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Argument for Appellant.

291 U.S.

14. If the law-making body within its sphere of government con

cludes that the conditions or practices in an industry make unrestricted competition an inadequate safeguard of the consumer's interests, produce waste harmful to the public, threaten ultimately to cut off the supply of a commodity needed by the public, or portend the destruction of the industry itself, appropriate statutes passed in an honest effort to correct the threatened consequences may not be set aside because the regulation adopted fixes prices, reasonably deemed by the legislature to be fair to those engaged

in the industry and to the consuming public. P. 538. 15. This is especially clear where the economic maladjustment is one

of price, which threatens harm to the producer at one end of the

series and the consumer at the other. P. 538. 16. The Constitution does not secure to anyone liberty to conduct

his business in such fashion as to inflict injury upon the public at

large, or upon any substantial group of people. P. 539. 17. Price control, like any other form of regulation, is unconstitu

tional only if arbitrary, discriminatory, or demonstrably irrelevant to the policy the legislature is free to adopt, and hence an unneces

sary and unwarranted interference with individual liberty. P. 539. 262 N.Y. 259; 186 N.E. 694, affirmed.

The New York Court of Appeals affirmed the conviction of a storekeeper for selling milk at a price below that allowed by an order promulgated by a state board pursuant to statutory authority. The appeal here is from the judgment of the County Court entered on remittitur.

Mr. Arthur E. Sutherland, Jr., with whom Mr. Arthur E. Sutherland was on the brief, for appellant.

Statutes similar to this have repeatedly been condemned under the Fourteenth Amendment for fixing prices of common commodities or services. Almost identical was Williams v. Standard Oil Co., 278 U.S. 235, involving a Tennessee statute which attempted to do for gasoline exactly what the statute here attempts to do for milk. The difference between the preambles of the two Acts is of rhetoric, not of substance. The only important point of difference lies in the clause of the present Act


Argument for Appellant.

which purports to end the powers of the Milk Control Board on March 31, 1934.

In several important cases construing the Fourteenth Amendment, this Court has selected the dairy and the grocery as among the best possible examples of essentially private businesses, to which the traditional “public utility” concept can not be applied. Cf. New State Ice Co. v. Liebmann, 285 U.S. 262, where, in speaking of the ice business, it was said: “It is a business as essentially private in its nature as the busines of the grocer, the dairyman, the butcher, the baker, the shoemaker, or the tailor.”

The Milk Control Law, here under discussion, was drawn with the Ice case before the author, for the preamble contains quotations from the opinion in that case. In an effort to escape from the effect of that decision, the Legislature did not start out with a requirement that all new milk dealers obtain a “certificate of convenience and necessity.” Instead, it proceeded to fix the minimum price of milk as though the supply were less than is actually the case. Obviously some persons, like Nebbia,

, will not be able to sell at the heightened price, inasmuch as there is an oversupply of milk for sale. To such a dealer the Legislature gives the alternative of voluntarily ceasing sales, or being obliged to cease under penal sanctions or injunctive process, or by being denied a license to

a carry on business. If enough people can thus be put out of the milk business, the effect will be the same as though a“ certificate of convenience and necessity” were exacted as a condition of continuing to sell milk. The difference is one of form only. Under the Ice case, the "public utility” concept which the Legislature has attempted to apply to the New York milk industry, is unconstitutional.

In Adkins v. Children's Hospital, 261 U.S. 525, the method of fixing the minima was strikingly like the

Argument for Appellant.

291 U.S.

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method here. The opinion emphasized as one of the principal faults of the statute that “the declared basis” of the minimum wage" is not the value of the service rendered, but the extraneous circumstance that the employee needs to get a prescribed sum of money to insure her subsistence, health and morals."

Similarly in the case at bar, the laudable desire to see the dairy farmer happier and more prosperous has brought the New York Legislature to say that, regardless of the retail value of milk as fixed by oversupply and limited demand, the dealer must sell to his customers at a fixed minimum, or else not sell.

If he does sell, under $ 312 (c) a dealer must "give fair and reasonable effect to the intent” of the legislature " that the benefits of any increase of prices received by milk dealers by virtue of the minimum price provisions of this section shall be given to producers.” If he fails to live up to this vague standard, the dealer may have his license suspended or be proceeded against civilly and criminally. In the Adkins case, this Court further said: “Should a

“ statute undertake to vest in a commission power to de termine the quantity of food necessary for individual support, and require the shopkeeper, if he sell to the individual at all, to furnish that quantity and not more than a fixed maximum, it would undoubtedly fall before the constitutional test. The fallacy of any argument in support of the validity of such a statute would be quickly exposed."

In the case at bar, the New York Legislature has created a Board of three men to attempt to determine what prices for milk will yield the producer and dealer a reasonable return, and insure a supply of good milk; and makes underselling this price a jail offense.

Price or wage fixing by state statute has been found invalid in Wolff Packing Co. v. Industrial Court, 262 U.S.


Argument for Appellant.

522 (Kansas statute regulating wages in the meat packing business during a declared “emergency"); Fairmont Creamery Co. v. Minnesota, 274 U.S. 1 (Minnesota statute forbidding a purchaser of dairy products to pay a higher price for the products in one locality than he paid in another); Tyson Bros. v. Banton, 273 U.S. 418 (New York statute limiting the charge for theatre ticket brokerage to 50€); Ribnik v. McBride, 277 U.S. 350 (New Jersey statute regulating rates charged by an employment agency).

The Milk Control Law, as applied by the order of the Board, discriminates unfairly against Nebbia as a “cashand-carry” dealer in milk. Having paid 8¢ per quart and 5¢ per pint to the dealer who supplied him, he was obliged to resell over his counter at not less than 94 per quart and 6¢ per pint. Some rival in trade, having no store, but a wagon and delivery route, had no lower limit set for the price at which he was obliged to buy his milk; and was allowed to sell pints of milk as low as Nebbia, with delivery to the customer's door as a bonus. When delivering a quart of milk, the route dealer had to charge only a cent more than Nebbia, a most inadequate differential.

The unquestioned surplus of wholesome milk in New York State results in competition to obtain buyers. Nebbia is obliged to sell as cheaply as possible to hold his business. This, of course, makes milk more accessible to the buying public in a time of dearth. Nebbia was obliged by the Board to pay 8¢ a quart to the dealer who supplied him, and was obliged by pressure of competition caused by surplus milk to sell at 9¢ a quart. The practical effect is to limit his “mark-up” or gross profit per quart to one cent. He is equally limited on purchases and sales of pints, and it is noteworthy that Nebbia and the route dealer each had to charge 6¢ per pint for milk; but the route dealer is allowed to give delivery service

Argument for Appellant.

291 U.S.

as a bonus. Nebbia, with a "cash and carry” business, can not legally give bread with milk to equalize this advantage.

Under $ 301 of the Act, if Nebbia could conceivably buy his milk from a producer (i.e., farmer) who delivers milk only to a dealer, the law might be construed to allow him to pay the producer whatever price they agreed on, provided Nebbia, as required by $ 312-c, would "give fair and reasonable effect to ... the intent of the legislature that ... the benefits of any increase of prices received by milk dealers by virtue of the minimum price provisions of this section shall be given to producers." If Nebbia failed in this attempt to follow an indefinite standard, he could be jailed, fined, enjoined, or have his license suspended, under § 312–c of the Milk Control Law. See International Harvester Co. v. Kentucky, 234 U.S. 216; United States v. Cohen Grocery Co., 255 U.S. 81.

The economic depression now affecting the dairy farmers of New York does not suspend the operation of the Fourteenth Amendment.

The Fourteenth Amendment was not adopted in fair weather; nor was its operation intended to be limited to times of general content, when no State is pressed to abridge the liberty and property of the individual. Surely the protection of the Constitution does not cease when the need for it is greatest! Ex parte Milligan, 4 Wall. 2, 120; United States v. Cohen Grocery Co., 255 U.S. 81, 88; Sterling v. Constantin, 287 U.S. 378

Wilson v. New, 243 U.S. 332, is an illustration of the power of Congress to regulate common carriers by rail in interstate commerce. This Court has often pointed out that power to regulate the affairs of the traditional “public utility” does not include power to fix prices or rates in the “common callings" such as those of the dairymen, the grocer, the butcher and the baker.

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