Nebbia v. New York
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 (set and/or otherwise control) the price of milk for dairy farmers, dealers, and retailers.
, 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 State 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.
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.
, Justice George Sutherland
, and Justice Pierce Butler
. These four Justices became nicknamed the Four Horsemen
for their 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.”
Case citation
Case citation is the system used in many countries to identify the decisions in past court cases, either in special series of books called reporters or law reports, or in a 'neutral' form which will identify a decision wherever it was reported...
(1934), was a case in which the Supreme Court of the United States
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
determined whether the state of New York could regulate (set and/or otherwise control) the price of milk for dairy farmers, dealers, and retailers.
History
New York State dairy farmers were disproportionately affected by farm prices decline after World War IWorld War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
, and the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
further exacerbated the problems they faced. To address this problem, the New York legislature created a joint legislative committee headed by State Senator Perley A. Pitcher
Perley A. Pitcher
Perley A. Pitcher was an American lawyer and politician from New York. He was Majority Leader of the New York State Senate in 1939.-Life:...
to devise a remedy.
Following the hearings, in 1933, the state of New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
established a Milk Control Board that was empowered to set maximum and minimum
Price floor
A price floor is a government- or group-imposed limit on how low a price can be charged for a product. For a price floor to be effective, it must be greater than the equilibrium price.-Effectiveness of price floors:...
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
Equal Protection Clause
The Equal Protection Clause, part of the Fourteenth Amendment to the United States Constitution, provides that "no state shall ... deny to any person within its jurisdiction the equal protection of the laws"...
and Due Process Clause of the Fourteenth Amendment
Fourteenth Amendment to the United States Constitution
The Fourteenth Amendment to the United States Constitution was adopted on July 9, 1868, as one of the Reconstruction Amendments.Its Citizenship Clause provides a broad definition of citizenship that overruled the Dred Scott v...
.
The county court and the Court of Appeals affirmed the conviction, and the case was heard by the Supreme Court.
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
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
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
Fifth Amendment to the United States Constitution
The Fifth Amendment to the United States Constitution, which is part of the Bill of Rights, protects against abuse of government authority in a legal procedure. Its guarantees stem from English common law which traces back to the Magna Carta in 1215...
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
Due process
Due process is the legal code that the state must venerate all of the legal rights that are owed to a person under the principle. Due process balances the power of the state law of the land and thus protects individual persons from it...
“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.
McReynolds' dissent
Justice James C. McReynolds dissented from the majority opinion. His dissent was joined by Justice Willis Van DevanterWillis Van Devanter
Willis Van Devanter was an Associate Justice of the United States Supreme Court, January 3, 1911 to June 2, 1937.- Early life and career :...
, Justice George Sutherland
George Sutherland
Alexander George Sutherland was an English-born U.S. jurist and political figure. One of four appointments to the Supreme Court by President Warren G. Harding, he served as an Associate Justice of the U.S...
, and Justice Pierce Butler
Pierce Butler (justice)
Pierce Butler was an American jurist who served as an Associate Justice of the Supreme Court of the United States from 1923 until his death in 1939...
. These four Justices became nicknamed the Four Horsemen
Four Horsemen (Supreme Court)
The "Four Horsemen" was the nickname given by the press to four conservative members of the United States Supreme Court during the 1932–1937 terms, who opposed the New Deal agenda of President Franklin Roosevelt. They were Justices Pierce Butler, James Clark McReynolds, George Sutherland,...
for their 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.”