Court Opinion

ID: 3576878
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:28:46.592585+00
Date Added: 2024-06-11T13:47:09.690810
License: Public Domain

Assuming but not deciding that the unadvertised differential provision is constitutional, is the provision limiting its application to dealers in the field "since April 10, 1933," reasonably adapted to the end to be accomplished, or does it go further and infringe arbitrarily and unreasonably upon the rights of the appellant and other dealers who have entered the business since that time and deny to them the equal protection of the laws? It is true that in a highly-organized society the liberty of each individual must yield to the public need when it appears that the interest of the public generally, as distinguished from that of a particular class, requires it, and when the means used are reasonably necessary for the accomplishment of the desired end, and are not unduly oppressive. (Lawton v. Steele,152 U.S. 133, 137; Colon v. Lisk, 153 N.Y. 188, 196; Wright v.Hart, 182 N.Y. 330.) To sustain such legislation under the police power, the courts must be able to find that it tends in some degree to prevent an evil or to preserve public health, morals, safety or welfare. When no such tendency is disclosed and the legislation impinges upon the liberty and interferes with the property of private citizens, the duty of the courts is to declare it invalid for undue interference with the right of a person to pursue unmolested and without unreasonable regulation any lawful calling which he may choose, has always been condemned under our form of government. (Lochner v. New York,198 U.S. 45.)
When we approach the case at bar from the standpoint of an individual who desires to enter the milk business, we find that the door is effectively closed to him. Denying the individual the price differential is as effective as a direct prohibition. *Page 18 
Mr. Justice CARDOZO in discussing the same Milk Control Law inHegeman Farms Corp. v. Baldwin (293 U.S. 163, 169), said: "What is fixed is a minimum only. None the less, the competition among dealers is so keen that in practice the legal minimum is the maximum that the appellant [an unadvertised dealer] is able to charge." (Words in brackets inserted.)
The basic purpose of the Milk Control Law was to afford protection and assistance to the farmers. The only claimed reason for the price differential was to prevent the price fixing provisions forcing the unadvertised dealer out of business, leaving complete control in the hands of the advertised dealers. The limitation on the number of unadvertised dealers, however, is of no benefit to the farmer, nor does it tend to preserve thestatus quo, or protect competitive conditions or opportunities existing just prior to the enactment of the Milk Control Law. On the contrary, this time provision limits the field of distribution for the farmer by limiting the number of independent dealers. Nor does the requirement in any way tend to prevent monopolistic control by the advertised dealers.
It is claimed that the differential in price is necessary for the preservation of the independent milk distributor for, if the price charged by all were the same, those doing business under a well-advertised name would tend to absorb the entire market. When the Legislature went further and conferred the additional benefit of a monopoly on those unadvertised dealers already in the business by preventing any newcomer from entering, they gave an advantage to the independent dealer which went far beyond the requirements of the circumstances. It transforms the provision from one aimed to prevent a monopoly by the well-advertised dealers into one creating a monopoly by the unadvertised dealers.
On the one hand, by the differential an attempt is made to preserve competitive conditions as they existed before the statute, and yet, on the other hand, it abolishes and *Page 19 
wipes out competitive conditions by prohibiting the normal and natural emergence of new dealers into the field. This provision might have provided for one set of qualifications for milk dealers who were engaged in business prior to April 10, 1933, and another and more stringent set for those who came in thereafter. The Legislature might have provided for stricter regulations concerning different classes of milk dealers. (Watson v.Maryland, 218 U.S. 173; People v. Griswold, 213 N.Y. 92;Spector v. Building Inspector, 250 Mass. 63.) The regulations could be validly based on conditions, as for example, the grades of milk sold, and the character of distribution. To prescribe qualifications for entrance into the business or to prescribe regulations covering the different classes, is entirely different from proscribing, in effect, the right to engage in such business altogether. The record shows that the identical brand of milk sold by appellant is sold by several other independent milk dealers, competitors of appellants, to the same class of retailers in the same stores and on the same streets. Why should the appellant have to charge one cent more per quart for his milk than his competitors charge? The appellant is in the same class with these competitors. Why the unfair discrimination? Without any apparent justification it discriminates between one entering the milk business prior to April 10, 1933, and a dealer entering on the next day. One looks in vain to find a reason for this discrimination. The only reason given is that the Legislature did not wish to increase or intensify the competition against the advertised dealers by permitting new dealers to join the class of the unadvertised dealers. In other words, a monopoly was given to the unadvertised dealers so as not to increase the competition against the advertised dealers. Is it not apparent that this reason is in fact no reason at all and is only given in an attempt to justify an unjustifiable discrimination? Another reason given is that the advertised dealers might permit their subsidiaries to enter *Page 20 
the field of the independent dealer. As the only justification for the differential against the advertised dealer is the potent sales appeal of the well-advertised name, no reason remains when the company sells the milk under another name. Thus does the monopoly given to the independent dealers stand without justification or reason.
Peculiarly applicable to the case at bar is the language which appears in Matter of Pell (171 N.Y. 48, at p. 59): "The learned counsel for the appellant states a very apt illustration in his brief, as follows: `We often hear it declared that the legislature may designate watches and carriages as a class of property and subject the same to the payment of duties and taxes, but would anyone claim that a law, declaring that all watches or carriages which were purchased prior to June 30, 1885, should be appraised and taxed, could be sustained upon the ground that such law merely designated a class of property for taxation?' Where the statute declares that the owners of a particular class of property, acquired at a particular time, shall be taxed, it is equivalent to naming the owners of such property; it is in no sense a general classification."
Just as watches are watches and carriages are carriages, regardless of when acquired, so are milk dealers selling unadvertised brands of milk, milk dealers selling unadvertised brands of milk, regardless of when they entered the milk business. If this time provision is valid then a similar provision would be valid which designates more exactly those intended to be benefited. Also such a monopolistic class as named by this statute will tend continually to become narrower and thus destroy itself and tend to play more into the hands of the advertised dealers because of this very provision shutting the door absolutely against newcomers in the field. Therefore, the general public will suffer from this monopoly given to the independent dealer.
Thus the statute by reason of the insertion of this time limitation not only makes a present of a monopoly to the *Page 21 
independent dealer, but in addition is foreign to the purpose of the law, which is alleged to be an attempt to preserve competitive conditions.
The presumption which attaches in favor of legislative action is of no avail where it is evident that the classification established by the statute is arbitrary. (Borden's Farm ProductsCo. v. Baldwin, 293 U.S. 194, 209, 210; Smith v. Cahoon,283 U.S. 553; Southern Ry. Co. v. Greene, 216 U.S. 400, 417.)
Although the time limitation clause is unconstitutional as denying to the appellant the equal protection of the laws, this does not require that the entire provision be declared a nullity. The section contained a separability clause and it is only necessary to delete the offending clause, viz., "since April 10, 1933." With the arbitrary time limitation excised from the unadvertised differential provision, the appellant will assume its rightful place in the class of milk dealers selling unadvertised milk and be able to meet the competition if it can, not only of the well-advertised dealers, but also of the unadvertised dealers who already have an established business and are selling the same product in the same territory as the appellant. Thus will the arbitrary, unreasonable and invalid time limitation be destroyed and at the same time the original purpose of the law, to protect the milk producer, to preserve competition and to stabilize milk prices, be promoted and safeguarded.
The order of confirmation of the Appellate Division should be reversed and the determination of the respondents should be annulled.
LEHMAN, CROUCH and LOUGHRAN, JJ., concur with HUBBS, J.; O'BRIEN, J., concurs in result on the authority of People v.Nebbia (262 N.Y. 259; affd., 291 U.S. 502); FINCH, J., dissents in opinion, in which CRANE, Ch. J., concurs.
Order affirmed. *Page 22