Mulford v. Smith
Mulford v. Smith
Opinion of the Court
delivered the opinion of the Court.
The appellants, producers of flue-cured tobacco, assert that the Agricultural Adjustment Act of 1938,
The portions of the statute involved are those included in Title III, providing marketing quotas for flue-cured tobacco.
There is no provision for continuous regulation of tobacco marketing, but, by § 312 (a), regulation becomes effective in any year only if, on November 15th, the Secretary finds that the total supply of tobacco as of July 1st exceeded the. reserve supply level which is defined in the Act.
Within thirty days after proclamation, the Secretary is to conduct a referendum of the producers of the crop of the preceding year to ascertain whether they favor or oppose the imposition of a quota. If more than one-third oppose, the Secretary is to proclaim the result before January 1st and the quota is not to be effective.
By § 313 (a) it is directed that the quota is to be first apportioned among the states based on the total quantity of tobacco produced in each state during the five years immediately preceding the year in question, plus the normal production of any acreage diverted under any agricultural adjustment and conservation program in any of the years. The basic determination is to be adjusted to correct state allotments, giving due consideration to seed bed or other plant diseases, production trends, or abnormal producing conditions which affected production in the several states during the five-year period, and to make required provision for allotments to small farms. A limit is set below which the quota of any state may not be reduced.
The Act provides for the apportionment of the state allotment amongst the farms which produced tobacco in the current year or have produced previously in one or more of the four preceding years. Apportionment to
Apportionment of the quota amongst individual farms is to be by local committees of farmers according to standards prescribed in the Act, amplified by regulations and instructions issued by the Secretary. Each farmer is to be notified of his marketing quota and the quotas of individual farms are to be kept available for public inspection in the county or district where the farm is located. If the farmer is dissatisfied-with his allotment he may have his quota reviewed by a local review committee, and, if dissatisfied with the determination of that committee, he may obtain judicial review.
Section 314 provides that if tobacco in excess of the quota for the farm on which the tobacco is produced is-marketed through a warehouseman, the latter must pay to the Secretary a penalty equal to fifty per cent, of the market price of the excess, and may deduct an amount equivalent to the penalty from the price paid the producer.
A few days before the 1938 auction sales were to take place, the appellants, who produce flue-cured tobacco in southern Georgia and northern Florida, filed a bill in equity in a Georgia state court against local warehouse-men to restrain them from deducting penalties under the Act from the sales price of tobacco to be sold at their auction warehouses on behalf of appellants. The bill alleged that the Act is unconstitutional; that it illegally commands the defendants to deduct penalties, pay them over to the Secretary, who must cover them into the treasury of the United States; that, if the defendants should make the required payments, the amounts paid by them would aggregate so large a sum that they would be unable to satisfy judgments in actions brought to recover the illegal payments. The court granted a preliminary injunction- and ordered the defendant warehousemen to pay the amounts of the penalties into the registry of the court. The cause was removed to the United States District Court for the Middle District of Georgia. The District Court continued the injunction, modified the order to' require the payments to be made into its registry, the auction sales were held, and payments into the court were made. The United States was permitted to intervene as a defendant.
Before coming to the merits we inquire whether the court below had jurisdiction as a federal court or as a court of equity. Though no diversity of citizenship is alleged, nor is any amount in controversy asserted so as to confer jurisdiction under subsection (1)
. The appellants plant themselves upon three propositions: (1) that the Act is a statutory plan to control agricultural production and, therefore, beyond the powers delegated to Congress; (2) that the standard for calculating farm quotas is uncertain, vague, and indefinite, resulting in an unconstitutional delegation of legislative power to the Secretary; (3) that, as applied to appellants’ 1938 crop,- the Act. takes their property without due process of law.
First. The statute does not purport to control, production. It sets no limit upon the acreage which may be planted or produced and imposes no penalty for the planting and producing of tobacco in excess of the marketing, quota. It purports to be solely a regulation of interstate commerce, which it reaches and affects at the throat where tobacco enters the stream of commerce, — the marketing warehouse.
The provisions of the Act under review constitute a regulation of interstate and foreign commerce within the competency of Congress under the power delegated to it by the Constitution.
Second. The appellants urge that the standard for allotting farm quotas is so uncertain, vague, and indefinite that it amounts to a delegation of legislative power to an executive officer and thus violates the Constitutional requirement that laws shall be enacted by the Congress.
What has been said in summarizing the provisions of the Act sufficiently discloses that definite standards are laid down for the government of the Secretary, first, in fixing the.quota and, second, in its allotment amongst states and farms. He is directed to adjust the allot
Third. In support of their contention that the Act, as applied to the crop year 1938, deprives them of their property without due process of law in violation of the Fifth Amendment, the appellants rely on the following undisputed facts.
Tobacco growers in "southern Georgia and northern Florida, began to arrange for the planting of their 1938 crop in December, 1937, when it was necessary for them to prepare beds for the planting of the seeds. ■ Thereafter it was-necéssary to cultivate the seed beds, sow and water the seed,, cover the beds with cloth, and otherwise care for the plants until they were large enough to be transplanted: At the date of approval of the Act each of the plaintiffs had planted his, seed beds and, about the middle of March, began transplanting into the fields, which were prepared and fertilized at large expense. The plants were thereafter cultivated and sprayed, and harvesting began during June and continued during July, followed by the curing and grading of the tobacco.
The marketing season for flue-cured tobacco in Georgia and Florida commences about August 1st of each year. Each of the appellants was notified of the quota of his farm shortly before the opening of the auction markets. Prior to the receipt of notice each .of them had largely, if not wholly, completed planting, cultivating, harvesting, curing and grading his tobacco. Until receipt of notice none knew, or could have known, the exact amount of his quota, although, at the time of filing the bill, each had concluded from available information that he would probably market tobacco in excess of any quota for his farm.
The Act was approved February 16, 1938. The Secretary proclaimed a quota for flue-cured tobacco on February 18th and, on the same date, issued instructions for holding a referendum on March 12th. March 25th the Secretary proclaimed the result of the referendum which was favorable to the imposition of a national marketing quota. In June he issued regulations governing the fixing of farm quotas within the states. July 22nd he determined the-apportionment as between states and issued regulations relative to the records to be kept by ware-housemen and others. Shortly before the markets opened each appellant received notice of the allotment to his farm.
The decree is
Affirmed.
52 Stat. 31, as amended March 26, 1938, 52 Stat. 120, April 7, 1938, 52 Stat. 202, May 31, 1938, 52 Stat. 586, and June 20, 1938, 52 Stat. 775; U. S. C. Supp. IV, Title 7, §§ 1281, et seq.
Title III, Subtitle B, Marketing Quotas, Part I, marketing quotas— tobacco, §§ 311-314, inclusive. See also § 301, Definitions. §§ 361-375, inclusive, administrative provisions; §§ 388 and 389 relating to personnel.
The total'supply, the carry-over for a marketing year, the reserve supply level, the normal supply, a normal year’s domestic consumption, and a normal year’s exports, are defined in § 301.
§ 312(d).
§ 312 (c). With respect to 1938 quotas, the proclamation of the result of the referendum was to be made within forty-five days after approval of the Act. § 312 (d).
§§ 313 (b) and 313 (c).
If the tobacco' is marketed directly to .a person outside the United States, the producer is required to pay the penalty. If the tobacco is sold by the grower directly to a purchaser without' intervention by the warehouseman or other agent, the buyer is required to pay the penalty, but may deduct an equivalent amount from the purchase price. §§ 314, 372,. 373. The penalty is to be three cents per pound if that rate is higher than 50% of the market price. § 314,
The Secretary may make regulations necessary for identifying tobacco subject to quotas, § 375; and requiring the keeping of records and the making of reports. The Act imposes upon handlers other than producers a fine of $500 upon conviction of failure to make any report or keep any record, or for making any false report or record. § 373 (a) and (b).
Act of August 24, 1937, c. 754, § 1, 50 Stat. 751; U. S. C. Supp. Ill, Tit. 28, § 401.
Ibid, U. S. C. Supp. III, Tit. 28, § 380 (a).
U. S. C. Tit. 28, § 41 (1).
U. S. C. Tit. 28, § 41 (8).
U. S. C. Tit. 26, § 1543.
Currin v. Wallace, 306 U. S. 1; compare Townsend v. Yeomans, 301 U. S. 441.
The Minnesota Rate Cases, 230 U. S. 352; The Shreveport Case, 234 U. S. 342; Currin v. Wallace, Supra.
Currin v. Wallace, supra; and see Dahnke-Walker Co. v. Bondurant, 257 U. S. 282, 290; Shafer v. Farmers Grain Co., 268 U. S. 189, 198. Compare Lemke v. Farmers Grain Co., 258 U. S. 50.
Champion v. Ames, 188 U. S. 321; Hipolite Egg Co. v. United States, 220 U. S. 45; Hoke v. United States, 227 U. S. 308; Brooks v. United States, 267 U. S. 432; Gooch v. United States, 297 U. S. 124.
Story, Commentaries oh the Constitution (4th Ed.), §§ 965, 1079, 1081, 1089.
United States v. Grimaud, 220 U. S. 506; Avent v. United States, 266 U. S. 127; Hampton & Co. v. United States, 276 U. S. 394; New York Central Securities Corp. v. United States, 287 U. S. 12; Currin v. Wallace, supra.
Dissenting Opinion
dissenting.
Plaintiffs are farmers in Georgia and' on their farms raise tobacco. They sell it in the market year when produced because, in their circumstances, they are unable to process and make it fit to be held for sale in a later year. The sales are at auction markets, through defendants who are Georgia warehousemen, to purchasers intending to take the tobacco outside, the State. The Secretary of Agriculture, assuming to be empowered by the Agricultural Adjustment Act of 1938, undertook to. prescribe the amount of flue-cured tobacco to be raised in . 1938 in the United States, in each State, and on each farm. He failed to let plaintiffs know the quotas respectively assigned to them until after their crops had matured and were ready for marketing. Each raised more than the assigned quota.
The Act declares that, if more than the amount- fixed for a farm is marketed, the warehouseman shall pay to
In United States v. Butler, 297 U. S. 1, we held the federal government without power to control farm production. We condemned the statutory plan there sought to be enforced as repugnant to the Tenth Amendment. That scheme was devised and put in effect under the guise of exertion of power to tax. We held it to be in excess of ¿he powers delegated to the federal government; found the tax, the appropriation of the money raised, and the directions for its disbursement, to be but the means to an unconstitutional end; showed that the Constitution confers no power to regulate production and that therefore legislation for that purpose is forbidden; emphasized the principle established by earlier decisions that a prohibited end may not be attained under pretext of exertion of powers which are granted; and finally we declared that, if Congress may use its power to tax and to spend compulsorily to regulate subjects within the reserved power of the States, that power “would become the instrument for total subversion of the governmental powers reserved to the individual States.”
Assuming that, under Currin v. Wallace, 306 U. S. 1, plaintiffs’ sales in interstate commerce at defendants’ auction markets are to be deemed subject to federal power under the commerce clause, the Court now rules that, within suggested limit's so vague as to be unas-certainable, the exercise of power under that clause, “the-grant being unlimited in its terms, may lawfully extend to the absolute prohibition of such commerce and a for-tiori to limitation of the amount of a given commodity which may be transported in such commerce.”
The Lottery Case, (Champion v. Ames) 188 U. S. 321, held that an Act of Congress prohibiting transportation of lottery tickets in interstate commerce is not inconsistent with any limitation or restriction imposed upon exercise of the powers granted to Congress. After demonstrating the illicit character of lottery tickets, the Court said (p. 357): “We should hesitate long before adjudging that ah evil of such appalling character, carried on through interstate commerce, cannot be met and crushed by the only power competent to that end. . . . [p. 358] It is a kind of traffic which no one can be entitled to pursue as of right.”
Hipolite Egg Co. v. United States, 220 U. S. 45, held within federal power the provisions of the Food and Drug Act forbidding transportation in interstate commerce of food “debased by adulteration” and authorizing articles so transported to be seized as contraband-.
Hoke v. United States, 227 U. S. 308, sustained congressional prohibition of interstate transportation of women for immoral purposes.
Brooks v. United States, 267 U. S. 432, upheld a statute of the United States making it a crime to transport a stolen automobile in interstate commerce.
Gooch v. United States, 297 U. S. 124, construed an Act of Congress making it a crime to transport a kidnapped person in interstate commerce.
Plainly these cases give no support to the view that Congress has power generally to prohibit or limit, as it may choose, transportation in interstate commerce of corn, cotton, rice, tobacco, or wheat. Our decisions establish the contrary:
Wilson v. New, 243 U. S. 332, upheld an Act regulating hours of service of employees of interstate earners
Hammer v. Dagenhart, 247 U. S. 251, held repugnant to the commerce clause and to the Tenth Amendment an Act prohibiting transportation in interstate commerce of articles made at factories in which child labor was employed. The Court said (p. 269): “In other words, the power [granted by the commerce clause] is one to control the means by which commerce is carried on, which is directly the contrary of the assumed right to forbid commerce from moving and thus destroy it as to particular commodities. But it is insisted that the adjudged cases in this court establish the doctrine that the power to regulate given to Congress incidentally includes the authority to prohibit the movement of ordinary commodities and therefore that the subject is not open for discussion. The cases demonstrate the contrary. They rest upon the character of the particular subjects dealt with and the fact that the scope of governmental authority, state or national, possessed over them is such that the authority to prohibit is as to them but the exertion of the power to regulate. . . . [p. 276] In our view the necessary effect of this act is, by means of a prohibition
Heretofore, in cases involving the power of Congress to forbid or condition transportation in interstate commerce, this Court has been careful to determine whether, in view of the nature and character of the subject, the measure could be sustained as an appropriate regulation of commerce.
For reasons above suggested, I am of opinion:
The penalty is laid on the farmer to prevent production in excess of his quota. It is therefore invalid.
To impose penalties for marketing in excess of quotas not disclosed before planting and cultivation is to deprive plaintiffs of their liberty and property without due process of law.
The judgment of the district court should be reversed.
Lottery Case, 188 U. S. 321, 355 et seq. United States v. Delaware & Hudson Co., 213 U. S. 366, 415. Hipolite Egg Co. v. United States, 220 U. S. 45, 57-58. Hoke v. United States, 227 U. S. 308, 321-323. Seven Cases v. United States, 239 U. S. 510, 514. Caminetti v. United States, 242 U. S. 470, 491-492. Hammer v. Dagenhart, 247 U. S. 251, 270 et seq. Brooks v. United States, 267 U. S. 432, 436-438. See Wilson v. New, 243 U. S. 332, 346. Cf. Clark Distilling Co. v. Western Md. Ry. Co., 242 U. S. 311, 325. United States v. Hill, 248 U. S. 420. Kentucky Whip & Collar Co. v. Illinois Central R. Co., 299 U. S. 334, 346 et seq.
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