Document: 512 U.S. 186114 S.Ct. 2205129 L.Ed.2d 157 WEST LYNN CREAMERY, INC., et al., Petitioners,v.Jonathan HEALY, Commissioner of Massachusetts Department Food and Agriculture. No. 93-141. Supreme Court the United States Argued March 2, 1994. Decided June 17, Syllabus * A pricing order subjects all fluid milk sold by dealers to retailers an assessment. Although most that is produced out State, entire assessment distributed dairy farmers. Petitioners licensed who purchase out-of-state farmers sell it within Massachusetts—sued enjoin enforcement on ground violated Federal Commerce Clause, but state court denied relief. The Judicial affirmed, concluding was not facially discriminatory, applied evenhandedly, only incidentally burdened interstate commerce, such burden outweighed "local benefits" industry. Held: unconstitutionally discriminates against commerce. Pp. ____. (a) clearly unconstitutional under this Court's decisions invalidating laws designed benefit local producers goods creating tariff-like barriers neutralized competitive economic advantages possessed lower cost producers. See, e.g., Bacchus Imports, Ltd. v. Dias, 468 263, 104 3049, 82 200. "premium payments" are effectively a tax making State more expensive. also applies in Massachusetts, its effect entirely (indeed than) offset subsidy provided exclusively farmers, thereby empowered at or below price charged (b) Respondent's principal argument—that, because both local-subsidy nondiscriminatory-tax components valid, combination two equally valid—is rejected. Even granting respondent's assertion would be constitutional standing alone, must still fall funded principally from taxes sale other therefore burdens More fundamentally, argument logically flawed assumption lawfulness each acts establishes legality their combination. Indeed, conjoining subsidy, has created program dangerous commerce than either part alone: Commonwealth's political processes cannot relied prevent legislative abuse where one powerful in-state interests ordinarily expected lobby premium as raising prices, have been mollified subsidy. (c) second argument—that discriminatory pay premiums competitors receive disbursements—cannot withstand scrutiny. imposition differential any stream commerce—from wholesaler retailer consumer—is invalid placed point will result disadvantage producer. P. (d) If accepted, third protectionist program's costs borne consumers benefits farmers—would undermine almost every case. paid businesses consumers, yet if they discriminate products unconstitutional. ignores fact integrated market. obvious impact production demonstrates simply wrong assume dealers. (e) Acceptance final order's incidental justified saving financially distressed industry—would make virtue vice rule discrimination condemns. Preservation industry protecting rigors competition hallmark protectionism Clause prohibits. 415 Mass. 8, 611 N.E.2d 239, reversed. STEVENS, J., delivered opinion Court, which O'CONNOR, KENNEDY, SOUTER, GINSBURG, JJ., joined. SCALIA, filed concurring judgment, THOMAS, REHNQUIST, C.J., dissenting opinion, BLACKMUN, Steven J. Rosenbaum, Washington, DC, for petitioners. Douglas H. Wilkins, Boston, MA, respondent. Justice STEVENS Court. 1 imposes retailers. About two-thirds State. assessment, however, question presented whether We hold does. 2 Petitioner West Lynn Creamery, Inc., dealer do business Massachusetts. It purchases raw milk, processes, packages, sells wholesalers, retailers, 97% LeComte's Dairy, dealer. distributes retail outlets 3 Since 1937, Agricultural Marketing Agreement Act, 50 Stat. 246, amended, 7 U.S.C. § 601 seq., authorized Secretary Agriculture regulate minimum prices issuing marketing orders particular geographic areas.1 While Government sets based conditions, those so high substantial among different States. In 1980's early 1990's, began lose market share neighboring response, Governor appointed Special Commission study found many had farms during past decade were significantly increased, majority remaining "forced year." App. 13. On January 28, 1992, relying Commission's Report, (respondent) declared Emergency. his declaration he noted average federal blend price2 declined $14.67 per hundred pounds (cwt) 1990 $12.64/cwt 1991, while risen estimated $15.50/cwt. Id., 27. He concluded: 4 "Regionally, serious trouble ultimately, solution required. meantime, we act level preserve our industry, maintain reasonable ensure continuous adequate supply fresh market, protect public health." 31. 5 Promptly after emergency, respondent issued challenged proceeding.3 6 requires "dealer"4 monthly payment" into "Massachusetts Dairy Equalization Fund." amount payments computed steps. First, "order premium" determined subtracting month $15 dividing difference three; thus $12/cwt, $1/cwt.5 Second, multiplied (in pounds) dealer's Class I6 sales Each fund producers.7 producer receives total equal proportionate contribution State's milk.8 complied with months, paying $200,000 Fund. 100, 105. Starting July petitioners refused payments, commenced license revocation proceedings. then action seeking injunction Constitution. relief conditionally revoked licenses. 8 parties agreed expedited appellate procedure, transferred cases own docket. concluded "the does face, evenhanded application, commerce." Inc. Dept. Agriculture, 15, 243 (1993). "pricing aid producers." 16, N.E.2d, 244. conceded "[c]ommon sense" indicated plan "adverse commerce" distribution scheme out-of-State Nevertheless, asserted given purpose design program." 18, Because "outweigh commerce," sustained constitutionality order. 19, 245. granted certiorari, 510 ----, 114 56, 126 26 (1993), now reverse. II 9 vests Congress ample power enact legislation providing regulation products. Darby, 312 61 451, 85 L.Ed. 609 (1941); Wickard Filburn, 317 111, 63 82, 87 122 (1942); Mandeville Island Farms, American Crystal Sugar Co., 334 219, 68 996, 92 1328 (1948). An affirmative exercise led promulgation setting prices. limits Commonwealth adopt regulations "This 'negative' aspect prohibits protectionism—that is, regulatory measures burdening competitors. . Thus, statutes routinely struck down unless demonstrably valid factor unrelated ." New Energy Co. Indiana Limbach, 486 269, 273-274, 108 1803, 1807, 100 302 (1988).9 10 paradigmatic example law discriminating protective tariff customs duty, imported States, similar attractive measure simultaneously raises revenue violates principle unitary national handicapping competitors, artificially encouraging even when same could 11 distorting effects geography production, tariffs long recognized violative Clause. fact, patently reveal single attempt one. Instead, filled aspire reap some means. Baldwin G.A.F. Seelig, 294 511, 55 497, 79 1032 (1935), York attempted adverse Vermont establishing elsewhere. This did hesitate, strike down. Writing unanimous Cardozo reasoned: 12 "Neither nor police may used destination aim barrier another labor residents. Restrictions contrived unreasonable clog upon mobility They set up what equivalent rampart duties neutralize belonging place origin." 527, 502. 13 duty—neutralizing advantage producers—it held Similarly, 200 (1984), invalidated advantaged exemption certain liquors Hawaii. Other kind legion. Welton Missouri, 91 275, 23 347 (1876); Guy Baltimore, 434, 25 743 (1880); Toomer Witsell, 385, 1156, 1460 (1948); Polar Ice Cream & Creamery Andrews, 375 361, 84 378, 389 (1964); Chemical Waste Management, Hunt, 504 112 2009, 119 121 (1992); see also, Hunt Washington Apple Advertising Comm'n, 432 333, 351, 97 2434, 2445, 53 383 (1977) (invalidating statute, "has stripping away apple earned ."). 14 Under these cases, Massachusetts' Its avowed undisputed enable higher compete makes Like ordinary tariff, imposed allows produce producers.10 there no might able retain lowering out-of-staters' ability remain immunize measure. U.S., S.Ct., 1808.11 case, option reducing share. certainly "cause constitute larger share, source smaller market."12 Exxon Corp. Maryland, 437 117, 126, n. 98 2207, 2214, 57 (1978). motive behind renders unconstitutional, it, like "neutralize[s] Baldwin, 15 ways, issue (1984). Both involve broad-based good special provisions involved 20% excise liquor sales, coupled fruit wine manufactured Hawaii okolehao, brandy distilled root shrub indigenous Hawaii's "had favor products." 273, 3056. See I.M. Darnell Son Memphis, 208 113, 28 247, 52 413 (1908) property favoring manufacturers). By products, tariff. Goods taxed, subject net tax. instead exempting Hawaiian tax, rebated collected liquors. (1988) (discriminatory credit). And rebate surely invalid; rebates domestic elsewhere.13 additional elsewhere way reduces danger posed barriers, exacerbates giving tool shore position.14 III 16 Respondent advances four arguments conclusion commerce: (A) component program—a non-discriminatory tax—is valid; (B) (the tax) disbursements Fund, discriminatory; (C) protectionist, farmers; (D) collapse. discuss turn. A. 17 that, achieves goals through lawful means," whole constitutional. Brief 20. argues Fund subsidies exercises power, provides money nondiscriminatory Therefore constitutional, merely independently regulations. effect, argues, impose dealers, free use proceeds chooses; subsidize finance means legitimate 18 alone,15 nevertheless fall. pure general assists business. States.16 funding cardinal "benefit competitors." 1807-1808; 272, 3055; 443, (1880). 19 errs assuming follows parts. alone. Nondiscriminatory measures, here, generally upheld, spite "[t]he existence major adversely affected safeguard abuse." Minnesota Clover Leaf 449 456, 473, 101 715, 728, 66 659 (1981); Raymond Motor Transportation, Rice, 434 429, 444, 787, 795, 54 664 (1978) (special deference highway "their usually falls well States' interests, insuring serve check unduly burdensome regulations"); South Carolina Highway Barnwell Bros., 303 177, 187, 58 510, 514, 734 (1938); Goldberg Sweet, 488 252, 266, 109 582, 591, 102 607 (1989).17 However, groups hurt state's can longer abuse, otherwise So, least three premium, which, (and hence lowers demand) milk: consumers. But groups, exerting influence primary supporters.18 20 require us analyze separately parts regulation, divorce put. program—not just contributions distributions fund—that choice means—nondiscriminatory subsidy—cannot guarantee whole. York's means—a prices—but deleterious effects. (1935). Bacchus, grant exemptions. 21 Our jurisprudence rigid controlled form erects Rather eschewed formalism sensitive, case-by-case analysis purposes As over years ago: "The clause forbids discrimination, forthright ingenious. case duty determine statute attack, whatever name be, practical operation work Best Maxwell, 311 454, 455-456, 334, 335, 275 (1940); Maryland Louisiana, 451 725, 756, 2114, 2134, 576 147, 2224 (1978); 430, (1879) wharfage fees "mere expedient device accomplish, indirection, accomplish direct viz., build unequal oppressive States"); 502 ("What ultimate dealings put itself position isolation. Formulas catchwords subordinate overmastering requirement"); Dean Milk Madison, 340 349, 354, 71 295, 297, 95 329 (1951); 276, 1808, 1809 reciprocal credit "in tax[es] product made [Indiana] manufacturers rate Ohio B 22 since 28-29. Is possible doubt Maine down, farmers? For 150 years, rightly invalid, Brown Wheat. 419, 448, 678 (1827) ("So, occupation importer manner, importation. add article, consumer, himself, manner article made." distinction between thing imported, person importer, subject. too controversy interfere commerce"); City (differential intermediate stage manufacturer); (1984) wholesaler); Webber Virginia, 103 344, 350, 565 (1881) agent); 1807-1808 retailer). C Order disproves claim protectionism," "only feel increase [and] [t]he themselves presence." (emphasis original). argument, idea "merely consumers" taxing thoroughly repudiated 3055. primarily violation. 24 above, supra, ____, divert diversion necessarily injures Furthermore, regulates portion broadly regulated covers England. CFR 1001.2 deliver participants guaranteed assessments them exclude To extent affect relative volume I area compared classes payable non-Massachusetts markets.19 D Finally, "is 'local benefits' preserving industry."20 42. closely related urges order, save collapse, protectionist." 16. accept arguments, 3055, explicitly rejected "between thriving struggling enterprises." Whether attempting "enhance enterprises" "subsidize troubled" ones irrelevant analysis. Ibid. With characteristic eloquence, responded echoes today: pressed us, end served Control Act something welfare class classes. maintenance regular wholesome being jeopardy unable earn living income. Nebbia York, supra [291 502, 505, 78 940]. Let exception admitted, times stress strain say merchants workmen protected without, lest go poor lists perish altogether. give entrance excuse invite speedy solidarity. Constitution framed dominion philosophy less parochial range. theory peoples several states sink swim together, run prosperity salvation union division". 522-523, 500.21 27 later involving farmers,22 Jackson described overriding interest flow across lines: "Our system, fostered farmer craftsman shall encouraged certainty access Nation, home embargoes withhold exports, foreign them. Likewise, consumer look producing Nation him exploitation any. Such vision Founders; doctrine reality." H.P. Hood Sons, Du Mond, 336 525, 539, 69 657, 665, 93 865 (1949). 29 judgment 30 ordered. 31 whom THOMAS joins, judgment. 32 my view negative-Commerce-Clause jurisprudence, reasons explained Part below. agree assigned seem me, I, broad expansion current law. Accordingly, concur 33 negative often said, create follow never held, obstructs Yet says today. seems canvassed corpus opinions, culled free-market snippet reasoning, melded sweeping "artificially encourag[es] States." Ante, ante, ____ here "neutraliz[es] producers"); (price "who (a " 'neutralizes origin' ") (quoting (1935)); ("Preservation prohibits"). 34 appreciate eagerness expressly reserve expansive calls wide variety hitherto thought permissible. me formulation guiding identified above. guardedly asserts "pure business," added), taken true (e.g., hardware store) competing notes taxed "not said revenues, invariably include monies come goods, assist[ing]" businesses, ibid., unquestionably neutralizes enterprises. subsidies, particularly cash (what comes thing) forgiveness, admitted purpose—indeed, nationally advertised having purpose—making profitable conduct elsewhere, i.e., normal incentives. 35 appears call garden-variety heretofore permissible law, example, requires, contrary practice, recyclable packaging materials, favors non-exporting producers, establish additional, separate sales. believed, without regard disruption "national market" real restriction, need "balance" importance pursued, Pike Bruce Church, 397 137, 90 844, 174 (1970). These results greatly extend beyond scope. intend consequences, want foster needless litigation concerning them, should adopted rationale. Another basis deciding available, proceed discuss. 36 historical record grounds reading says—an authorization Tyler Pipe Industries, Revenue, 483 232, 107 2810, 2828, 199 (1987) (SCALIA, part). Nonetheless, formally ago, Case Freight Tax, Wall. 146 (1873), decided vast number engendering considerable reliance interests. result, will, stare decisis grounds, enforce self-executing "negative" situations: (1) (2) indistinguishable type previously Itel Containers Int'l Huddleston, 507 ---- - nn. 1, 113 1095, 1107 421 (1993) (slip op., 1-2 2) judgment) (collecting cases). Applying approach—or it—is always easy, once gets facial becomes been) "quagmire." Northwestern Portland Cement Minnesota, 358 450, 458, 357, 362, (1959). D. Currie, Court: First Hundred Years 1789-1888, pp. 168-181, 222-236, 330-342, 403-416 (1985). object clear honors holdings declines rationale further. Trucking Assns., Scheiner, 305-306, 2829, 2851-2852, 226 dissenting). 37 There devices here: imposing liability members competitors; "exemption" "credit" members; (3) revenues segregated fund, disbursed "rebates" "subsidies" situation case); (4) taxation revenues. settled first methodologies "neutral" first, likewise invalid. Westinghouse Electric Tully, 466 388, 399-400, 9, 1856, 1865, 80 388 fourth methodology, application far removed prohibiting regarded extension therefore, unacceptable. 278, 1810, (1988). already approved subsidies. Hughes Alexandria Scrap Corp., 426 794, 809-810, 96 2488, 2497-2498, 49 220 (1976). 38 before present close, conclude principled disembark train. methodology refund returned rather left favored taxpayer place. (4), hand, assisting taxation, 39 allow fund. Perhaps, commentators contend, line comports important reality: likely citizens perceive fund) available competing, non-protectionist, purposes. Coenen, Untangling Market-Participant Exemption Dormant 88 Mich.L.Rev. 395, 479 (1989); Collins, Economic Union Constitutional Value, N.Y.U.L.Rev. 43, (1988); Gergen, Selfish Market, Tex.L.Rev. 1097, 1138 17. That not, position, THE CHIEF JUSTICE explains, "[a]nalysis group participation process useful purposes, serving interpreting dormant them." Post, (dissenting opinion). draw clear, rational extant jurisprudence. 40 Chief BLACKMUN dissenting. 41 description lay strikes undoubtedly sought beset steady declining escalating costs. apparently unique Massachusetts; Jersey amicus brief support enacted lie northeastern metropolitan corridor, urbanized prospect becoming so. value agricultural land located near areas driven demand housing urban uses; eventually developers. Not farm lost, but, whose report found: 42 "Without continued locally together open lands wildlife refuges, recreation, hunting, fishing, tourism, education." 43 dealt problem beleaguered validity enactments. "No disputes pursuant powers industry." 271, "Direct subsidization afoul [dormant Clause]; does." today relegates well-established principles footnote and, time, gratuitously casts observing "[w]e squarely confronted" constitutionality. 15. 44 Bd. Eisenberg Farm Products, 306 346, 59 528, 83 752 (1939), upheld Pennsylvania challenge shipped purchased there. observed reach Pennsylvania." 352, 531. went say: 45 "One commonest forms directed control conditions exerted citizens. Every degree, counter Congressional indirectly involves guided judicial decision century." 351-352, 530-531. 46 consideration respects Eisenberg, supra. borders. even-handed affects regardless origin milk. ("the ."); (". acted strong-arm sister Limbach; rather, motives purely local. aptly it: "[T]he represent doing Commonwealth, pay." 245 47 Consistent precedent, observes: "A business." correctly recognizes "[n]ondiscriminatory upheld" due normally accorded passing light various groups. citing (1981), Transportation method levied distorts process: points out, strong opposed order—consumers importantly, nothing suggests fate turn promulgated. Analysis 48 concludes combined "simultaneously conclusion, cites examples cry bottled required though price. effort selling explained, keep drink not." 521, 499. disputed negated doing. effect. incentives priced equally. borrow Cardozo's description, it—on terms exemptions There, exempted Despite strained compare Bacchus. statement distinguished "by noting goes entity pays (milk dealers) themselves." 14. distinction, significant difference. No supports using lawfully obtained neutral distributing closest supporting reaches ill-starred Butler, 297 56 312, 477 (1936), processing raised 51 half century Brandeis Liebmann, 285 262, 311, 371, 386, 76 747 (1932): "To stay experimentation things social grave responsibility. Denial right experiment frought consequences Nation. happy incidents system courageous may, choose, laboratory; try novel experiments risk rest country." Brandeis' cited subsequent opinions Reeves, Stake, 447 441, 2271, 2279, 65 244 (1980). His observation bears heeding today, it. wisdom messianic insistence grim sink-or-swim policy laissez-faire economics debatable chosen it; done kind. bodes ill values federalism animated syllabus constitutes prepared Reporter Decisions convenience reader. Detroit Lumber 321, 337, 282, 287, "blend price" determined, part, 1001.1 seq. Raw highest characterized "Class I" eggnog, sour cream, hard cheese, II" III" file computing price, Market Administrator calculates weighted predominates reports, high; predominate, lower. put, unit relatively uniform sellers nonuniform payment obligations purchasing prohibit established minima. basis. assessments, explanation term price," previous footnote. February amended 26, 1992. 32-40; 4-5. Only "dealer" defined "any engaged receiving, purchasing, pasteurizing, bottling, processing, distributing, handling consignee agent producer, producer-dealer, dealer-retailer, sub-dealer." 33. 35-36; 11, 10, 241, about one-third 21. generates enough leaving surplus. $15/cwt loss I," "producer" cattle." disbursement qualifications. 200,000 considered pounds. cwt (including Fund) $15/cwt. limitations lead surplus 36-38. "father Constitution," James Madison. letters, Madison wrote "grew importing non-importing, intended preventive provision injustice themselves, positive General Government." M. Farrand, Records Convention 1787, p. 478 (1911). numerical clearer. Suppose profitably break even. $1/cwt (one-third target $12/cwt price). Assuming sufficient funds (which case), $3/cwt. breaking Selling raise after-tax exactly rise $1/cwt. surplus, refunded mitigate increase, although higher-cost lower-cost out-of-staters. Energy, noted: "It Cotrell Sporhase [v. Nebraska ex rel. Douglas, 458 941, 3456, 73 1254 (1982) ] refusal offered reciprocity elimination transport offering State; whereas commercial treatment. leading excluding absolute ban, allowed importation initial above State-mandated words, appellant Ohio, cut profits sufficiently compensate purchaser-retailer forgone credit, wholesaler-distributor increasing meet York-prescribed premium. viewed Law 'an competition' 'equivalent duties.' 502." continue shrink producers' compete. imposed. matter actually increases mitigates projected decline. ("[W]e enterprises 523, 500. valuable (order premium) 5, One distinguish themselves. Rebating directly reinforces quantity might, refunding ensures benefit. confronted now. have, "[d]irect afoul" 1810; 815, 2500, (1976) (STEVENS, concurring). addition, attract environment conducive activity, maintaining roads, sound education, low taxes. Zobel Williams, 457 55, 67, 2309, 2316, 72 672 (Brennan, concurring); Metropolitan Life Ins. Ward, 470 869, 876-878, 105 1676, 1680-1681, 751 overwhelming even-handedly unlike confident via Stabilization conceptually field intergovernmental nondiscrimination plays central role boundary impermissible. 460 536, 545, 1344, 1350, 75 264 (1983) ("A 'political check' counted votes excessively, placing unfair Government"); Baker, 485 525-526, 13, 1355, 1366, 99 592 County Fresno, 429 452, 462-464, 699, 704-705, 683 (1977). Governor's Relative Establishment realized, unlikely organize oppose remarked, cent quart noticed consuming public," varies attribute changing changes covered Among identifies "protecting space benefits." 40. relegating "open space" footnote, 6, 240, environmental enhancement "incidental" turns head. preservation uphold regulation. Philadelphia Jersey, 617, 626-627, 2531, 2536-2537, 475 suggestion collapse endangers self-evident. enclosed fences, decline farming intensive use. scholar "Many people lost agriculture uses. urbanized, especially World War II, moving abandoned natural forest growth." Foster W. MacConnell, Land Use Change 1951-1971, (Research Bulletin 640, Jan. 1977); Daugherty, Major Uses States: 1987, 4, (Agricultural Rep. 643, 1991) (decline grazing pasture increased wilderness, wildlife, park areas). shelter menaces health safety fraud, dangers emanate lack retard, constrict advantage, deeply rooted history law." 533, 662, (1949); 272-273, 3055-3056. surprisingly large arose attempts Schollenberger Pennsylvania, 171 757, (1898); (1935); 665; 298, Great Atlantic Pacific Tea Cottrell, 424 366, 923, effectiveness explored G. Miller, Industrial Organization Political Production: Study, 149 Institutional Theoretical Economics 769

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