Hillside Dairy Inc. v. Lyons
Concurring in Part
concurring in part and dissenting in part.
I join Parts I and III of the Court’s opinion and respectfully dissent from Part II, which holds that § 144 of the Federal Agriculture Improvement and Reform Act of 1996, 7 U. S. C. § 7254, “does not clearly express an intent to insulate California’s pricing and pooling laws from a Commerce Clause challenge.” Ante, at 66. Although I agree that the Court of Appeals erred in its statutory analysis, I nevertheless would affirm its judgment on this claim because “[t]he negative Commerce Clause has no basis in the text of the Constitution, makes little sense, and has proved virtually unworkable in application,” Camps Newfound/Owatonna, Inc. v. Town of Harrison, 520 U. S. 564, 610 (1997) (Thomas, J., dissenting), and, consequently, cannot serve as a basis for striking down a state statute.
Opinion of the Court
delivered the opinion of the Court.
In most of the United States, not including California, the minimum price paid to dairy farmers producing raw milk is regulated pursuant to federal marketing orders. Those orders guarantee a uniform price for the producers, but through pooling mechanisms require the processors of different classes of dairy products to pay different prices. Thus, for example, processors of fluid milk pay a premium price, part of which goes into an equalization pool that provides a partial subsidy for cheese manufacturers who pay a net price that is lower than the farmers receive. See West Lynn Creamery, Inc. v. Healy, 512 U. S. 186, 189, n. 1 (1994).
The California Legislature has adopted a similar program to regulate the minimum prices paid by California processors to California producers. In the cases before us today, out-of-state producers are challenging the constitutionality of a 1997 amendment to that program. They present us with two questions: (1) whether § 144 of the Federal Agriculture
I
Government regulation of the marketing of raw milk has been continuous since the Great Depression.
While it serves the same purposes as the federal marketing orders, California’s regulatory program is more complex.
The complexities of the California scheme are not relevant to these cases; what is relevant is the fact California processors of fluid milk pay a premium price (part of which goes into a pool) that is higher than either of the prices paid to the producers.
In 1997, the California Department of Food and Agriculture amended its plan to require that contributions to the
Without reaching the merits of petitioners’ constitutional claims, the District Court dismissed both cases and the Court of Appeals for the Ninth Circuit affirmed. 259 F. 3d 1148 (2001). Relying on its earlier decision in Shamrock Farms Co. v. Veneman, 146 F. 3d 1177 (1998), the court held that a federal statute enacted in 1996 had immunized California’s milk pricing and pooling laws from Commerce Clause challenge. It also held that the corporate petitioners had no standing to raise a claim under the Privileges and Immunities Clause, and that the individuals’ claim under that Clause failed because the 1997 plan amendments did not, “on their face, create classifications based on any individual’s residency or citizenship.” 259 F. 3d, at 1156. We granted certiorari to review those two holdings, 537 U. S. 1099 (2003), but in doing so we do not reach the merits of either constitutional claim.
II
In some respects, the State’s composition standards set forth in the 1947 Act exceed those set by the federal Food and Drug Administration (FDA). For example, California’s minimum standard for reduced fat milk requires that it contain at least 10 percent solids-not-fat (which include protein,
“Nothing in this Act or any other provision of law shall be construed to preempt, prohibit, or otherwise limit the authority of the State of California, directly or indirectly, to establish or continue to effect any law, regulation, or requirement regarding—
“(1) the percentage of milk solids or solids not fat in fluid milk products sold at retail or marketed in the State of California; or
“(2) the labeling of such fluid milk products with regard to milk solids or solids not fat.” 7 U. S. C. § 7254.
Thereafter, Shamrock Farms brought another suit against the Secretary of the California Department of Food and Agriculture challenging the validity of both the State’s compositional standards and its milk pricing and pooling laws. In that case, the Court of Appeals held that § 144 had immunized California’s marketing programs as well as the compositional standards from a negative Commerce Clause chai-
The text of the federal statute plainly covers California laws regulating the composition and labeling of fluid milk products, but does not mention laws regulating pricing. Congress certainly has the power to authorize state regulations that burden or discriminate against interstate commerce, Prudential Ins. Co. v. Benjamin, 328 U. S. 408 (1946), but we will not assume that it has done so unless such an intent is clearly expressed. South-Central Timber Development, Inc. v. Wunnicke, 467 U. S. 82, 91-92 (1984). While § 144 unambiguously expresses such an intent with respect to California’s compositional and labeling laws, that expression does not encompass the pricing and pooling laws. This conclusion is buttressed by the separate California statutes addressing the composition and labeling of milk products, on the one hand, and the pricing and pooling of milk on the other. See supra, at 62-65 and this page. The mere fact that the composition and labeling laws relate to the sale of fluid milk is by no means sufficient to bring them within the scope of §144. Because §144 does not clearly express an intent to insulate California’s pricing and pooling laws from a Commerce Clause challenge, the Court of Appeals erred in relying on § 144 to dismiss the challenge.
III
Article IV, § 2, of the Constitution provides:
“The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.”
Petitioners, who include both individual dairy farmers and corporate dairies, have alleged that California’s milk pricing laws violate that provision. The Court of Appeals held that the corporate petitioners have no standing to advance such
In Chalker, we held that a Tennessee tax imposed on a citizen and resident of Alabama for engaging in the business of constructing a railroad in Tennessee violated the Privileges and Immunities Clause. The tax did not on its face draw any distinction based on citizenship or residence. It did, however, impose a higher rate on persons who had their principal offices out of State. Taking judicial notice of the fact that “the chief office of an individual is commonly in the State of which he is a citizen,” we concluded that the practical effect of the provision was discriminatory. Id., at 527. Whether Chalker should be interpreted as merely applying the Clause to classifications that are but proxies for differential treatment against out-of-state residents, or as prohibiting any classification with the practical effect of discriminating against such residents, is a matter we need not decide at this stage of these cases. Under either interpretation, we agree with petitioners that the absence of an express statement in the California laws and regulations identifying out-of-state citizenship as a basis for disparate treatment is not a sufficient basis for rejecting this claim. In so holding, however, we express no opinion on the merits of petitioners’ Privileges and Immunities Clause claim.
* * *
The judgment of the Court of Appeals is vacated, and these cases are remanded for further proceedings consistent with this opinion.
It is so ordered.
The history and purpose of federal regulation of milk marketing is described in some detail in Zuber v. Allen, 396 U. S. 168, 172-187 (1969).
Because processors of fluid milk typically manufacture some other products as well, their respective pool contributions reflect the relative amounts of those end uses. Each processor’s mix of end uses produces an individual monthly “blend price” that is multiplied by its total purchases. Under federal orders the term “blend price” has a different meaning; it usually refers to the price that the producer receives. See West Lynn Creamery, Inc. v. Healy, 512 U. S. 186, 189, n. 1 (1994).
After the 1997 amendment, processors whose blend price exceeds the quota price must make contributions to the pool on their out-of-state purchases as well as their in-state purchases.
Reference
- Full Case Name
- HILLSIDE DAIRY INC. Et Al. v. LYONS, SECRETARY, CALIFORNIA DEPARTMENT OF FOOD AND AGRICULTURE, Et Al.
- Cited By
- 38 cases
- Status
- Published