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Nebbia v. New York
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Nebbia v. New York, 291 U.S. 502 (1934), was a case in which the Supreme Court of the United States determined whether the state of New York could regulate the price of milk for dairy farmers, dealers, and retailers.
York State dairy farmers were disproportionately affected by farm prices decline after World War I, and the Great Depression further exacerbated the problems they faced. To address this problem, the New York legislature created a joint legislative committee headed by Senator Perley A. Pitcher to devise a remedy.
Following the hearings, in 1933, the state of New York established a Milk Control Board that was empowered to set maximum and minimum retail prices.
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Encyclopedia
Nebbia v. New York, 291 U.S. 502 (1934), was a case in which the Supreme Court of the United States determined whether the state of New York could regulate the price of milk for dairy farmers, dealers, and retailers.
Prior history
New York State dairy farmers were disproportionately affected by farm prices decline after World War I, and the Great Depression further exacerbated the problems they faced. To address this problem, the New York legislature created a joint legislative committee headed by Senator Perley A. Pitcher to devise a remedy.
Following the hearings, in 1933, the state of New York established a Milk Control Board that was empowered to set maximum and minimum retail prices. The Board set the price of a quart of milk at nine cents. This price reflected the then-current market price, and the purpose of this order was to prevent price-cutting. Nevertheless, the public suspected that the Board’s intent was to benefit the dairy dealers instead of farmers because the minimum prices for the two sides were not the same. Tensions ran so high that violent milk strikes took place throughout the state, resulting in two deaths and a great deal of property damage. Every public hearing of the Milk Control Board resulted in a "tumultuous, popular assemblage" and its every action was "Statewide news."
A search began for a case that would challenge the constitutional basis of the statute. Leo Nebbia, the owner of a grocery store, sold two quarts of milk and a 5-cent loaf of bread for 18 cents. Nebbia was found guilty of violating the price regulations, and was fined five dollars. Nebbia challenged the conviction, arguing that the statute and order violated the Equal Protection Clause and Due Process Clause of the Fourteenth Amendment.
The county court and the Court of Appeals affirmed the conviction, and the case was heard by the Supreme Court.
The case
Majority opinion
Justice Owen J. Roberts delivered the majority opinion.
Roberts began by examining the legislative intent of the statute in question, discoursing briefly on the effects of the Great Depression on milk prices and the significance of milk production to the agriculture of the United States. He next noted that although use of property and making of contracts are typically private matters and thus remain free of government interference, “neither property rights nor contract rights are absolute”, adding that occasional regulation of these by the state is requisite for proper government function, especially in instances where such regulation is used to promote general welfare. Neither the Fifth nor the Fourteenth Amendments prohibit governmental regulation for the public welfare; instead, they only direct the process by which such regulation occurs. As the Court has held in the past, such due process “demands only that the law shall not be unreasonable, arbitrary, or capricious, and that the means selected shall have a real and substantial relation to the object sought to be attained.”
Roberts noted also that the New York milk industry had long been the subject of public interest regulation. He indicated that because the legislative investigation that resulted in the establishment of the Milk Control Board was well aware of the insufficiency of regular laws of supply and demand to correct the issues with milk prices, “the order appears not to be unreasonable or arbitrary.”
Addressing the due process challenge further, Roberts wrote that in absence of other constitutional restrictions, a state may adopt an economic policy that can reasonably be said to promote public welfare, and enforce such policy by appropriate legislation. Courts, however, have no authority to create such policy or to strike it down when it has been properly enacted by the legislature, adding “With the wisdom of the policy adopted, with the adequacy or practicability of the law enacted to forward it, the courts are both incompetent and unauthorized to deal.”
He concluded that the majority found no basis in the due process clause to strike down the challenged provisions of the Agriculture and Markets law.
McReynold’s dissent
Justice James C. McReynolds dissented from the majority opinion. His dissent was joined by Justice Willis Van Devanter, Justice George Sutherland, and Justice Pierce Butler. These four Justices became nicknamed the Four Horsemen (Supreme Court) for their legendary rejection of New Deal regulation.
McReynolds provided a lengthy discussion of the history and application of the Due Process Clause and the legislative findings that led to the creation of the Milk Control Board. He ultimately concluded that although “regulation to prevent recognized evils in business has long been upheld as permissible legislative action…fixation of the price at which A, engaged in an ordinary business, may sell, in order to enable B, a producer, to improve his condition, has not been regarded as within legislative power,” adding “This is not regulation, but management, control, dictation.”
External links
- Full text of the opinion courtesy of Findlaw.com.
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