Mayflower Farms, Inc. v. Ten Eyck

297 U.S. 266, 56 S. Ct. 457, 80 L. Ed. 675, 1936 U.S. LEXIS 526

• Court: Supreme Court of the United States
• Decided: February 10, 1936
• Docket: 349
• Status: Published

Opinions

Me. Justice Robeets

delivered the opinion of the Court.

The appellant is a corporation formed under the laws of New York, pursuing the' business of ,a milk dealer in Brooklyn. It did not enter the business until the autumn of 1933, when it applied for, and was granted, a license under the Milk Control Act of March 31, 1933. The statute having been reenacted for the year commencing April 1, 1934, the company, on April 16, 1934, sought a license under the new act. After ,a hearing the application was denied. The Supreme Court granted a certiorari order, and upon that order and the return the Appellate Division confirmed the order of the Department of Agriculture, and Markets refusing a license, and this, action was'affirmed by the Court of Appeals.

The Milk Control Act of 1933,¹ authorized a board to fix minimum prices for sales of fluid milk in bottles by dealers to stores in cities of more than one million inhabitants, with a differential of one cent per quart in favor of dealers “not having a well advertised trade name.” ² The term of the act was one year. An amended act, effective April 1, 1934,³ which placed milk control under the jurisdiction of a division of the Department of Agriculture and Markets, contained a similar provision with respect to the differential. The pertinent section, as it stood at the time of the appellant’s application for a license, follows; the words in brackets having been in the original act, but eliminated when the statute was revised in 1934, those in italics having been added by the later act:

“It shall not be unlawful for any .milk dealer who [at the time this act shall take effect is] since April tenth, nineteen hundred thirty-three has been engaged continuously in the business of purchasing and handling milk not having a well advertised trade name in a city of more than one million inhabitants to sell fluid milk in bottles to stores in such city at a price not more than one cent per quart below the price of such milk sold-to stores under a well advertised trade name, and such lower price shall also apply on sales from stores to consumers; provided that in no event shall the price of such milk not having a well advertised trade name, be more than one. cent per quart below the minimum price fixed [by the board] for such sales to stores in such a city.” ⁴

The appellant had not a well-advertised trade name. The reason for refusing it a license was that though it. had not been continuously in the business of dealing in milk since April 10, 1933 it had sold and was selling to stores milk at a price a cent below the established minimum price. The question is whether the provision denying the benefit of the.differential to all who embark in the business after April 10, 1933, works a discrimination which has no foundation in the circumstances of those engaging in the milk business in New York City, and is therefore so unreasonable as to deny appellant the equal protection of the laws in violation of the Fourteenth Amendment.

The record discloses no reason for the discrimination. The report of the committee, pursuant to which the Milk Control Act was adopted, is silent on the subject. While the legislative history indicates that the differential provision was intended to preserve competitive conditions affecting the store trade in milk, it affords no clue to the genesis of the clause denying the benefit of the differential to those entering the business after April 10, 1933.

The Court of Appeals thought a possible reason for the time limitation might be that, without-it, the companies having well advertised names could, through subsidiaries, sell milk not bearing- their names in competition with unadvertised dealers and thus drive some of the latter out of the field with consequent injury to the farmers who sell them milk. This view ignores the fact that the purchase price to the farmer is fixed and that the introduction of new unadvertised brands of bottled milk would not reduce the total demand for fluid, milk in the metropolitan area. The appellees do not attempt now to support the provision on this ground.

Another suggested reason for the discrimination is that the legislature believed an equal price basis for all dealers would cause most of the business of selling milk through stores to pass into the hands of the large and well known dealers; the differential provision was designed to prevent this result, and save existing businesses of the independent dealers, but was limited in its scope by the reason for it; the legislature did not wish to increase the lower price competition against well advertised dealers by permitting new independent dealers to go into the business, and so required persons or corporations- desiring to make investments in the milk business after April 10, 1933. to attach themselves to the higher price group. This is but another way of saying- the legislature determined that during the life of the law no person or corporation might enter the business of a milk dealer in New York City. The very reason for the differential was the belief -that no one could successfully market an unadvertised brand on an even price básis with the seller of a well advertised brand. One coming fresh into the field would not possess -such a brand and clearly could not meet the competition of those having an established trade name and good will, unless he were allowed the same differential as others in his class. By denying him this advantage the law effectually barred him from the business.

We are referred to a host of decisions to the effect that a regulatory law may be prospective in operation and may except from its sweep those presently engaged in the calling or activity to which it is directed. Examples are statutes licensing physicians and dentists, which apply only to those entering the profession subsequent to the passage of the act and exempt those then in practice, or zoning laws which exempt existing buildings, or laws forbidding slaughter houses within certain areas, but excepting existing establishments. The challenged provision is unlike such laws, since, on its face, it is not a regulation of a business or an activity in the interest of, or for-the protection of, the public, but an -attempt to give an economic advantage to .those engaged in a given business at an arbitrary date as against all those who enter the industry after that date. The appellees do not intimate that the classification bears any relation to the public health or welfare generally; that the provision will discourage monopoly; or that it was aimed at any abuse, cognizable by law, in the milk business. In the absence of any such showing, we have no right to conjure up possible situations which might justify the discrimination. The classification is-arbitrary and unreasonable and denies the appellant the equal protection of the law.

At the argument we were asked to hold that if the time limitation be bad, it is severable, and the provision for the differential, shorn of it, remains in force; and we were referred to a section of the act claimed to show the legislature so intended. While we have jurisdiction to decide the question, it is one which may appropriately be left for adjudication by the courts of New York, Dorchy v. Kansas, 264 U. S. 286, 290, 291; Fox Film Corp. v. Muller, 296 U. S. 207, 209, 210.

The judgment is reversed and the cause remanded for further proceedings not inconsistent with this opinion.

Reversed.

1 Laws of 1933 (N. Y.) c. 158. See Nebbia v. New York, 291 U. S. 502.

2 Ibid., § 317 (c).

3 Laws of 1934 (N. Y.) c. 126.

4 Laws of 1933 N. Y., c. 158, § 317 (c); Article 21-A, § 258 (q). pf the Agriculture and Markets Law of the State of New York; Laws of 1934 (N. Y.) 580.