Rieck-McJunkin Dairy Co. v. Milk Control Commission of Pennsylvania

• Decision Date: 24 March 1941
• Docket Number: 9
• Citation: 18 A.2d 868,341 Pa. 153
• Parties: Rieck-McJunkin Dairy Company, Appellant, v. Milk Control Commission of Pennsylvania
• Court: Pennsylvania Supreme Court

18 A.2d 868

341 Pa. 153

Rieck-McJunkin Dairy Company, Appellant, v. Milk Control Commission of Pennsylvania

No. 9

Supreme Court of Pennsylvania

March 24, 1941

Argued October 2, 1940.

Reargued January 9, 1941.

Appeal, No. 9, May T., 1941, from order of C.P. Dauphin Co Com. Docket, 1939, No. 815, in case of Rieck-McJunkin Dairy Company v. Milk Control Commission of Pennsylvania. Order affirmed.

Appeal to common pleas from order of Milk Control Commission.

The opinion of the Supreme Court states the facts.

Appeal dismissed, opinion by FOX, J. Plaintiff appealed.

Error assigned was order dismissing appeal.

Order dismissing appeal affirmed, at cost of appellant.

Charles K. Robinson, of Dickie, Robinson & McCamey, with him Willis F. Daniels, for appellant.

Frank E. Coho, Deputy Attorney General, with him Claude T. Reno Attorney General, for appellee.

A Evans Kephart, for intervenor.

E. Lowry Humes, for intervenor.

Before SCHAFFER, C.J., MAXEY, DREW, LINN, STERN, PATTERSON and PARKER, JJ.

OPINION

MR. STERN JUSTICE:

In form this appeal is an attack on the validity of General Order No. A-45 of the Milk Control Commission, but in substance its challenge is directed to the constitutionality of the proviso contained in section 803 of the Milk Control Law of April 28, 1937, P.L. 417. That section provides that "The commission shall fix, by official order, the minimum prices to be paid by milk dealers to producers for milk: Provided, however, that the fixing of prices to be paid by milk dealers to producers for milk to be used solely in manufacturing shall be discretionary with the commission."

General Order No. A-45, promulgated by the Commission, after a public hearing, on October 23, 1939, approved by the Governor November 15, 1939, and effective December 1, 1939, established a "Pittsburgh Milk Marketing Area," classified milk into seven classes as permitted by section 804 of the act, and prescribed minimum prices in that area to be paid to producers for milk in each class. These classes embraced milk for human consumption in fluid form and milk utilized in the manufacture of butter, chocolate, candy, cheese, ice cream and other dairy products. Rieck-McJunkin Dairy Company, a Pennsylvania corporation with its principal place of business in Pittsburgh, purchases milk from producers for utilization in several, if not all, of the classes. It appealed from the order of the Commission to the Dauphin County Court, not on the ground that the prices established by the order were unfair or in themselves subject to criticism, but that the Commission had no legal power to fix the prices of milk to be used solely in manufacturing.

The constitutionality of the grant to the Commission of the general power to fix minimum and maximum wholesale and retail prices of milk was sustained in two pronouncements of this court: Rohrer v. Milk Control Board, 322 Pa. 257, 186 A. 336; and Colteryahn Sanitary Dairy v. Milk Control Commission, 332 Pa. 15, 1 A.2d 775. The question now raised is in regard to the legality of the discretionary power vested in the Commission to regulate the prices of milk used in manufacturing. The reason why the exercise of that power was made discretionary instead of mandatory becomes evident from even a cursory study of the manner in which the milk industry is conducted. Milk to be used for drinking can travel, because of its ephemeral life, only within a restricted area, but manufactured milk products, owing to their less perishable nature, can be, and are, imported into Pennsylvania from other states where milk is sold at a lower cost than that at which it can be produced here. The result is that the prices of milk absorbed into manufacturing processes must face the competition of low-cost production areas which may be located far away, and, because of the necessity of meeting such competitive conditions, it is practically impossible to establish a price of milk used in manufacturing that would pay the cost of production in Pennsylvania. The majority of dealers use milk both for resale in fluid form and for manufacturing, and, under the so-called "utilization" system which is commonly employed, the total price received by the producer for milk delivered to the dealer is determined at periodic intervals when the latter reports the different uses to which the milk has been devoted; a "blended" price is thus obtained, made up in part of the higher price of the milk resold as fluid and in part of the lower prices of that used in the manufacture of various dairy products. The main purpose of the Milk Control Law being to insure a sufficient supply of wholesome milk, which cannot be accomplished unless, as the preamble of the act recites, "the high cost of maintaining sanitary conditions of production and standards of purity is returned to the producers of milk," it is obvious that, under ordinary conditions, the proper minimum price that producers should receive will depend not only upon the amount obtained for fluid milk used directly for human consumption but also upon the portion of the blended price derived from the lower rate for the milk used in manufacturing. ^[1] If the Commission were not given the power to fix minimum prices of milk for manufacturing purposes, there would be a tendency for the prices of such milk to be so depressed by the competition which characterizes the sale of the manufactured products that the total price received by the producers might fall to a point where they would not be able to furnish the pure milk necessary for the maintenance of public health and which it is the object of the Milk Control Law to secure. On the other hand, it would not always be necessary for the Commission to exercise that power. Circumstances and conditions in particular areas might conceivably be such that, at times, the prices of milk for manufacturing would exert no substantial influence upon the market as a whole, and consequently the Commission might find that the fixing of minimum prices for milk so used would not be needed to fulfill the major purpose of the Milk Control Law. There might occasionally be places where all the milk produced would be marketed only for resale in fluid form, or where certain types of milk would be used for making products the prices of which would have no effect upon the price of milk generally. Then again, notwithstanding the play of competitive forces, the market prices of the milk used for manufacturing might not become so drastically lowered as to interfere to any great degree with the total or blended price received by the producers, in which case no regulatory action on the part of the Commission would be required. For such and, no doubt, other reasons, the legislature, appreciating the fact that the situation demanded a flexible control, deemed it wise to leave to the Commission the duty of investigating conditions to ascertain whether, and to what extent, the prices of milk for manufacturing purposes affected, in any given area, those prevailing in the milk market as a whole, and, in accordance with the findings made, to exercise, or to refrain from exercising, the power to fix the prices of such milk in order to accomplish the object for which the Milk Control Law was designed.

It is not a novelty in legislation for power to be given to a body other than the legislature itself to determine facts upon which should depend whether, and when, a law was to become effective, or for authority to be granted to such a body to act, or to withhold action, depending upon a factual ascertainment of conditions, in order to carry out the legislative intent in conformity with the principles laid down in the law itself. In Baldwin Township's Annexation 305 Pa. 490, 158 A. 272, an act was sustained which provided that in a proceeding for the annexation of part of a township to a contiguous city there must first be obtained the approval of the state council of education. The court there said (p. 496): "If the grant of authority is not a delegation of power to make a law but merely investing some official or group of electors with discretion in putting the law into effect in a certain situation, it can as constitutionally be granted to the state council of education as it can be to the electors of the district affected. . . . There are many analogies to this in our system of laws." A quotation from Tranter v. Allegheny County Authority, 316 Pa. 65, 76, 173 A. 289, 294, is also in point: "It is first said that the statute violates Article II, section 1, vesting legislative power in the General Assembly; that, by empowering the county commissioners to take the steps necessary to obtain the charter for Allegheny County Authority, legislative power was delegated. The legislature has made the law permitting organization of the corporation in certain circumstances. No power to make the law was delegated to the county commissioners; all that remained for them to do was to find a fact from which they should determine whether to act or not, i.e., whether it was...