Maryland Co-Operative Milk Producers, Inc. v. Miller

Urner, J., delivered the opinion of the Court. Two affiliated corporations, known as Maryland Cooperative Milk Producers, Inc., and Maryland State Dairymen’s Association, Inc., and three members of both organizations, are plaintiffs in this suit for an injunction to prevent the Maryland Milk Control Commission, and its members individually, from enforcing the provisions of the “Milk Control Law,” enacted by chapter 310 of the Acts of 1935 of the General Assembly of Maryland. If the act is valid and effective, the plaintiffs are subject to regulation and control by the commission in their operations as milk producers and distributors. It is alleged in their bill of complaint that the act is unconstitutional and void.

By the decree of the lower court the statute was sustained as a valid exercise of legislative power, and the bill of complaint was therefore dismissed. From that decree the plaintiffs have appealed. The purposes of the challenged act are thus described in its title: “An Act to add a new Article to the Code of Public General Laws of Maryland, title ‘Milk Control,’ to follow Article 65 of said Code and to be known as Article 65-A; creating a Milk Control Commission; establishing its jurisdiction; powers and duties; regulating the production, transportation, processing, storage, distribution, delivery, and sale of milk; providing for the licensing of milk dealers and the issuing of permits to producers ⁸³ and the payment of fees therefor; requiring distributors to furnish bonds or their cash equivalent or a satisfactory financial statement to secure payments to producers and all other payments authorized or required by the Commission; authorizing the examination of the business, papers, and affairs of, and requiring the filing of reports by milk dealers and producers, and permitting with limitations the dissemination of information obtained therefrom; authorizing the issuance of subpoenas by the Commission or its agents, and conferring jurisdiction upon courts to punish contempts or to prohibit violations of orders of the Commission; providing for appeals to the courts from decisions of the Commission ; authorizing meetings and agreements between local groups of producers and distributors and between local groups of milk dealers; imposing penalties; repealing all laws inconsistent with the provisions of this Act; providing for its termination June 1st, 1937; declaring an emergency with respect to production and marketing of milk, and making the Act an emergency measure to take effect from the date of its passage.” Section 1 of the new Code article enacted under that title defines various terms which it employs. By section 2 the Maryland Milk Control Commission is created, and the method for the selection of its three members by the Governor is prescribed.

The provisions of section 3 are in part as follows: “The Commission, when requested by a substantial proportion of the producers and/or consumers and/or distributors in any marketing area, shall have power: “(a) To supervise and regulate the entire milk industry in any marketing area established under sub-section (e) of this Section. The general power hereby conferred upon the Commission extends to the supervision and regulation of the production, processing, distribution and sale of the entire output of the lacteal secretion of dairy animals in this State to the extent that the same is available in the form of milk as defined by this Act. * * * “ (b) To investigate all matters pertaining to the pro ⁸⁴ duction, transportation, processing, storage, distribution and sale of milk in this State. For the purpose of such investigation or any hearing which the Commission is authorized or required to conduct, the Commission or any member thereof, and its executive secretary shall have power to administer oaths, take depositions, issue subpoenas, compel the attendance of witnesses and the production of books, accounts, papers, records, documents and testimony. * * * “(c) To have access to and at all reasonable hours enter any place where milk is being produced, transported, processed, stored, bottled or sold. * * * “(d) To act as mediator and arbitrator in any controversy or issue that may arise among or between producers and dealers, or any other group in this Act defined, participating in the milk industry. “ (e) To determine and designate any area of the State as a natural marketing area, whenever such determination and designation may be requested, as provided in this Section, to establish definite boundaries between markets in order to secure uniformity, enforce the provisions and effect the purposes of this Act. “(f) To appoint one or more advisory boards representing all phases of the industry affected, including producers and distributors, to assist the Commission in the performance of its duties. * * * “(g) To adopt and enforce all rules, regulations and orders necessary to carry out the provisions of this Act, including rules and regulations establishing minimum prices to be paid by milk dealers to producers and others, and to be charged by producers and others to milk .dealers for milk in its various grades and uses” and “minimum wholesale or retail prices to be charged by milk dealers for milk handled within the State for fluid consumption wheresoever produced. * * * “(h) To require the butter fat content of milk and cream received by the distributors from producers to be determined by independent laboratories or qualified persons approved by the. Commission.” ⁸⁵ Section 4 provides penalties for willful failure to comply with the requirements of the act or any lawful rule or order of the commission.

Section 5 is under the caption, “Milk Dealer’s License.” Every application for such a license must be in writing and must include a designation of the “market or markets in or in connection with which the business of the applicant is proposed to be conducted,” and must also state the applicant’s “consent to the jurisdiction of the Commission in establishing wholesale and retail prices in the market or markets specified in his application.” Sections 6 and 7 authorize the granting, refusal, or revocation of licenses under prescribed conditions. Provisions for court review of actions of the commission under section 6 are contained in section 8. In section 9 certain conditions are specified for consideration by the commission in “determining the reasonableness of prices to be paid or charged * * * for any grade, quantity or class of milk.” Section 10 refers to the form in which licenses shall be issued, section 11 to amending schedules of prices, and section 12 to the nonrenewability of licenses. Included in section 13 are provisions that all milk “received and/or produced for sale within any marketing area” established under the provisions of the Act “shall be taxed not to exceed one cent for each one hundred pounds,” to be paid by the dealer to the commission, but one-half of the amount to be collectible by the dealer from the producer, and that “the books and records of all such dealers shall be open to inspection by the Commission at all times for the purpose of determining the amount of tax due.” Joint agreements of “any two or more distributors purchasing in the same market,” “upon prices to be paid by milk dealers to producers and others and to be charged by producers and others to milk dealers” are authorized by section 14, “subject to the regulations laid down in sub-paragraph (g) of Section three,” and subject to the commission’s approval. ⁸⁶ Section 15 provides that all moneys received by the commission shall be paid into the state treasury “to the credit of a special fund therein to be known as the ‘Milk Marketing Fund.’ ” which “shall be subject to withdrawal by the Commission on vouchers drawn upon the State Comptroller,” and “shall be used only for the administration and enforcement” of the act, and that the commission may from time to time reduce or increase the tax authorized 'by section 13 within the rate limit therein specified.

Auditing of the commission’s books and accounts is the subject of section 16. The commission is empowered by section 17 to require licensees to keep records and make reports of facts pertinent and material to the enforcement of the act. Section 18 applies the provisions of the act to the distribution of milk produced outside of Maryland after “it shall have come to rest within the State.” It is declared by section 19 that no provision of the act “shall apply or be presumed to apply to foreign or interstate commerce, except in so far as the same may be permitted by the