Mooney, Richard F.

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Constitutional Law: Police Power: Price Fixing

Marquette University Law School

Marquette Law ReviewVolume 18Issue 3 April 1934 Article 8Constitutional Law: Police Power: Price FixingRichard F. MooneyFollow this and additional works at: http://scholarship.law.marquette.edu/mulrPart of the Law CommonsThis Article is brought to you for free and open access by the Journals at Marquette Law Scholarly Commons. It has been accepted for inclusion inMarquette Law Review by an authorized administrator of Marquette Law Scholarly Commons. For more information, please contactmegan.obrien@marquette.edu.Repository CitationRichard F. Mooney, Constitutional Law: Police Power: Price Fixing, 18 Marq. L. Rev. 198 (1934).Available at: http://scholarship.law.marquette.edu/mulr/vol18/iss3/8THE MARQUETTE LAW REVIEWsold by a retailer in the course of trade. The creditor should not be required torecord his security instrument to get protection against any creditors of the bor-rower.HOWARD J. MACHESKY.CONSTITUTIONAL LAw-PoLICE POWER-PRIcE FIXING.-A law passed by theNew York state legislature (Chapter 158 of the Laws of 1933) declared that themilk industry was of paramount importance to the people of the state; that con-ditions existed in the industry which warranted control in the interests of thepublic welfare; and founded a conrol board with the power to regulate the entiremilk industry and in particular to fix minimum and maximum prices for the saleof fluid milk. The law was based on an extensive survey made by a joint legisla-tive committee which reported that the evils in the industry, owing to certainpeculiar factors, could not be expected to right themselves through the ordinaryplay of the forces of supply and demand. The statute also provided for a crimi-nal sanction. Defendant was convicted of selling milk at a price lower than thatfixed by the control board. His conviction was affirmed by the New York Courtof Appeals. [262 N.Y. 259, 186 N.E. 694 (1933) ; Recent Decision, 18 Marq. LawRev. 56 (1933).] Defendant appeals to the Federal Supreme Court on the groundthat the statute contravenes the 14th Amendment, particularly the due processclause. Held, judgment of conviction affirmed. The statute is constitutional Neb-bia v. New York, 54 Sup. Ct. 505, 78 L.Ed. 563 (1934).A state legislature has no power to fix prices at which commodities may besold, services rendered, or property used, unless the business or property involvedis "affected with a public interest." Munn v. Illinois, 94 U.S. 113, 24 L.Ed. 77(1876) ; William v. Standard Oil Co., 278 U.S. 235, 49 Sup. Ct. 115, 73 L.Ed. 287,60 A.L.R. 596 (1928). As first ennunciated in the Munn case, where a state stat-ute fixing maximum charges for the storage of grain in warehouses was sus-tained, this simply meant that a business, although private in its nature, may be-come of such public consequence and so affect the community at large, as to besubject to reasonable regulation in the interest of the public. However, Mr. Jus-tice Field, dissenting in that case, construed the phrase "affected with a publicinterest" more narrowly, to mean a business dedicated by the owner to publicuses, or a business the use of which was granted by the government, or in con-nection with which special privileges were conferred. It was this constructionthat was adopted by the court in decisions subsequent to Munn v. Illinois, supra;so that statutes very similar to the one in the instant case have been held invalidas taking property without due process of law: Lochner v. New York, (hours oflabor in bakeries) 198 U.S. 45, 25 Sup. Ct. 539, 49 L.Ed. 937 (1905) ; Adkins v.Children's Hospital, (minimum wages for women) 261 U.S. 525, 43 Sup. Ct.394, 67 L.Ed. 785 (1923) ; Wolff Packing Co. v. Court of Ind. Rel., (wages forthe meat packing industry) 262 U.S. 522, 43 Sup Ct. 630, 67 L.Ed. 1103 (1923);Tyson & Bro. v. Banton, (maximum price for resold theater tickets) 273 U.S.418, 47 Sup. Ct. 426, 71 L.Ed. 718 (1926) ; Fairmount Creamery Co. v. Minnesota,(price at which creameries could buy cream) 274 U.S. 1, 47 Sup. Ct. 506, 71L.Ed. 893 (1926); Ribnick v. McBride, (charges to be made by employmentagencies) 277 U.S. 350, 48 Sup. Ct. 545, 72 L. Ed. 913 (1927) ; Williams v. Stand-ard Oil Co., (price at which gasoline could be sold (278 U.S. 235, 49 Sup. Ct.115, 73 L.Ed. 287 (1928). In each of these cases the legislature, no doubt, thoughtthat conditions warranted control in the interests of public welfare, and thatthe regulation passed was reasonably adapted to achieving such control.RECENT DECISIONSIt seems that the extraordinary economic emergency, that existed when thelaw was passed, is not used by the court as a justification of its decision; thecases of Wilson v. New, (fixing of wages and hours of railroad employees dur-ing a national emergency sustained) 243 U.S. 332, 37 Sup. Ct. 298, 61 L.Ed. 755(1917) ; Block v. Hirsh, (fixing of rents during emergency in housing facilitiessustained) 256 U.S. 135, 41 Sup. Ct. 458, 65 L.Ed. 865 (1921) ; and Marcus BrownHolding Co. v. Feldman, (same as Block case) 256 U.S. 170, 41 Sup. Ct. 465, 65L.Ed. 877 (1921) are not even cited in the opinion.The court goes back to the majority opinion in Munn v. Illinois, supra; in thatcase defendants enjoyed a virtual monopoly, but neither the enjoyment of amonopoly nor of a franchise is held to be "the touchstone of public interest"which justifies the regulation in the instant case. 78 L.Ed. 563, 575; cf. Brass v.North Dakota, 153 U.S. 391, 14 Sup. Ct. 857, 38 L.Ed. 757 (1894) where priceregulation for grain elevators was sustained even though it was established thatthe business was highly competitive. In rediscovering Munn v. Illinois, supra, thecourt renounces the laissez-faire philosophy of the cases which had given so nar-row a construction to the phrase, "affected with a public interest." As the lawnow stands, a business is affected with a public interest, so as to be subject tothe exercise of the police power, when the legislature reasonably determines thatregulation is for the best interests of the people as a whole. And such regula-tion will not be considered as denying due process unless it is "arbitrary, dis-criminatory, or demonstrably irrelevant to the policy the legislature is free toadopt * * * " A definite tendency is indicated to hold all legislation, which ispassed in the interests of public welfare, valid unless the party assailing suchlegislation can show it to be unreasonable and arbitrary. See Notes, 82 U. of Pa.Law Rev. 619 (1934). Such a construction in effect adopts the economic philoso-phy and the approach to the due process clause of Mr. Justice Brandeis, as evi-denced in his dissenting opinions in New State Ice Co. v. Liebinann, 285 U.S.262, 52 Sup. Ct. 371, 76 L.Ed. 747 (1932) ; and Liggett Co. v. Lee, 288 U.S. 517,53 Sup. Ct. 481, 77 L.Ed. 929 (1933).RPCHARD F. MOONEY.PATENT RIGHTS-INJUNCTION IN PATENT CASES.-The city appeals from adecree holding the appellee's patents covering processes and mechanisms appro-priate for their practice, in purification of sewage valid and infringed by theoperation of the city's large sewage disposal plant. The decree granted an ac-counting and also an injunction restraining the city from operating its plant.The patents had not as yet expired. Held, the decree is affirmed except as tothe injunction and as to it the decree is reversed. The City of Milwaukee v. Ac-tivated Sludge, Inc., Fed. (C.C. A. 7th, 1934).The right (franchise) which the patent grants to the inventor and his as-signs is the right to exclude everyone from making, using or vending the in-vention patented. Bloonver v. McQuewan, et al, 14 How. 539, 549, 14 L.Ed. 532(1852) ; U. S. Const. Art. 1, § 8, cl. 8; Pomeroy's Eq. Rem. 2nd Ed. § 565 (1919).The inventor does not get from the law a right to a use he did not have beforebut he gets the right to an exclusive use. United States v. United Shoe MachineCo., 247 U.S. 32, 58, 62 L.Ed. 968 (1917). When the right has been legally estab-lished, the obvious means of protecting it is by an injunction. If no other rem-edy could be given than an action at law for damages, the inventor would beruined by the necessity of perpetual litigation. Story's Eq. Jur. § 931 (1877);Allington & Curtis Mfg. Co., et al v. Booth, 78 Fed. 878 (C.C.A., 2d, 1897); §

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Constitutional Law: Police Power: Price Fixing

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