1. Objections, on constitutional grounds, to the Agricultural
Marketing Agreement Act of 1937, and to certain features of an
order of the Secretary of Agriculture made thereunder,
overruled upon the authority of the
Rock Royal case,
ante p.
307 U. S. 533. P.
307 U. S.
595.
2. The finding and proclamation required of the Secretary of
Agriculture by § 8(e) of the Agricultural Marketing Agreement Act
of 1937 to justify an order based on purchasing power during the
post-war period specified in that section, rather than upon the
pre-war period mentioned in § 2 -- that is to say, a finding and
proclamation that the purchasing power of the commodity regulated
cannot be satisfactorily determined for the pre-war period from
available statistics of the Department of Agriculture -- need not
be repeated in connection with an amendment of the order which does
not involve any change of the base period, although it is declared
by § 8(17) that the provisions of § 8(e) applicable to orders
"shall be applicable to amendments to orders." P.
307 U. S.
595.
3. A referendum to producers, under § 8c(9)(B) and § 8c(19) of
the above-mentioned Act, of amendments to an order regulating the
handling of milk in the marketing area of Boston and vicinity, was
properly restricted to producers who sold their fluid milk to
handling plants licensed by the state law to distribute or sell
fluid milk in the marketing area and which had shipped milk or
cream to that area during the representative period. So
held in the light of the object of the regulation, which
was to remedy marketing evils caused by a surplus of fluid milk. P.
307 U. S.
597.
The referendum election was not invalidated (a) by denying the
vote to producers who sold to handlers not licensed to sell milk,
but only cream, in the marketing area; (b) by allowing the vote to
producers who sold their milk at plants which shipped only cream to
the marketing area during the representative period,
Page 307 U. S. 589
but which were licensed to sell fluid milk in that area, and
could have done so; (c) by allowing the vote to producers not
registered as required by the state law, but whose milk was sold in
the marketing area by licensed handlers; or (d) by permitting the
vote to producers who sold to stations which shipped less than 50
percent of the milk to the area during the representative
period.
4. At such a referendum, a cooperative association of producers
may vote for its members. P.
307 U. S.
509.
. 5. An order of the Secretary of Agriculture which regulated
the prices of milk sold by producers to licensed handlers for a
marketing area, and which required such handlers to pay through an
equalization fund --
construed as including milk bought of
unregistered farms and sold in violation of the state law. P.
307 U. S.
599.
6. Assuming that, under the Agricultural Marketing Agreement Act
of 1937, reinstatement of a suspended order should be supported by
a finding that the reinstatement will tend to effectuate the policy
of the Act, the omission can be supplied by an appropriate finding
on repromulgation of the order with amendments. P.
307 U. S.
602.
21 F. Supp.
321, 26 F. Supp. 672, affirmed.
Certiorari, 306 U.S. 627, 629, to review decrees of a District
Court granting mandatory injunctions in two suits brought by the
United States and the Secretary of Agriculture to enforce a
marketing order regulating prices of milk and milk products in an
area comprising the City of Boston and adjacent settlements. The
original defendants were three milk dealers. Two milk producers,
one of whom is the petitioner in No. 865, intervened as defendants.
Upon interlocutory appeal, the Circuit Court of Appeals gave an
opinion which is reported as
H. P. Hood & Sons, Inc. v.
United States, 97 F.2d 677. The writs of certiorari were
issued while the cases were pending in that court upon appeals from
the final decrees.
Page 307 U. S. 590
MR. JUSTICE REED delivered the opinion of the Court.
These cases involve the constitutionality of the Agricultural
Marketing Agreement Act of 1937 [
Footnote 1] as applied in an order of the Secretary of
Agriculture regulating the handling of milk in the Greater Boston,
Massachusetts, Marketing Area.
The petitioners, H. P. Hood & Sons, Inc., and Noble's Milk
Company of No. 772 and Whiting Milk Company of No. 809, original
defendants below, are engaged in handling milk in the marketing
area in the current of interstate commerce or in a manner which
burdens that commerce. Producers intervened as defendants,
petitioner E. Frank Branon on the side of H. P. Hood & Sons and
Chester D. Noyes beside the Whiting Company. The respondents,
plaintiffs below, are the United States of America and the
Secretary of Agriculture. The parties will be referred to as
defendants and plaintiffs, respectively.
It is unnecessary to detail the facts of each case. They are two
of many instituted by the plaintiffs to secure obedience to the
Order. On October 1, 1937, bills of complaint were filed in the
District Court for the District of Massachusetts,
21 F. Supp.
321, for the purpose of enjoining Hood & Sons, Noble's Milk
Company and
Page 307 U. S. 591
Whiting Milk Company from violating the terms of Order No. 4 as
amended. A temporary mandatory injunction issued on November 30,
1937. A supersedeas followed soon after, conditioned upon payment
by the three handlers into the registry of the court of the amounts
billed to them by the Market Administrator for equalization charges
and marketing services under the Order. Answers to the bills
asserted constitutional infirmities in the Act and fatal weaknesses
in the Order as amended. A Special Master was charged with the duty
of finding the facts in these and similar suits. His report was
filed on January 27, 1939. Shortly thereafter, the District Court
confirmed the report, sustained both the Act and the Order, and
entered a decree for the plaintiffs. 26 F. Supp. 672. The
defendants took an appeal to the Circuit Court of Appeals and,
after the cases were docketed, filed petitions for writs of
certiorari. The writs were granted because important questions of
Federal law undecided by this Court were involved and pending
appeals in other cases with similar issues were ready for argument.
306 U.S. 627.
The pertinent provisions of the Marketing Act have been
summarized in
United States v. Rock Royal Cooperative,
ante, p.
307 U. S. 533.
They will not be repeated here.
Order No. 4, as amended, which the plaintiffs seek to enforce,
is the culmination of an extended effort by the Secretary to work
out a plan to regulate the marketing of milk in the Boston area.
Order No. 4 was originally issued on February 7, 1936, under the
Agricultural Adjustment Act. [
Footnote 2] All steps leading to its issuance were taken.
On November 30, 1935, the Secretary gave notice of a public hearing
on a proposed marketing agreement and order. Hearings were held. A
marketing agreement was tentatively approved which handlers failed
to accept.
Page 307 U. S. 592
On January 25, 1936, the Secretary found and proclaimed that the
purchasing power of milk could not be satisfactorily determined for
the pre-war base period from available statistics in the Department
of Agriculture, but could for the post-war period. August, 1919, to
July, 1929, was declared the base period for the purpose of issuing
an order. On February 5, 1936, the Secretary made a determination,
as required by Section 8c(9), as to the necessity for issuing an
order. The President approved the determination, and the Order
issued. It remained in effect until August 1, 1936, shortly after
the District Court for the District of Massachusetts held that the
Act under which the Order was issued was unconstitutional.
[
Footnote 3] On that day, the
Secretary suspended the Order for an indefinite time.
After the passage of the Marketing Act, the Secretary, on June
24, 1937, gave notice of a hearing upon proposed amendments to
Order No. 4. On the following day, he terminated the suspension of
the formal and administrative provisions as of July 1, and of the
price-fixing provisions as of August 1. Hearings were held. A
proposed marketing agreement failed of approval by the handlers. On
July 17, 1937, a referendum took place. It will be discussed later
at some length because of contentions which question its validity.
On July 27, 1937, acting pursuant to § 8c(9), the Secretary
determined that the failure of the handlers to sign tended to
prevent effectuation of the declared policy of the Act; that
issuance of the proposed amendments to the Order was the only
practical means of advancing the interests of milk producers in the
area, and that the issuance was approved by over 70 percent of the
producers who, during May, 1937, were engaged in the production of
milk for sale in the area. The President approved the
determination.
Page 307 U. S. 593
On July 28, 1937, "Order No. 4, Amendment No. 1" issued. In it,
the Secretary made findings upon the evidence introduced at the
hearings upon the proposed amendments and ratified the original
findings insofar as they were not in conflict with the new ones. He
made no finding or proclamation, as he had in the original Order,
that satisfactory statistics were not available for the pre-war
period, but were for the post-war period. It is not disputed that
the latter was used as the base period for the purpose of computing
the prices to be used in the amended Order.
This amended Order is based upon the same principles discussed
in
United States v. Rock Royal Cooperative, ante, p.
307 U. S. 533, and
companion cases, decided today. It establishes a comprehensive
scheme for the regulation of milk handled in interstate or foreign
commerce in an area which includes Boston and 36 other cities or
towns. A Market Administrator, appointed by the Secretary of
Agriculture, is in charge. Producers and handlers are defined, the
first as any person producing milk in conformity with the health
regulations applicable to milk sold for consumption as milk in the
marketing area, the second as all, including producers or
associations of producers, who engage
"in such handling of milk, which is sold as milk or cream in the
Marketing Area, as is in the current of interstate commerce or
which directly burdens, obstructs or affects interstate or foreign
commerce in milk and its products."
There are two use classifications -- roughly, fluid and
nonfluid. A price is stated for Class I or fluid milk; a formula,
based primarily on the price of cream in Boston and casein in New
York, is provided for the calculation of the Class II price for
each delivery period. Minimum prices determine the value of all the
milk delivered by all producers to all the handlers subject to the
Order. Except to associations of producers for Class I milk,
payment
Page 307 U. S. 594
to producers is made at a blended price. The Administrator
computes the value of milk for each handler by multiplying the
quantities used by him in each class by the class price, and by
adding the two results. Then the values for all handlers are
combined into one total. Adjustments are made for differentials.
The adjusted total is divided by the total quantity of milk. The
result is a weighted average price somewhere between the two class
prices, known as the "blended price." Each handler pays his
producers at the blended price. The amount paid to producers may be
less, or it may be more, than the value of the milk sold by the
handler. Equalization is made among handlers. As the Order puts it,
after paying his own producers, each handler pays
"To producers, through the Market Administrator, by paying to or
receiving from the Market Administrator, as the case may be, the
amount by which payments made . . . are less than, or exceed, the
value of milk as required to be computed for such handler. . .
."
The defendants urge that the decree of the District Court should
be reversed because of error under the Constitution, under the
statute, under the Order itself. It is contended that the
equalization provisions of the amended Order violate the due
process clause of the Fifth Amendment; that the price-fixing
features of the Act and Order constitute an invalid exercise of the
power to regulate commerce and an invasion of the powers reserved
to the states under the Tenth Amendment; [
Footnote 4] and that the Act involves delegation of
legislative power. The amendments to the Order are said to be void
because an essential finding required by the statute is lacking.
The referendum among producers is assailed as improperly conducted.
And the defendants in No. 772 raise the point that the Market
Administrator failed to comply with the provisions of the amended
Order.
Page 307 U. S. 595
Constitutionality. There is nothing to be added to the
discussion of the constitutionality of the Act in
United States
v. Rock Royal Cooperative, ante, p.
307 U. S. 533. The
discussion there of the validity of the amended Order, insofar as
similar issues are raised in this case, is also determinative.
Order Amended without Finding as to Base Period. Order
No. 4, as amended, is the controlling regulation in these cases. As
authorized by § 8e, [
Footnote
5] it used a post-war period as the base period to determine
prices. The finding and proclamation by the Secretary as to the
absence of statistics for the pre-war period, available for use,
were made for the original issue of Order No. 4, but not for the
amendments. Section 8c(17) makes certain sections, including 8e,
applicable to amendments of orders. It reads thus: "The provisions
of this section, section 8d, and section 8e applicable to orders
shall be applicable to amendments to orders. . . ." Defendants
contend that this requires a finding and proclamation under § 8e
each time an order which includes a post-war base period is amended
in any particular.
Ordinarily the base period of § 2 is to be used. It is only
after a finding that the purchasing power of the commodity during
the period fixed in § 2 cannot be satisfactorily determined from
available statistics of the Department of Agriculture that the
Secretary, by § 8e,
Page 307 U. S. 596
is authorized to find and proclaim the post-war base period. By
§ 8c(1), the Secretary is authorized to issue "and from time to
time amend" orders. Obviously, as a general clause to make all the
provisions of §§ 8c, 8d, and 8e applicable to amendments, § 8c(17)
was adopted. Without it, questions would have been pertinent as to
the applicability to amended orders of various provisions in these
sections. Doubt would arise as to the power to change the base
period after it was once determined. There would seem to be no
occasion to review the absence of satisfactory statistics, however,
on a proposed amendment which does not involve any change in the
base period. The requirement for finding and proclamation in
adopting a base period is not intended to force the Secretary to go
through a meaningless ritual. A determination of the necessity of
using the post-war base period, once made and proclaimed, satisfies
the conditions of §§ 8c(17) and 8e for amendments, so long as no
amendment is made which involves a change in the base period. This
has been the administrative construction [
Footnote 6] where amendments have been made to orders
which had utilized a post-war base period. The plaintiffs show this
by a series of references to the Federal Register which are not
challenged. [
Footnote 7]
Page 307 U. S. 597
Validity of the Referendum. The referendum is
challenged as conducted contrary to the terms of the Act. Section
8c(9)(B) authorizes the Secretary of Agriculture to issue an order,
notwithstanding the failure of handlers to approve a marketing
agreement, if he makes certain determinations, one of them that the
issuance is approved by at least two-thirds of the producers who,
during a representative period, "have been engaged in the
production of such commodity for sale in the marketing area. . . ."
[
Footnote 8] Under § 8c(19),
the Secretary "may conduct a referendum among producers" to
ascertain whether two-thirds approve. He restricted voting in the
referendum under scrutiny to producers who had delivered milk to a
station approved for the shipment of milk to the marketing area and
which had shipped milk or cream to the marketing area during the
representative period.
It is said that the Secretary, by this restriction, disregarded
the language of the statute as to producers eligible to vote, and
that the ballot was either accorded to producers not entitled to
vote or denied to qualified producers. Specifically, the following
errors are urged: (1) A large number of southern and western
producers who delivered to stations shipping cream were not
permitted to vote. (2) Many New England or Eastern New York
producers voted who delivered to handlers at plants which shipped
only cream in the representative period. (3) Many voted who
produced milk on farms as to which no certificate of registration
had been issued, as required by §§ 16A and 16C of the Massachusetts
milk law. [
Footnote 9] (4) A
number of approving producers delivered milk to stations which
shipped less than 50 percent of their product to the Boston area.
(5) Cooperatives cast votes in favor of the
Page 307 U. S. 598
amendments to the Order solely through ballots cast by their
boards of directors. Inclusion of the southern and western shippers
of cream or elimination of any one of the remaining groups might
have changed the result of the referendum.
It does not seem profitable to expand each of the contentions of
the defendants. The question is simply whether the statute was
followed. It seems to us that it was.
The Act does not supply the Secretary with detailed directions
as to the manner of holding a referendum. Its language is general.
The Secretary "may conduct a referendum among producers." [
Footnote 10] What producers? Those
"engaged in the production of [milk] for sale in the marketing
area. . . ." [
Footnote 11]
Every producer who voted was so engaged. Each delivered milk to the
plant of a handler licensed [
Footnote 12] to distribute and sell fluid milk in the
marketing area. The Order is aimed at the handling of milk marketed
in the area. The problems to be solved are those engendered by the
necessary, yet troublesome, surplus of fluid milk. Every handler to
whom the voters delivered contributed to that surplus.
The milk of the southern and western producers outside the
milkshed could not be sent into the marketing area in fluid form,
for their handlers were not licensed to sell milk in the area. The
station in Indiana, used in the hearings as illustrative of the
situation, held a license for the emergency shipments of sweet
cream only. The exclusion of the southern and western producers
therefore was proper. They are located outside the Boston milkshed;
they do not produce any part of the burdensome surplus of fluid
milk.
Page 307 U. S. 599
There was no error in permitting the remaining groups of
producers to vote. That some handlers to whom voting producers
delivered milk shipped only cream during the representative period
is immaterial. The farmers, it was found, cannot tell when they
bring in their milk whether it will be sold by the handlers as milk
or cream. As these handlers could have sent the fluid milk to the
area, and in most instances did at times other than the
representative period, the milk delivered to them was a potential
part of the surplus. The producers who lacked certificates of
registration were properly included. Their milk was sold in the
area by licensed handlers. [
Footnote 13] Nor can it make any difference that less
than 50 percent of the milk of some stations was shipped the
marketing area during the representative period. There is nothing
in the Act that compels adopting 50 percent as determinative. It
was enough that the handlers of these producers did send some part,
and could have sent all.
Two cooperatives voted for their members in favor of the
amendments to the Order. [
Footnote 14] No poll was taken of the individual producer
members. Nor was there any subsequent approval by them of the
action taken on their behalf by the cooperatives. Section 8c(12)
directs the Secretary to consider the approval or disapproval of
cooperatives as the approval or disapproval of members. This is
complete authority for the action of the Secretary. He need not
require further referendums by cooperatives themselves. Presumably
they will vote with an eye to the best interest of their
members.
Violation of Order. The decree directs the defendants
to pay to the Market Administrator for distribution to the
producers through the equalization fund the amounts
Page 307 U. S. 600
which he had billed to them under the Order. The defendants H.
P. Hood & Sons and Noble's Milk Company contend that the bills
include in their computation milk plainly excluded by the terms of
the Order because the product of dairies without the certificates
of registration required by Massachusetts General Laws, Chapter 94,
§§ 16A
et seq. Under these sections, no person may sell
milk known to have been produced on unregistered farms. It is not
disputed that milk from such farms figured in the operation of the
equalization pool. The explanation of the plaintiffs is that the
Order covers this milk.
The Administrator seeks payment on the basis of all milk
received by licensed handlers for use in the Marketing Area. It was
found that milk received at a country plant was included in the
computation if the Administrator knew the plant was approved for
shipment of fluid milk by a city or town of the marketing area. By
statute, handlers are required to have a license to handle milk in
any town where an inspector of milk is appointed and a permit from
the local board of health [
Footnote 15] and they must register with the director of
the dairying division of the state department of agriculture.
[
Footnote 16]
As the action of handlers forms the ground for the initiation of
regulation under the Act [
Footnote 17] and for classification, reports,
Page 307 U. S. 601
calculation, and payment under the Order, [
Footnote 18] we conclude that the milk received
by handlers for use in the area is the proper basis of computation.
True, the reports are based on the delivery of milk by defined
producers, but, in view of the terms of the Order as a whole,
Page 307 U. S. 602
we are of the opinion the milk from unregistered farms must also
be reported. The Act and Order regulate marketing. In violating the
state health laws by knowingly selling milk from unregistered
farms, producers and handlers may risk prosecution by the
Massachusetts authorities. Nevertheless, the handlers must conform
to the Order. It is the milk handled, not the milk produced, which
is determinative. The Administrator was justified in using milk
received at an approved plant for computation. It may be added
that, under the state and town regulations, the municipalities in
the marketing area, through their control over licenses and
permits, have the power to supervise the handlers to see that they
comply with the law forbidding sales from unlicensed farms.
[
Footnote 19]
The further contention is made that the Secretary failed to make
a finding as to the tendency of the reinstatement
Page 307 U. S. 603
of the original Order to effectuate the policy of the Act. This
is conceded. T he Order was reinstated in part as of July 1, 1937.
It was thereafter amended after hearings and on July 28, 1937, the
Order as amended was promulgated with the finding
"That the issuance of the amendment to the order and all of the
terms and conditions of the order, as amended, will tend to
effectuate the declared policy of the act."
We are of the view that this finding cured any omission, if such
a finding prior to reinstatement were necessary, as to which we
express no opinion. While Order No. 4 was partly in effect prior to
this amendment, the finding covered the entire Order No. 4 as
amended, and the language of the Order promulgating the amendments
is an approval of Order No. 4 as amended, as tending to effectuate
the declared policy of the Act.
Other contentions are made which have been considered, but they
do not seem to require any statement.
Affirmed.
* Together with No. 809,
Whiting Milk Co. v. United States
et al., and No. 865,
Branon v. United States et al.
also on writs of certiorari to the Circuit Court of Appeals for the
First Circuit.
[
Footnote 1]
Act of June 3, 1937, 50 Stat. 246.
[
Footnote 2]
Act of May 12, 1933, 48 Stat. 31, as amended August 24, 1935, 49
Stat. 750.
[
Footnote 3]
United States v. David Buttrick Co., 15 F. Supp.
655,
reversed in 91 F.2d 66.
[
Footnote 4]
Only defendant in No. 809 makes this contention.
[
Footnote 5]
"Sec. 8e. In connection with the making of any marketing
agreement or the issuance of any order, if the Secretary finds and
proclaims that, as to any commodity specified in such marketing
agreement or order, the purchasing power during the base period
specified for such commodity in section 2 of this title cannot be
satisfactorily determined from available statistics of the
Department of Agriculture, the base period, for the purposes of
such marketing agreement or order, shall be the post-war period,
August 1919-July 1929, or all that portion thereof for which the
Secretary finds and proclaims that the purchasing power of such
commodity can be satisfactorily determined from available
statistics of the Department of Agriculture."
[
Footnote 6]
Armstrong Paint & Varnish Works v. Nu-Enamel Corp.,
305 U. S. 315,
305 U. S.
329.
[
Footnote 7]
"Order No. 2, amended June 5, 1936 (1 Fed.Reg. 549); Order No.
3, amended April 13, 1936 (1 Fed.Reg. 185), and March 29, 1937 (2
Fed.Reg. 616), and March 31, 1939 (4 Fed.Reg. 1404); Order No. 4,
amended July 28, 1937 (2 Fed.Reg. 1331), and January 13, 1939 (4
Fed.Reg. 249); Order No. 5, amended March 29, 1937 (2 Fed.Reg.
614); Order No. 7, amended October 24, 1936 (1 Fed.Reg. 1662);
Order No. 11, amended November 17, 1936 (1 Fed.Reg.1979); Order No.
12, amended February 24, 1937 (2 Fed.Reg. 354); Order No. 15,
proclamation dated September 10, 1938 (3 Fed.Reg. 2222), amendment
dated September 10, 1938 (3 Fed.Reg. 2222); Order No. 20, amended
August 15, 1938 (3 Fed.Reg. 2015)."
[
Footnote 8]
The alternative provisions may be disregarded in this case.
[
Footnote 9]
Mass.Ann.Laws, c. 94, §§ 12-48.
[
Footnote 10]
§ 8c(19).
[
Footnote 11]
§ 8c(9)(B)(i).
[
Footnote 12]
Mass.Ann.Laws, c. 94, § 40.
[
Footnote 13]
Compare the discussion under the next heading,
Violation of Order.
[
Footnote 14]
See United States v. Rock Royal Cooperative, ante, p.
307 U. S. 533,
307 U. S.
556.
[
Footnote 15]
Mass.Ann.Laws, c. 94, §§ 40, 43.
[
Footnote 16]
Id., § 16F.
[
Footnote 17]
§ 8c.
"(1) The Secretary of Agriculture shall, subject to the
provisions of this section, issue, and from time to time amend,
orders applicable to processors, associations of producers, and
others engaged in the handling of any agricultural commodity or
product thereof specified in subsection (2) of this section. Such
persons are referred to in this title as 'handlers.' Such orders
shall regulate, in the manner hereinafter in this section provided,
only such handling of such agricultural commodity, or product
thereof, as is in the current of interstate or foreign commerce, or
which directly burdens, obstructs, or affects interstate or foreign
commerce in such commodity or product thereof."
[
Footnote 18]
"
Article III"
"Section 1.
Sales and Use Classification. -- Milk
purchased or handled by handlers shall be classified as
follows:"
"1. All milk sold or distributed as milk, chocolate milk, or
flavored milk and all milk not specifically accounted for as Class
II milk shall be Class I milk; and"
"2. Milk specifically accounted for (a) as being sold,
distributed, or disposed of other than as milk, chocolate milk, or
flavored milk and (b) as actual plant shrinkage within reasonable
limits shall be Class II milk."
"
Article V"
"Section 1.
Periodic Reports. -- On or before the
eighth day after the end of each delivery period, each handler
shall, except as set forth in section 1 of article VI, with respect
to milk or cream which was, during such delivery period, (a)
received from producers, (b) received from handlers, or (c)
produced by such handler, report to the Market Administrator in the
detail and form prescribed by the Market Administrator, as
follows:"
"1. The receipts at each plant from producers who are not
handlers;"
"2. The receipts at each plant from any other handler, including
any handler who is also a producer;"
"3. The quantity, if any, produced by such handler; and"
"4. The respective quantities of milk which were sold,
distributed, or used, including sales to other handlers, for the
purpose of classification pursuant to article III."
"
Article VII"
"Section 1.
Computation of Value of Milk for Each
Handler. -- For each delivery period, the Market Administrator
shall compute, subject to the provisions of article VI, the value
of milk sold or used by each handler, which was not purchased from
other handlers, by (a) multiplying the quantity of such milk in
each class by the price applicable pursuant to sections 2, 3, and 4
of article IV and (b) adding together the resulting value of each
class."
"
Article VIII"
"Section 1.
Time and Method of Payment. -- On or before
the 25th day after the end of each delivery period, each handler
shall make payment, subject to the butterfat differential set forth
in section 3 of this article, for the total value of milk received
during such delivery period as required to be computed pursuant to
section 1 of article VII, as follows:"
"1. To each producer, except as set forth in paragraph 2 of this
section at the blended price per hundredweight computed pursuant to
section 2 of article VII, subject to the differentials set forth in
section 4 of this article, for the quantity of milk delivered by
such producer;"
"2. To any producer, who did not regularly sell milk for a
period of thirty days prior to the effective date hereof to a
handler or to persons within the Marketing Area at the Class II
price, in effect for the plant at which such producer delivered
milk, for all the milk delivered by such producer during the period
beginning with the first regular delivery of such producer and
continuing until the end of two full calendar months following the
first day of the next succeeding calendar month;"
"3. To producers, through the Market Administrator, by paying to
or receiving from the Market Administrator, as the case may be, the
amount by which the payments made pursuant to paragraphs 1 and 2 of
this section are less than, or exceed, the value of milk as
required to be computed for such handler pursuant to section 1 of
article VII, as shown in a statement rendered by the Market
Administrator on or before the twentieth day after the end of such
delivery period."
[
Footnote 19]
Mass.Ann.Laws, c. 6, and c. 94, §§ 16A, 16F, 40, 41, 43.
MR. JUSTICE ROBERTS.
I regret that I cannot concur in the Court's disposition of
these cases. I find it unnecessary to consider whether the order
complied with the terms of the Act or whether the Act or the order
deprived the appellees of their property without due process. I am
of opinion that the Act unconstitutionally delegates legislative
power to the Secretary of Agriculture.
Valid delegation is limited to the execution of a law. If power
is delegated to make a law, or to refrain from making it, or to
determine what the law shall command or prohibit, the delegation
ignores and transgresses the Constitutional division of power
between the legislative and the executive branches of the
government.
In my view, the Act vests in the Secretary authority to
determine, first, what of a number of enumerated commodities
Page 307 U. S. 604
shall be regulated; second, in what areas the commodity shall be
regulated; third, the period of regulation, and fourth, the
character of regulation to be imposed, and, for these reasons,
cannot be sustained.
The statute is an attempted delegation to an executive officer
of authority to impose regulations within supposed limits and
according to supposed standards so vague as in effect to invest him
with uncontrolled power of legislation. Congress has not directed
that the marketing of milk shall be regulated. Congress has not
directed that regulation shall be imposed throughout the United
States or in any specified portion thereof. It has left the choice
of both locations and areas to the Secretary. Congress has not
provided that regulation anywhere shall become effective at any
specified date, or remain effective for any specified period.
Congress has permitted such a variety of forms of regulation as to
invest the Secretary with a choice of discrete systems each having
the characteristics of an independent and complete statute.
Section 8c(2) provides that the Secretary may make orders in
respect of eight specified agricultural products. It embodies no
directions as to the specific conditions which shall move him to
issue orders affecting each of the named commodities. The same
section permits and promulgation of orders applicable to specified
regions. It omits any restriction or direction as to the size or
location of the area to be affected by a regional order. It leaves
the Secretary free to determine when regulation shall become
effective, when it shall be terminated throughout the United States
or in any portion thereof.
The supposed standards by which the Secretary is to be governed
turn out, upon examination, to be no standards whatever. All of the
choices mentioned are, according to the Act, to be made if the
Secretary has reason
Page 307 U. S. 605
to believe, or finds, that his proposed action will "tend to
effectuate the declared policy" of the Act.*
We turn therefore to § 2, which declares the policy of the
Congress to be:
"Through the exercise of the powers conferred upon the Secretary
of Agriculture under this title, to establish and maintain such
orderly marketing conditions for agricultural commodities in
interstate commerce as will establish prices to farmers at a level
that will give agricultural commodities a purchasing power with
respect to articles that farmers buy, equivalent to the purchasing
power of agricultural commodities in the base period,"
which base period is defined as a period of years antedating the
passage of the Act. The section further declares the policy to be
worked out through the Secretary to be
"To protect the interest of the consumer by (a) approaching the
level of prices which it is declared to be the policy of Congress
to establish in subsection (1) of this section by gradual
correction of the current level at as rapid a rate as the Secretary
of Agriculture deems to be in the public interest and feasible in
view of the current consumptive demand in domestic and foreign
markets, and (b) authorizing no action under this title which has
for its purpose the maintenance of prices to farmers above the
level which it is declared to be the policy of Congress to
establish in subsection (1) of this section."
Assuming that any of these proposed ends or aims were in
themselves capable of reasonable definition, it is nevertheless
evident that the Secretary is to form a judgment by balancing a
price raising policy against a consumer protection policy,
according to his views of feasibility and public interest.
If, then, the separate objects to be attained were matters
susceptible of a definite finding, there would still be
Page 307 U. S. 606
the inescapable result that, after such definite finding as to
each proposed aim, there must be an exercise of judgment as to the
extent to which that aim should be accomplished in the light of
other and conflicting aims. And there would still remain the fact
that the conclusion might be against any regulation by reason of
the Secretary's restrained judgment that, in the circumstances,
regulation is not "feasible."
Enough has been said to show that a law is to come into being on
the basis of the Secretary's sole judgment as to its probable
effect upon the milk industry, its probable effect upon the
consumer, its probable consonance with the public interest, and its
feasibility. The resolution of all such problems is of the essence
of lawmaking.
But if, as the Act discloses, the supposed standards whereby the
Secretary is to ascertain the elements which are to determine his
ultimate decision are themselves so vague that neither he nor
anyone can accurately apply them, the unlimited nature of the
delegation becomes even clearer.
The first thing the Secretary is permitted to accomplish by
regulation, so the statute declares, is the parity in purchasing
power of the price to be received by producers with that received
in the base period. This parity is to be in terms of things farmers
purchase. A moment's reflection will show that any calculation of
such parity is impossible. The things farmers purchase, the
relative quantities in which they purchase them, and their price in
terms of milk vary from month to month and from year to year.
Moreover, the Secretary is not to establish a parity between two
past periods, but is to regulate the industry in such fashion as
will, in his opinion, produce for the future a parity of the
purchasing power of milk with its purchasing power in the base
period. The Secretary's conclusion must lie in the realm of hope or
opinion, and not in that of ascertained fact. The major objective
of
Page 307 U. S. 607
the Act is in truth to raise prices paid farmers for milk. The
upward limit is really left to the Secretary's uncontrolled
discretion.
Turn now to another alleged standard which is to control the
Secretary's action. He is not to raise prices so fast as to injure
the interest of the consumer, but is to raise them gradually by
correction of the current level at as rapid a rate as he deems to
be in the public interest and feasible in view of consumptive
demand. It is fair to ask whether this constitutes a standard at
all. What is the public interest? Must not Congress ascertain and
declare it? What is feasible in the way of regulation? Is not this
a matter for legislative judgment? How is anyone to tell whether
the Secretary has disobeyed the mandate of Congress in these
respects?
There is in the Act a further delegation of power. Congress
might, although committing to the Secretary's will and judgment the
matters above enumerated, have directed him how to regulate the
industry if he determined so to do. It might have considered the
possible modes of regulation and provided which of them the
Secretary should adopt. The Act does not such thing. It leaves to
the Secretary the choice of different and mutually exclusive
methods of control.
Section 8c(5) applies to orders affecting milk and its products.
Section 8c(7) refers to orders affecting any of the commodities
named in the Act. The first requires that any order affecting milk
must contain one, and may contain others, of seven specified
conditions. The second requires that, in any order, there must be
included one, and there may be included others, of four conditions.
These sections give the Secretary the choice of three independent
programs for raising the price of milk -- namely, bargaining with
handlers, stabilizing the retail price, or fixing prices to be paid
producers. Within each, variation of the widest sort is allowed.
Moreover, the Act permits alternative schemes for distributing
amongst the
Page 307 U. S. 608
producers the dollar value of milk sold in the area to which the
Secretary's order applies. The differences between the permissible
schemes are not matters of mere detail, but are basic and
fundamental.
In respect of the choice of method, the only guide is the
declaration of policy embodied in § 2. If the Secretary is of
opinion that one method is more likely to raise prices than
another, he is at liberty to put into the form of an order what is
tantamount to a statute prescribing the method of his choice. Thus,
the Secretary is to decide not only whether there is to be a law,
but, as well, the nature of the law to be enacted.
What was said concerning unconstitutional delegation of
legislative power in
Panama Refining Co. v. Ryan,
293 U. S. 388, and
Schecter Poultry Corp. v. United States, 295 U.
S. 495, applies with equal force here. Comparison of the
provisions of the Act respecting flue-cured tobacco, which are
summarized in
Mulford v. Smith, ante, p.
307 U. S. 38, with
those applicable to milk will disclose the fundamental difference
between the administrative character of the powers delegated in the
case of tobacco and the legislative character of those delegated in
the case of milk. No authority cited by the Government presents a
situation comparable to that here disclosed. It would not be
profitable to analyze each of the cases, because, in each, the
question of the nature of the statutory standard and its
application in the administration of the statute involved depended
upon the field which the legislation covers. Where delegation has
been sustained, the court has been careful to point out the
circumstances which made it possible to prescribe a standard by
which administrative action was confined and directed. Such a
standard, as respects milk marketing, is lacking in the
Agricultural Marketing Agreement Act of 1937.
I think that the decree should be reversed.
MR. JUSTICE McREYNOLDS and MR. JUSTICE BUTLER join in this
opinion.
*
See § 8c(3), 8c(4), 8c(16).