Court Opinion

ID: 9703482
Source: CourtListenerOpinion
Date Created: 2023-08-25 23:58:18.724452+00
Date Added: 2024-06-11T18:21:49.743138
License: Public Domain

YANKWICH, District Judge
(dissenting).
The control of the Congress over interstate commerce, United States Constitution, Art. I, § 8, Cl. 3, being absolute, any direct interference with it by any State must give way. But this Congressional primacy does not stand in the way of regulations by the States, through the exercise of their taxing or police powers, which, although local in their nature, affect interstate commerce. See The Minnesota Rate Cases, 1913, 230 U.S. 352, 399, 33 S.Ct. 729, 57 L.Ed. 1511, 48 L.R.A.,N.S., 1151, Ann.Cas.1916A, 18; Milk Control Board v. Eisenberg Farm Products, 1939, 306 U.S. 346, 351, 59 S.Ct. 528, 83 L.Ed. 752; United States v. Rock Royal Co-Op., 1939, 307 U.S. 533, 569, 59 S.Ct. 993, 83 L.Ed. 1446; Mulford v. Smith, 1939, 307 U.S. 38, 48, 59 S.Ct. 648, 83 L.Ed. 1092.
In a recent case (California v. Thompson, 1941, 61 S.Ct. 930, 932, 85 L.Ed. -), Mr. Justice Stone has stated the extent of compatibility of state regulation with national supremacy in the field of interstate commerce in these words:
“As this Court has often had occasion to point out, the Commerce Clause, in conferring on Congress power to regulate commerce, did not wholly withdraw from the states the power to regulate matters of local concern with respect to which Congress has not exercised its power, even though the regulation affects interstate commerce. Ever since Wilson v. Blackbird Creek Marsh Co., 2 Pet. 245, 7 L.Ed. 412, and Cooley v. Board of Port Wardens, 12 How. 299, 13 L.Ed. 996, it has been recognized that there are matters of local concern, the regulation of which .unavoidably involves *903some regulation of interstate commerce, but which because of their local character and their number and diversity may never be adequately dealt with by Congress. Because of their local character, also, there is wide scope for local regulation without impairing the uniformity of control of the national commerce in matters of national concern and without materially obstructing the free flow of commerce which were the principal objects sought to be secured by the Commerce Clause. Notwithstanding the Commerce Clause, such regulation in the absence of Congressional action has, for the most part, been left to the states by the decisions of this Court, subject only to other applicable constitutional restraints. See cases collected in Di Santo v. Pennsylvania, supra, 273 U.S. [34] 40, 47 S.Ct. 267, 71 L. Ed. 524.”
When we consider Congressional regulation of interstate commerce, we must, as students of late juristic trends, concede that recent decisions, such as those sustaining the National Labor Relations Act, 29 U.S. C.A. § 151 et seq. (National Labor Relations Board v. Jones-Laughlin Corp., 1937, 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893, 108 A.L.R. 1352) and the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq. (United States v. Darby, 1941, 312 U.S. 100, 61 S.Ct. 451, 85 L.Ed.-, 132 A.L.R. 1430), extend the power of the Congress to dominate purely local conditions, through the exercise of its absolute control over interstate commerce. 1
But this does not mean that because a product is destined for interstate commerce, or a business aims at interstate commerce, it is, by this very fact, without the ambit of state regulation. Carriers or persons engaged in transportation in interstate commerce may be subjected to many state regulations. See their enumeration by Mr. Justice Stone in California v. Thompson, 1941, 61 S.Ct. 930, 85 L.Ed. -. So, also, may the taxing power of a state be used to tax products originating in, or intended for, interstate commerce, either before leaving the state or after reaching it. See Henneford v. Silas Mason Co., 1937, 300 U.S. 577, 57 S.Ct. 524, 81 L.Ed. 814; Ford Motor Company v. Beauchamp, 1939, 308 U.S. 331, 60 S.Ct. 273, 84 L.Ed. 304; Felt & Tarrant Manufacturing Co. v. Gallagher, 1939, 306 U.S. 62, 59 S.Ct. 376, 83 L.Ed. 488; Pacific Tel. & Tel. Co. v. Gallagher, 1939, 306 U.S. 182, 59 S.Ct. 396, 83 L.Ed. 595; McGoldrick v. Berwind-White Co., 1940, 309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. 565, 128 A.L.R. 876.
While the rigid distinction between production and commerce no longer holds in so far as the exercise of congressional restraint and regulation is concerned, (See United States v. Darby, 1941, 312 U.S. 100, 61 S.Ct. 451, 85 L.Ed. —, 132 A.L.R. 1430), it is still maintained when we come to assay the exercise of state powers. In a leading case on the subject, (Heisler v. Thomas Colliery Co., 1922, 260 U.S. 245, 43 S.Ct. 83, 86, 67 L.Ed. 237), Mr. Justice McKenna stated the principle in these words:
“We may, therefore, disregard the adventitious considerations referred to and their confusion, and by doing so we can estimate the contention made. It is that the products of a state that have, or are destined to have, a market in other states are subjects of interstate commerce, though they have not moved from the place of their production or preparation.
“The reach and consequences of the contention repels its acceptance. If the possibility, or indeed certainty, of exportation of a product or article from a state determines it to be in interstate commerce before the commencement of its movement from the state, it would seem to follow that it is in such commerce from the instant of its growth or production, and in the case of coals, as they lie in the ground. The result would be curious. It would nationalize all industries, it would nationalize and withdrazv from state jurisdiction and deliver to federal commercial control the fruits of California and the South, the wheat of the West and its meats, the cotton of the South, the shoes of Massachusetts and the woolen industries of other states at the very inception of their production or growth, that is, the fruits unpicked, the cotton and wheat ungathered, hides and flesh of cattle yet !on the hoof/ wool yet unshorn, and coal yet unmined because they are in varying percentages destined for and surely to be exported to states other than *904those of their production.” Heisler v. Thomas Colliery Co., 1922, 260 U.S. 245, 259, 43 S.Ct. 83, 67 L.Ed. 237. (Italics added.)
And see Veazie v. Moor, 1852, 14 How. 568, 573, 574, 14 L.Ed. 545; Kidd v. Pearson, 1888, 128 U.S. 1, 20, 21, 9 S.Ct. 6, 32 L.Ed. 346; Oliver Iron Co. v. Lord, 1923, 262 U.S. 172, 178, 179, 43 S.Ct. 526, 67 L. Ed. 929.
The act there before the Court subjected every ton of anthracite coal mined “washed, screened, or otherwise prepared for market” in the state to a one and one-half percent tax of its value when prepared for market, to be assessed after it is prepared as indicated and “is ready for shipment or market.” Penn.Laws, 1921, page 479, 72 P.S.Pa. § 2501.
Here was a product, anthracite coal, on which many states depended at the time, for fuel, found only in a small number of counties in the State of Pennsylvania, and, from its very nature, destined for interstate commerce the moment it left the mine. Here was a tax, the effect of which made the cost of production greater and sale in interstate commerce more burdensome. Yet the Court could see in it no assault upon federal supremacy in the realm of interstate commerce.2
I can see no escape from this conclusion.
Unless we are ready to say that the recent decisions extending congressional power to regulate local conditions, through the exercise of control over interstate commerce, have destroyed the power of the States to deal with products of agriculture or manufacture which are destined for interstate commerce before they actually enter the flow of that commerce. Even the most extreme of the newer federalists would not go so far. See Walton H. Hamilton and Douglass Adair, 1937, The Power to Govern; Edward Corwin, 1926, The Commerce Power versus State Rights; Edward Corwin, 1941, Constitutional Revolution Limited.
The thoughts just expressed find support in Champlin Refining Co. v. Commission, 1932, 286 U.S. 210, 52 S.Ct. 559, 76 L.Ed. 1062, 86 A.L.R. 403, which involved the Oklahoma oil prorate law. It is true that oil, being a natural resource, allows, constitutionally, broader regulation both federal and state, than other products of industry or agriculture. And the Court said so. However, the Court, while giving its sanction to the State’s regulation upon that score, also dealt specifically with its relation to the interstate commerce clause. And, in finding no conflict with it, the Court did not place its decision upon the character of oil as a natural resource. It determined the case upon the ground that the law was a regulation of production before oil entered the flow of interstate commerce. And it found it unobjectionable, although the oil was intended for interstate shipment. The Court said:
“Plaintiff contends that the act and pro-ration orders operate to burden interstate commerce in crude oil and its products in violation of the commerce clause. * * * It is clear that the regulations prescribed and authorized by the act and the proration established by the commission apply only to production and not to sales or transportation of crude oil or its products. Such production is essentially a mining operation, and therefore is not a part of interstate commerce, even though the product obtained is intended to be and in fact is immediately shipped in such commerce. Oliver Iron Co. v. Lord, 262 U.S. 172, 178, 43 S.Ct 526, 67 L.Ed. 929; Hope Gas Co. v. Hall, 274 U.S. 284, 288, 47 S.Ct. 639, 71 L.Ed. 1049; Foster Packing Co. v. Haydel, 278 U.S. 1, 10, 49 S.Ct. 1, 73 L.Ed. 147; Utah Power & Light Co. v. Pfost, supra [286 U.S. 165, 52 S.Ct. 548, 76 L.Ed. 1038], No violation of the commerce clause is shown.” Champlin Refining Co. v. Commission, 1932, 286 U.S. 210, 235, 52 S.Ct. 559, 565, 76 L.Ed. 1062, 86 A.L.R. 403. (Italics added.)3
*905In effect, this means that the nature of a product does not determine its availability as an object of state legislative control outside of the inhibition of the commerce clause. Rather must the question be determined in the light of the facts in each case. A state embargo upon a product is forbidden. See Lemke v. Farmers’ Grain Co., 1922, 258 U.S. 50, 42 S.Ct. 244, 66 L. Ed. 458; Shafer v. Farmers’ Grain Co., 1925, 268 U.S. 189, 45 S.Ct. 481, 69 L.Ed. 909; Baldwin v. Seelig, 1935, 294 U.S. 511, 55 S.Ct. 497, 79 L.Ed. 1032, 101 A.L.R. 55. But state enactments or programs which affect, indirectly, either through regulation or taxation, the quantity of a product available for use in interstate commerce before it enters it, do not, as I read the cases, impinge upon the commerce clause.4 To hold otherwise is to bring about the conditions which Mr. Justice McKenna envisaged in Heisler v. Thomas Colliery Co., supra. It is to remove every product, the sale of which is ultimately an interstate act, from local control. For if every regulation which may affect the quantity of the product available for interstate shipment be violative of the commerce clause, state statutes regulating the quantity and conditions of production of an article of commerce, or the wages or hours and conditions of labor of employees producing it, must go by the board. And the reason is obvious. For such legislation, from an economic standpoint, ultimately affects production. It increases the burden upon production and discourages those who consider the burden oppressive from engaging in such enterprise.
And this is true, whether we consider restrictions on working hours of men (California Labor Code, St.Cal.1937, p. 205 et seq., §§ 510-856) or of women and children (California Labor Code, §§ 1171-1398, p. 213 et seq.) regulations of the manner of payment of wages (California Labor Code, §§ 200-452, p. 201 et seq.), minimum sanitation requirements (California Labor Code, §§ 2330-2425, p. 253 et seq.), or laws establishing employers’ liability (California Labor Code, §§ 3201-6002, p. 265 et seq.), or decreeing safety devices (California Labor Code, §§ 6300-7601, p. 306 et seq.).
They all increase cost and, therefore, diminish the quantity of production. It is also axiomatic that free, unregulated, anarchic enterprises attract the intrepid and adventurous in the economic field more readily than strictly controlled ventures. Control thus diminishes production in existing establishments and discourages increase in the number of enterprises.
It follows that if the fact that a product is destined for interstate commerce, automatically places it without the scope of state control, then control of the type enumerated is immediately nullified.
To bring these thoughts to bear upon the problems before us.
Raisins as produced by the grower, through the drying and sweating process, from grapes grown on his land, are not an article of commerce. They are not ready for shipment or market. Nor are they fit for human consumption. Before they may be served as human food, the packers must process them through a complicated process. This alone makes them palatable and fit for use. The State of California has undertaken, through this legislation, and the program intended to carry it into effect, to impose certain regulations, to pool a portion of the crop and to restrict free sales as between the growers and the packers. This program, which derives its sanction from *906the assent of the growers, deals entirely with raisins before they enter the flow of interstate commerce. I grant that its effect rs to restrict freedom of action in dealings between growers and packers within the state. If this result in making raisins unavailable to recusants like the plaintiff, except upon compliance with certain conditions, this is no more a direct burden on interstate commerce than was the tax on anthracite coal (Heisler v. Thomas Colliery Co., supra), without the payment of which no anthracite coal was available for shipment in interstate commerce, or the curtailment of oil production, through pro-ration, (Champlin Refining Co. v. Commission, supra), which reduced directly the quantity of oil available for shipment in interstate commerce.
Hence my dissent from the conclusion reached by my colleagues.

 These decisions overrule all the cases, such as Hammer v. Dagenhart, 1918, 247 U.S. 251, 38 S.Ct. 529, 62 L.Ed. 1101, 3 A. L.R. 649, Ann.Cas.1918E, 724, and Carter v. Carter Coal Co., 1930, 298 U.S. 238, 56 S.Ct. 855, 80 L.Ed. 1160, which, if followed, would have made it impossible for the Congress to influence, by indirect regulation, industrial relations within state confines.

 This ease was decided after Lemke v. Farmers’ Grain Co., 1922, 258 U.S. 50, 42 S.Ct. 244, 66 L.Ed. 458, upon which my associates’ finding of unconstitutionally of the raisin program is chiefly bottomed. And the opinion was written by the same justice, Mr. Justice McKenna. The principles it declares have never been questioned. Some of the later eases in which it is cited or followed are: Oliver Iron Co. v. Lord, 1923, 262 U.S. 172, 179, 43 S.Ct. 526, 67 L.Ed. 929; United Leather Workers’ International Union v. Herkert & Meisel Trunk Co., 1924, 265 U.S. 457, 465, 44 S.Ct. 623, 6S L.Ed. 1104, 33 A.L.R. 566; Hope Gas Co. v. Hall, 1927, 274 U.S. 284, 288, 47 S.Ct. 639, 71 L.Ed. 1049; McGoldrick v. Berwind-White Co., 1940, 309 U.S. 33, 47, 60 S.Ct. 388, 84 L.Ed. 565, 128 A.L.R. 876.

 The California Agricultural Prorate Act was enacted on June 5, 1933, St.1933, p. 1969, after the decision in Champlin *905Refining Co. v. Commission, 1932, 286 U. S. 210, 52 S.Ct. 559, 76 L.Ed. 1062, 86 A. L.R. 403, which was filed on May 16, 1032. It was modeled after the Oklahoma Oil prorate statute which the Court had before it in that case. Its definition of “waste” is almost identical with that in the Oklahoma Statute. It reads:
“The terms ‘agricultural waste’ — in addition to their ordinary meaning — shall include economic waste, and waste incident to the harvesting and/or preparation for any delivery to market of agricultural commodities in excess of reasonable market demands.” (Calif.Stats.1933, Ch. 754, Sec. 2, as amended by St.1935, p. .1527 (b) (Italics added.)
The definition of waste in the Oklahoma Statute, 52 Okl.St.Ann. § 273 (as found in a footnote to page 223 of 286 U.S., 52 S.Ct. at page 560 of the opinion) reads:
“That the term ‘waste’ as used herein, in addition to its ordinary meaning, shall include economic waste, underground waste, surface waste, and waste incident to the production of crude oil or petroleum in excess of transportation or marketing facilities or reasonable market demands.” (Italics added.)

 A very recent illustration of judicial sanction for a state regulation of the handling of what might be called an inherently interstate commodity, tobacco, is found in Townsend v. Yeomans, 1937, 301 U.S. 441, 57 S.Ct. 842, 81 L.Ed. 1210.