United States v. Warne

Decision Date29 November 1960
Docket NumberNo. 39030,39073.,39030
PartiesUNITED STATES of America, Plaintiff, v. William E. WARNE, Director of Agriculture of the State of California, and Stanley Mosk, Attorney General, State of California, Defendants.
CourtU.S. District Court — Northern District of California

George Cochran Doub, Asst. U. S. Atty. Gen., Donald B. MacGuineas, Harland F. Leathers, Dennis C. Cronin, Attys., Dept. of Justice, Washington, D. C., Laurence E. Dayton, U. S. Atty., Charles Elmer Collett, Asst. U. S. Atty., San Francisco, Cal., for plaintiff United States.

Stanley Mosk, Atty. Gen. of California, John Fourt, Deputy Atty. Gen. of California, for defendant Warne, etc.

McVay, Stone & Reid, Modesto, Cal., amicus curiae for Milk Producers Assn. Central Calif.

Gordon, Knapp, Gill & Hibbert, Los Angeles, Cal., for Challenge Cream & Butter Assn.

Emil Steck, Jr., Pasadena, Cal., for Dairy Industry of California.

Before JERTBERG, Circuit Judge, and HARRIS and SWEIGERT, District Judges.

SWEIGERT, District Judge.


Background of the Case.

The above two actions have been brought by the United States to determine the applicability of the California Milk Stabilization Law (Cal.Agricultural Code, Div. 6, Ch. 17, Secs. 4200 to 4420) to purchases made by the United States, through U. S. Army and Air Force procurement officers, of milk and milk products from local producers and distributors for on-base mess hall consumption and on-base commissary sales at three federal military installations located within the territorial limits of California.

Civil Action No. 39030, involving the Oakland Army Terminal, is before this Court on plaintiff's motion for a preliminary injunction. Civil Action No. 39073, involving Travis Air Force Base (Count I) and Castle Air Force Base (Count II), is before the Court on plaintiff's motion for summary judgment. Because these actions test the constitutionality of the State milk law as applied to the federal government, the present three judge court was assembled, pursuant to 28 U.S.C. §§ 2282 and 2284.

Two additional actions, Civil Action No. 39052, involving Camp Pendleton, and Civil Action No. 39059, involving Mather Air Force Base, are on file awaiting determination of these actions.


California Milk Stabilization Act.

Briefly, the California Milk Stabilization Act was passed in 1935 to regulate the marketing and distribution of fluid milk and fluid cream. Cal.Agricultural Code Section 4201 declares that such products are necessary articles of food, that the production and maintenance of an adequate supply of healthful milk is vital to the public health and welfare, and that the policy of the State is to promote, foster and encourage the intelligent production and orderly marketing of milk, and to eliminate unfair and destructive trade practices.

To achieve these ends, marketing areas throughout the State were established (Section 4204), to be administered by the Director of Agriculture (Section 4270), whose duty it is to establish minimum milk prices (Sections 4246, 4247, 4281, 4352, 4353), and to license milk distributors within each marketing area (Sections 4244, 4375).

Under provisions of the Act, the Director is also empowered to revoke and suspend licenses for violation of any stabilization and marketing plan (Section 4415) to bring actions to enjoin such violations (Section 4256), and to prosecute actions to recover civil penalties of $500 for each violation (Section 4410).

The California Attorney General is also empowered to enforce the Act, under Article V, Section 21 of the California Constitution, Section 12511 of the California Government Code, and Section 4410, supra, to bring prosecutions for criminal violations of the milk code.


Preliminary Matters.

The defendants, the California Director of Agriculture and the California Attorney General, have filed actions in various State courts, seeking injunctive relief and civil penalties against milk suppliers and distributors who have entered into procurement contract with federal officials at the several military bases, calling for the sale of milk at negotiated prices less than those established under the State Act. (Exhibits 8-11). Defendants have also instituted declaratory judgment actions in this Court against federal procurement officers at Travis Air Force Base, Civil Action No. 39080, seeking a determination of their right to enforce the State law as to milk sales consummated at that base.

The United States contends that these State attempts to enforce the milk act have interfered with the purchase of milk and milk products by the United States at its military installations, over which it claims exclusive legislative jurisdiction, and are in conflict with federal competitive bidding policy and procedures, expressed in Armed Services Procurement Regulations, para. 1-301, 1-302.2, 3-101 and 3-108.1, and Army Procurement Procedure, para. 3-101.

The United States alleges that, being unable to obtain milk and milk products at less than the State minimum price, it has incurred additional operating costs of $15,000 per month on milk purchases at Travis Air Force Base (Rainey's Affidavit of March 8, 1960), $112,457 per year at Castle Air Force Base (Mann's Affidavit, Attachment H), and $10,000 per month at Oakland Army Terminal. (Complaint, para. 18).

It is the position of the United States that the State milk code may not constitutionally be applied to lands over which the United States has exclusive legislative jurisdiction; further that its enforcement violates the right of the plaintiff to be free from State interference in the exercise of a federal function, under the Supremacy Clause, Art. VI, Clause 2 of the United States Constitution. On these facts, we believe that a justiciable controversy exists. Florida Lime & Avocado Growers, Inc. v. Jacobsen, 1960, 362 U.S. 73, 80 S.Ct. 568, 4 L.Ed.2d 568; Public Utilities Commission of California v. United States, 1958, 355 U.S. 534, 78 S.Ct. 446, 2 L.Ed.2d 470.

Preliminarily, the defendants urge that this Court should abstain from consideration of these cases on the merits, because of the existence of State questions which, if determined by the California State Courts, would render assistance to this Court in the formulation of its decision.

Although a determination of these cases upon the merits depends in part upon the legal effect of certain proceedings taken pursuant to State consent-to-purchase statutes and State cession statutes, the question whether the United States acquired exclusive legislative jurisdiction over the lands comprising the various military reservations under discussion is a federal question arising under Title 28 U.S.C. §§ 1331, 1345. Silas Mason Co. v. Tax Commission, 1937, 302 U.S. 186, 197, 58 S.Ct. 233, 82 L.Ed. 187.

In Allegheny County v. Frank Mashuda Co., 1959, 360 U.S. 185, 79 S.Ct. 1060, 3 L.Ed.2d 1163, it was held that a federal district court may not abstain from exercising its jurisdiction where there is no hazard of unnecessarily deciding a federal constitutional question, or of unsettling some delicate balance in the area of federal-state relationships, or of resolving difficult and uncertain issues of State law.

Such factors being absent, we are of the opinion that we should proceed to a consideration of the issues.


The Issues.

In Penn Dairies v. Milk Control Commission, 1943, 318 U.S. 261, 63 S.Ct. 617, 87 L.Ed. 748, the Supreme Court held that the Pennsylvania Milk Control Commission should not be restrained from enforcing a similar milk act or from refusing to license a milk distributor who had sold milk to the United States at a military installation at prices less than the minimum fixed by the Pennsylvania act. In that case, however, the Court noted that the military installation was situated, not on land over which the United States had exclusive jurisdiction, but on land over which the State of Pennsylvania retained its jurisdiction.

In Pacific Coast Dairy, Inc. v. Department of Agriculture, 1943, 318 U.S. 285, 63 S.Ct. 628, 87 L.Ed. 761, decided the same day, the Court reached a different conclusion, holding that the California Department of Agriculture could not enforce the California milk code by revoking the license of a milk distributor for selling milk to the United States at a military reservation, Moffet Field, over which the United States exercised exclusive jurisdiction, at prices less than the minimum set by State law.

Recognizing that the results reached in the two cases might seem contradictory, the court noted, 318 U.S. at page 295, 63 S.Ct. at page 631, that: "in preserving the balance between national and state power, seemingly inconsequential differences often require diverse results."

In the instant cases, defendants seek to avoid application of the Pacific Coast Dairy case to the three military installations here involved upon the ground that these installations are not in fact within the exclusive jurisdiction of the United States and that, therefore, these cases are to be determined, not under Pacific Coast Dairy, but under the rule of Penn Dairies.

Defendants contend further, that even if these installations are within the exclusive jurisdiction of the United States, the penal provisions of the California Milk Act were assimilated as law within these federal enclaves under the so-called Assimilative Crimes Act, as amended in 1948, Title 18 U.S.C. § 13.

Plaintiff contends: First, that the three installations here involved are in fact within the exclusive jurisdiction of the United States.

Secondly, that even if they are not, these cases should not be determined under the rule of the Penn Dairies case, supra, because the California Milk Act is in conflict with federal procurement regulations and policy within the rule of Public Utilities Commission of California v. United States, 1958, 355 U.S. 534, 78 S.Ct. 446, 2 L.Ed.2d 470, to which we shall refer in due course;...

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