Source: https://supreme.justia.com/cases/federal/us/315/110/
Timestamp: 2019-04-20 22:56:55+00:00

Document:
Justia › US Law › US Case Law › US Supreme Court › Volume 315 › United States v. Wrightwood Dairy Co.
United States v. Wrightwood Dairy Co.
1. The national power to regulate the price of milk moving interstate into a marketing area extends to such control over intrastate transactions there as is necessary and appropriate to make the regulation of the interstate commerce effective; it includes authority to regulate the price of intrastate milk, the sale of which, in competition with the interstate milk, affects adversely the price structure and federal regulation of the latter. P. 315 U. S. 121.
3. Viewed in the light of its legislative history, § 8c(1) of the Agricultural Marketing Agreement Act of June 3, 1937, which authorizes the Secretary of Agriculture to issue marketing orders fixing minimum prices to be paid to producers of milk, limiting the regulation to such handling of the commodity as is in the current of interstate or foreign commerce or as "directly affects" such commerce, was intended, by a full exercise of the commerce power, to confer upon the Secretary authority to regulate the handling of milk produced and marketed intrastate, which by reason of its competition with the handling of interstate milk so affects the interstate commerce as substantially to interfere with its regulation under the Act. P. 315 U. S. 125.
4. Opinions of individual members of Congress on the meaning of a bill, which conflict with committee reports concerning it and explanations of it made on the floor by Committee members having it in charge, are not persuasive of the Congressional purpose. P. 315 U. S. 125.
an order of the Secretary of Agriculture, and granting an injunction to the defendant against the execution of the order.
provisions of the Agricultural Marketing Agreement Act of June 3, 1937, 50 Stat. 246, 7 U.S.C. § 608c, and is a permissible regulation under the commerce clause of the Constitution.
"shall regulate, in the manner hereinafter in this section provided, only such handling of such agricultural commodity, or product thereof, as is in the current of interstate or foreign commerce, or which directly burdens, obstructs, or affects, interstate or foreign commerce in such commodity or product thereof."
The United States sought in the present suit a decree directing respondent to comply with the Secretary's Order No. 41, of August 28, 1939, regulating the handling of milk in the "Chicago, Illinois, marketing area." Respondent is a handler in that area of milk which it purchases from producers in Illinois. The order, which is of the type described in the opinion of this Court in United States v. Rock Royal Cooperative, Inc., 307 U. S. 533, 307 U. S. 551-555, is, by its terms, applicable to respondent and purports to carry out the statutory scheme for regulating the price of milk paid to producers, considered in the opinion in that case. By the order, the Secretary found that all milk produced for sale in the marketing area "is handled in the current of interstate commerce, or so as directly to burden, obstruct, or affect interstate commerce in milk or its products . . . ," and directed that it apply to such "handling of milk" in the marketing area "as is in the current of interstate commerce or which directly burdens, obstructs, or affects interstate commerce."
for each class of milk. It prescribes the method of determining the value of milk received from producers by each handler during each month. It requires the payment of a uniform unit price to producers, computed by dividing the total value of milk reported by all handlers in the marketing area by the total quantity of such milk, with deductions of certain amounts to provide a cash balance in a "producer settlement fund." The handler is required to pay producers the uniform price, subject to butterfat and location differentials. But he is also required to pay into the settlement fund, or permitted to withdraw from it, as the case may be, certain amounts, depending on whether the total value of the milk used by him is greater or less, respectively, than his total payments to producers at the uniform price. The amounts withdrawn from the settlement fund by handlers are required to be used to bring the price received by certain producers up to the uniform price set in the order where, because of the purpose for which the handler has sold it, the value of their milk is less than the uniform price. Handlers are required to make reports to the Administrator containing information necessary for the execution of the order, and to bear the expense of administering it.
none of respondent's milk is physically intermingled with that which has crossed state lines, and that, prior to the order, 60 percent of the milk sold in the marketing area was produced in Illinois and 40 percent in neighboring states, and that, at the time of the findings, "over 60 percent" was produced in Illinois. The record shows that "approximately 40%" comes from without the state.
"was not in the current of interstate . . . commerce, and did not directly burden, obstruct or affect interstate . . . commerce in milk marketed within the Chicago, Illinois, marketing area."
It accordingly decreed that the complaint be dismissed, and granted the injunction prayed by the counterclaim.
"[it] may well be that the effective sanction of the order will wither before the force of competition, the morale of the market will disintegrate, and this attempted solution of the problem by the National Government will fail."
But it concluded that there is a hiatus between the constitutional power of state and nation which precludes any solution of the problem by Congressional legislation.
needed to make that regulation effective. The commerce power is not confined in its exercise to the regulation of commerce among the states. It extends to those activities intrastate which so affect interstate commerce, or the exertion of the power of Congress over it, as to make regulation of them appropriate means to the attainment of a legitimate end, the effective execution of the granted power to regulate interstate commerce. See McCulloch v. Maryland, 4 Wheat. 316, 17 U. S. 421; United States v. Ferger, 250 U. S. 199; Consolidated Edison Co. v. Labor Board, 305 U. S. 197, 305 U. S. 221; United States v. Darby, 312 U. S. 100, 312 U. S. 118-119. The power of Congress over interstate commerce is plenary and complete in itself, may be exercised to its utmost extent, and acknowledges no limitations other than are prescribed in the Constitution. Gibbons v. Ogden, 9 Wheat. 1, 22 U. S. 196. It follows that no form of state activity can constitutionally thwart the regulatory power granted by the commerce clause to Congress. Hence, the reach of that power extends to those intrastate activities which in a substantial way interfere with or obstruct the exercise of the granted power.
tobacco under the Agricultural Adjustment Act, Mulford v. Smith, 307 U. S. 38, 307 U. S. 47, and see cases collected and discussed in United States v. Darby, 312 U. S. 100, 312 U. S. 118-125.
Competitive practices which are wholly intrastate may be reached by the Sherman Act because of their injurious effect on interstate commerce. Northern Securities Co. v. United States, 193 U. S. 197; Swift & Co. v. United States, 196 U. S. 375; United States v. Patten, 226 U. S. 525; Coronado Coal Co. v. United Mine Workers, 268 U. S. 295; Local 167 v. United States, 291 U. S. 293; Stevens Co. v. Foster & Kleiser Co., 311 U. S. 255. So too the marketing of a local product in competition with that of a like commodity moving interstate may so interfere with interstate commerce or its regulation as to afford a basis for Congressional regulation of the intrastate activity. It is the effect upon the interstate commerce or its regulation, regardless of the particular form which the competition may take, which is the test of federal power . Cf. Shreveport Case, supra; Railroad Commission of Wisconsin v. Chicago, B. & Q. R. Co., supra; Labor Board v. Jones & Laughlin Corp., 301 U. S. 1, 301 U. S. 36-43; United States v. Darby, supra, 312 U. S. 122.
which is based upon the average price for the several classes of milk combined. Such a handler would have an advantage over others in the sale of the class of milk in which he principally deals, and could force his competitors dealing in interstate milk to surrender the market or seek to reduce prices to producers in order to retain it.
It is no answer to suggest, as does respondent, that the federal power to regulate intrastate transactions is limited to those who are engaged also in interstate commerce. The injury, and hence the power, does not depend upon the fortuitous circumstance that the particular person conducting the intrastate activities is, or is not, also engaged in interstate commerce. See Chicago Board of Trade v. Olsen, 262 U. S. 1; Stevens Co. v. Foster & Kleiser Co., supra. It is the effect upon interstate commerce or upon the exercise of the power to regulate it, not the source of the injury, which is the criterion of Congressional power. Second Employers' Liability Cases, 223 U. S. 1, 223 U. S. 51. We conclude that the national power to regulate the price of milk moving interstate into the Chicago, Illinois, marketing area extends to such control over intrastate transactions there as is necessary and appropriate to make the regulation of the interstate commerce effective, and that it includes authority to make like regulations for the marketing of intrastate milk whose sale and competition with the interstate milk affects its price structure so as, in turn, to affect adversely the Congressional regulation.
interstate . . . commerce." The argument is that the word "directly" in the statute is restrictive, evidencing an intention to exercise less than the full authority possessed by Congress, and a purpose not to extend that authority to the regulation of local products which affect the interstate commodities and their regulation only by competing with them.
"engaged in the handling of any agricultural commodity or product thereof, in the current of or in competition with, or so as to burden, obstruct, or in any way affect, interstate or foreign commerce."
"in the handling, in the current of interstate or foreign commerce, of any agricultural commodity or product thereof, or any competing commodity or product thereof."
In the 1935 amendments to the Agricultural Adjustment Act, these provisions were replaced by the phraseology which was taken over without change into § 8c(1) of the Agricultural Marketing Agreement Act of 1937, already quoted. Hence, it is to the legislative history of the 1935 amendments that we must turn to ascertain the significance of the phrase, "directly affects" interstate commerce, which then appeared in the statute for the first time.
competing commodity or product thereof, in the current of or in competition with or so as to burden, obstruct, or in any way affect, interstate or foreign commerce."
"not intended to authorize the licensing of persons handling goods only in intrastate commerce except where such handling burdens, obstructs, or affects interstate commerce."
S.Rep. No. 548, p. 6, H.Rep. No. 808, p. 5, H.Rep. No. 952, p. 5, 74th Cong., 1st Sess.
These bills were pending in Congress when Schechter Corp. v. United States, 295 U. S. 495, was decided on May 27, 1935. In consequence of that decision, a new bill, H.R. 8492, was reported out which superseded the pending bills and eventually became the Act of 1935. The new bill, in terms, permitted the Secretary to regulate the handling of products which "directly affects" interstate commerce. As the legislative history demonstrates, this phraseology was deliberately chosen to conform to that adopted in the opinion in the Schechter case, as signifying the full reach of the commerce power, and with the avowed purpose of conferring on the Secretary authority over intrastate products to the full extent of that power. See 79 Cong.Rec. 9478 and S.Rep. No. 1011, p. 8, H.Rep. No. 1241, p. 8, 74th Cong., 1st Sess.
of which came from without the state, and who were engaged in slaughtering and reselling to retailers, had failed to maintain for their employees wages and hours prescribed by the code, and had failed to abandon "selective selling" to their customers in New York which the code had prohibited.
The Court's opinion pointed out that the defendants were not charged with injury to interstate commerce or interference with persons engaged in that commerce, and that the acts charged had no different relation to or effect upon interstate commerce than like acts in any other local business which handle commodities brought into the state. Schechter Corp. v. United States, supra, 295 U. S. 545-546. It characterized their effect upon interstate commerce as "indirect," and distinguished them from those acts and transactions intrastate which, because they "directly affect" interstate commerce, are within he Congressional regulatory power. In explanation of this distinction and as examples of direct effects which are within the commerce power, it referred to the "fixing of rates for intrastate transportation which unjustly discriminate against interstate commerce," citing the Shreveport Case, supra, and referred to intrastate restraints upon competition injuriously affecting interstate commerce condemned by the Sherman Act, citing Local 167 v. United States, supra, and other cases.
is intended to be vested in the Secretary of Agriculture in connection with orders."
See S.Rep. No. 1011, p. 9; H.Rep. No. 1241, p. 8, 74th Cong., 1st Sess.
"The position of the Committee in respect to these amendments is that intrastate commerce may burden or affect interstate commerce, and that consequently this is a constitutional enactment under the decision of the Court in the Shreveport case."
The House debates also disclose general recognition that the bill as amended was intended to be a full exercise of the federal power over competing intrastate milk. 79 Cong.Rec. 9479-9480, 9485.
Cooperative, Inc., supra, 307 U.S. at 307 U. S. 568. We adhere to that opinion now.
The judgment will be reversed, but, as errors assigned below have not been passed on there or argued here, the cause will be remanded to the Circuit Court of Appeals for further proceedings in conformity with this opinion. The mandate will issue forthwith.
* Together with No. 783, Wrightwood Cairy Co. v. United States, also on writ of certiorari, 314 U.S. 605, to the Circuit Court of Appeals for the Seventh Circuit.

References: v. 
 v. 
 § 8
 § 608
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 8
 v. 
 v. 
 v. 
 v.