Great A&P Tea Co., Inc. v. Cottrell
424 U.S. 366 (1976)

Annotate this Case

U.S. Supreme Court

Great A&P Tea Co., Inc. v. Cottrell, 424 U.S. 366 (1976)

Great Atlantic & Pacific Tea Co., Inc. v. Cottrell

No. 74-1148

Argued December 1, 1975

Decided February 25, 1976

424 U.S. 366

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF MISSISSIPPI

Syllabus

A Mississippi regulation provides that milk and milk products from another State may be sold in Mississippi only if the other State accepts milk or milk products produced and processed in Mississippi on a reciprocal basis. Appellant's application for a permit to distribute for sale at its retail outlets in Mississippi milk and milk products from its Louisiana processing plant was denied solely on the ground that Louisiana had not signed a reciprocity agreement with Mississippi as required by the regulation. Appellant then brought suit claiming that the regulation violated the Commerce Clause, but a three-judge District Court upheld the regulation as a valid exercise of state police powers, even though it incidentally burdened interstate commerce.

Held: The mandatory character of the regulation's reciprocity requirement unduly burdens the free flow of interstate commerce in violation of the Commerce Clause, and cannot be justified as a permissible exercise of any state power. Pp. 424 U. S. 370-381.

(a) Only state interests of substantial importance can save the regulation in the face of its devastating effect upon the free flow of interstate milk by in practical effect, though not in absolute terms, excluding from Mississippi wholesome milk produced in Louisiana. Cf. Dean Milk Co. v. Madison,340 U. S. 349. Pp. 424 U. S. 372-375.

(b) The reciprocity requirement cannot be justified as serving Mississippi's vital interests in maintaining the State's health standards, for even if Louisiana's standards were lower than Mississippi's, such requirement, if met, permits Louisiana milk to be admitted to Mississippi if Louisiana enters into a reciprocity agreement. And even if the requirement enables Mississippi to assure itself that the reciprocating State's health standards are the "substantial equivalent" of its own, Mississippi has available for accomplishing that objective the alternative, substantially less burdensome on commerce, of applying its own inspection

Page 424 U. S. 367

standards to milk shipments from a nonreciprocating State. Pp. 424 U. S. 375-378.

(c) Nor can the reciprocity requirement be justified as an economic "free trade" measure, since it is

"precisely the kind of hindrance to the introduction of milk from other states . . . condemned as an 'unreasonable clog upon the mobility of commerce'"

and "hostile in conception as well as burdensome in result.'" Polar Ice Cream & Creamer Co. v. Andrews,375 U. S. 361, 375 U. S. 377. Pp. 424 U. S. 378-381.

383 F.Supp. 569, reversed and remanded.

BRENNAN, J., delivered the opinion of the Court, in which all Members joined except STEVENS, J., who took no part in the consideration or decision of the case.

MR. JUSTICE BRENNAN delivered the opinion of the Court.

Section 11 of Mississippi's Regulation Governing the Production and Sale of Milk and Milk Products in Mississippi, promulgated by the Mississippi State Board of Health (1967), provides, among other things, that

"[m]ilk and milk products from . . . [another State] may be sold in . . . Mississippi . . . provided . . . that the regulatory agency [of the other State that] has jurisdiction accepts Grade A milk and milk products produced and processed in Mississippi on a reciprocal basis. [Footnote 1]

Page 424 U. S. 368

The question presented by this case is whether Mississippi, consistently with the Commerce Clause, Art. I, § 8, cl. 3, of the Constitution, [Footnote 2] may, pursuant to this regulation, constitutionally deny a Louisiana milk producer the right to sell in Mississippi milk satisfying Mississippi's health standards solely because the State of Louisiana has not signed a reciprocity agreement with the State of Mississippi as required by the regulation. A three-judge District Court in the Southern District of Mississippi rejected appellant's Commerce Clause challenge, holding that"

"[s]ection 11 is within the permissible limits of state police powers even though it incidentally or indirectly involves or burdens interstate commerce."

383 F.Supp. 569, 575 (1974). We noted probable jurisdiction of appellant's appeal, 421 U.S. 961 (1975). We reverse. [Footnote 3]

I

Appellant, The Great Atlantic & Pacific Tea Co., Inc. (A&P), a Maryland corporation, owns and operates 38 outlets in Mississippi that engage in the retail sale

Page 424 U. S. 369

of milk and milk products. A&P also operates at Kentwood, La., a plant for the processing of raw milk into milk and milk products for delivery to its retail outlets. A&P invested over $1 million in the Kentwood processing facilities, intending that part of the dairy products produced at the facility would supply its retail outlets in Mississippi. However, A&P's application on August 28, 1972, to the Mississippi State Board of Health for a permit to distribute the products from its Kentwood facility for sale in Mississippi was denied by the Board because A&P failed to submit the reciprocal agreement between Louisiana and Mississippi required by § 11. [Footnote 4] Appellant thereupon brought this action.

Evidence was stipulated before the District Court which conclusively established that the milk produced at the Kentwood plant fully complied with the requirements of § 11 in all respects save the required reciprocity agreement. The Kentwood plant had received milk sanitation-compliance ratings in excess of 90% in all respects following each inspection by Louisiana officials. These sanitation-compliance ratings were published in the Sanitation Compliance and Enforcement Ratings of Interstate Milk Shippers, a list compiled by the Public Health Service and the Food and Drug Administration of the United States Department of Health, Education, and Welfare (HEW), which includes only processors receiving compliance ratings from state officials who have been certified by the Public Health Service.

Page 424 U. S. 370

Further, the parties stipulated that the Spervisor of the Milk Control Program of the Mississippi State Board of Health testified, on the basis of an inspection by Louisiana officials of the Kentwood plant reported on an HEW form, that Kentwood milk would be acceptable in Mississippi, as the Louisiana regulations were substantially equivalent to Mississippi's within the meaning of § 11. Thus, only the lack of a reciprocity agreement between the two States prevented appellant from marketing its Kentwood milk at its Mississippi retail outlets. [Footnote 5]

II

Mississippi's answer to appellant's Commerce Clause challenge is that the reciprocity requirement of § 11 is a reasonable exercise of its police power over local affairs, designed to assure the distribution of healthful milk products to the people of its State. We begin our analysis by again emphasizing that "[t]he very purpose of the Commerce Clause was to create an area of free trade among the several States." McLeod v. J. E. Dilworth Co.,322 U. S. 327, 322 U. S. 330 (1944). And, at least since Cooley v. Board of Wardens, 12 How. 299 (1852), it has been clear that

"the Commerce Clause was not merely an authorization to Congress to enact laws for the protection and encouragement of commerce among the States, but, by its own force, created an area of trade free from interference by the States. . . . [T]he Commerce

Page 424 U. S. 371

Clause, even without implementing legislation by Congress, is a limitation upon the power of the States."

Freeman v. Hewit,329 U. S. 249, 329 U. S. 252 (1946). It is no less true, of course, that, under our constitutional scheme, the States retain "broad power" to legislate protection for their citizens in matters of local concern such as public health, H. P. Hood & Sons, Inc. v. Du Mond,336 U. S. 525, 336 U. S. 531-532 (1949), and that not every exercise of local power is invalid merely because it affects in some way the flow of commerce between the States. Freeman v. Hewit, supra at 329 U. S. 253; Milk Control Board v. Eisenberg Farm Products,306 U. S. 346, 306 U. S. 351-352 (1939). Rather, in areas where activities of legitimate local concern overlap with the national interests expressed by the Commerce Clause where local and national powers are concurrent -- the Court, in the absence of congressional guidance, is called upon to make "delicate adjustment of the conflicting state and federal claims," H. P. Hood & Sons, Inc. v. Du Mond, supra, at 336 U. S. 553 (Black, J., dissenting), thereby attempting "the necessary accommodation between local needs and the overriding requirement of freedom for the national commerce." Freeman v. Hewit, supra at 329 U. S. 253. In undertaking this task, the Court, if it finds that a challenged exercise of local power serves to further a legitimate local interest but simultaneously burdens interstate commerce, is confronted with a problem of balance:

"Although the criteria for determining the validity of state statutes affecting interstate commerce have been variously stated, the general rule that emerges can be phrased as follows: where the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly

Page 424 U. S. 372

excessive in relation to the putative local benefits. Huron Cement Co. v. Detroit,362 U. S. 440, 362 U. S. 443. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will, of course, depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities."

Pike v. Bruce Church, Inc.,397 U. S. 137, 397 U. S. 142 (1970). [Footnote 6]

Adjudication of Commerce Clause challenges to the validity of local milk regulations burdening interstate milk is not a novel experience for this Court. See, e.g., Polar Ice Cream & Creamery Co. v. Andrews,375 U. S. 361 (1964); Dean Milk Co. v. Madison,340 U. S. 349 (1951); H. P. Hood & Sons, Inc. v. Du Mond, supra; Milk Control Board v. Eisenberg Farm Products, supra; Baldwin v. G.A.F. Seelig, Inc.,294 U. S. 511 (1935). The District Court seems to have concluded that Dean Milk Co. v. Madison, supra, while especially pertinent to a decision upon the validity of the reciprocity provision

Page 424 U. S. 373

of § 11, did not require the conclusion that the requirement rendered the section violative of the Commerce Clause. We disagree. Dean Milk involved a Madison, Wis., ordinance that forbade the sale of milk in the city unless it had been pasteurized and bottled at an approved plant located within five miles of the center of the city. Although agreeing that sanitary regulation of milk originating in remote areas is a "matter . . . which may appropriately be regulated in the interest of the safety, health and wellbeing of local communities,'" 340 U.S. at 340 U. S. 353, the Court held that the Madison ordinance could not withstand challenge under the Commerce Clause,

"even in the exercise of [the city's] unquestioned power to protect the health and safety of its people, if reasonable nondiscriminatory alternatives, adequate to conserve legitimate local interests, are available."

Id. at 340 U. S. 354. Inquiry whether adequate and less burdensome alternatives exist is, of course, important in discharge of the Court's task of "accommodation" of conflicting local and national interests, since any "realistic' judgment" whether a given state action "unreasonably" trespasses upon national interests must, of course, consider the "consequences to the state if its action were disallowed." Dowling, Interstate Commerce and State Power, 27 Va.L.Rev. 1, 22 (1940).

Dean Milk identified as adequate to serve local interests, and yet less burdensome to the flow of interstate commerce, the alternatives of either inspection of the distant plants by city officials or reliance on milk ratings obtained by officials in localities having standards as high as those of Madison, the enforcement of which could be verified by reliance on the United States Public Health Service's system of checking local ratings. This latter alternative reflected the recommendation of the United States Public Health Service based on § 11 of the

Page 424 U. S. 374

Model Milk Ordinance proposed by the Service, Dean Milk, supra at 340 U. S. 355 n. 5, that the local

"health officer approve milk or milk products from distant points without his inspection if they are produced and processed under regulations equivalent to those of this ordinance, and if the milk or milk products have been awarded by the State control agency a rating of 90 percent or more on the basis of the Public Health Service rating method."

The Illinois producer's milk involved in Dean Milk was processed in plants inspected by the public health authorities in Chicago on the basis of the Public Health Service rating method.

The District Court in the instant case acknowledged that,

"[i]nterestingly enough, Section 11 of the Mississippi regulation, but for the reciprocal clause, is identical in every material aspect to Section 11 of the U.S. Public Health Service Ordinance"

discussed in Dean Milk. 383 F.Supp. at 574. Accordingly, the District Court concluded that § 11 was "free of any constitutional infirmity," "insofar as it follows Section 11 of the U.S. Public Health Service Milk Ordinance." Id. at 575. The District Court held, further, that the reciprocity clause of Mississippi's § 11 -- not found in HEW's proposed Model Milk Ordinance § 11 -- did not constitute a sufficient burden on interstate commerce to violate the Commerce Clause. Mississippi, said the District Court, may constitutionally

"enforce its own standards, either through inspections at the source of the processed milk, although such may require out-of-state inspections, or through reciprocal agreements . . . ,"

and "[a]s long as Mississippi mutually exchanges standards of inspection with other states, there can be no burden on interstate trade." 383 F.Supp. at 575. Further, said the District Court, "Mississippi adopted the reciprocity clause to avoid the expense of out-of-state inspections,"

Page 424 U. S. 375

id. at 576, and offers reciprocity to all States without discrimination.

The fallacy in the District Court's reasoning is that it attached insufficient significance to the interference effected by the clause upon the national interest in freedom for the national commerce, and attached too great significance to the state interests purported to be served by the clause. Although not in terms an absolute and universal bar to sales of out-of-state milk, which was the effect of the Madison ordinance invalidated in Dean Milk, the barrier of the reciprocity clause to sales of out-of-state milk in Mississippi has, in this case, also, "in practical effect, exclude[d] from distribution in [Mississippi] wholesome milk produced . . . in [Louisiana]." 340 U.S. at 340 U. S. 354. [Footnote 7] Only state interests of substantial importance can save § 11 in the face of that devastating effect upon the free flow of interstate milk.

Mississippi's contention that the reciprocity clause serves its vital interests in maintaining the State's health standards borders on the frivolous. The clause clearly does not do so in the sense of furthering Mississippi's established milk quality standards. For, according to appellee,

"§ 11 covenants that Mississippi will do the inspections, will certify them, and will accept a standard below that applicable to domestic producers if the forwarding state will do the same."

Brief for Appellee 9. Thus, even if Louisiana's standards were lower than Mississippi's, the clause permits Louisiana milk to be admitted to Mississippi if Louisiana enters into a reciprocity agreement. The reciprocity clause thus disserves, rather than promotes, any higher Mississippi milk quality standards.

Page 424 U. S. 376

Therefore, this is a case where the "burden imposed on [interstate] commerce is clearly excessive in relation to the putative local benefits." Pike v. Bruce Church, Inc., 397 U.S. at 397 U. S. 142.

Mississippi next argues that the reciprocity clause somehow enables Mississippi to assure itself that the reciprocating State's (here Louisiana's) health standards are the "substantial equivalent" of Mississippi's. [Footnote 8] But even if this were true, and the premise may be disputed, [Footnote 9] there are means adequate to serve this interest

Page 424 U. S. 377

that are substantially less burdensome on commerce, and, therefore, Dean Milk teaches that the burden of the mandatory reciprocity clause cannot be justified in view of the character of the local interest and these available methods of protecting it. In the absence of adequate assurance that the standards of a sister State, either as constituted or as applied, are substantially equivalent to its own, Mississippi has the obvious alternative of applying its own standards of inspection to shipments of milk from a nonreciprocating State. [Footnote 10] Dean Milk, 340 U.S. at 340 U. S. 355, expressly supported the adequacy of this alternative:

"[S]uch inspection is readily open to it without hardship, for it could charge the actual and reasonable cost of such inspection to the importing producers and processors. [Footnote 11]"

Cf. 405 U. S. S. 378

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