Document: 375 U.S. 361 84 S.Ct. 378 11 L.Ed.2d 389 POLAR ICE CREAM & CREAMERY CO., Appellant,v.Charles O. ANDREWS, Jr., etc., et al. No. 38. Argued Nov. 20, 1963. Decided Jan. 6, 1964. [Syllabus from pages 361-362 intentionally omitted] Joe J. Harrell, Pensacola, Fla., for appellant. Mallory E. Horne, Tallahassee, and Johnson S. Savary, Inverness, appellees. Mr. Justice WHITE delivered the opinion of Court. 1 We have before us recurring question validity a State's attempt to regulate supply distribution milk products. Challenged in this case is Florida's system regulation dealings between distributors local producers. 2 The appellant, Polar Ice Cream Creamery Company, located Florida, 16 miles Florida-Alabama state line, processor distributor fluid It sells products human consumption consumers dealers within State Florida competition with nearby Alabama distributors. Pursuant contracts let after competitive bidding, it also supplies large quantities military installations, both without Folrida. purchases, processes as or approximately 5,000,000 gallons each year. 3 Prior regulations challenged here, purchased 30% its requirements dairy farm producers Florida. remaining 70% was procured producers, producer pools brokers other States, such Alabama, Mississippi, Wisconsin, Minnesota, Missouri, Virginia, Illinois. Its customary arrangement pay 61 cents per gallon specified quantity 35.5 all over that quantity. price paid out-of-state sources varied; some low 30—35 Arkansas sources. Polar's could at no time requirements, but times produced sold amounts equal greater than sales excluding military, on reservations, schools. 4 statute orders Milk Commission by Pensacola Marketing Area.1 First, they require minimum Class I milk, defined form exceptions, substantially lower prices II, III, IV milk,2 consisting chiefly nonbeverage cream, sour cream 5 Second, has established method which proportion distributor's monthly various classes allocated designated Each whom does business September November 30 year, called base-fixing period, assigned an earned base, representing ratio total during period. resultant percentage then applied number I, channels monthly, order, determine earned-base must be class utilization.3 allocation producer's deliveries first utilization, continued thereafter descending order through classifications. Only are considered calculating th period therefore these totals 100%. result attributed may their used less remunerative utilizations, only if do not fulfill need purpose thus command premium price. Moreover, formula requires purchases makes producers.4 percentages remain same until next 6 Third, forbids termination relationship had continuous course dealing just cause provides rejection refusal accept any tendered offered delivery ordinary continuance previous ground revocation license.5 These statutory provisions been construed mean regulated marketing area his including excess needs. A relieved obligation purchase upon showing cause, met demonstration Commission's burdensome available elsewhere price.6 7 three-pronged regulatory structure, requiring aside, fixed price, obligating take offer, argues imposes undue burden interstate commerce.7 8 proposed special installations United States—military milk. Although outset litigation, plan voted into effect. While present status under law entirely clear record arguments parties, we read testimony required However, utilize obtained sales, applicable sales. challenges requirement inconsistent federal procurement policy Federal Government's exclusive jurisdiction consumed. 9 To finance activities Commission, tax fee 15/100 cent handled regardless where sold, installations. This abates revenue exceeds 25% amount Com ission expenditures budgeted fiscal year.8 Polar, clearly obliged fee, contends include ceded tax. 10 Since objections Control Act posed substantial questions, three-judge District Court convened, 28 U.S.C. § 2281, taken heard respect above questions. court found reasonable exercise police power accordingly rejected claims Act, fixing assuring rate return compelling denied due process protection. distributed based privilege doing concluded measure did unduly commerce infringe States serves. controls were said conflict Procurement Statutes, 2301 seq., since impose restriction Government Polar. finding intended protect favor upheld Commerce Clause because there alleged discrimination against burdened restricted commerce. decision Baldwin v. G. A. F. Seelig, Inc., 294 511, 55 497, 79 L.Ed. 1032, invalidating imposed shield effects competition, deemed inapplicable regulations. Because serious questions raised decisions here regulations, noted probable jurisdiction. 372 939, 83 932, 966. determined prior cases industry cannot withstand attack judgment below reversed. I. controlling 1032; Hood Sons Du Mond, 336 525, 69 657, 93 865; Dean Co. Madison, 340 .S. 349, 71 295, 95 329. 12 In Baldwin, Metropolitan New York about sources, States. forbade sale unless would lawful provision attacked distributor, whose Vermont Remarking aimed keeping 'the unimpaired afar,' U.S., 519, S.Ct., 498, struck down impermissible outlaw prices, so 'set barrier traffic one another effective customs duties, differential, laid thing transported,' 521, 500, 1032—which forbidden Constitution, Art. 10, cl. 2, reserved Congress 8, 3. Nice distinctions direct indirect burdens irrelevant. 13 'when avowed obstruction, well necessary tendency, suppress mitigate consequences states. * (A) chief occasion clauses mutual jealousies aggressions taking barriers economic retaliation.' Farrand, Records Convention, vol. p. 308; pp. 478, 547, 548; Federalist, XLII; Curtis, History 1, 502; Story 259. If York, promote welfare her farmers, guard them cheaper Vermont, door opened rivalries reprisals meant averted subjecting states nation.' 522, 1032. 14 argument reality health measure, farmers protected provide reliable healthful locality entitled have, said, 15 'Let exception admitted, will stress strain say merchants workmen without, lest go poor relief lists perish altogether. give entrance excuse invite speedy end our national solidarity. Constitution framed dominion political philosophy parochial range. theory peoples several sink swim together, long run prosperity salvation union division.' 523, 1032.9 Bald heavily relied Mond Dean, supra. forbid establishing additional processing plants State. City Madison prevented reserving market distance city, although purported considerations public advanced justifying restriction. 17 principles sound today when announced. They justify, indeed require, invalidation part scheme reserves share market. II. 18 Under buy it, raw more offered, surplus prices. And obligations continue bind even though needs obtainable steadily increase. obviously use outside those uses turn exhausting farmer become regular sell company. he market—Pensacola probably able market—his uses, cover cost production.10 19 clear. York's control removed incentive thereby encouraged consume turning Out-of-state opportunity compete York-produced extent bore transportation charges. preempt market, especially most lucrative participate production inadequate, given domain profitably serve remainder relegated alone. precisely kind hindrance introduction condemned 'unreasonable clog mobility set up what equivalent rampart duties designed neutralize advantages belonging place origin. hostile conception result.' 527, 502, 20 exclusion foreign major portion justified insure existence wholesome much made Nor escape interest providing satisfactory blend basis ongoing relationships buying distress selling detriment orderly For assertion own areas. 'to prohibit territory quality acquired (in state), whether high ones,' 499, not, sole promoting insulate 21 true, prevent But allowing level justification barring segment Given is,11 still can wants acquire face embargo remain. 22 save here. Nebbia 291 54 505, 78 940, retail wholesale offend Due Process Equal Protection Clauses. commerce, Highland Farms Dairy Agnew, 300 608, 57 549, 81 835, who cools transports sale, incidental essentially activity. Board Pennsylvania Eisenberg Farm Products, 306 346, 59 528, 752. none reserve means 23 deny Clause, nothing indicating either congressional consent to, acquiescence in, employed. On contrary, authorizing industry, 'prohibit anner limit, product thereof States.' provision, explained Lehigh Valley Cooperative 370 76, 82 1168, 345, Secretary Agriculture setting trade importation areas seriously doubt Congress, denying Secretary, granted III. 24 matter reservations. purport charge off bases. regulates for. holding Paul 371 245, 426, 292, dealt prescribe Likewise, occur bases, vulnerable legislate regard transactions occurring enclaves subject Cf. Standard Oil California, 242, 381, 775, James Dravo Contracting Co., 302 134, 58 208, 155. 25 initially California's along issue abandoned expressly saved Court's opinion. now presents us. 26 good reason again put day. At trial temporarily enjoined application That however, leaving considerable confusion, amply demonstrated us, concerning so-called outstanding Commission. seem—although sure, findings matters—that nevertheless free purpose, it. apparent oral dispute impact existing hesitate adjudicate absence helpful consideration below, particularly using future. whatever want pursue all. Besides, obtaining wholly exhausted other, nonmilitary, put. 27 possible producer-pricing systems premature time, view law, unrelated whole problem different aspect remand case. IV. distributor. computation includes Fort Benning, Tyndall Air Force Base, Naval Station, being exercises jurisdiction, taxing invalid beyond impose. agree. 29 reliance 155, misplaced. 2% gross receipts levied every person engaging contracting State, contractor undertaking construction locks dams certain navigable streams. West Virginia's assess grossreceipts work done Pennsylvania, exterior limits Virginia property California undertook lay excise gasoline motor vehicle fuel 'sold him State.' occurred boundaries Presidio San Francisco, enclave exercised fall facilities conducted facilities, principle borders enclave, attach. Contrariwise, distributing acting distributor; 'any dealer operates gathering station plant collected bottled otherwise processed prepared sale.' Fla.Stat. 501.02, F.S.A. incidence appears activity bottling performed property. reach case, taxes—the milk—occurs Government.12 31 urged dealer13 enclaves. so, has, definition, dimension, enough sustain 105, enacted subsequent Oil, supra, confers levy collect 'in area,' on, measured by, tangible personal *' 110. think ample distributes 32 reversed remanded further proceedings consistent ordered. 33 Judgment remanded. Chapter 501 Statutes establishes comprehensive empowers inter alia, supervise entire production, transportation, manufacture, storage, establish markets fix distributors, producer-distributors, generally adopt enforce rules, carry out purposes Act. 501.04, addition authorized revoke suspend license satisfied refused committed act injurious demoralization structure pure interfere supply. §§ 501.09(3)(a), (c), Before supervisory powers area, least 10% petition majority vote regulation. 501.20(1), 1961, producing four westernmost counties, Escambia, Santa Rosa, Okaloosa Walton, ea issued pursuant thereto. Thereupon January 1962, series covering four-county termed Area, letter specifying newly structure. August rules implementing defining herein. Official Order PEN—4, 18, II Miami, Order, 118, III gallon. There utilization order. 20—29, March 4, retained adopted gallon, All minor adjustments variations 4% average butterfat content class. Classes follows 20—28: 'IT IS HEREBY ORDERED THAT: '1. CLASS MILK hereby buttermilk, chocolate drink cream. '2. shall skim butterfat: '(a) Used produce acidophilus drink, half half, light heavy '(b) Contained inventories paragraph (1) section hand month accounting period; provided, classification shrinkage prorated butterfat, respectively, exceed two (2%) '3. paragraphs (2) section; fortified classified subparagraph (1)(a) section, '(c) source received '4. is: Disposed fertilizer livestock feed, Dumped notification administrator require.' utilized consumer form, beverage commands higher identical make manufactured products, butter, cheese, ice forth. Accordingly consumption, milk-pricing according use. See Co-operative 79, 1170, 345. maintains meet changing demands excess, referred channeled less-desirable, lower-priced outlets. explains how 35 regulation, Where forms, problems arise. Orders marketwide pools, proceeds handlers pooled. 'blend' calculated multiplying 'pool' disposed class, pertinent Cooperative, 80, 1170—1171, divided among sells, actually represents combined area. Until Rule 220—1.05 promulgated 24, applicability unclear. 25, assigning bases month, referring utilizations. 100%, entitling collectively 1962. 220—1.05(6) provides: 'BASE PERCENTAGE; COMPUTATION AND APPLICATION. During base herein 'earned base.' immediately following close thirty (30) days thereafter, notified mail participating particular base. Deputy Administrator summary computations. illustrate concerned determined. producer-distributor fails base' entitles channels, deficit reallocated bases,' reallocated. outlined computing allocations followed classes. First classification. balance placed lowest adjustment and/or producer-distributors producers.' Section 501.05(3) 'The regularly accepted once established, terminated therefor, approval commission. Just commission prudent man.' 501.09(3) decline grant rejected, behalf dealing, advance notice, dealing. reject refuse exists notice *.' Borden Odham, 121 So.2d 625, Supreme apply acted reasonably. tim producer, held authority. statute, note 5, subsequently amended permissible. Dairy, Comm., Fla.App., 149 867, sought terminate rendered unable injury consequent loss upheld. Foremost Dairies 636, upholding annual V. Fisher, testified show-cause disciplinary proceedings. see 220—1.05(4), (6). PEN—2, delivers reduced; discourage increasing point supplying jurisdictional statement filed Court, objected violated protection laws Fourteenth Amendment. pursued issues brief appear merit, and, resolution asserted renders unnecessary. 501.09(4)(b), 501.09(8), F.S.A.: 'For continuing chapter, fifteen-one hundredths calendar month. remitted reports provided chapter.' 'If year revenues chapter twenty-five payment taxes subsection, 501.09(4), discontinued months commencing year.' response enhance ensure observance sanitary stated evils springing uncared cattle remedied measures repression creation parity Whatever relation earnings sanitation too remote justify obstructions normal flow movement states.' 524, 501, 329, invalidated nondiscriminatory alternatives, adequate conserve interests, available. informed operate therein lies requirement. why situation non-Florida recent study patterns Southeastern indicates Grade moving across lines relatively small, six North Carolina, South Georgia, Tennessee far highest processed. 95%. Carley Purcell, Movement Patterns Southeast, 44 (So.Coop.Series, Bull. 84, April 1962). Another sample 1959 shows supplied 99.3% Florida; markets, shipments 90% markets. northwest 2.6% supplies. 1% receipts. R. L. Greene H. W. Wurburton, An Economic Evaluation Fluid Supply, Utilization (Dept. Agricultural Economics, Fla. Experiment Station). ultimately falls purchasers Decisions clear, fact determinative As materials, pay: Government, rightly think, disclaims contention unaided Congressional legislation, prohibits exacted contractors merely passed economically, terms contract otherwise, Government. So non-discriminatory enters materials incident organization independent sovereignties. right taxation spell immunity paying added costs, attributable furnish immunity.' King Boozer, 341 8—9, 62 43, 45, 86 "Milk dealer' handles state, chapter. corporation natural meaning subsidiary corporation, definition. dealer.'

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