Court Opinion

ID: 9652970
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:36:13.264759+00
Date Added: 2024-06-11T18:12:55.172421
License: Public Domain

GARRECHT, Circuit Judge
(dissenting).
Some matters alluded to in the majority opinion may be elaborated to advantage. The California dairy farmer, as shown by the evidence, has been receiving since 1932 considerably less for his milk than he received during the “base period” defined by the Agricultural Adjustment Act, although the farmer’s cost of living has been higher during the last few years than during such “base period.” Between 1929 and 1932- the gross income of California dairy farmers from milk declined 35.4 per cent. Likewise, the sharp decrease in the purchasing power of the inhabitants of urban and industrial centers, such as Los Angeles, during the depression has greatly reduced the ability of the city population to purchase market milk. The struggle of distributors to maintain sales in these diminishing markets has resulted in price cutting and price .wars. This warfare forced down the price received by dairy farmers for market milk. Similar practices prevailing throughout the country have brought about a shifting from the production of market milk to the production of manufacturing milk, for processing into butter and other products. It is testified that these conditions disturb the normal, movement of dairy products in interstate commerce throughout the nation, and tend to reduce the national price of such dairy products. It is clear that the farmers’ price of milk, employed -in any one of its major uses, is closely interrelated with the price which farmers' receive for milk employed in any other use. Therefore, as'contended by appellants, the marketing conditions for fluid milk in the Los Angeles area affect in a direct and immediate manner the interstate movement of dairy products; and the price received by farmers for the vast amount of milk which is converted into dairy products. ; ■
The statistics in evidence show- that most of the milk produced in the United States.is consumed., not in the form of fluid milk' and 'creamj but in the form óf these p'fher dairy products, such - as' butter' and ídhéesé which ar'e processed from milk. Over 58 per cent, of all the milk produced in this country (exclusive of.- that consumed -on farms) is manufactured into such .products. Most of the so-called manufactured milk which is processed into butter, cheese, evaporated milk and other milk products is produced in a few states and is transported to every state in the Union for consumption. An important part of this nation-wide flow of dairy products goes into the Los Angeles market in interstate commerce. In each of the last four years over 60 per cent, of the butter and over 85 per cent, .of the cheese received at Los Angeles were produced outside of the state of California.
Then, too, dairy products produced from surplus milk compete directly with the dairy products produced from manufacturing milk and distributed in interstate commerce. This condition exists in Los Angeles. The testimony is that market milk produced for the Los Angeles market is greatly in excess- of the consumptive demand for milk in fluid form in that city. During 1933 the surplus milk received at the Los Angeles market and diverted into , manufacturing channels averaged 20,000 pounds daily. A considerable proportion of these dairy products manufactured in California are shipped in interstate commerce to the east and middle west for consumption. Thus, in 1932, 13 per cent, of the total United States .production of evaporated milk was produced in California. In addition, there was shipped from the Los Angeles sales area in foreign commerce large quantities of cream, butter, cheese, malted milk, ice cream mix, evaporated milk, and powdered skim milk.
The direct effect which fluctuations in the producers’ price of market milk have upon the producers’ price of milk processed into dairy products which move in interstate commerce to every state clearly appears from this evidence, which shows the relationship existing between the price of milk used for different purposes. The interdependence of the farm price of butterfat and the farm price of fluid milk sold at wholesale is evident. The same is true of the relationship between the price of butterfat and the wholesale price of butter. The testimony further shows that the relationship between the farm price of butterfat and the price paid producers of milk sold for manufacture of condensed and evaporated milk js very close, not only for the nation as a whole, but f.o.r each geográphical area in the country, so that fluctuations in the producers’ price of milk produced for consumption in the Los Angeles area directly. affects nation-wide interstate commerce *907in dairy products and the prices received hy farmers for the milk which goes into these dairy products.
Although the particular distributors interested in this action did not themselves handle milk or dairy products which physically moved in interstate commerce, it is plain that the regulation complained of is justified because the producers’ price of fluid milk distributed in the urban markets of the country, of which Los Angeles is one, has a direct and immediate effect upon the vast movement of butter, cheese and other dairy products in interstate commerce.
The fundamental purpose of the Agricultural Adjustment Act is to increase the price received by farmers for their products which move in interstate commerce. With respect to the dairy industry, this purpose could not be achieved without regulating the distribution of fluid milk in markets such as Los Angeles, even though such milk distributed in such areas does not itself move in interstate commerce. '
The question of price dominates trade between the states. The sale of milk in the Los Angeles area to that extent affects the country-wide price of milk, and thus affects interstate commerce.
A satisfactory price stabilization for milk and milk products cannot be achieved otherwise than through some plan such as outlined by the Secretary of Agriculture in the Agricultural Adjustment Act.
In its delegation of power to the Secretary of Agriculture the Congress did and intended to confer power upon the Secretary to effectuate the object to be attained, which included power over such intrastate commerce as was inextricably intermingled in the current of interstate commerce to the extent here shown.
To permit a few milk distributors operating in the Los Angeles sales area to enjoin the enforcement of the act as against them is to destroy the entire marketing plan, for it is obvious that any just and efficient plan for stabilization of market conditions cannot function if any small group in the industry is permitted to set it at naught.
The Supreme Court has sustained federal regulation of purely intrastate activities upon the ground that they burdened interstate commerce by adversely affecting the price of commodities which move in interstate commerce. Board of Trade of City of Chicago v. Olsen, 262 U. S. 1, 43 S. Ct. 470, 67 L. Ed. 839; Stafford v. Wallace, 258 U. S. 495, 42 S. Ct. 397, 66 L. Ed. 735, 23 A. L. R. 229.
There is another reason why this case should be reversed. Appellees have been conducting business under the Agricultural Adjustment Act and have accepted the benefits thereof. They have retained moneys collected under the authority of the act which admittedly is not theirs; they now seek to avoid accounting for this money by asserting that the act is unconstitutional. The temporary injunction granted in this case permits this procedure, which fails to find support either on sound morals or good law. One having accepted the benefits of a statute and having received money thereunder and for which he wrongfully refuses to account should not be permitted to restrain collection thereof by asserting the unconstitutionality of the law. By all principles of equity the money accepted by appellees under the act must be accounted for whether the act is constitutional or not. Wall v. Parrot Silver & Copper Co., 244 U. S. 407, 37 S. Ct. 609, 61 L. Ed. 1229; Booth Fisheries Co. v. Industrial Commission, 271 U. S. 208, 46 S. Ct. 491, 70 L. Ed. 908; North Dakota-Montana Wheat Growers’ Ass’n v. United States (C. C. A. 8) 66 F.(2d) 573, 578, 579, 92 A. L. R. 1484.
The order granting an interlocutory injunction should be reversed.