Court Opinion

ID: 9653274
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:42:39.786067+00
Date Added: 2024-06-11T18:12:57.476714
License: Public Domain

MeDERMOTT, Circuit Judge (concurring).
I concur in the decision of this case. My first impression, as to both points involved, was contrary, and I take the liberty of stating the reasons that induced my change of opinion.
The extent of the power to regulate private business is dependent largely upon the evil aimed at. The remedy should have a direct relation to the disease. Dishonest methods, -inaccurate weights, unfair discrimination, and many other abuses are subject to legislative correction. Merchants’ Exchange v. Missouri, 248 U. S. 365, 39 S. Ct. 114, 63 L. Ed. 300; House, v. Mayes, 219 U. S. 270, 31 S. Ct. 234, 55 L. Ed. 213; Brodnax v. Missouri, 219 U. S. 285, 31 S. Ct. 238, 55 L. Ed. 219; McLean v. Arkansas, 211 U. S. 539, 29 S. Ct. 206, 53 L. Ed. 315; Cargill Co. v. Minnesota, 180 U. S. 452, 21 S. Ct. 423, 45 L. Ed. 619. That abuses exist which require and justify some appropriate regulation, does not in itself authorize the state to take over the control of the business. In the Wolff Packing Company Case, 262 U. S. 522, at page 539, 43 S. Ct. 630, 634, 67 L. Ed. 1103, 27 A. L. R. 1280, the court said: “To say that a business is clothed with a public interest is not to determine what regulation may be permissible in view of the private rights of the owner. The extent to which an inn or a cab system may be regulated may differ widely from that allowable as to a railroad or other common carrier. It is not a matter of legislative discretion solely. It depends on the nature of the business, on the feature which touches the public, and on the abuses reasonably to be feared. To say that a business is clothed with a public interest is not to import that the public may take over its entire management and run it at the expense of the owner.”
The question presented by this record is not whether the state has power to regulate in some respects; the question is, Does it have power to fix the price for the service, and to deny a 'person the right to enter the ginning business ? In the theater ticket ease (Tyson v. Banton, 273 U. S. 418 at page 431, 47 S. Ct. 426, 428, 71 L. Ed. 718, 58 A. L. R. 1236) the court said: “The latter power is not only a more definite and serious invasion of the rights of property and the freedom of contract, but its exercise cannot always be justified by circumstances which have been held to justify legislative regulation of the manner in which a business shall be carried on.”
Eor the state to say to one of its citizens that he may not erect a gin on his own land, and gin his neighbor’s cotton for a price agreeable to himself and his neighbor, is an heroic remedy, which should only be resorted to in situations where less drastic remedies will not do.
As I see this case, if the power to fix prices is to be sustained, it must be because the husiness'has been devoted to a public use, that is, within the third of the three classes designated by the late Chief Justice in the Wolff Packing Company Case. But even within that class, I feel that we cannot say that the state can take over a business because it is essential to the public, for that would include doctors, tailors, groeerymen, and many other businesses which all concede today to be private; nor is it enough that the business is that of processing, or using property to render service for another, for that would include lauhdries, wheat threshers, the advertising columns of the newspapers, and many others. Whether there is any one test that can he applied in determining whether a business falls within that third elass, I do not know. Ordinarily, at least, I feel that before a business should he so classified, it should appear that it offered to serve all who came, and that it is either a “natural” monopoly, that is, that any competition in such business is economically wasteful, or that there is an absence of both actual and potential competition.
As to whether the situation calls for the' drastic remedy of price regulation, the judgment of the legislative body should be final, if reasonable doubt exists about the matter. Adkins v. Children’s Hospital, 261 U. S. 525, 544, 43 S. Ct. 394, 67 L. Ed. 785, 24 A. L. R. 1238. At first blush, I. could see no reasonable ground for regulating the price of the service of ginning cotton, where competition, actual and potential, was unrestricted. More mature consideration raises a doubt in my mind as to whether, at least in parts of Oklahoma, competition is not more apparent than real; and as to whether the economic situation of the cotton grower was not a serious factor in the problem. The Legislature of Oklahoma which passed this law understood the situation better than I do; I am not apprised of the conditions which confronted the Legislature in 1915. Furthermore, for fifteen years the state has exercised the power without challenge. If this act is an unwarranted invasion of private right, it seems fair *852to assume that the validity of the legislation would have been long since challenged. Long public acquiescence should, and does, greatly strengthen the presumption of constitutionality. 12 C. J. 798, and eases there cited. Officials of both the cotton ginners’ association and the cotton growers’ association indorse the law. Under such circumstances, I have concluded that we should assume that conditions existed which justified the drastic remedy prescribed by the Legislature.
In an opinion written by me in a three-judge ease [Owens v. Corporation Commission, 41 F.(2d) -] I treated the 1929 amendment as valid. The question was not briefed, and was but incidentally in issue; from a reading of the statute, I assumed the intent was to exempt those who ginned their own cotton, either in person or through a corporation. The possibilities of abuse that lurked in the statute did not occur to me. I thought then, and think now, that the Legislature has power to classify genuine co-operative associations or corporations; one who gins his own cotton, or a group of growers who incorporate for the purpose of ginning their cotton, may be fairly and differently classified from those who gin cotton primarily for profit. But the 1929 amendment is not so drawn as to confine the exemption to co-operative enterprises. There are no real limitations in it. The defendant is not a cooperative concern at all; it is a commercial enterprise; on its present plan, when working to capacity, $24,850 of its $25,000 capital will be owned by a commercial ginner, who grows cotton as a side line, or to enable him to gain exemption from the regulation to which other commercial ginners are subject. It is %o of 1 per cent, co-operative, and that is not enough. Because it is not in fact and truth a co-operative concern, and because the amendment permits of such a subterfuge, and for that reason alone, I agree the amendment cannot stand.