U.S. Supreme Court BALDWIN v. G. A. F. SEELIG, INC., 294 U.S. 511 (1935)

[Page 294 U.S. 511, 519]

The New York Milk Control Act, with the aid of regulations made thereunder, has set up a system of minimum prices to be paid by dealers to producers. The validity of that system in its application to producers doing business in New York state has supported in our decisions. Nebbia v. New York, 291 U.S. 502, 54 S.Ct. 505, 89 A.L.R. 1469; Hegeman Farms Corporation v. Baldwin, 293 U.S. 163, 55 S.Ct. 7. Cf. Borden's Farm Products Co., Inc., v. Baldwin, 293 U.S. 194, 55 S. Ct. 187. From the farms of New York the inhabitants of the so-called Metropolitan milk district, comprising the city of New York and certain neighboring communities, derive about 70 per cent. of the milk requisite for their use. To keep the system unimpaired by competition from afar, the act has a provision whereby the protective prices are extended to that part of the supply (about 30 per cent.) which comes from other states. The substance of the provision is that, so far as such a prohibition is permitted by the Constitution, there shall be no sale within the state of milk bought outside unless the price paid to the producers was one that would be lawful upon a like transaction within the state. The statute, so far as pertinent, is quoted in the margin, together with supplementary regulations by the Board of Milk Control. [Footnote 1]

[Page 294 U.S. 511, 520]

Seelig buys its milk from the Creamery in Vermont at prices lower than the minimum payable to producers in New York. The Commissioner of Farms and Markets refuses to license the transaction of its business unless it signs an agreement to conform to the New York statute and regulations in the sale of the imported product. [Footnote 2] This the applicant declines to do. Because of that refusal other public officers, parties to these appeals, announce a purpose to prosecute for trading without a license and to recover heavy penalties. This suit has been brought to restrain the enforcement of the act in its application to the complainant; repugnancy being charged between its provisions when so applied and limitations imposed by the Constitution of the United States. United States Consti-

[Page 294 U.S. 511, 528]

advance or came to him thereafter. The decisions of this court as to the significance of the original package in interstate transactions were not meant to be a cover for retortion or suppression.

The distinction is clear between a statute so designed and statutes of the type considered in Leisy v. Hardin, , 10 S.Ct. 681, to take one example out of many available. By the teaching of that decision intoxicating liquors are not subject to license or prohibition by the state of destination without congressional consent. [Footnote 3] They become subject, however, to such laws when the packages are broken. There is little, if any, analogy between restrictions of that type and those in controversy here. In licensing or prohibiting the sale of intoxicating liquors a state does not attempt to neutralize economic advantages belonging to the place of origin. What it does is no more than to apply its domestic policy, rooted in its conceptions of morality and order, to property which for such a purpose may fairly be deemed to have passed out of commerce and to be commingled in an absorbing mass. So, also, the analogy is remote between restrictions like the present ones upon the sale of imported milk and restrictions affecting sales in unsanitary sweat- shops. It is one thing for a state to exact adherence by an importer to fitting standards of sanitation before the products of the farm or factory may be sold in its markets. It is a very different thing to establish a wage scale or a sacle of prices for use in other states, and to bar the sale of the products, whether in the original packages or in others, unless the scale has been observed.

The decree in No. 604 is affirmed, and that in No. 605 reversed, and the cause remanded for proceedings in accordance with this opinion.

It is so ordered. Footnotes

Footnote 1 Section 258-m(4), article 21-A, New York Agriculture and Markets Law, Laws 1934, c. 126, formerly section 312(g), article 25, Laws 1933, c. 158: 'It is the intent of the legislature that the instant, whenever that may be, that the handling within the state by a milk dealer of milk produced outside of the state becomes a subject of regulation by the state, in the exercise of its police powers, the restrictions set forth in this article respecting such milk so produced shall apply and the powers conferred by this article shall attach. After any such milk so produced shall have come to rest within the state, any sale, within the state by a licensed milk dealer or a milk dealer required by this article to be licensed, of any such milk purchased from the producer at a price lower than that required to be paid for milk produced within the state purchased under similar conditions, shall be unlawful.'

Order of New York Milk Control Board, July 1, 1933: 'Any continuous and regular purchase or sale or delivery or receipt of milk passing to a milk dealer at any place and available for utilization as fluid milk and/or cream within New York State, followed by such utilization in one or more instances, where the price involved in such purchase or sale or delivery or receipt is less than the sum of the minimum price established to be paid to producers for such milk plus actual costs of transporting and handling and processing such milk to the place and to the condition involved in such purchase or sale or delivery or receipt, hereby is forbidden.'

Footnote 2 The application blank contains the following questions which show the form of the required agreement: 'Do you agree not to sell within New York State after it has come to rest within the State, milk or cream purchased from producers without the State at a price lower than that required to be paid producers for milk or cream produced within the State purchased under similar conditions?''Do you agree that you will obtain for the Commissioner and supply to him, at such times and in such manner as he requires, concerning milk and cream produced without the State and in any way dealt in by you, data to whatever extent is necessary to ascertain or compute whether the producers were paid for such milk or cream a price not lower than that required to be paid producers for milk or cream produced within New York State and purchased under similar conditions?'

Footnote 3 The rule is different today under the Twenty-First Amendment. Article 21, 2.