Case Title: ALABAMA DAIRY COM'N v. Food Giant, Inc.

Citation: 357 So. 2d 139

Docket Number: 

State: alabama

Court: Alabama Supreme Court

Date: 1978-02-10T00:00:00Z

Document:
357 So. 2d 139 (1978)
ALABAMA DAIRY COMMISSION
v.
FOOD GIANT, INC., a corporation, et al.
SC 2482.

Supreme Court of Alabama.
February 10, 1978.
*140 B. G. Minisman, Jr., Birmingham, for appellant.
George L. Beck, Deputy Atty. Gen., and Benjamin Cohen, Asst. Atty. Gen., Montgomery, for William J. Baxley, Atty. Gen., and Food Giant, Inc., appellees.
Norman K. Brown, Bessemer, for Sam Pillitteri, Food Giant, Inc., and William J. Baxley, Atty. Gen., appellees.
Henry C. Chappell, Jr., Montgomery, on behalf of appellant, for Associated Milk Producers, Inc., amicus curiae.
BLOODWORTH, Justice.
Appellant Alabama Dairy Commission appeals from a final judgment holding, inter alia, that: (1) appellant, by virtue of its unconstitutional administration and application of Tit. 22, §§ 205-231, Code of Alabama 1940,[1] (Alabama Dairy Commission Act), is permanently enjoined from exercising any powers granted to it in said Act pertaining to price fixing of fluid milk at the producer, wholesale, and retail levels; (2) appellant is permanently enjoined from setting prices of fluid milk at the wholesale and retail levels because the wholesale and retail sale of fluid milk is not a business so affected with the public interest as to warrant price fixing, and such attempt by the legislature violates both the State and Federal Constitutions; (3) appellant's power to fix prices, contained in Tit. 22, §§ 223-223(1), Code, rests on such vague generalities that it constitutes an unconstitutional delegation of legislative authority in violation of the due process clause of the State Constitution; and (4) enforcement of the Alabama Dairy Commission Act works an unconstitutional burden on interstate commerce because it discriminates against out-of-state producers by relegating them to a secondary milk market and obstructs the free flow of milk across state lines. We reverse and remand.
Appellant instituted this action on December 9, 1976, by filing a complaint, seeking a temporary restraining order and a preliminary and permanent injunction against appellee, Food Giant, Inc., for selling and offering to sell fluid milk in violation of Dairy Commission Regulation 115-1. This regulation, which was passed by the Dairy Commission, pursuant to the Act, and went into effect on September 1, 1976, fixed the minimum price for retail out-of-store sales of homogenized milk at $1.74 per gallon.
The Circuit Court, after notice to appellee, Food Giant, Inc., entered the temporary restraining order, ex parte, and set a hearing for the application for a preliminary injunction for December 13, 1976. Food Giant then filed a motion to hold the temporary restraining order in abeyance, pending a hearing on its motion, and on appellant's application for preliminary injunction, which motion was granted, pending the December 13 hearing. On December 10, 1976, appellant filed a first amended complaint, adding a party as a defendant. Subsequently, three more parties were added as defendants.
At the December 13, 1976, hearing, Food Giant filed an answer and counterclaim and a motion for continuance, which motion was granted, and the cause was continued until December 28, 1976, in order to allow service of the counterclaim on the Attorney General of Alabama. On December 22, 1976, the court entered an order continuing the case until January 10, 1977.
*141 On January 6, 1977, appellant filed a request for a pretrial conference, interrogatories, a request for the production of documents, a motion to shorten time to answer interrogatories, and a motion for a continuance. These motions were denied. On that same date, the Attorney General intervened on behalf of the appellees and filed his answer and counterclaim.
On January 10, 1977, the trial commenced, ore tenus. Also, on January 10, 1977, appellant rescinded Regulation 115-1, and removed minimum price controls, effective immediately. Appellees, on January 11, 1977, moved to dismiss appellant's complaint and application for preliminary injunction, due to appellant's action. The Circuit Court granted appellee's motion to dismiss appellant's complaint, and the case proceeded to trial on appellees' counterclaim.
On March 3, 1977, final judgment was entered containing the findings enumerated above.
Appellant filed a motion for new trial, which was subsequently withdrawn, and notice of appeal. A stay order was entered by the Circuit Court on March 6, 1977, and dissolved on April 7, 1977. A new motion for stay was also denied. Appellant's motion for stay, filed in this Court, was granted on April 12, 1977.
Appellant makes a number of contentions on appeal, including the contentions (1) that the trial court erred in holding that the legislative grant of authority to regulate prices, contained in the Act, constitutes an unauthorized delegation of legislative power in violation of the due process clause of the State Constitution; (2) that the trial court erred in holding that appellant is permanently enjoined from setting prices at the producer, wholesale and retail levels, due to its unconstitutional administration and application of the Act, and in holding that the legislature's attempt to set prices at the wholesale and retail levels violates both the State and Federal Constitutions, because the wholesale and retail sale of fluid milk is not a business so affected with the public interest as to warrant price fixing; and (3) that the trial court erred in holding that the Alabama Dairy Commission Act and the regulations promulgated pursuant thereto place an unconstitutional burden on interstate commerce.
We agree with appellant and therefore reverse and remand.
We shall consider these contentions seriatim.
In Norton v. Lusk, 248 Ala. 110, 26 So. 2d 849 (1946), this Court made the following observations, which we think are pertinent here, viz:
At the time the original Alabama Dairy Commission Act was passed, the argument that it constituted an unconstitutional delegation of legislative power in violation of the due process clause of our State Constitution was pressed upon this Court and summarily rejected, viz:
Franklin v. State ex rel. Alabama State Milk Control Board, 232 Ala. 637, 169 So. 295 (1936).
More recently, this holding was cited with approval in Dixie Dairies v. Alabama State Milk Control Board, 286 Ala. 198, 238 So. 2d 551 (1970), as well as in Baxley v. Alabama Dairy Commission, 360 F. Supp. 1159 (M.D. Ala.1970), by a three judge federal panel.
Appellees have failed to advance sufficient persuasive argument to convince us that Franklin, Dixie Dairies, and Baxley were decided incorrectly. This is particularly true since this Court presumes that statutes are constitutional, and we will not hold them unconstitutional unless convinced beyond a reasonable doubt of their unconstitutionality. Crabtree v. City of Birmingham, 292 Ala. 684, 299 So. 2d 282 (1974); Johnston v. Alabama Public Service Commission, 287 Ala. 417, 252 So. 2d 75 (1971).
Crabtree v. City of Birmingham, supra.
James v. Todd, 267 Ala. 495, 103 So. 2d 19 (1957).
Crabtree v. City of Birmingham, supra.
This court has held on a number of occasions that both the production and distribution of milk is a business which vitally affects the public. State v. Dixie Dairies Corp., 268 Ala. 480, 107 So. 2d 896 (1959); Franklin v. State ex rel. Alabama State Milk Control Board, supra.
Moreover, it is certain that included within the state's police power is the authority to fix prices. See Baxley v. Alabama Dairy Commission, supra; Nebbia v. New York, 291 U.S. 502, 54 S. Ct. 505, 78 L. Ed. 940 (1934).
Appellees' Federal Constitutional attack is apparently aimed at the price fixing provisions of the Act as being violative of the due process clause. This argument was advanced in Baxley and rejected. There, the court noted, quoting Nebbia v. New York, supra, that if the law bears a "reasonable relation to a proper legislative purpose." and is "neither arbitrary nor discriminatory," it satisfies due process. Further, it was noted that price fixing, in particular, is unconstitutional "only if arbitrary, discriminatory, or demonstrably irrelevant to the policy the Legislature is free to adopt, and hence an unnecessary and unwarranted interference with individual liberty."
The appellees argue, however, that although price fixing may have once been necessary, as evidenced by the findings of fact made by the legislature in Tit. 22, § 205, Code, these findings are now irrelevant and antiquated, if not anachronistic.
While it may be relevant to note that strikes and bloodshed in the milk industry are no longer prevalent,[1] this largely misses the point as the Baxley court explained. In order to prevail on this point, appellees bear the "heavy burden of establishing the complete absence of any state of facts which the legislature might reasonably believe would redound to the public injury unless regulated." Baxley, supra. Appellees have failed to meet that burden, in our judgment.
Appellant finally contends that the trial court erred in holding that the Alabama Dairy Commission Act, and the regulations passed pursuant thereto, work an unconstitutional burden on interstate commerce. We agree.
James v. Todd, supra.
Appellees advance two contentions with regard to this issue.
*145 First, they argue that the requirement that Alabama distributors purchase their needs from Alabama sources until such sources are exhausted prior to turning to out-of-state suppliers offends the commerce clause.
Second, they contend that even though retailers may purchase out-of-state milk at its source at a negotiated price, they must transport it back to this State at their own expense, and they argue this places an unconstitutional burden on interstate commerce.
Both these contentions were advanced in Baxley, and both were rejected. With regard to the first contention, the Baxley court noted that this requirement was lifted by Dairy Commission Order 2-72-1, and thus the court refused to pass on it. Dairy Commission Order 3-75-1 continues this policy. It was recently held not to be violative of the Commerce Clause by Judge Varner in Dairymen, Inc. et al. v. Alabama Dairy Commission et al., Civil Action No. 77-445-N (M.D.Ala. December 27, 1977). In that opinion, he made the following comments, which we think are pertinent here:
With regard to the second contention, the Baxley court stated the following:
We agree with the Baxley court that Milk Control Board v. Eisenberg Farm Products, 306 U.S. 346, 59 S. Ct. 528, 83 L. Ed. 752 (1939), is controlling, and therefore, these contentions must fail.
For the foregoing reasons, this cause is due to be reversed and remanded. In so holding, however, we think the following comments may be pertinent. First, we have not addressed all of appellant's contentions, as it was not necessary to do so in order to decide this case. Second, in reversing this cause, we have not re-instituted minimum price controls on the price of fluid milk.
REVERSED AND REMANDED.
All the Justices concur except JONES, J., not sitting.
[1]  Revised and codified as 2-13-40, et seq., Code of 1975. This revision is not an issue on this appeal, since the cause below was tried under then applicable Tit. 22, § 205-231.
[1]  In his dissent in Edmonson v. Brewer, 282 Ala. 581, 213 So. 2d 578 (1968), Mr. Justice Coleman observed, "It has been said that `Judges ought not to be ignorant in court of what everyone else knows and the judges themselves know out of court.'" It is therefore that we take note that there is a current movement for a nation-wide farm strike seeking 100 percent parity price supports for farm products.