*1 respondents to assert ample opportunity There in orderly through proceeding their claims an courts authoritatively interpret her laws empowered the state questions. of federal respect final here review Butler, dissenting: Mr. Justice I challenged am of that ordinance is not opinion it on does differ face; principle void its ordinance, applied upheld the Boston Mr. Davis v. through Justice Court, White, speaking Massachusetts, 167 U. S. Judi 43, affirming Supreme Massachusetts, through Mr. speaking cial Court of Justice Davis, in Commonwealth v. 510; Mass. Holmes, decree of the Circuit 113, Court of N. E. reversed. should be Appeals v. ROCK ROYAL CO-OPER STATES
UNITED INC. ATIVE, et al.* 24, 25, 5, Argued April 1939. Decided June 1939. No. Agriculture and Noyes, Commissioner 826, *Together with No. Royal Co-operative, York, v. Rock New the State Markets Cooperative Dairymen’s League Assn., Inc. v. al.; 827, Inc. et No. Metropolitan al.; Co Co-operative, Inc. et and No. Royal Rock Royal Agency, v. Rock Bargaining Inc. operative Producers Milk Court al., from the District Co-operative, Inc. et appeals on also District of New the Northern of the United States York. *6 Jackson, with whom Assistant Attor- Solicitor General Yost, Arnold, Charles General and Messrs. John L. ney S. McCarthy, McConñaughey, Robert and Mastin G. J. K. United States in No. 771, White were on the brief of the appellants. for R. and Louis S. Wallach were on
Messrs. Milo Kniffen A. appellant 826; in No. Messrs. Seward Miller a brief appellant Edward Schoeneck were on a brief for Edmund and Messrs. F. Cooke and John E. Lar- 827; No. appellant were on a brief for son No. Acker Co-oper- Mr. Leonard for the Central New York
n R. Assn., Royal ative and Mr. Willard Pratt the Rock Co-operative, Inc., al., appellees. et
By Court, briefs of amici curiae were leave filed Reno, T. No. 771 Messrs. Claude General Attorney Harry.Polikoff, Deputy Pennsylvania, Attorney Gen- eral, State, urging validity on behalf of that of Order Henry Manley S. 27; No. and Mr. on behalf Guernsey New Co-operative, York Breeders State Inc. al. et Reed delivered the opinion of the Court.
Mr. Justice involve appeals validity These of Order No. 27 of Secretary Agricul- issued under the Agriculture, Marketing Agreement tural Act of regulating, 1937,1 milk in York handling the New metropolitan area. 1938, On October the United States of America against filed complaint Royal the Rock Co-operative, York Inc., Cooperative the Central New Association, Inc., Schuyler Junction New Milk York Shed Cooperative, mandatory Inc., seeking injunction requiring de- representatives fendants their to comply with the provisions of the Order. On November 26, 1938, a simi- lar filed in the against action was same court the Jetter Dairy Company, Inc. On December these causes were original proceedings consolidated. had sought relief only for violations of the Order of Secretary if also, but Agriculture court should find that them subject defendants or were not to that for violation of Official Order No. Order, issued *7 Agriculture the Commissioner of and Markets of the York. The two pari of New orders materia, State covering moving milk in or directly one burdening, ob- affecting interstate structing commerce and the other2 in intrastate commerce. Each covering defendant handling moving interstate dealer commerce. 15, Holton Y. Noyes, December On Commissioner of and Markets of the Agriculture of New York, State was a party plaintiff intervene as to permitted consoli- sought injunction action. He an dated commanding the representatives their to comply defendants with it be determined or, 126 should that Order No. their milk Order, to subject comply Order Secretary Agriculture. of the pleaded answers, the certain In their defendants affirm- up invalidity defenses, setting Order 27 ative No. n improper efforts to secure its adoption. because 1 3, 1937, Act of 50 Stat. June Noyes by N. Y. Laws c. 383. As See v. Erie authorized & 42; Co-op., Misc. Wyoming N. Y. S. 2d 114. Farmers Broadly speaking, these defenses were based upon errone- representations ous alleged by to have been made officials and by private certain organizations to bring about approval of the Order and an upon alleged conspiracy private organizations same a monopoly create means of the Order. The motion to strike these defenses having overruled, been Dairymen’s League Coopera- tive Association, hereinafter League, called Metropolitan Cooperative Milk Bargaining Producers Agency, Inc., hereinafter the Agency, per- called were mitted to intervene them. combat
The answers also challenged the two orders Act as contrary the Fifth and Fourteenth Amendments to the Constitution and the Act as del- involving improper egation legislative York power. The Central New Co- operative Association power denied the Congress of the legislation to enact the under the Commerce Clause and set further up subject as a defense that it was not either order. hearing
After a upon merits, the Court District dis- complaints. missed the The state order was eliminated from consideration on the understanding, not questioned here, milk of that all defendants four covered if It Order, Federal valid. was further held that (ii) and (5) (B) (5) (F) §§ 8c 8c the Act violate the due the Fifth process clause Amendment, discriminatory Order is and takes property withoút com- approval of pensation, was secured misrepresentation unlawful and coercion and that im- Order, portant provisions authorizing payments *8 cooperative and proprietary handlers, have no basis States Royal United v. the Act. Rock Co-operative, 26 548, 545, F. 534, 550, 544, 553. Supp. As the unconsti- tutionality of sections of an certain Act of Congress was ground decision an appeal one of the directly allowed to this Court.3
3 2, 24, Aug. 1937, 752; Act of 50 Stat. 349a. U. S. C. § entirely almost
The controversy Statute.4 revolves of the Order is the 27. Back No. Order around statute Marketing issued, Agricultural it was under which amended which and of reenacted 1937, Act Agreement Adjustment Act.5 Agricultural provisions certain as follows: of tbe Act are portions 4Pertinent shall, subject Agriculture Secretary- of to (1). “The Act, 8c§ amend, section, issue, from time to time orders and provisions of this engaged próducers, others associations processors, applicable any agricultural commodity product or' thereof handling of (2) of . . .” this section. specified in subsection applicable pursuant this section shall be- (2) issued “Orders products following agricultural commodities and only any regional, stores), products of naval or or (except thereof commodity product: Milk, fruits such or classification market including apples and not (including and walnuts but not pecans canning), tobacco, vegetables olives, for fruits, than including other asparagus, canning), soy- (not including vegetables, other than included in the Naval Stores Act stand- stores as and naval beans refined, partially refined (including thereunder or ards established oleoresin).” Secretary Agriculture has reason to believe
(3) “Whenever will to effectuate the declared of an order tend the issuance any commodity product respect to thereof title with or policy this give (2) section, he shall due of this notice of specified in subsection hearing upon proposed order.” for- a opportunity and an hearing, Secretary opportunity for notice and (4) such “After finds, an if he and sets forth in such Agriculture issue order shall hearing (in introduced at addition to such order, upon the evidence required by section) may specifically findings such other and all the terms and conditions such order the issuance policy of declared this title will tend to effectuate thereof - commodity.” respect such pursuant products, orders issued (5) of milk and its “In the case following terms and one or more shall contain this section (7)) provided in no others: conditions, (except as subsection with the form in which or “(A) Classifying milk accordance providing fixing, used, method purpose for which it page.) (Footnote on next 4 continues 1935, 31, Aug. 24, as amended May 12, 48 Stat. 5 Act of Stat. *9 assisting in mar aimed at implies, it was As its-name of commodities. keting agricultural disruption orderly “the it is By § declared impairs interstate commerce exchange of commodities in for each such classification which all fixing, prices use for minimum made, payments when shall be for pay, and the time shall hándlers producers. associations of producers or Such purchased milk only adjustments subject handlers, as to all prices be uniform shall customarily production differentials volume, market, (1) subject' order, (2) grade or to such by handlers applied delivery (3) the locations at purchased,-and milk quality of the which milk, thereof, is made such or use classification of such handlers. Providing:
“(B) pro- to all and associations payment “(ii) for delivering handlers of uniform for all milk to all ducers by milk irrespective the uses made of such delivered, milk so delivered; to whom it is individual handler adjustments (a), market, only volume, subject, case, in either by customarily applied the handlers production differentials delivered, quality order, grade or milk- subject (b) the to such delivery made, (d) milk is a (e) at which of such the locations equitably apportion the total value of adjustment, further among producers by any handler, .handlers, all purchased marketings their- on the basis of producers, and associations of period during representative time. accomplish purposes paragraphs set forth in “(C) In order to making (5), providing method for (A) (B) of this subsection among (including producers handlers adjustments payments, as paid total each handlers), to the end that the sums also who are purchased him at equal value the milk handler shall of. paragraph (A) hereof. accordance with prices fixed in (5) Nothing or shall “(F)' contained in'this subsection intended quali marketing cooperative association prevent a construed to 18, Congress February provisions of the Act of fied under1 the engaged Act’, 'Capper-Volstead amended, known as for the products or its making collective sales or- of milk blending all-its sales in proceeds producers thereof, from net purchasing power farmers” destroying thus agricultural value assets -of the "detriment of the na- to. public tional interest. This interference is declared to *10 “burden and obstruct the normal channels of interstate commerce.” classifications, making in all use and
all markets distribution thereof producers in accordance with the to its contract between the asso producers: Provided, ciation and That its it shall not sell milk or any products consumption its handler for use or any to in market prices prices pursuant less than the fixed paragraph at to (A) of (5) such this subsection milk. marketing agreement' “(G) applicable or order No to milk and any marketing products prohibit any its in area shall or in manner
limit, products milk, marketing of in the case of in that area thereof, any any product produced production in of milk or area in the United States.” products (6) relates to other than B. milk.]
[N. agricultural (7) case of the products “In the commodities and the (2) subsection specified thereof orders shall contain one or more following of terms and conditions: Prohibiting competition unfair methods of “(A) and unfair trade handling practices thereof. in the Providing “(B) (except for milk and cream be to sold form)
consumption commodity product fluid such or thereof, or any size, quality grade, shall be sold or thereof the handlers only prices filed such handlers in the provided thereof at manner in such order. Providing Secretary
“(C) Agriculture, for the selection of selection, agency agencies defining or for the of an or a method duties, only powers: which shall include powers their such order in accordance with “(i) its terms To administer provisions; regulations rules and to effectuate the
“(ii) To make terms and order; provisions such of report
“(iii) receive, investigate, Secretary Agri- to the To order; such and- complaints culture of violations of Secretary Agriculture “(iv) recommend to the To amendments , to such order. agency person acting pursuant No as a member of an established (C) acting paragraph shall be deemed to be in an this official Congress, policy to be the it is declared By§ powers upon conferred through the exercise “to establish and maintain Secretary Agriculture, such for, agricultural orderly marketing conditions commodi- in interstate commerce as will establish ties will give agricultural farmers at level that commodities meaning capacity, .within the (g) section 10 title, unless person compensation such receives personal for his services from funds the United States. to,
“(D) Incidental and not with, inconsistent the terms and con- specified in (5), (6), subsections and (7) and necessary ditions provisions effectuate the other of such order.” (18) Secretary Agriculture, prior prescribing “The any term agreement order, or or amendment thereto, relating products, to milk or its if such fix term to minimum prices to be paid producers, prior or associations of modifying *11 any price term, the fixed in such ascertain, shall in accordance with 8e, prices give 2 section and section the that will such commodities equivalent power purchasing purchasing power to their during the period. prices of base level which it is declared to policy be the Congress of to establish in section and section shall, 8e for the agreement, purposes order, such amendment, of or level such feeds, as will reflect the of the supplies available feeds, of and supply other economic conditions which affect demand, market and products marketing for milk or its area to which the contem- marketing order, plated agreement, or amendment relates. When- Secretary finds, upon basis ever of the evidence adduced at required hearing 8c, may section or as 8b the case be, that give purchasing power equiva- will such commodities a prices during purchasing power period the base their lent to as determined 8e are pursuant section and section not reasonable in to view of feeds, feeds, supplies price of the available other economic .the and supply affect market and demand for milk conditions which and its marketing contemplated agree- products in the area to which order, relates, prices fix he ment, amendment he shall such as or factors, quantity pure will reflect such insure a sufficient finds milk, Thereafter, public and be interest. and wholesome finds, changed circumstances, necessary Secretary on account shall, adjust- opportunity hearing, due notice for make after he prices.” in such ments to articles that farmers respect with purchasing power of agricultural purchasing power to the
buy, equivalent period. . . in the base commodities Act, period agricultural the base § Under tobacco is fixed at the potatoes, commodities, except August, 1909, July, to 1914. Where period of pre-war during the base be satis- period cannot power purchasing from within the available statistics factorily determined Secretary is authorized Agriculture, Department July, August, 1919, from period the base take as In mini- thereof. prescribing § 8e. portion or a Secretary milk the statute authorizes the prices mum purchas- fix minimum without restriction prices period base as to reflect the during so ing power other condi- supplies of feed and economic available hearing if after a that minimum prices finds tions, he unreasonable. period purchasing power a base are (18). 8c§ jurisdiction (6) to the courts gives
Section 8a district to enforce and re- prevent of the United States violating any regu- strain of the person orders, under agreements provisions. its lations Secretary 8b authorizes Agriculture Section agreements into with the enter agricultural in the engaged handling others commodi- affecting in or commerce. ties interstate agree- These agricultural for all may be ments commodities and their entirely voluntary and may products, cover commodity handling any person engaged in the *12 processing of or operations various Agree- distribution. only incidentally are involved in this ments proceeding. for orders, a of provides Section 8c use agree- instead of in ments, certain situations. These orders only apply commodities, milk.6 specified including They are the only Secretary Agriculture entered when of rea- has . (2). 8c 6 § of an order will tend the issuance that believe
son Act respect the with policy of declared the effectuate and after notice thereof, commodity product necessary It is also hearing. opportunity and an order forth in to set such Secretary Agriculture of the hearing at the evidence introduced finding upon the a- and con- the Order the terms issuance of the that the declared policy.7 to effectuate tend thereof will ditions milk, requires8 the Act commodity is here, as When, in of specified or more terms one Order contain that the certain terms common to others, except (5) and no 8c§ 8c These (7). terms, § used out all orders set will be referred to later. examination, Order under in the hearing upon after a market- may be issued9 only Orders handling of the com- regulates which agreement ing in the manner as the order. Without modity special samé Agriculture Secretary of of and ap- determination President, orders not to of the become effective proval Act.10' required handlers as thé approved unless refusal or failure handlers to Notwithstanding the relating to marketing agreement commodity, such sign Secretary Agriculture, approval ,an President, issue without may adoption order an if he determines failure agreement, refusal or sign agreement handlers tends to effectuation the declared policy with re- prevent commodity and spect to the issuance practical only advancing order is means inter- In such a case the producers. est order must be approved or favored two-thirds of the who number or volume have been engaged, during a representative period, production for market of the 7 8c (c).
8c (5).
9 8c (10)
10 8c (8) *13 production or commodity within the area two-thirds in- the of the engaged commodity those production in marketing sale the the marketing specified area agreement (9). (19) or order. 8c Section 8c author- § izes a referendum to determine whether the issuance of by order approved producers. (12) Section 8c provides Secretary shall consider the approval or any cooperative disapproval .association as the by ap- proval or disapproval producers members, who are patrons cooperative stockholders or association. (15) Section provides 8c administrative by review Secretary petition on a handler objecting to any provision as accordance with law seeking and exemption By (B) modification therefrom. (15) jurisdiction district have courts review such ruling. The Problem. —In accordance with the provisions of Secretary Agriculture, the Act before promulgat- ing Order No. conducted public hearings attended by handlers, and consumers producers of milk and their representatives throughout the milkshed. No defendant, however, represented. hearings was These' followed the Agency the' to the presentation Secretary and to the of a proposed marketing Commissioner agreement regulating handling' order in the New York for- request area with a action under the fed- eral New York The statutes. hearings were jointly governments. held state federal The coop- governments two was eration the culmination of a investigation legislation course which had con- many years. problem over tinued from the stand- York point fully of New was considered and the results Report set out 1933 of the Joint Legislative Milk Investigate Committee Industry. in- This creatipn of vestigation followed the Milk Con- powers regulate trol Board with broad dairy busi- power of the state. This board had to fix prices ness paid charged and to be to consumers.11 A New York Rogers-Alien later act, Act,12 authorized the state commissioner to cooperate with’ the federal *14 acting authorities under the present Marketing Agree- ment Act, and to issue orders supplementary to of those Federal Government to be carried out under joint administration. problems concerned with the maintenance and dis- adequate
tribution of an
milk
supply of
in metropolitan
well
centers are
understood
producers and handlers.
In the milkshed and marketing area of metropolitan
York
problems
these
are
It
peculiarly
New
acute.13
is
recognized
generally
the chief cause of fluctuating
prices and
of
supplies is the
Surplus
existence
normal
necessary to furnish an adequate
which is
amount
for
periods
consumption. This
in an
peak
of
results
excess
production during
troughs
of demand.
milk
As
highly
for
perishable,
growth
a fertile field
bacteria,
yet
diet,
an
essential
item
it is most
adequate
an
production
desirable to have
under close
sanitary supervision to meet
the constantly varying
metropolitan
milk in
needs. The sale of
New York is
with
ringed around
of the health
requirements
depart-
to assure the
purity
supply.
ments
Only farms
equipment approved by
with
the health
authorities
operated
area and
accordance
requirements
permitted
their
market
their milk.
sixty
More than
thousand dairies located in the states of
'
n
York, Connecticut, Massachusetts,
New
Maryland,
Pennsylvania and
Jersey,
New
Vermont hold certificates
powers
upheld
York,
11 Certain of these
were
in Nebbia v. New
511; Corp. Baldwin, v. Farms 293 U. S. Department approval inspection hun- than five More York. City of New Health of the ap- have been similarly scattered receiving plants dred A and grades shipping receiving for proved ready find a cannot produced milk milk. all B Since surplus must periods, in flush market' fluid other powder cheese, cream, butter, move into manu- Since these products. nonperishable more or less prod- dairy with all similar competition' factures are in manufactur- into the milk ucts, for absorbed competition necessarily meet the processes ing must metro- from the far removed areas production low-cost for fluid milk use as a The market politan centers. profitable producer. most beverage food fluid milk mar- Consequently, all strive *15 marketing milk the of fluid in It ket. is obvious that least with the entire national York has contacts at New Depart- industry. approval The of dairies the dairy New York a condition for of Health of Qity, ment milk in metropolitan area, their fluid the iso- the sale of general competition recognized a well lates from industry. producers the entire Since these segment of keep enough up a volume of fluid milk numerous beyond ordinary requirements, New York distribution for competition among them even would threaten cüt-throat quantity and in 'end the of fluid milk quality consumption. New York for deemed suitable Students have problem generally apparently of recognized producers among of fluid milk fair division market the rest of the supply and utilization available of other dairy appropriate as an method staples of attack its 27 attempt No. was an solution. Order to make effective such, arrangement an under of authority Agricul- Marketing Agreement tural Act. Agriculture Secretary of found
Order No. milk York for the produced two-thirds New commerce' actually area moves interstate remaining and that one-third within produced portions 14 Pertinent are as follows: Obligation Order, VI, Article 1. “Net Pool of Handlers. —The § obligation pool producers net handler for received from milk during money compúted each month shall be a sum for such month as follows: quantity
“1. Determine the total of milk in each class at each plant;
“2. quantity quantity from milk in Subtract each class the of' such plants handlers; milk received other from from other pro quantity “3. Subtract rata out of each class re- ' ceived from the own farm; handler’s “4. remaining quantity class, Subtract of milk in each quantity prices each to which the section of Article IV apply, do not which known pooled result shall be as the ‘net milk’' in each class. Multiply quantity
“5. pooled class, milk in total of net each combined, plants respective at all the handler class together set forth in resulting section 1 article and add IV . . sums; per hundredweight “8. Deduct 20 cents pooled all net plants received from at in the or'portions counties listed in this counties below section. The result thus obtained shall ” obligation;.’ pool be known as the ‘handler’s net Jersey: Hunterdon, Counties —New Somerset, Essex, Union, Morris, Warren, Sussex, Columbia, Passaic. New York: Nassau, Dutchess, Putnam, Suffolk, Orange, Westchester. Connecticut: Litchfield. Mas- County, sachusetts: Berkshire. Towns in Ulster New York: Marble- *16 Hurley, town, Kingstown, -Ulster, Rosendale, Esopus, Paltz, New Lloyd, Gardiner, Plattekill, Shawangunk. Marlborough, Computation of
“Seo. 2. the Uniform Price. —The market ad- shall day ministrator on before month, of each 14th audit for mathematical correctness and report obvious err-ers the final sub- preceding mitted for the month each by and, handler on the 14th day compute month, such from ah of such reports the corrected ' uniform price following in the manner: pool “1. into obligations Combine total the net handlers; of all one in- inextricably and “physically York was New State all handled milk; that interstate termingled” or so as to commerce in of interstate either the current in interstate commerce obstruct burden and such affect, required be made for such payments to total of “2. Subtract payments total of claimed and the of article VII by month section VII; section 6 of article pursuant to fund; producer settlement cash in Add the amount of “3. quantity represented in by total the result “4. Divide section; and pursuant paragraph this obtained the sum pro- cents nor more than 5 not less than 4 cents “5. Subtract payments contingency reports in or of against of errors vide This result be known' delinquencies payments in handlers. shall containing percent price such month for 3.5 uniform for as the (cid:127) plants in the 201-210 mile producers from at butterfat received . zone.” day Payment. or before the 25th “Time of VII, Article 1.§ —On handler, cooperative association which
of each month each producer all milk payment to each producers make shall during producer any preceding month plant at delivered such subject differentials set forth price, the uniform than at not less this article.” 2 and 3 of sections “Transportation Location Differentials.— VII, 2. Article § minus differential shown in plus or shall be uniform section article for the schedule contained in 3 of IV column B of the purposes of section plant as established zone of the located in the IV, plants case of counties plus article 25 cents paragraph 8 of section 1 of listed in article VI.” “Payments Cooperative Any VII, Article § Associations. — Secretary producers may apply to the cooperative association of its'qualifications payments pursuant to receive for a determination of having authority exercising its full section reason of members, using milk of its best efforts to sale of the its Class I milk supply, supply, in times to' of short long milk, supply, in a utilization of in times of area and to secure producers, greatest possible returns to all manner to assure the having activities under the control of its members. . . . its entire cooperative payments made each Such shall be association following following rates: under the conditions and at per hundredweight pooled
“1. milk at One cent of net plant handler’s which was caused to be delivered its members
55T milk and products. An exception its was made to milk as regulated by of the Agricul- the order of Commissioner ture and Markets of the State-of New The Secre- York. tary prices further found that calculated accordance Agricultural Marketing Agreement 1937 ofAct by such association and on which such handler has reports made the - payments required by and order. . “2, Except section, forth in 3 paragraph set of this cents 2% per hundredweight pooled plants' of net milk at other of handlers reported was by which and collected for such association. hundredweight “3. cents per pooled Five of net milk plants at operated by and, if, quali- such association in addition to the other fications, by Secretary such association been has determined plant capacity have sufficient to all producers to receive the milk of willing who are members and and able to receive milk from producers members, per hundredweight any not cents pooled 5 of net milk which by -any was caused it to be delivered to other handler reported by and which is collected such and association. (cid:127) “Sec. 6. Market Service Payment. market administrator —The pay producer shall of the settlement fund any out im- handler mediately after audit for such payment of claim made on forms supplied market administrator: respect milk “I. With received from a plant at operated only equipped receiving handler ship- such for the and area, ping marketing was, during of milk which month December, except plant or November moved to a where it was II-A, II-B, III-A', III-B, III-C, III-D, or, utilized in during Classes October, IV-A, which, of if operated month and such handler, I shipped no milk marketing during Class was to the area month, per hundredweight such 23 cents moved, plus so per hundredweight cents for the first five thereof, miles or fraction plus per hundredweight per cent mile miles, for the next 20 !/4 plus hundredweight per and A 1 cent per mile, additional highway shortest plants; distance between the two Thirty per hundredweight “2. during cents I Class milk sold months of marketing November and December in the area from, producers which was' plant received equipped at which is condensing drying which, during milk and from the months May preceding, equivalent and June in terms milk received plant, percent such at no in excess no cream area,”' percent shipped of 50 to the exceás equivalent power purchasing milk a give this Act were of that and 8e §§ mentioned parties feeds supplies *18 view of the reasonable in and which the supply affect conditions other economic for price minimum He a milk. then fixed for demand by to formula. from time time milk to be determined as City is defined the marketing area the Order the By Nassau, Suffolk and counties of York and of New the producing milk any person A is producer Westchester. plant approved by health at a a a handler to delivered for in the market- receiving milk sale for authority the 'in engaged handling, the handler a person area. A is ing plant for simi- approved received at an milk or cream cooperative “Handler” includes associations. lar sale. milk setting up of the Order a The sections administrative are not attacked. defining his duties administrator classify milk. which Nor are those it minimum important IV since establishes Article is There differentials based for milk. various prices content, distances between the butter fat upon.use, consumption which it is unneces- points production opinion it analyze. purposes For this is to the sary price the minimum say, example, to an as sufficient by for milk a is fixed formula pay should each handler butter-price range for 92-score with the which varies York during market the New at the butter wholesale month. day preceding the 25th days preceding required file reports re- their handlers are milk of the' various and utilization classes. It ceipts understood, however, this minimum price should be producer which amount but is not receives “value” from level or which is so-called calculated price which he in dollars and cents is to the actual amount receive. computed VI uniform is and it price Article
By price paid is actually by the producer uniform which- uni- proprietary (noncooperative) handlers. The iiy'' computation form is determined by which , ac- n (classified milk multiplies substance the amount of cording use) by handlers, its received all less certain quantities of milk min- deducted, by permitted be IY prices imum fixed Article different classes From payments the result various reser- milk. vations are deducted and remainder divided total .quantity milk To equalize, received. handlers pay producer into settlement fund. much While over-simplified made operation will sum- clear by provisions VII marizing require Article that' producer shall pay handlers settlement fund by which their purchased amount by the multiplied minimum greater various classes is than purchased multiplied their price. uniform *19 the purchased multiplied When handlers’ by the than is multiplied by minimum is less it when the uniform price, producer pays the settlement .fund them producers. the distribution their These difference provisions give all uniform producers, with ex- ceptions herein stated, gen- accordance with the eral use of preceding period. the (cid:127) provisions the Order upon Other of which an attack is out in the made be pointed will discussion of par- the objections. ticular
Suspension developed Order. —It at the argument of causes this Court the Secretary of the Agricul- 1939,15 March had .18, suspended on ture Order No. 27 of the effect the decree on account below on its admin- (16)- § enforcement. (A). istration Since 8c authorized suspension this statute and the. rights, accrued preserves (cid:127)Order o£ .opinion .are. the. We. ' does not 'make these step Reports proceedings moot. Reg. 1259. 4 Fed. accounting milk, sales of receipts and classified of their in the determination of the uni- obligations pool of their producers with their on the price and settlement form Order, as well as the payment of the money, basis controversy over the defendants. The from the sought to enforce its power pro- and the validity of the Order remains. visions considering the validity the Order. —Before
Adoption of of the provisions Order Marketing Act and contention examine the de- attack, under we shall under circum- adopted was fendants Order equity court of to refuse to en- require a which stances sign had refused failed After dealers it. force Secretary conducted marketing agreement, proposed (19) ascertain 8c whether § under referendum approved by two-thirds No. of Order issuance Vigorous (9). 8c cam- required § producers, opponents of proponents both waged by paigns were League were the Among proponents Order. 24, on vote, Secretary August After the Agency. President, of the determined that approval 1938, with favored at least two- the Order was the issuance declared it effective as of producers, thirds 1938.16 September. appeal to conscience base their defendants
The with the referen- matters upon connected the chancellor fraud in they adoption. claim amount dum which its widespread public to consist of alleged fraud said effect that all would to the misrepresentations *20 conspiracy milk and a for their price the same receive the to convert state and others League and between creation for the of a instruments into acts national in of fluid in the the sale handlers large in monopoly marketing área. Reg. Fed. findings supporting charges misrepresenta-
tion conspiracy may and as determining summarized (cid:127) (cid:127) the intervening plaintiffs, League that and the in participated Agency, actively proposing, adopting and both inducing and accept handlers the Order. In greater detail, that findings League show organization instrumental in the Agency; that it the. of. representatives has upon Agency’s of Direc- Board tors; Agency an organization .that as has.acted promoting action acts; under both and federal state that League Agency both and published papers which gave vigorous support to the campaign approval of the' At Order. time of hearings the Agency issued stating an an explanatory booklet equal purchasing by price paid would be all dealers for milk of the same producer and that each equally use would share the bene- fits milk market. Both fluid Agency League announced repeatedly handlers would be required to no pay a uniform and that handler would receive advantage competitive over the others. The Agency $63,000 expended over between December 1, 1937, and $45,000 over 1, 1938, June between the latter date 1, 1938, the date September the order went into effect, supported it actively the federal-state order Voting on program. place the Order August took 18, 19 and 20. Of votes 38,627 counted as in valid the referen- 87.1 dum, 33,663 or were in percent favor of the issuance Order, 4,964 12.9 percent were opposed. Of votes, League 22,287. the favorable cast . beyond Supporting evidence the coordinated activities League Agency, cooperatives and other for the charge conspiracy to monopolize securing adop- tion of the Order was found the District Court provisions the Order. Competitive, advantages to co- operatives thought by the Order it were to indicate an improper them drafting. influence These will its *21 legality of of their the view point later discussed
be that The court found classification. permissible under by monopoly out was carried to obtain conspiracy the the leader- under producers, of part tactics on coercive .the con- tactics Agency. the These League of the ship comply not that if did they to handlers sisted of threats delivery withhold the would Order, producers with the determined, were the schemes, lower court milk. of These and ac- drafting, adoption securing in the so successful monopolize conspiracy of that a ceptance the Order was- Sherman Act contrary to the interstate commerce of the incidents’ occurrence that established. It held do injunction. of We refusal just compelled detailed not agree. of the adoption manner considering the
While validity provisions the Act and the Order, Order was submitted Order must assumed. The hearings producers specified after approval explana- in The full text of the Order with the statute. each voter. In tory prospective was mailed pamphlets n fact, per- erroneous statements cannot be the face of this futile; There no evi- mitted to render the submission dence, A misunderstood. casual ,any producer that sen- Department pamphlets tence in one of the publica- a number other statements Agriculture League Agency were the effect that tions of the uniform producers pay dealers would all qualifications given need the milk. Such assertions ,are sold they applicable that not outside Order cooperatives. handled marketing area or from the facts immaterial view The variation of milk But the Order, of the value or volume involved. cooperatives VII, plainly Article stated were not payment requirements and it appeared, covered also, that milk sold area was not outside
05KSId Order form of the official A study terms. within its by misconception created up have cleared would declared Agriculture Secretary language. ap- the Order .affected three-fourths *22 three- deny that not litigants do terms. its proved of the the institution voted for voters fourths of the in to behind authority go the courts There is no Order. in- inquire into the Secretary to of the this conclusion favor the the to producers which caused fluences resolution. exercised League the.Agency, the
The coercion force adoption handlers after the of the Order to the upon of the acquiesce operation, them to in its is or induce alleged misrepresentation. indirect as the character same seeking producer coercion of the partisan It is the plan by of the threat of the support the compel dealer his own milk. The coer- power economic over of his use Producers’ upon ineffective these defendants. cion was meetings urged papers in their diver- organizations agree to influence them to handlers of sion not could have had an effect on efforts the Order. Süch quite the It is true that producers. the prior vote itself cast two-thirds of the favorable votes League which than one-third of total in more position cast against the Order. This from the arises vote qualified authorizing cooperatives Act, express of the provision for all of their disapproval or members or approval provision, not an unreasonable This is as the patrons.17 marketing agency of those for cooperative is whom it Congress in put If is power the order votes. the manner the demonstration effect, of further in likewise under its control. is These associations approval have a vital interest estab- marketing system. of an efficient This ade- lishment (12). 8c§ their qüately explains interest securing, adoption of an order believed by them favorable for this If purpose. corporate ulterior motives of aggrandizement their their activities, stimulated efforts were thereby rendered unlawful.18 If the Act and Order are otherwise valid, the fact that give- cooper- théir effect would be to monopoly market atives would not violate the injunction. Act or refusal of justify Sherman Correlation Order Act. phase There another against argument of the the Order which is not affected validity application Act its by the Order ready disposition before and therefore constitu- need be reached. Defendants questions contend tional statutory basis for sections is no Order there from the cooperatives payment the uniform exempting authorizing to them payments and certain price19' producer fund.20 from the settlement handlers *23 point makes of the The Government none object to can these of the handlers, all terms defendants, milk only producers delivering cooper- to because Order exemption cooperative by affected are atives at not pay less than requirement from handlers are only producers by affected price uniform payments §§ for and 6 money pooled use 5. Although three of the other handlers. cooperative upon of the benefits conferred complain cannot defendants cooperatives, defendant they are for cooperatives, raise standing to issue Company has Dairy letter except cooperative authority to handlers statutory want It price. is a proprie- of the uniform the payment from milk, required the Order a handler corporation, tary 18 139, 145; States, 300 U. S. v. United Co. Cf. Isbrandtsen-Moller 254, v. 304 U. S. Redding, Co. Service Water California VII, 1. Article § and 6. VII, 5§§ Article purchases.21 for it This pay prices uniform from the prices pro- arises pay uniform requirement minimum pay prices. it shall of Article IV that visions for the deduction of certain except two are the same The from excepted The payments. cooperatives service laid payment directly The burden of payment. excepted. others are None the de- upon Jetter while hand, position the other is in raise the fendants, on statutory authority payments lack of issue of cooper- 5 and 6. Whether VII, §§ authorized Article corporations the defendant no not, ative or have finan- in the fund. producer cial interest settlement All de- accord-, of, or draw out that fund in pay into, fendants their utilization of the anee with delivered to them patrons. profit The defendants’ depends their loss each upon spread receives between the class If the deductions the fund price. sale are small or higher receives a patron nothing, uniform'price but not affected.22 handler is whether the Act now consider We authorizes the excep from the uniform cooperatives payment tion of pro VII, if § of Article This authority, exists, visions it (5) (F) the Act. earlier is in 8c paragraphs § minimum prices paid by to be handlers to provide subject associations of producers, to usual differentials important and location quality here. minimum require would be paid by These coop when, here, they were under eratives handlers Order,23 definition of the were it not for the exception of *24 VII, Article 1.§ 22 1, Chicago 18; Currin v. 306 U. S. Wallace, Board Trade v. 42; Mining 1, v. 172, 262 U. S. S.U. Olsen, Lord, Iron Oliver Co. 603, 606; 181; v. S. cf. Carmichael Fox, U. v. Southern Gorieb 495, 513; 301 U. S. Co. v. Davis, Machine Co., Coal Steward 548, 598. U. S. I, subsec.
23 Article §
. Same,
these cooperatives under subsection “Noth (E): ing . . . shall . prevent-a . . cooperative . . from . . . . making distribution thereof proceeds] ... ac [net cordance with the contract between the association and producers.” its This language specifically permits, indeed requires, the Order to except cooperatives from the re quirement of paying minimum prices to producers. As minimum price is paid to producer through the payment of the uniform price, equalization after in the pool, authority there is in the Act to except coopera tive from the payment of the uniform price.
I. Terms the Order. provisions Certain of the Order were found by the Dis- trict Court to show unconstitutional discrimination one or more of the against defendants. The discrimina- complaint which tions of made arise applica- from the York problem tion to the New 8c§ (5) Act relating milk.
A. Dairy Price. —The Jetter Company, pro- Uniform prietary handler, urges cooperatives as milk need not uniform pay producers a it price, unreasonably discrim- inatory process and violative of 'the due clause of the to'require Fifth Amendment pay it to this uniform price. §In 8c (5) (F) is a definition of type there of coop- erative with permitted to settle its members in accordance with the contract. membership The general character- coopératives'are well istics of The Capper- understood. cooperatives Yolstead defines Act such associations corporate or otherwise, with or producers, without capital their product for stock, the mutual benefit- of equal members as voting privileges, capital dividends on employed restricted and dealings percent^ products.24 limited to non-member Different 24 42Stat. 388.
663 marketing cooperatives by- treatment has been accorded legislation Secretary federal alike.25 Indeed the state and recognition such charged by Act to “accord producer-owned encouragement producer-con- cooperative harmony as will trolled associations cooperative associations set forth policy with the toward promote as will tend to existing Congress, Acts 26 methods of and distribution.” These efficient means agricultural cooperatives are the which farmers enter into the processing and stockmen and distribution The crops of their and livestock. distinctions between cooperatives organizations such business have re- to justify been held different treatment.27 peatedly Frost Clayton 6, Act, 731; 38 States —The Stat. 25 United Robinson- § 1528; 4, Capper-Volstead Act, Act, 388; 49 Stat. 42 Patman Stat. § Corporation Act, 506, 181, 40 as Stat. amended 42 War Finance Stat. Act, 1000; Agricultural 42 182; Stat. The The Grain Futures Mar Act, 46 keting Stat. Hanna, Cooperative Marketing Law Associa-
States —See (1931), c. 3. tions 26 (b), Adjustment Act, 37, 10 48 Agricultural Stat. as amended § August 24, (1) 1935, (b) 767, of the Act 49 Stalt. 16 § 3, 1937, (h) Act of 1 June 50 adopted Stat. 246. § 27 107, Tracy Co., 173; 220 S. v. U. Brushaber Flint Stone v. Union Chicago Co., 1, 21; 240 U. S. Board Railroad Trade v. Pacific Liberty 40; Burley 1, Warehouse S. Co. v. Olsen, U. Tobacco 262 Assn., Cooperative 276 U. S. 89. The Government fur Growers approving special of state cases a collection nishes us ad Coop. given co-operatives: Tobacco Growers vantages Jones, Assn. v. 174; 265; Kansas Wheat E. Growers v. Schulte, 117 S. 113 185 C.N. 311; Brown Staple Co-op. v. Cotton 672; 216 P. Growers Assn., Kan. 849; 859; Co-op. Northern So. Wisconsin 96 132 T. P. v. Miss. 571; 936; 197 N. W. Dark Tobacco Gr. Bekkedal, Co-op. 182 Wis. 614; Dunn, 308; 266 S. W. 150 Tenn. Minnesota Wheat v. Assn. 471; 420; Huggins, 162 Minn. 203 N. List Burley W. v. v. Growers Assn., Co-op. 361; 471; 114 Ohio St. 151 N. E. Tobacco Growers Co-op. Robertson, 51; Assn. v. Ind. App. Tobacco Growers Dark 106; Co-op., Ky. Tobacco Growers v. Dark E. Potter 150 N. Co-op., 30; Harrell Cane Growers 160 Ga. 33; v. 441; 257 S. W. Corporation v. Commission28 in’ fact recognized the va- lidity of such classification. The Commission was en- joined license for issuing operation cooper- gin,' ative cotton under a proviso directing it to do so on *26 petition 100 taxpayers citizens and without show- ing public required for necessity ginners. other The applicant organized for though profit, were dividends limited, and its membership pro- was not confined to thought court ducers. The no rea- distinctions had subject relation sonable special the legislation, opportunities cooperatives. for It was the Court said had “no reason to doubt” that the classification was valid cooperatives.29 applied as to true cooperative producer The mem seeks to return to its portion largest bers the possible necessarily the dollar spent by the consumer the product with deductions only for modest distribution without costs, profit with limited membership profit to the cooperative cooperative. organized stock by producers It is for their mutual benefit.30 For that reason, may it be assumed largest it will seek to distribute amounts its patrons. E. 531;
S. 113 Norquest, 731; v. Wheat Growers Neb. Nebraska 798; Warren v. Alabama Farm B. Cotton 204 N. W. 213 Ala. Assn., 264; p System 61 104 v. Dairy So. 82 N. H. Hayward, Manchester 193; 12, 19; Co-operative 132 Atl. Clear Lake Live Stock Assn. v. 1293; 297; Hollingsworth 206 N. W. 200 Iowa v. Texas Weir, Hay Washington Cranberry 1068; S. Assn. v. Assn., Moore, 246 W. 117 773; Poultry 430; 278; 201 P. 189 Cal. Barlow, Producers v. Wash. 93; Assn. v. 107 Oregon Co-op. Lentz, 561; Ore. 208 P. Growers 811; 19; Carolina Cotton Growers v. English, 212 P. 135 C.S. South 542; App. Bell, Milk Producers Co. v. 234 Ill. 222 S. E. 133 App. (N. Y.) Co-operative Inc., Div. Dairymen’s Assn., v. Barns 624; Y. 294. 222 N. S. S. 515. 278 U. 29 Id., Corporations Cooperative Law. Cf. N. Y. corresponds cooperative commodity handled a
The capital corpora- of a business some purposes as cost, one may sale below long tion. Either cut assets its other as its deliver, long as members will prices, lower sales corporations When permit. proprietary profit Their naturally purchase prices. seek to lower they cooperative hand, On the other depends spread. on selling All ex- price less pass cannot reduction. to its its. pense patrons. available for distribution As cutting, it was price own members bear the burden fixed it from the exempt payment reasonable return cooperative measures his member price. handler uniform pays. the market business commodities dairy In market of staple wide If distribu- quotations are available. products, readily cooperators’ equal prices, tions reactions open do losing of stockholders of those businesses. parallel would *27 from Act law- protects anyone Neither the nor the order they it essential that should competition, ful is do nor in not find an unreasonable discrimination so.31 We do requirement cooperatives the excepting producers’ pay price. to a uniform Milk. Another to Unpriced
B. discrimination is said the Order minimum .part that which limits reside in marketing milk area or which passes "sold prices to in marketing milk, in the area.” Other plant a through area, is milk” production “unpriced same though from the computation of the figure not in uniform does deal'; unpriced milk are priced both Where price. must a statement handler, furnish pro- in he a of his milk for paid at the showing percentage ducer handle milk only The defendants which uniform price.32 They that marketing area. assert un- is in the an sold 166; Ellerman, Power v. Alabama Co. v. U. S. Co. Railroad Ickes, 480. 302 U. S. VII, Order, Article § in handlers, results favor of such
reasonable discrimination milk in market both and outside the League, which as the marketing area. complaint large dealers and
The basis is and dis- gathering with extensive cooperative handlers milk purchase permitted facilities tributing if the throughout they milk shed at pricé please, marketing milk a in the through plant not pass does the sale they provided it area, any price please, and sell at By New York area. is outside limited milk for Jersey fact sells more New reason in handler. greater New is made York, profit than in profit replace If handler can use desires, he so position in a New York area and still be losses on sales This on milk. pool uniform pay price against the defendants. is to create discrimination said tomilk unpriced with It is handlers possible in trade area profitable their from the profits use extra for them to equally It way suggested. possible a competitive the Order. It situation do so before with which it does not the Order create which did discrimination that there no deal. We are view by reason of this situation. unpriced handlers of found that
The District Court prices paid purported milk to blend permitted “are markets, milk for such sold other paid been have Administrator by the with the uniform .announced the actual reducing area, thereby milk sold in the Metro- handlers, for sold by such price paid de- competition sold Area, politan *28 by the handler figured “If price the fendants.” market value, than its actual the is lower unpriced milk, permitted pay thereby -pro- is blending, by handler, the Order price, at less than and less for milk all ducers erroneous, thereof.” It is to suppose value than actual minimum, milk at less some than buying by that “actual for milk in paid sold price” marketing area by. reduced. The for all milk sold paid proprie- is handlers in that is tary price. area the uniform Unpriced from, may be producer bought same for less. average may be paid producer below the mini- part mum sold in the marketing but area or pass- through the minimum ing plants paid. there located is justifies language finding of the This is all handler, by blending, thereby permitted “the to pay for milk less than price. all the Order producers at . . C. Nearby Provision made Differentials. differentials of 20 special Order for cents on milk from favorably counties located most certain pay This is enable handlers to area.33 five plants.34 The cent at these difference is absorbed Act the handlers. The authorizes such an arrange- (A). (5) 8c This was found discriminatory § ment. producers by District Court as between but there was law to finding no conclusion discrimination against The District Court defendants. unfair these defendants
opinion this was who no have counties. Here the these defendants patrons urge arrangement from this advantages to their further com- patrons who have counties these because near petitors freight considered, differentials locations, have lower The differential transportation costs. increases payment This producers. to the tends to stimulate Larger production means more production. benefit from advantage to freight competitors. The discrimination fanciful remote. It would not justify seems a.court Secretary’s overturning determination of the pro- differentials on evidence of the found priety the lower an Such substantial. administrative court deter- presumption carries mination existence state VI, Order, Article 1.§ VII, Article Order, § *29 568 strong far to be over- too the action facts justifying made here.35 suggestions as
turned such Constitutionality Act. II. authorizes and The Act A. Minimum Prices. for the minimum fixing Order undertakes foreign interstate or purchase of “in the current obstructs, affects, or burdens, or which commerce, directly no is commerce” milk.36 There foreign interstate or defendants milk of all four the fact that challenge to inter- the channels of marketing through reaches the area to the any question raised as Nor is state commerce. in the the distribution Congress regulate power recognized that milk. It intrastate is wholly area of the its milk, of this authority covers sales the federal directly inextricably intermingled with marketing is area which moves affects the across state lines.37 price “of the challenge regulation is to dairy farmer v/ho delivers his upon the sale
paid
plant.”
urged
It
country
sale,
milk to
some
fully completed
a local
before
inter
transaction,
n
attempt
fix
begins
commerce
and that
state
of that incident
the Tenth
other elements
violates
Amendment.
bought
But where commodities are
for use
is a
lines,
part
state
the sale
interstate com-
beyond
35
Baldwin,
194, 209;
v.
293 U. S.
Farm Products Co.
Borden’s
176, 185.
White,
Co. v.
296 U. S.
States
Pacific
36
(1).
8c§
37
495;
Chicago
258
v.
Wallace,
v.
U. S.
Board
Trade
Stafford
1;
v.
States,
234
Ry.
Olsen, 262
Houston
Texas
Co. United
U. S.
&
352, 399;
Cases, 342, 351-2; Minnesota Rate
U. S.
Labor
U. S.
1;
1;
S.
v.
Wallace,
Cases, Currin v.
U.
U. S.
Board
Mulford
v.
38;
Fainblatt,
ante, p.
Smith,
Labor Relations Board
National
xnerce.38 interstate transportation commingled were with intra transactions, state the existence of local activity did not interfere with the federal power regulate inspection *30 of the Activities within conducted lines state whole.39 by do not this fact alone of escape the sweep the Com Clause, merce Interstate commerce may dependent be upon quotas Power to establish for interstate them.40 marketing gives quotas power name for that which is left within the state of production.41 Where local foreign milk alike are drawn into general plan a protecting the interstate commerce commodity in the interferences, burdens and obstructions, arising surplus from excessive and the social and sanitary evils of values, the power Congress low extends also to local sales. over power
This when commerce complete it exists is been to fix It has exercised wage scale for perfect.42 limited railroa’d tariffs44 charges fees and period,43 for live-stock exchanges.45 The authority the Federal over Government inter state commerce does differ extent character by retained from that states over intrastate com 38 Milling v. 282, 257 Bondurant, 290, U. S. Co. Dahnke-Walker 50, 54; Co., 291; v. 258 U. S. cf. Farmers’ Grain Lemke Foster-Foun Haydel, 1, 10. v. 278 U. S. Packing Co. tain 39 1. Wallace, v. 306 U. S. Currin 40 v. National Labor Relations Edison Co. Board, 305 Consolidated 197, 220. U. S. 41 Smith, supra, note 37. v. Mulford 42 196; 230 Cases, 1, Wheat. Ogden, Rate 9 Minnesota Gibbons v. 352, S. 398. U. 43 243 S. 346. New, Wilson v. U. 44 (1). 15 589, U. C. S. Stat. §. 420; States, 280 U. Moorhead v. S. United Tagg Bros. & Stafford Wallace, 258 U. S. v. had oc Court has Illinois, Munn this v. merce. Since action to the give repeatedly consideration casion a reexami Recently, upon regulating prices.46 states prices, over power grounds state nation “upon mean that Court phrased by this power state appropriate measures occasion and proper including in any aspects, of its regulate a business may or commodities charged products for the to be it sells.”47 been fix has
The power of a state cities great Court.48 adjudicated people fresh adequate supply pure depend upon an largely the consumer has for health that milk. So essential is it low competition from been unrestricted willing forego producer’s compliance territory to be assured cost municipal sanitary as enforced requirements, qf com- belongs category to that health It authorities. *31 subjected to the years for has been many modities that exposition of thorough A power the state. regulatory in made the milk in the New York shed was situation Nebbia, there nothing to- was to add what case. There is decision, that we have out that since said, point save to milk imported sale prohibit that a state cannot held pre- below the extra-state purchase price where Pennsylvania regulatory minimum49 a and that scribed 46 York, 113; S. Budd v. New 143 94 S. U. Illinois, Munn v. U. 391; 517; U. Alliance Insur v. North 153 S. Dakota, German Brass 389; v. 233 Lewis, Young O’Gorman & ance Co. v. U. S. Hartford 502; York, 251; v. 291 U. S. Co., 282 U. S. Nebbia New Insurance 379; Townsend v. Yeo 300 U. S. Parrish, Hotel Co. v. West Coast mans, 301 S. 441. U. 522; Tyson Court, 262 S. v. Industrial U. & Packing Co. Wolff Minnesota, 418; Co. v. Creamery Banton, Fairmont v. 273 U. S. Bro. 350; 277 U. S. McBride, v. 1; 274 v. Williams S. Standard U. Ribnik . U. 235 Co., 278 S. Oil 537. S. York, 291 U. Nebbia v. New 48Id. Seelig, 294 U. S. Baldwin v. law, minimum including prices, applied the absence of federal legislation Pennsylvania for purchased In Hege York shipment into the New area.50 Baldwin,51 Corp. man Farms v. again this Court sustained York Milk Control Statute against the New com plaint arbitrary. A price limits were variation in prices charged the consumer between dealers who had and who had advertised dealers not well trade upheld.52 enjoyed names was The power by states regulate the prices handling selling and commodities within internal Congress their commerce rests with the commerce between states. .
B. Equalization Pool. —In order equalize the prices required received producers, handlers are to clear their purchases through producer fund. Pay- settlement ments into this fund depend upon withdrawals the “value” of the milk which is fixed received governed by Order at different the use made purchased upon the handler of the whether his obligations producers or less than uni- greater form due the under the scheme. The equalization result of the use the device of an pool is with producer, dealing proprietary handler, each uniform gets weighted average price milk, his differentials for quality, location or other usual variations, irrespective market of the manner of its use. (ii) (5) (B) (C) Ar- Act, Order, § The 8c authorize IV, VII, adjustment. VI and such an ticles objection to equalization defendants’ pool, is not to the disbursements from considered, here *32 expenses standby fund services 50 306 Eisenberg Products, Board v. U. S. 346. Farm Milk Control 163. 51 293U. S. 52 Eyck, 297 251. U. S. Borden’s Co. v. Ten
53 502; S. York, v. New U. v. Yeomans, Townsend Nebbia 301 U. S. which 6, concerning VII, Article §§
authorized to It is standing complain. handler has no we hold liberty property deprivation of .accom- alleged to the taking away from requirement plished by pooling milk acquire to their their right defendants price, according use, minimum class to its patrons at the to their forcing surplus, the handlers over the pay equalization pool instead of to their price, uniform to validity assumes the patrons. argument This regulation, such, but denies the constitutionality arrangement because handlers pooling at producer in accordance with liberty pay the use of müst but distribute the producer’s surplus resold less advantageously. whose others It is carry principle urged contribution to its mean that logical wages conclusion would of the em- shared with ployed unemployed; should be the highly underpaid; and receipts with paid, able, diligent, fortunate and the the incompetent, unlucky drone. and the equalization exaggerated
No such of wealth and op portunity proposed. pool is only a device reason adapted regulation to allow ably the interstate market which minimize the upon terms results of the restrictions. ancillary price regulation to the It designed, as is the foster, price provision, protect and encourage inter by smoothing commerce out state the difficulties of the surplus competition and cut-throat which burdened this In marketing. Smith,54 v. we made it clear that Mulford commodity volume of might movement be controlled or discouraged. Congress As the would have, clearly, the right only limited permit of milk amounts move commerce, interstate we are of opinion might it per mit the movement on pool terms of settlement here provided.
S I ’tí tí o co
573 equalizing Common funds for are not unknown risks and have not been considered violative of due process. comp pooling principle The upheld was in workmen’s 56 bank ensation,55 deposit insurance, and distribution of Transportation benefits Act.57 rely particularly defendants upon Thompson v. Consolidated Corp.,58 Gas Utilities and Railroad Retire ment Board v. Alton R. Co.59 In the Thompson case, the Texas Railroad Commission proration ordered gas production in the Panhandle. It was assumed that pro- prevent ration to waste protect rights correlative a .pool was valid it but was held proration that the order in issue purposes. none these It was for the purpose “sole compel ... those market [with out purchase ... gas from potential producers” lets] who have no market. This was not deemed to be reasonably related to the gas conservation of or the protection of In rights. correlative the Retirement Board case, the pooling principle was involved but was found to in valid because the burdens on the roads were equal ized with the Entry benefits. on service was made at age different levels for different roads. Employees seventy or older required were to retire. Some roads had none. Solvent and insolvent roads were liable alike. All carriers were treated single as a employer. It was provisions, these deemed unequal, which led to the con clusion the manner of pooling of funds denied due In process. case, the pooling has differentials to cover the variations quality and location. v. Washington, Timber 219; 243 U. S. 55 Mountain Co. New York 243 Co. v. White. U. 188. R. S. Central 56 Haskell, 104; v. 219 Bank U. S. Noble State Abie State Bank v. S. 765.
Bryan, 282 U. 57 England 184; Dayton Case, 261 U. S. New Divisions Goose Creek Ry. States, v. United U. S. 55, 77, 78. 300 U. S. 330, 355 et seq. 295 U. S. delegation are three issues of Delegation. C. —There authority delegation Secre- (1) presented: marketing areas; (2) to establish tary Agriculture approve a authority market- delegation (3) agreement handlers; an without order ing *34 to cast the votes authority cooperatives to of delegation patrons. of producer been com- days Congress has
From the earliest gov- the administrative officers to leave to pelled which put facts were to authority to determine ernment regulations and the details of which effect into legislation general It is the more enactments. well implement would no argument against it therefore, that settled, it say delegates an to that broad constitutionality of act any legis- determine details powers to executives necessary authority has never This been lative scheme. legislation involving questions dealing with In denied.60 must be adjustment, each enactment con- of economic purpose whether it which states to determine sidered accomplish standards seeks Congress worked is to be out with sufficient purpose which affected to understand to enable those these exactness tests, Congress specify needs these limits. Within reasonably practicable.61 present far only so tests. believe, we satisfies these Act, .Agriculture. Delegation Secretary 1. —The Act is establish maintain such “to purpose agricultural conditions commodi orderly as- commerce will in interstate establish ties 60 421; 388, 293 U. S. Ryan, Co. v. Refining Schechter Panama 495, 529; v. Wallace, S. States, 295 U. Currin Corp. v. United 1. U. S. 496; 470, S. Stranahan, 192 U. United States v. v. Buttfield 12; Monongahela 1, Bridge Foundation, 272 U. S. Co. v. Chemical 177, 193; United States v. Grimaud, S. States, 216 U. United 127, S. States, 506, 516; v. United 266 U. Avent U. S. give agricultural farmers commodi at a level that will power respect ties a articles purchasing agri power of buy, equivalent purchasing farmers to the accom the base To period.” cultural commodities in is directed to issue this, Agriculture plish Secretary he the issuance orders, has reason to'believe whenever policy an order to effectuate will tend declared #the Re Industrial language act. of the National Unlike the case, covery page in the Schechter Act condemned purpose powers tests to determine the here In the Re that conclusion are defined. dependent upon couched in most covery Policy the 'Declaration of Act In general parity prices, Act it is restore terms.62 general might welfare Recovery Act, 2.§ Under the formulated to sought through any industry, codes of' competition for the express standards fair businesses *35 spe Here the of orders are limited to the covered. terms (5) (7). out in 8c and provisions, minutely § cific set flexibility provided by (D), § 8c (7) While considerable emergency productive widespread of un “Section A national disorganization industry, which burdens inter employment and of welfare, foreign public under commerce, and affects the and state hereby de living people, is mines the standards of of-the American hereby policy Congress to to It is declared be the of to clared exist. foreign to flow of interstate and com remove the free obstructions thereof; and. to provide to diminish the amount merce which tend organization industry by promoting of for the general welfare .the among to induce and cooperative groups, of action trade purpose adequate management under action of labor and maintain united supervision, competi eliminate governmental to unfair sanctions possible promote pres fullest utilization practices, to tive industries, to capacity of avoid undue restriction of productive ent may temporarily required), (except to increase the as be production agricultural by increasing products consumption industrial and unemployment, improve relieve to reduce and to purchasing power, industry labor, and otherwise to rehabilitate and to standards resources.” Stat. 195. conserve natural gives opportunity only provisions auxiliary it to include definitely specified. to those Secretary permitted is not freedom of choice as may
the commodities which he an attempt aid him Act, order. The 8c limits fruits (2), milk, § fresh except apples, tobacco, vegetables, fresh soybeans agreement Act marketing naval stores. The authorizes a production and order be issued for such A regions practicable. city or areas as milkshed seems on homogeneous. practicality This standard is a limit power to issue orders. It determines when an order may promulgated. .
It is further to be observed the Order could not hearing findings be and was not issued until after the hearings Public required by (4). § as 8c were held at Syracuse, New York from Albany, Malone, Elmira, and 1938, 16 to with four May 7, days’ Nearly June recess. introduced, three pages testimony thousand were eighty-eight documentary exhibits and some briefs twenty were filed. parties July 23, interested On Federal Secretary, Register, public notified the findings again his the terms Order and invited parties again right Numerous filed A comment. briefs. given object handlers to Secretary statute is order not “in an acordance with provision law,” privilege appeal with the to the courts. (15) (A) § 8c though procedural safeguards and.(B). Even cannot delegation, they an unconstitutional do furnish validate against arbitrary properly an use of protection delegated authority.63
A
provision of the Act is to be noted
it was
further
employed as a standard
determine the minimum price.
(18). Acting
section,
under this
the
§
This is
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York. While it is true that the.
Corp.
States,
v. United
tive failure of the handlers to a similar if approve agreement, the Secretary Agriculture approval President deter- mines, among things, other that the issuance of the order approved by producers two-thirds interested or producers interested the volume pro- tw.o-thirds duced for the market of the specified area. production provided purpose it is fori By subsection whether issuance of such ascertaining ap- order is Secretary may “the conduct a referendum proved among objection is made that un- this is an producers.” legislative delegation power lawful In considering into effect a market. order put .an assume that had Congress must question, we approval this Order into effect without put power.to ' producer approval by election anyone. Whether *37 requirement a reserve, we question not, or a necessary delegation.64 invalid be an would not approval such Votes to Cast the Cooperatives Authorization before the too, falls Patrons. —This objection, Producer could Congress inasmuch as that argument answering permis- it is any vote, without Order effect place in such disapproval approval for provide for it to sible may it choose. manner as way or Fund. —The defend- Equalization in the Cooperatives Association, denies Cooperative York Central New ant, the Order VII and VIII of VI, under Articles liability pool its obli- pay not liable to net it is ground on the fund or to meet ex- administrative gation into the its The reason for asserted of administration. penses com- cooperative it a liability is freedom from of its and distributes the milk milk producers posed agent. others as members dairy are farms. Its members owns no cooperative The “to . . they agree deliver-. By their contract farmers. milk said is to be . . . produced milk which all . .. . . .” [cooperative] by the and distributed marketed milk ... ... “agrees pay The latter received . . amount . less the upon . . based price . milk marketed under . Nonmembers’ . .” expenses receiving and cooperative'- leases The contract. same corporation.' The facilities from distributing business receiving milk plants at cooperative is received the. through It depot. city to the distributes shipped wholly-owned sub- corporations business other ^hich distributing sub- cooperative. These sidiaries of facilities under verbal physical leased sidiaries use cooperative receives cooperative. contracts with amoupt pa- distributes to its the sales ahd the net from the Director of Division of under license trons 1, 15. v. Wallace, 306 U. S. Cunin permitting York Milk Control of New manner described. an order (5) (A) 8c authorizes to classify Section fix minimum all pay which handlers shall (5) producers.' (C) Section 8c au- purchased from *38 equalization payment and the handlers’ pool thorizes the cooperatives fund. It is that urged this settlement to in- merely agents act for their members are not which as producers. from This is purchasing cluded handlers (5) provisions § of 8c definitely said to be shown contained (F) providing nothing subsection prevent Capper-Yolstead coopera- shall be to construed making “producers distribution to its accord- from tive The Order defines a handler with the contract.” ance to association “with including cooperative respect as producers any from at plant operated milk received any respect to or with which it association by such other delivered”' to handlers. Under the to be causes Order, VII, 9, Article of provisions §§ cooperar equalize purchases as other handlers their handlers tive producer fund, into the settlement even by payment required to the uniform pay not though they, exception of of VII, reason Article their (5) (F), explained § as at provisions and the 1, 8c § 561. page general types, contracts are two
Cooperative sale and York Cooperative New The Central operates agency.65 type. agency under the use the word “purchased” in
It obvious (A) (C), (5) 8c would not Act, exclude § (5) § When 8c cooperative. (F) type “sale” was apply however, it made both the drawn, “sale” type without distinction. This “agency” would in no intention distinguish had been between dicate there by (A) (C). The section au types the two which 65Hanna, Marketing Associations, pp. Cooperative Law of thorizes all (1), 8c makes orders, no The distinction. § orders are be applicable to “processors, associations producers, engaged and others in the handling” of com modities. reports The on the bill show no effort to diff Neither do the in Congress. debates erentiate.66. statutory equalization provisions for burdens surplus nugatory would be rendered exception “agency” cooperatives. The construction administrative has been organizations to include such as handlers.67 agree. With “purchased” this we As here used the word “acquired marketing.” (A) means Subsection can freeing agents, cooperative pro construed be prietary, requirement to account at for milk minimum handled. prices As a by' is made also Central corollary contention Cooperative cooperative may required pay that no surplus its receipts equaliza- uniform into over tion This, upon fund. a construction too, based *39 (5 ) § 8c (P) permitting cooperative as a to make settle- in ment its members accordance with the terms of its If mem- cooperative own contract with the them. carrying bers were freed of the burden of their propor- discrimina-, tion milk the going manufacturing use, tion in their favor strongly would be most marked. Such required. Cooperatives a construction is not are covered ,and by (1) (A) § 8c (5) (B), provisions the as, Order, except payment to the of the uniform price. the uniform Any payments below fall ón their members. are of the view that We adminis- trative construction correct the “net pro- (F) cooperative ceeds” of refer to the result sales complying equaliza- with the area after requirements. tion Sess.; Report 1241, Cong., Report 1st Senate House 74th No. No. 1011, Cong., 74th 1st Sess. 341, 345; Tillinghast, United States v. Costanzo v. 287 U. S.
Chicago Co., 1, R. 13-14. North 288 U. S. Shore
tOCO defendant, The Central New York Cooperative Asso ciation, raises for itself final In point. determining pool net obligation of any handler for milk from received producers,68 handler is authorized to subtract pro rata out of each class from the milk involved in the pool “the milk quantity of from received the handler’s own farm.” We have determined cooperative, though mar keting under an agency contract with its members, subject is a handler to .the Act and Order. coopera argues tive that as its members, farmers, would not need to account their pool personal sales to con sumers, cooperative, being utilized as an agent 'market the farmers’ milk, is under no obligation to con equalization. tribute to cooperative As the does not have its own fárm itself handler but under Act, it into pay producer must settlement fund.
Inasmuch all the defendants in as these appeals are handling interstate commerce, petition of Official Order No. 126, the enforcement issued under of 1937 of c. 383 of the Laws the State of New York, concerning milk not covered Order No. 27 of Sec- the. Agriculture, retary should dismissed. of the District Court Nos. 771,
The order 827 and 828 is and the causes are remanded to reversed that Court to enter an order specifically with instructions enforcing up suspension provisions to the time of of Order No. Agriculture Secretary August 15,1938, issued milk in regulating handling New York market- to all the defendants and ing area, enjoining defend- officers, agents servants, their further ants, vio- *40 of the Order. lation m
The order the District Court dismissing peti- Noyes, Agriculture tion of as Commissioner of V. Holton York, Markets of the State of New and affirmed.. VI, Article §
[Over.] Douglas concur Black and Mr. Justice Mr. Justice insofar except of the Court opinion judgment in the Congress imply power that appears opinion as the nature the use and upon law depends enact the upon that we are called do not believe They of milk. think we there is do, indicate, they case Congress power limitation such on constitutional interstate commerce. regulate McReynolds Butler, Mr. Justice Mr. Justice dissenting. below should
We are the decree opinion affirmed. Secretary must challenged
In our order of view objections. unnecessary It succumb to two manifest impedi- for us to dissect the record search other ments. Congress possesses delegated by
First. powers of this Court opinion Constitution —no others. Corp. (1935), United Poultry Schechter v. States noteworthy modernity S. because and re- U. 495— sufficiently of ancient affirmation demonstrates doctrine — Congressional authority manage private. the absence of transparent guise regulating under the business affairs and distribution True, production commerce. interstate easy not important enterprises, of wise most cows, authors of the breeding so is execution; but fodder reaping which sowing commodity; also, them. inspires to man- Congress possesses power If perchance
Second. states, authority various within the age the business cursory to another. A so to cannot be committed do clearly enough the de- examination of the statute shows áccording to own. his sign secretary prescribe to allow government will then to execute. This is errant delibér- Whimseys may displace by caprice. .by law but *41 by representatives ate action become rules of chosen wholly incompatible To the outcome seems conduct. us supposed which we are to system with the under live. Roberts, dissenting. Mr. Justice I 772, expressed In 865* my Nos. have views Agri of the unconstitutionality provisions to the the of 1937 Agreement Act here Marketing involved, cultural attempted delegation in of their of legislative view the That matter not in powers. pressed present is cases subject. I need not here advert I am of Order in opinion, nevertheless, No. not, is respects be if it by authorized but discussed, Act, is deprives authorized, appellees of their property with in Amend out due of law violation of the Fifth process ment. upon findings conclusion is of fact of the
This based question in are District findings Court. While subject of assignments error, appellants failed, they or in argument, point either brief oral out that evidence. support lack substantial Examination findings of the are on record discloses that these based testimony, documentary uncontradicted authentic evi- dence, stipulation parties. They should, and a accepted briefly be reca- therefore, They may here. pitulated.
Under Act all of order, the terms of the and the appellees Dairymen’s League Coop- handlers and the appellant 827, erative in No. Association, likewise § handler. Art. By on or before VII, 1, order, each day the 25th each handler which month, is not required cooperative pay association of price each uniform the order for all producer fixed producer during preceding delivered coop- month which was sold area. required erative which are associations handlers are post, Inc. v. United Sons, States, *H. Hood & P. milk at the uniform payment
to make for similar handlers, all VII, 8, requires Art. price. § at stated to the month, pay on or the 18th each day before n market administrator for the Producer Settlement Fund obligation for the “the amount which his net pool- *42 by month amount obtained preceding greater is than the by milk the net of such handler the multiplying pooled uniform handler required Thus each is into price.” pay milk the fund for all used in marketing the area the differ- $2.45 uniform for per price ence between and the all cwt. I milk. milk selling pro- Class Handlers received from the area, in the but production ducers marketed outside (denominated marketing aréa, “unpriced milk”) are not required to a uniform milk or pay price such to pay into the difference price fund the between the uniform and the actual market value of such or fixed milk, in thereof. respect They permitted amount are to blend have prices paid purported paid been for unpriced milk uniform price with the Adminis- by announced the in trator for milk marketing sold area, thereby re- the actual ducing price paid by them milk in sold competition marketing area'in with other who handlers milk sell in In only by that area. pamphlet issued Secretary, provisions order so construed the method accounting is described as follows: the, “Thus, handler may multiply, pounds total milk it in by sold by area the uniform price;' multiply total of milk in pounds sold other markets and which called milk’ ‘unpriced by is ‘such prices it fit;’ sees add the totals, and divide the total pounds of milk, obtain average of ‘blended’ price paid producers for all milk. If figured the price by the handler for unpriced milk, is lower than its actual market value, handler, by blending, thereby permitted pay producers for all milk at less than the price, and less than Order the actual value thereof.”
585' The in appellees’ receiving area production stations supply marketing defined the order. The area in Dairy competition Jetter milk appellee, Company, sells with milk operating dealers in receiving pro- stations duction in York, ship area who milk their New received at marketing stations area. Other milk appellees buy independent which sold in competition dealers milk received at the other in the stations producing area. the appellees’ Several of largest competitors, including the Dairymen’s League Cooperative, large proportions sell of their milk outside the area in northern New Jersey. Milk Control Jersey Board New fixed á $2.76 per base cwt. to for 3.5 f. country o. b. which plants, price was effect during order. period covered The same Board wholesale prices from fixed dealers to at eleven stores per quart, cents bottled in two rural glass, districts, quart, and twelve per glass, cents in three heavily *43 populated fixed minimum districts, price and a con- to out in sumers of stores the two of rural districts twelve quart in per and, cents more heavily populated dis- quart. of tricts, thirteen per No cents resale are prices in marketing fixed area either from to dealers stores or from stores to consumers. The fair market value of “unpriced” I milk produced Class in the production area, by handlers in sold New Jersey, during period order in force, $2.76 was was per cwt. price
Whereas uniform for 3.5 milk fixed by the Administrator for was, September, $1.87, October, $1.91, $2.10 and November, per cwt., the'Dairymen’s League paid its producers a price for the same milk, in the base zone, same September, $1.75, for for October, $1.81, and, for $2.01 cwt. November, per Thus difference be- tween the I value of Class milk Dairymen’s sold League in New Jersey, prices and the for paid the same' cwt., to producers per in was, September, $1.01, in Oc- $1.01 cwt. on per $.75.. November, and, in $.95, tober, Jersey by in New milk of sold pounds 10,208,500 $103,105.85. League amounts Dairymen’s appel- of the competitor Company, Farms Sheffield 40,083,075 pounds September, in utilized, lees, 6,426,443 pounds in New York State I milk Class For milk milk in other markets. well as Jersey, as in New company negotiated, milk the hnpriced market or out of order for such price the uniform pay producers with its market, therefore, paid was, price milk. The base out of price than the cents cwt. less eighty-nine per or $1.87, Board. The Jersey Control difference- the New fixed per 14.27 cents on such or cwt. $57,194.96, amounted I milk reduced for paid Class price milk' and the company’s spreads are shown Similar that amount. October, for purchases finds that facts, the court further upon these
Based delivering handlers, whether paid which sell fluid milk cooperative proprietary, Jersey also the State New area, actual' milk less than the of the markets, value other blending prices milk process to the for delivered, due marketing area, no true outside of which.bear sold thereof, with prices actual value charged relation in-the area. sold order, evident from the of the It is terms and the Secre- it, “un- tary’s construction handlers who use fix price milk may they fix choose to for it. priced” requirement contrary to the Thus, (5) § 8c (A), statute, all.producers do receive a uniform necessary milk. This is effect provision per- mitting blending price paid producers for *44 in the area marketing sold arbitrary price an fixed “unpriced” milk. The upon for effect a handler whose solely trade is in the is marketing area disastrous. The price those paid by lower who are permitted to blend possible it for makes them to resell the milk in mar- area, price fixed, in no resale at a keting which cut rate is is destructive of And competitors’ which their business. cooperative handlers, is evidence that and proprie- there of the tary, advantage have taken terms the order to milk in the marketing to consumers area cut the competitors. of their disadvantage to the appellants appellees’ make no answer The to the attack The opinion on this feature of order. court this states that the detriment the smaller sell handlers who milk in use only area is the result of conditions which the competitive order does not affect. that minimum is evident the order But it freezes the paid by many is to price which handlers and leaves the other compete handlers who price of them open to by the device of blending. reduction in nothing Act which There authorizes the dis- worked the order crimination permitting handlers, proprietary cooperative, whether blend the prices milk of milk, with that unpriced sold the marketing (5) I (F), 8c read prohibits Section it, area. such a If cooperatives. order practice provided had Jersey New should be sold accounted value and its actual had pool at so been sold pool, competitors into the accounted could not have ob- which, advantage so injures tained seriously the busi- appellees. As the order ness drawn and administered tends, destroy inevitably it the business' of smaller by placing them at the handlers mercy their larger I think no such competitors. arrangement contem- but if it Act, that, was, plated operates it deny appellees process due of law. I the decree should think be affirmed. joins in this opinion so far as it Chief Justice invalidity
relates to the on order the ground McReynolds stated; and Mr. Justice But- Mr. Justice join ler also opinion.