Court Opinion

ID: 9591958
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:09:08.51426+00
Date Added: 2024-06-11T09:19:44.238019
License: Public Domain

EDMONDS, J., Dissenting.
I do not know, nor do I consider it the judicial function to decide—as the majority of this court has done—that “producers and distributors of milk and the consuming public will benefit more under the protective wing of the act than they did under the destructive practices and influences” of free competition in the mik industry. Price fixing legislation is still in an experimental stage, and its ultimate worth as an economic policy is a question for the people of the state to decide. This court’s only duty is to determine whether the legislature, in the particular instance, has dealt with this complex subject within the bounds of organic law and whether the officers entrusted with its administration have followed the authority committed to them.
I am of the opinion that in one provision of the present Milk Control Act the legislature has surrendered too large a share of its powers to administrative action. It may be conceded that a legislative body may delegate to administrative officers the authority to determine facts which will put enactments into effect. (Dominguez Land Corp. v. Daugherty, 196 Cal. 468 [238 Pac. 703]; Brock v. Superior Court, 9 Cal. (2d) 291 [71 Pac. (2d) 209, 114 A. L. R. 127]; Field v. Clark, 143 U. S. 649 [12 Sup. Ct. 495, 36 L. Ed. 294] ; Hampton & Co. v. United States, 276 U. S. 394 [48 Sup. Ct. 348, 72 L. Ed. 624]) and to devise rules and incidental regulations which are necessary to implement and make effective the more general powers conferred. (United States v. Shreveport Grain & Elevator Co., 287 U. S. 77 [53 Sup. Ct. 42, 77 L. Ed. 175]; United States v. Grimaud, 220 U. S. 506 [31 Sup. Ct. 480, 55 L. Ed. 563].) But the purpose which the legislature seeks to accomplish and the standards by which that purpose is to be made effective must be stated with sufficient exactness to enable both the administrative agency and those affected by the law to understand the limits of administrative authority. *315(Tarpey v. McClure, 190 Cal. 593 [213 Pac. 983]; People v. Parks, 58 Cal. 624; Schechter Corp. v. United States, 295 U. S. 495 [55 Sup. Ct. 837. 79 L. Ed. 1570, 97 A. L. R. 947].) Undefined authority is objectionable not only because it may be abused, but also because it is referable to no legal standard by which abuse may be controlled.
By section 736 of the Milk Control Act, the director of agriculture is authorized to designate marketing areas “which he deems necessary or advisable to effectuate the purposes of this chapter and wherein he finds the conditions affecting the production, distribution and sale of fluid milk, fluid cream, or both reasonably uniform”. To my mind, this standard is so vague as to constitute no standard at all. The enforcement of the act in any particular area of the state and the determination of the size and location of such an area are matters which have been committed entirely to the unfettered discretion of the director. That such a delegation of power is unlawful seems to me to be too clear for argument. I am, therefore, of the opinion that the decision on this point in Jersey Maid Milk Products Co. v. Brock, 13 Cal. (2d) 620 [91 Pac. (2d) 577], is not in accordance with established law and should be overruled.
I also believe that in the conduct of the hearing upon order No. 40, by which minimum wholesale and retail prices were established, the director did not regularly pursue the authority conferred upon him by the act. The opinion of the majority of the court shows that in this hearing, as in the others, the director did not conceive it to be his duty to introduce any evidence to support the findings and order which he afterwards promulgated; in fact he refused to do so.
At the hearing which the director called, counsel for the milk producers requested “that the Department put on its ease briefly or in extenso so that we may have some appreciation of how these prices and regulations were arrived at and be prepared to answer them”. To this request the director replied: ‘ ‘ The Department has made a study of this particular area. We have with us information which you may delve into if you like. If you don’t oppose the Plan at this hearing, or call upon us to give evidence upon some particular point that you want, I can see no object in that. We will just waste that much time, whereas if we can get your objection then we might be able to meet it. I think we will save time *316by having your man take the witness stand, or you take it, and make the proposals at this time, and let us consider them. Then if you want to know why we arrived at the procedure or the particular section of the Plan you have in mind, we will be glad to show you why.”
To be sure, the director declared that his files were open for the examination of any one interested, and he invited those present to offer suggestions, objections or evidence concerning the proposed order. Moreover, the director’s experts, who had worked up the evidence upon which the order was based, were available for questioning by interested objectors, and through this opportunity a considerable amount of evidence of a desultory nature was extracted. But the fact remains that the director refused to present, even in a general way, the foundational facts upon which his specific findings and order were based.
The majority of the court justifies this procedure by calling the present hearing a “legislative” as distinguished from a “judicial” or “gitem'-judicial” hearing, from which it would follow that a hearing could be dispensed with entirely. To support this conclusion their opinion quotes at some length from Norwegian Nitrogen Products Co. v. United States, 288 U. S. 294 [53 Sup. Ct. 350, 77 L. Ed. 796], “The Assigned Car Cases”, 274 U. S. 564 [47 Sup. Ct. 727, 71 L. Ed. 1204], Highland Farms Dairy v. Agnew, 16 Fed. Supp. 575, State Board of Milk Control v. Newark Milk Co., 118 N. J. Eq. 504 [179 Atl. 116], and Baldwin v. Dellwood Dairy Co., 150 Misc. 762 [270 N. Y. Supp. 418]. These eases may be authority for the proposition that the legislature in drafting the present law was not required under the due process clause to provide for a full judicial hearing, but not one of them justifies the interpretation given the statute now before the court.
For example, Norwegian Nitrogen Products Co. v. United States, supra, involved provisions of the Tariff Act of 1922 which required the tariff commission to make investigations and hold private hearings and report to the President upon proposed changes in tariff rates. It was. held that in view of the history and background of the statute, the provision for a hearing did not require the commission to disclose secret trade information furnished to it in confidence. The decisions requiring public utility commissions to hold full public hearings in the exercise of their rate-making power were dis*317tinguished in this way: “The Tariff Commission advises; these others ordain. There is indeed a common bond that all alike are instruments in a governmental process which according to accepted classification is legislative, not judicial [citing cases]. Whatever the appropriate label, the kind of order that emerges from a hearing before a body with power to ordain is one that impinges upon legal rights in a very different way from the report of a commission which merely investigates and advises. . . . The Commerce Act, as it stands today, and kindred statutes in the states, are instinct with the recognition of a duty to give a hearing of such a kind that the courts will understand why a Commission has acted as it has if their supervisory powers are afterwards invoked for enforcement or revision. No such inference is to be drawn from the act now before us. ’ ’
In the present case the director ordains; he does not advise. Moreover, the California Milk Control Act, like the public utility rate-fixing statutes, and unlike the Tariff Act of 1922, contemplates a judicial review of the administrative orders. For these reasons, in my judgment, the present case should be decided in ’accordance with the principles in such decisions as Morgan v. United States, 298 U. S. 468 [56 Sup. Ct. 906, 80 L. Ed. 1288], St. Joseph Stock Yard Co. v. United States, 298 U. S. 38 [56 Sup. Ct. 720, 80 L. Ed. 1033], and Morgan v. United States, 304 U. S. 1 [58 Sup. Ct. 773, 999, 82 L. Ed. 1129], in which administrative action impinged directly upon legal rights through the fixing of rates for personal services. Assuming, however, that the regulation of the milk industry stands upon a different footing (Nebbia v. New York, 291 U. S. 502 [54 Sup. Ct. 505, 78 L. Ed. 940, 89 A. L. R. 1469]), the decisions of other jurisdictions interpreting particular milk control laws are not authority for a decision construing the very different terms of the California statute which contemplates the introduction of evidence by the director of agriculture to support an administrative order.
In the promulgation of an order establishing minimum wholesale and retail prices, the director is required first to investigate cost conditions in the distribution of milk and then after giving appropriate notice to “hbld one or more public hearings, take testimony and may subpoena witnesses”. All testimony received must be given under oath. A record of the proceedings must be kept and made available for the in*318spection of any interested person. The director is then required to make written findings determining that the prices which he proposes to establish comply with specified conditions and standards. All of these steps are conditions precedent to the issuance of the administrative order (sec. 736.12). Once made, such an order may be reviewed by any court of competent jurisdiction at the suit of any party substantially affected (sec. 735.6).
In my opinion these provisions clearly contemplate that no order shall be made by the director unless he shall present affirmative proof of facts justifying some action by him, and the particular requirements later made by his order must be reasonably supported by that evidence and any which may be offered in opposition to it. Any other procedure makes an empty form of the requirement for a hearing and an order based upon evidence and specific written findings. Moreover, it is only through such procedure that efficient judicial review of administrative orders may be had. As the court pointed out in Norwegian Nitrogen Products Co. v. United States, supra, an administrative hearing should be of “a kind that the courts will understand why a Commission has acted as it has”. If no evidence is introduced at the hearing, a reviewing court cannot decide whether a challenged order was justified unless there is produced before it the evidence which the administrative officer should have heard. The point finds apt illustration in the present proceedings.
Complaint is made that the retail carry-out price fixed by order No. 40 with respect to sales of milk in gallon lots is discriminatory because the differential is too slight between that price and the retail delivered price per gallon. Retailers who sell to the consumer at their stores in gallon lots claim that they cannot stay in business unless they can sell at a price substantially below the delivered price. There is some suggestion in the administrative record that the director was unable to secure cost statistics from gallon-lot retailers; at least there is no affirmative proof that the retail carry-out price per gallon was fixed with reference to the costs of such retailers. Section 736.12 requires that each particular price be “sufficient, but not more than sufficient, to cover all necessary costs, according to the method or type of distribution”. But upon the record made, no reviewing court can determine *319whether the director complied with the statute in this particular.
For these reasons, I am of the opinion that the judgment should be affirmed.
Rehearing denied.