Court Opinion

ID: 9419059
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:45:15.588168+00
Date Added: 2024-06-11T17:22:14.837377
License: Public Domain

Mr. Justice Roberts,
dissenting.
In Nos. 772, 809 and 865* I have expressed my views as to the unconstitutionality of the provisions of the Agricultural Marketing Agreement Act of 1937 here involved, in view of their attempted delegation of legislative powers. That matter is not pressed in the present cases and I need not here advert to the subject. I am of opinion, nevertheless, that Order No. 27 is not, in the respects to be discussed, authorized by the Act, but if it is authorized, deprives the appellees of their property without due process of law in violation of the Fifth Amendment.
This conclusion is based upon findings of fact of the District Court. While the findings in question are the subject of assignments of error, the appellants failed, either in brief or in oral argument, to point out that they lack substantial support in the evidence. Examination of the record discloses that these findings are based on uncontradicted testimony, authentic documentary evidence, and a stipulation of the parties. They should, therefore, be accepted here. They may briefly be recapitulated.
Under the terms of the Act and the order, all of the appellees are handlers and the Dairymen’s League Cooperative Association, the appellant in No. 827, is likewise a handler. By Art. VII, § 1, of the order, on or before the 25th day of each month, each handler which is not a cooperative association of producers is required to pay to each producer the uniform price fixed by the order for all milk delivered by the producer during the preceding month which was sold in the marketing area. The cooperative associations which are handlers are not required *584to make payment for similar milk at the uniform price or at any stated price. Art. VII, § 8, requires all handlers, on or before the 18th day of each month, to pay to the ■market administrator for the Producer Settlement Fund “the amount by which his net pool- obligation for the preceding month is greater than the amount obtained by multiplying the net pooled milk of such handler by the uniform price.” Thus each handler is required to pay into the fund for all milk used in the marketing area the difference between $2.45 per cwt. and the uniform price for all Class I milk. Handlers selling milk received from producers in the production area, but marketed outside the marketing aréa, (denominated “unpriced milk”) are not required to pay a uniform price for such milk or to pay into the fund the difference between the uniform price and the actual market value of such milk, or any fixed amount in respect thereof. They are permitted to blend prices paid or purported to have been paid for unpriced milk with the uniform price announced by the Administrator for milk sold in the marketing area, thereby reducing the actual price paid by them for milk sold in the marketing area'in competition with other handlers who sell milk only in that area. In a pamphlet issued by the Secretary, the provisions of the order are so construed and the method of accounting is described as follows:
“Thus, the handler may multiply, the, total pounds of milk sold by it in the area by the uniform price;' multiply the total pounds of milk sold in other markets and which is called ‘unpriced milk’ by ‘such prices as it sees fit;’ add the totals, and divide by the total pounds of milk, to obtain the average of ‘blended’ price paid producers for all milk. If the price figured by the handler for unpriced milk, is lower than its actual market value, the handler, by blending, is thereby permitted to pay producers for all milk at less than the Order price, and less than the actual value thereof.”
*585The appellees’ receiving stations in the production area supply the marketing area defined by the order. The appellee, Jetter Dairy Company, sells milk in competition with dealers operating milk receiving stations in the production area in New York, who ship milk received at their stations to the marketing area. Other appellees buy milk which is sold to independent dealers in competition with milk received at the other stations in the producing area. Several of the appellees’ largest competitors, including the Dairymen’s League Cooperative, sell large proportions of their milk outside the marketing area in northern New Jersey. The Milk Control Board of New Jersey fixed á base price of $2.76 per cwt. to producers for 3.5 milk f. o. b. country milk plants, which price was in effect during the period covered by the order. The same Board fixed wholesale prices from dealers to stores at eleven cents per quart, bottled in glass, in two rural districts, and twelve cents per quart, in glass, in three heavily populated districts, and fixed a minimum price to consumers out of stores in the two rural districts of twelve cents per quart and, in the more heavily populated districts, of thirteen cents per quart. No resale prices are fixed in the marketing area either from dealers to stores or from stores to consumers. The fair market value of “unpriced” Class I milk produced in the production area, and sold by handlers in New Jersey, during the period the order was in force, was $2.76 per cwt.
Whereas the uniform price for 3.5 milk fixed by the Administrator was, for September, $1.87, October, $1.91, and November, $2.10 per cwt., the'Dairymen’s League paid its producers a base price for the same milk, in the same zone, for September, $1.75, for October, $1.81, and, for November, $2.01 per cwt. Thus the difference between the value of Class I milk sold by the Dairymen’s League in New Jersey, and the prices paid for the same' to producers per cwt., was, in September, $1.01, in Oc*586tober, $.95, and, in November, $.75.. $1.01 per cwt. on 10,208,500 pounds of milk sold in New Jersey by the Dairymen’s League amounts to $103,105.85.
Sheffield Farms Company, a competitor of the appel-lees, utilized, in September, 1938, 40,083,075 pounds of Class I milk in New York State and 6,426,443 pounds of milk in New Jersey, as well as milk in other markets. For out of market or hnpriced milk the company negotiated, with its producers to pay the uniform order price for such out of market, milk. The base price paid was, therefore, $1.87, or eighty-nine cents per cwt. less than the price fixed by the New Jersey Control Board. The difference-amounted to $57,194.96, or 14.27 cents per cwt. on such milk' and the price paid for Class I milk was reduced by that amount. Similar spreads are shown in the company’s purchases for October, 1938.
Based upon these facts, the court further finds that prices paid to producers delivering to handlers, whether cooperative or proprietary, which sell fluid milk in the marketing area, and also in the State of New Jersey and other markets, are less than the actual' value of the milk delivered, due to the process of blending prices for milk sold outside of the marketing area, which.bear no true relation to the actual value thereof, with prices charged for milk sold in-the area.
It is evident from the terms of the order, and the Secretary’s construction of it, that handlers who use “un-priced” milk may fix any price they choose to fix for it. Thus, contrary to the requirement of § 8c (5) (A), of the statute, all.producers do not receive a uniform price for milk. This is a necessary effect of the provision permitting the blending of the price paid producers for milk sold in the marketing area and an arbitrary price fixed for “unpriced” milk. The effect upon a handler whose trade is solely in the marketing area is disastrous. The lower price paid by those who are permitted to blend makes it possible for them to resell the milk in the mar*587keting area, in which no resale price is fixed, at a cut rate which is destructive of their competitors’ business. And there is evidence that handlers, cooperative and proprietary, have taken advantage of the terms of the order to cut the price of milk to consumers in the marketing area to the disadvantage of their competitors.
The appellants make no answer to the appellees’ attack on this feature of the order. The opinion of this court states that the detriment to the smaller handlers who sell milk for use only in the marketing area is the result of competitive conditions which the order does not affect. But it is evident that the order freezes the minimum price which is to be paid by many handlers and leaves the price of other handlers who compete with them open to reduction by the device of blending.
There is nothing in the Act which authorizes the discrimination worked by the order permitting handlers, whether proprietary or cooperative, to blend the prices of unpriced milk with that of milk, sold in the marketing area. Section 8c (5) (F), as I read it, prohibits such a practice by cooperatives. If the order had provided that milk sold in New Jersey should be accounted for to the pool at its actual value and had the milk so sold been accounted into the pool, competitors could not have obtained the advantage which, so seriously injures the business of appellees. As the order is drawn and administered it inevitably tends, to destroy the business' of smaller handlers by placing them at the mercy of their larger competitors. I think no such arrangement was contemplated by the Act, but that, if it was, it operates to deny the appellees due process of law.
I think that the decree should be affirmed.
The Chief Justice joins in this opinion so far as it relates to the invalidity of the order on the ground stated; Mr. Justice McReynolds and Mr. Justice Butler also join in this opinion.

H. P. Hood & Sons, Inc. v. United States, post, 588, 603.