Milk Marketing Board v. Johnson

295 N.W. 346, 295 Mich. 644
CourtMichigan Supreme Court
DecidedDecember 10, 1940
DocketDocket 2, Calendar 41,090; Docket 1, 3, Calendar 41,059, 41,156
StatusPublished
Cited by34 cases

This text of 295 N.W. 346 (Milk Marketing Board v. Johnson) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Milk Marketing Board v. Johnson, 295 N.W. 346, 295 Mich. 644 (Mich. 1940).

Opinions

Bushnell, C. J.

Plaintiff Johnson was granted a writ of certiorari to review Orders 3 and 4 of the Michigan milk marketing board, which determined the existence of an emergency and fixed wholesale and retail prices of milk within the Detroit milk marketing area.

*648 After the entry of order No. 3, the board filed a bill of complaint in Wayne circuit seeking to restrain Johnson and his agents from violating amended order No. 2. During the hearing on the chancery matter, Johnson agreed to submit to the licensing provisions of the milk marketing act, Act No. 146, Pub. Acts 1939 (Comp. Laws Supp. 1940, §5394-41 et seq., Stat. Ann. 1940 Cum. Supp. § 12.805 [1] et seq.), and that question is eliminated from the case.

Por a number of years, many of the milk producers in Michigan have been organized as the Michigan Milk Producers Association, with market sales committees in various counties. This association has current and invested assets of over $200,000, and trust assets of $135,000. The trust assets are to guarantee payments to producers and provide for a quarantine fund, et cetera. The amount of milk sold in the Detroit marketing area is about 2,000,000 pounds daily, some 80 per cent, of which is supplied by members of the association. Formerly, the association was financed by dues from its members. Under the act, the board authorized a check-off of four cents per hundredweight on milk handled in the area, which is used in part to finance the association.

Johnson is the fourth largest milk distributor in the Detroit area. He purchases milk from producers and distributes at retail through a chain of milk depots on a cash and carry plan. He claims to be able to pay more for milk, sell it for substantially less than others, and still make a profit. However, he ignores the factors of base and surplus and does not carry his share of the burden of this claimed necessary element of cost of milk.

After the publication of notice and informal hearings without the swearing of witnesses, certain orders were issued by the board. Order No. 1, made *649 July 17, 1939, designated the extent of the Detroit milk marketing area. Order No. 2, entered August 8, 1939, is quite inclusive and regulatory. Its main purpose is to establish minimum prices to be paid producers by distributors. The minimum price on Class 1 milk was established at $1.90 per hundredweight. This order was amended in considerable detail on August 28th, the minimum on Class 1 being fixed at $2.08.

Following publication of notice and hearings at which all witnesses were sworn, order No. 3 was entered on September 29, 1939. This order fixed in detail the minimum prices at which milk of various grades could be sold to the consumer, setting the retail price of 3% to 4 per cent, milk from vehicles at 11 cents per quart in containers, and from retail stores at 9 cents. Other prices were fixed for varying grades and quantities.

Order No. 4, dated March 27,1940, amended order No. 3 in certain respects, without changing the differential of 2 cents between the price of milk sold from stores and that retailed through wagon deliveries.

The trial judge filed a comprehensive opinion in the chancery cause, denied Johnson’s claim of unconstitutionality of the act, and authorized a decree granting the relief prayed for in plaintiff’s bill of complaint.

The constitutional objections raised by Johnson in the chancery cause were summarized by the trial judge as follows:

“ (1) The Michigan milk marketing board (hereafter referred to as the board) is prohibited by reason of the personal interest of its members in its orders and regulations from acting lawfully.

_ “ (2) The check-off provisions of the statute (section 24, subd. [b]) violate the due process of law; *650 provisions of the Federal and State constitutions, and the price-fixing orders based thereon constitute a fraud against producers and distributors.

11 (3) The notice of hearing provided by section 19 is so inadequate, both as to content and time, as to amount to a violation of the due process of law provision.

“(4) The limitation upon judicial review prescribed in section 53 violates the due process of law provisions of the Constitution.

“(5) The delegation of the power to fix price of milk by the use of base and surplus plan constitutes an unlawful delegation of legislative power.”

These objections are renewed on appeal, with enough change to conform to the joint review of the orders, by certiorari, and of the decree, by appeah It is also claimed that the title of the act is insufficient. Appellant urges that we should declare the statute unconstitutional and, if such determination is not available, that orders Nos. 2, 3, and 4, as amended, should be held invalid.

Milk marketing acts have been considered by several courts of last resort. The acts of Connecticut, Maryland, New Hampshire, and Utah have been declared unconstitutional, and the acts of Alabama, California, Florida, Georgia, Indiana, Iowa, New Jersey, New York, Oregon, Pennsylvania, Virginia, and Wisconsin have been held good. The authorities may be found collected in 101 A. L. R. 64, 110 A. L. R. 644, 119 A. L. R. 243, and 122 A. L. R. 1062. The more recently decided cases are Savage v. Martin, 161 Ore. 660 (91 Pac. [2d] 273); Jersey Maid Milk Products Co. v. Brock, 13 Cal. (2d) 620 (91 Pac. [2d] 577); Rowell v. State Board of Agriculture, 98 Utah, 353 (99 Pac. [2d] 1); and State v. Stoddard, 126 Conn. 623 (13 Atl. [2d] 586).

The leading case is Nebbia v. New York, 291 U. S. 502 (54 Sup. Ct. 505, 89 A. L. R. 1469), an appeal *651 from People v. Nebbia, 262 N. Y. 259 (186 N. E. 694). It is the basis on which various milk marketing acts have been held constitutional. We refrain from repeating what Mr. Justice Roberts there said regarding the importance of an adequate supply of milk and the need for regulation of prices so as to insure a continous flow to the congested centers of population.

Although determination of the constitutionality of our act will be made upon the single question of the composition of the board as tested by the principle of due process, we deem it advisable to discuss other phases in the event that reenactment is sought.

Is the act constitutional and did the board comply with it in issuing its orders ?

The argument is advanced that the legislature could not delegate its authority to fix prices. Where this same argument was made in other States a complete answer was found in the Nebbia Case. Within proper limits, legislative power may be delegated, as was the power of altering and fixing rates for public service corporations in City of Traverse City v. Railroad Commission, 202 Mich. 575 (P. U. R. 1918 F, 752).

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295 N.W. 346, 295 Mich. 644, Counsel Stack Legal Research, https://law.counselstack.com/opinion/milk-marketing-board-v-johnson-mich-1940.