chapter 150.

This opinion will serve as findings of fact and conclusions of law under Rule 52(a), Fed.R.Civ.P.

FRED M. TAYLOR, District Judge (dissenting):

The majority of this three-judge court have concluded that Chapter 150, Oregon Laws 1965 is in violation of the Commerce Clause of the United States Constitution.

Under the facts of this case and the authorities relied on, as I understand them, I am unable to agree with the majority.

The Act in question was enacted under and pursuant to the police power of the State of Oregon with the intent and for the purpose of protecting the consuming-purchasing public against deception. The evidence reveals that the principal objection to the enforcement of the law is the apprehension on the part of the retailers of meat that the public would become aware of the fact that they are selling foreign or imported meat together with domestic meat which might result in loss of business. It is clear that by not divulging the true facts, the retailers are now pawning off to the consumer foreign meat, imported in a frozen state, as domestic meat. It is my opinion that under its police power the State of Oregon not only has the right but the duty to protect its citizens from such deception.

I do not believe the evidence is sufficient to justify the holding that the enforcement of this Act would unreasonably burden interstate or foreign commerce so as to violate the Commerce Clause of the Constitution of the United States.

1 The parties agree that Chapter 150 does not apply to imported meat and meat products which are cured, canned, dried, or cooked.

2 150 AN ACT

Relating to foreign meat; and providing penalties.

Be It Enacted by the People of the State of Oregon:

Section 1. The purpose of sections 2 to 4 of this Act is to protect the consumers of this state in their choice of meat for...