Penn Dairies, Inc. v. Milk Control Comm'n of Pa.

318 U.S. 261, 63 S. Ct. 617, 87 L. Ed. 748, 1943 U.S. LEXIS 1112
CourtSupreme Court of the United States
DecidedMarch 1, 1943
Docket399
StatusPublished
Cited by202 cases

This text of 318 U.S. 261 (Penn Dairies, Inc. v. Milk Control Comm'n of Pa.) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Penn Dairies, Inc. v. Milk Control Comm'n of Pa., 318 U.S. 261, 63 S. Ct. 617, 87 L. Ed. 748, 1943 U.S. LEXIS 1112 (1943).

Opinions

[266]*266Mr. Chief Justice Stone

delivered the opinion of the Court.

Decision of this case turns on the question whether the minimum price regulations of the Pennsylvania Milk Control Law of April 28, 1937, P. L. 417, Purdon’s Pa. Stat. Ann., Tit. 31, § 7OOj, may constitutionally be applied to the sale of milk by a dealer to the United States, the sale being consummated within the territorial limits of the state in a place subject to its jurisdiction.

The Pennsylvania Milk Control Law establishes a milk control commission, § 201, with authority to fix prices for milk sold within the state wherever produced, §§ 801-803, including minimum wholesale and retail prices for milk sold by milk dealers to consumers, § 802, and to issue rules, regulations and orders to effectuate this authority, § 307.

[267]*267In the fall of 1940 the United States established, under a permit from the Commonwealth of Pennsylvania, a military encampment on lands belonging to the Commonwealth. As is conceded, the permit involved no surrender of state jurisdiction or authority over the area occupied by the camp. On February 1, 1941, the purchasing and contracting officer at the encampment, an officer of the Quartermaster Corps of the United States Army, invited bids for a supply of milk for the period from March 1 to June 30, 1941, for consumption by troops stationed at the camp. On February 4, the Milk Control Commission sent a notice to interested parties, including appellant, Penn Dairies, Inc., a Pennsylvania corporation, addressed to' “all milk dealers interested in submitting bids to furnish milk to the United States Government” at the encampment. The notice was accompanied by the Commission’s Official General Order No. A-14, § 4-B of which prescribed the “minimum wholesale prices to be charged by or paid to milk dealers.” The notice announced that the unit prices specified for sales to institutions by that section of the order should be considered in the preparation of bids and that sales of milk at prices below the prescribed minima would be construed as violations of the milk control law. The dairy submitted a bid offering to sell milk in wholesale quantities at prices substantially below those prescribed by the Commission. Its bid was accepted by a War Department Purchase Order of March 1, 1941, the contract was awarded to it as the lowest bidder, and it performed the contract by deliveries of the milk at the contract price — all within the state.

On March 5, 1941, the Commission, pursuant to §§ 404 and 405 of the Milk Control Act, issued a citation to the dairy to show cause why its application for a milk dealer’s license for the year beginning May 1, 1941, should not be denied because of its sale and delivery of the milk at prices below the minima fixed by the Commission’s order. [268]*268Section 404 makes the grant of a license mandatory save in circumstances not now material, but provides that the Commission may deny or cancel a license where the applicant or licensee “has violated any of the provisions of this Act or any of the rules, regulations or orders of the Commission . .

The dairy’s answer to the citation challenged the constitutional authority of the state to regulate prices charged to the United States. After a hearing the Commission denied the dairy’s license application because of its sale of milk to the United States at prices below those fixed by the Commission. The Commission’s order was sustained on review by the Court of Common Pleas of Lancaster County. The Superior Court affirmed this judgment, 148 Pa. Super. 261, 24 A. 2d 717, in an opinion which was adopted by the Supreme Court of Pennsylvania, 344 Pa. 635, 26 A. 2d 431, both courts holding that the Commission’s price-fixing order was applicable to sales of milk made to the United States, and that as thus applied the statute did not impose an unconstitutional burden on the United States or otherwise infringe the Constitution or laws of the United States. The case comes here on appeal under § 237 of the Judicial Code. The government was granted leave to intervene in the Court of Common Pleas, and has participated in all subsequent stages of the litigation.

Appellants urge that the Pennsylvania Milk Control Act, as applied to a dealer selling to the United States, violates a constitutional immunity of the United States, and also conflicts with federal legislation regulating purchases by the United States and therefore cannot constitutionally apply to such purchases.

Appellants’ first proposition proceeds on the assumption that local price regulations normally controlling milk dealers who carry on their business within the state, when applied to sales made to the government, so burden it [269]*269or so conflict with the Constitution as to render the regulations unlawful. We may assume that Congress, in aid of its granted power to raise and support armies, Article I, § 8, cl. 12, and with the support of the supremacy clause, Article VI, § 2, could declare state regulations like the present inapplicable to sales to the government. Cf. Pittman v. Home Owners’ Loan Corp., 308 U. S. 21, 33; Federal Land Bank v. Bismarck Co., 314 U. S. 95, 101-04; Parker v. Brown, 317 U. S. 341, 350-351, and cases cited. But there is no clause of the Constitution which purports, unaided by Congressional enactment, to prohibit such regulations, and the question with which we are now concerned is whether such a prohibition is to be implied from the relationship of the two governments established by the Constitution.

We may assume also that, in the absence of Congressional consent, there is an implied constitutional immunity of the national government from state taxation and from state regulation of the performance, by federal officers and agencies, of governmental functions. Ohio v. Thomas, 173 U. S. 276; Johnson v. Maryland, 254 U. S. 51; Hunt v. United States, 278 U. S. 96; Arizona v. California, 283 U. S. 423. But those who contract to furnish supplies or render services to the government are not such agencies and do not perform governmental functions, Metcalf & Eddy v. Mitchell, 269 U. S. 514, 524-5; James v. Dravo Contracting Co., 302 U. S. 134, 149; Buckstaff Co. v. McKinley, 308 U. S. 358, 362-63 and cases cited; cf. Susquehanna Co. v. Tax Comm’n, 283 U. S. 291, 294; Helvering v. Mountain Producers Corp., 303 U. S. 376, 385-86, and the mere fact that non-discriminatory taxation or regulation of the contractor imposes an increased economic burden on the government is no longer regarded as bringing the contractor within, any implied immunity of the government from state taxation or regulation. Alabama v.

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318 U.S. 261, 63 S. Ct. 617, 87 L. Ed. 748, 1943 U.S. LEXIS 1112, Counsel Stack Legal Research, https://law.counselstack.com/opinion/penn-dairies-inc-v-milk-control-commn-of-pa-scotus-1943.