The Constitution of the United States of America: Analysis and Interpretation Part 24

MISCELLANEOUS

Banks and Banking

A State statute which forbids individuals or partnerships to engage in the banking business without a license is not, as to one whose business chiefly consists in receiving deposits for periodic shipment to other States and to foreign countries, invalid as a regulation of interstate and foreign commerce.[893]

Brokers

A statute which requires dealers in securities evidencing t.i.tle or interest in property to obtain a license from a State officer, is not invalid as applied to dispositions within the State securities transported from other States.[894]

Commission Men

A statute requiring commission merchants to give bonds for the protection of consignees may be validly applied to commission merchants handling produce shipped to them from without the State.[895]

Attachment and Garnishment

Railway cars are not exempt from attachment under State laws, although they may have been or are intended to be used in interstate commerce.[896]

Statutory Liens

A State statute which gives a lien upon all vessels whether domestic or foreign, and whether engaged in interstate commerce or not, for injuries to persons and property within the State, does not as applied to nonmaritime torts offend the commerce clause, there being no act of Congress in conflict.[897] Nor can the enforcement of a lien for materials used in the construction of a vessel be avoided because the vessel is engaged in interstate commerce.[898]

The Police Power and the Subject-Matter of Commerce

SCOPE OF THE POLICE POWER

"Quarantine regulations are essential measures of protection which the States are free to adopt when they do not come into conflict with Federal action. In view of the need of conforming such measures to local conditions, Congress from the beginning has been content to leave the matter for the most part, notwithstanding its vast importance, to the States and has repeatedly acquiesced in the enforcement of State laws.

* * * Such laws undoubtedly operate upon interstate and foreign commerce. They could not be effective otherwise. They cannot, of course, be made the cover for discriminations and arbitrary enactments having no reasonable relation to health * * *; but the power of the State to take steps to prevent the introduction or spread of disease, although interstate and foreign commerce are involved (subject to the paramount authority of Congress if it decides to a.s.sume control), is beyond question.[899] * * * State inspection laws and statutes designed to safeguard the inhabitants of a State from fraud and imposition are valid when reasonable in their requirements and not in conflict with Federal rules, although they may affect interstate commerce in their relation to articles prepared for export or by including incidentally those brought into the State and held for sale in the original imported packages."[900]

QUARANTINE LAWS

In two earlier cases a Missouri statute which prohibited the driving of all Texan, Mexican, and Indian cattle into the state during certain seasons of the year was held void;[901] while a statute making anybody in the State who had Texas cattle which had not wintered north of a certain line liable for damage through the communication of disease from these to other cattle was sustained;[902] as were also the regulations of a sanitary commission which excluded all cattle, horses, and mules, from the State at a certain period when anthrax was prevalent.[903]

Reviewing previous cases in the one last cited, the Court declared their controlling principle to be simply whether the police power of the State had been exerted to exclude "_beyond what is necessary for any proper quarantine_," a question predominantly of fact, and one therefore to be determined for each case with only general guidance from earlier decisions.[904]

More recent cases conform to the same pattern. Among measures sustained are the following: an Ohio statute forbidding the sale in that State of condensed milk unless made from unadulterated milk;[905] a New York statute penalizing the sale with intent to defraud of preparations falsely represented to be Kosher;[906] a New York statute requiring that cattle shall not be imported for dairy or breeding purposes unless accompanied by the certificate of a proper sanitary official in the State of origin, in order to prevent the spread of an infectious disease;[907] an order of a State Department of Agriculture, pursuant to a State law, regulating the standards of containers in which agricultural products (berries) may be marketed within the State;[908] a State statute restricting the processing of fish found within the waters of the State with the purpose of conserving it for food, even though it also operates upon fish brought into the State from without;[909] the price fixing and licensing provisions of a State Milk and Cream Act, not applicable to transactions in interstate commerce, by declaration of the act;[910] a Maine statute requiring the registration with the State Health Department of cosmetic preparations for the purpose of ascertaining whether the products are harmless;[911] an Indiana Animals Disposal Act requiring that animal carca.s.ses, not promptly disposed of by the owner, be delivered to the representative of a disposal plant licensed by the State, and prohibiting their transportation on the public highways for any other purpose;[912] a Pennsylvania statute providing for the licensing and bonding of all milk dealers and fixing a minimum price to be paid producers, as applied to a dealer purchasing milk within the State for shipment to points outside it.[913]

STATE INSPECTION LAWS

The application of State inspection laws to imports from outside the State has been sustained as warranted by local interests and as not discriminating against out-of-state products, in the following instances: A North Carolina statute providing that "every bag, barrel, or other package" of commercial fertilizer offered for sale in the State should bear a label truly describing its chemical composition, which must comply with certain requirements, and charging 25 cents per ton to meet the cost of inspection;[914] an Indiana statute forbidding the sale in the original package of concentrated feeding stuffs prior to inspection and a.n.a.lysis for the purpose of ascertaining whether certain minimum standards as to composition had been met;[915] a Minnesota statute requiring as a precondition of its being offered for sale in the State, the inspection of illuminating oil and gasoline;[916] a Kansas statute forbidding any moving picture film or reel to be exhibited in the State unless it had been examined by the State Superintendent of Instruction and certified by him as moral and instructive and not tending to debase or corrupt the morals.[917] A Minnesota statute, on the other hand, which forbade the sale in any city of the State of any beef, mutton, lamb, or pork which, had not been inspected on the hoof by local inspectors within twenty-four hours of slaughter, was held void.[918] Its "necessary operation," said the Court, was to ban from the State wholesome and properly inspected meat from other States.[919]

Also a Virginia statute which required the inspection and labelling of all flour brought into the State for sale was disallowed because flour produced in the State was not subject to inspection;[920] likewise a Florida statute providing for the inspection of all cement imported into the State and enacting a fee therefor, but making no provision for the inspection of the local product, met a like fate;[921] as did also a Madison, Wisconsin ordinance which sought to exclude a foreign corporation from selling milk in that city solely because its pasteurization plants were more than five miles away.[922]

STATE PROHIBITION LAWS; THE ORIGINAL PACKAGE DOCTRINE

The original package doctrine made its debut in Brown _v._ Maryland,[923] where it was applied to remove imports from abroad which were still in the hands of the importer in the original package, out of the reach of the State's taxing power. This rule the Court, overriding a dictum in Marshall's opinion in Brown _v._ Maryland,[924] rejected outright after the Civil War as to imports from sister States.[925]

However, when in the late eighties and early nineties State-wide Prohibition laws began making their appearance, the Court seized on the rejected dictum and began applying it as a brake on the operation of such laws with respect to interstate commerce in intoxicants, which the Court denominated "legitimate articles of commerce." While holding that a State was ent.i.tled to prohibit the manufacture and sale within its limits of intoxicants,[926] even for an outside market--manufacture being no part of commerce[927]--it contemporaneously laid down the rule, in Bowman _v._ Chicago and Northwestern Railroad Co.,[928] that so long as Congress remained silent in the matter, a State lacked the power, even as part and parcel of a program of Statewide prohibition of the traffic in intoxicants, to prevent the shipment into it of intoxicants from a sister State; and this holding was soon followed by another to the effect that, so long as Congress remained silent, a State had no power to prevent the sale in the original package of liquors introduced from another State.[929] The effect of the latter decision was soon overcome by an act of Congress, the so-called Wilson Act, repealing its alleged silence,[930] but the Bowman decision still stood, the act in question being interpreted by the Court not to subject liquors from sister States to local authority until their arrival in the hands of the person to whom consigned.[931] Not till 1913 was the effect of the decision in the Bowman case fully nullified by the Webb-Kenyon Act,[932]

which placed intoxicants entering a State from another State under the control of the former for all purposes whatsoever.

OLEOMARGARINE AND CIGARETTES

Long before this the immunity temporarily conferred by the original package doctrine upon liquors had been extended to cigarettes[933] and, with an instructive exception, to oleomargarine. The exception referred to was made in Plumley _v._ Ma.s.sachusetts,[934] where the Court held that a statute of that State forbidding the sale of oleomargarine colored to look like b.u.t.ter could validly be applied to oleomargarine brought from another State and still in the original package. The justification of the statute to the Court's mind was that it sought "to suppress false pretenses and promote fair dealing in the sale of an article of food." Nor did Leisy and Co. _v._ Hardin[935] apply, said Justice Harlan for the Court, because the beer in that case was "genuine beer, and not a liquid or drink colored artificially so as to cause it to look like beer." That decision was never intended, he continued, to hold that "a State is powerless to prevent the sale of articles manufactured in or brought from another State, and subjects of traffic and commerce, if their sale may cheat the people into purchasing something they do not intend to buy * * *."[936] Obviously, the argument was conclusive only on the a.s.sumption that a State has a better right to prevent frauds than it has to prevent drunkenness and like evils; and doubtless that is the way the Court felt about the matter at that date.

On the one hand, the liquor traffic was a very ancient, if not an altogether, venerable inst.i.tution, while oleomargarine was then a relatively novel article of commerce whose wholesomeness was suspect. On the other hand, laws designed to secure fair dealing and condemnatory of fraud followed closely the track of the common law, while anti-liquor laws most decidedly did not. The real differentiation of the two cases had to be sought in historical grounds. Yet the State must not put unreasonable burdens upon interstate commerce even in oleomargarine.

Thus a Pennsylvania statute forbidding the sale of this product even in the unadulterated condition was p.r.o.nounced invalid so far as it operated to prevent the introduction of such oleomargarine from another State and its sale in the original package;[937] as was also a New Hampshire statute which required that all oleomargarine marketed in the State be colored pink.[938] A little later in the case above mentioned involving cigarettes, the Court discovered some of the difficulties of the original package doctrine when applied to interstate commerce, in which the package is not so apt to be standardized as it is in foreign commerce.[939]

DEMISE OF THE ORIGINAL PACKAGE DOCTRINE

What importance has the original package doctrine today as a restraint on State legislation affecting interstate commerce? The answer is, very little, if any. State laws prohibiting the importation of intoxicating liquor, have since the pa.s.sage of the Twenty-first Amendment consistently been upheld, even when imposing a burden on interstate commerce or discriminating against liquor imported from another State.[940] Indeed the Court has, without appealing to the Twenty-first Amendment, even gone so far as to uphold a statute requiring a permit for transportation of liquor through the enacting State.[941] In Whitfield _v._ Ohio,[942] moreover, the Court upheld a State law prohibiting the sale in open market of convict-made goods including sales of goods imported from other States and still in the original package. While the decision is based on the Hawes-Cooper Act of 1929,[943] which follows the pattern of the Webb-Kenyon Act, Justice Sutherland speaking for the Court, takes pains to disparage the "unbroken-package doctrine, as applied to interstate commerce, * * *, as more artificial than sound."[944] Indeed, earlier cases make it clear that the enforcement of State quarantine and inspection acts, otherwise const.i.tutional, is not to be impeded by the doctrine in any way.[945]

CURBS ON THE INTERSTATE MOVEMENT OF PERSONS

Prior to the Civil War the slaveholding States, ever fearful of a slave uprising, adopted legislation meant to exclude from their borders free Negroes whether hailing from abroad or from sister States, and in 1823 a South Carolina Negro Seamen's Act embodying this objective was held void by Justice William Johnson, himself a South Carolinian, in a case arising in the Carolina circuit and involving a colored British sailor.[946] The basis of the ruling, which created tremendous uproar in Charleston,[947] was the commerce clause and certain treaties of the United States. There followed two rulings of Attorneys General, the earlier by Attorney General Wirt, denouncing such legislation as unconst.i.tutional;[948] the latter by Attorney General Berrien, sustaining it;[949] and in City of New York _v._ Miln[950] the Court, speaking by Justice Barbour of Virginia, a.s.serted, six years after Nat Turner's rebellion, the power of the States to exclude undesirables in sweeping terms, which in the Pa.s.senger Cases,[951] decided in 1840, a narrowly divided Court considerably qualified. Shortly after the Civil War the Court overturned a Nevada statute which sought to halt the further loss of population by a special tax on railroads on every pa.s.senger carried out of the State.[952] This time only two Justices invoked the commerce clause; the majority, speaking by Justice Miller held the measure to be an unconst.i.tutional interference with a right of national citizenship--a holding today translatable, in the terminology of the Fourteenth Amendment, as an abridgment of a privilege or immunity of citizens of the United States.

Against this background the Court in 1941, in Edwards _v._ California,[953] held void a statute which penalized the bringing into that State, or the a.s.sisting to bring into it, any nonresident knowing him to be "an indigent person." Five Justices, speaking by Justice Byrnes, held the act to be even as to "persons who are presently dest.i.tute of property and without resources to obtain the necessities of life, and who have no relatives or friends able and willing to support them,"[954] an unconst.i.tutional interference with interstate commerce.

"The State a.s.serts," Justice Byrnes recites, "that the huge influx of migrants into California in recent years has resulted in problems of health, morals, and especially finance, the proportions of which are staggering. It is not for us to say that this is not true. We have repeatedly and recently affirmed, and we now reaffirm, that we do not conceive it our function to pa.s.s upon 'the wisdom, need, or appropriateness' of the legislative efforts of the States to solve such difficulties. * * * But this does not mean that there are no boundaries to the permissible area of State legislative activity. There are. And none is more certain than the prohibition against attempts on the part of any single State to isolate itself from difficulties common to all of them by restraining the transportation of persons and property across its borders. It is frequently the case that a State might gain a momentary respite from the pressure of events by the simple expedient of shutting its gates to the outside world. But, in the words of Mr.

Justice Cardozo: 'The Const.i.tution was framed under the dominion of a political philosophy less parochial in range. It was framed upon the theory that the peoples of the several States must sink or swim together, and that in the long run prosperity and salvation are in union and not division'."[955] Four of the Justices would have preferred to rest the holding of unconst.i.tutionality on the rights of national citizenship under the privileges and immunities clause of Amendment XIV.[956]

STATE CONSERVATION AND EMBARGO MEASURES

In Geer _v._ Connecticut[957] the Court sustained the right of the State to forbid the shipment beyond its borders of game taken within the State--this on the ground, in part, that a State has an underlying property right to wild things found within its limits, and so is ent.i.tled to qualify the right of individual takers thereof to any extent it chooses; and a similar ruling was laid down in a later case as to the prohibition by a State of the transportation out of it of water from its important streams.[958] In Oklahoma _v._ Kansas Natural Gas Co.,[959] however, this doctrine was held inapplicable to the case of natural gas, on the ground: first, that "gas, when reduced to possession, is a commodity, the individual property" of the owner; and secondly, that "the business welfare of the State," is subordinated by the commerce clause to that of the nation as a whole. If the States had the power a.s.serted in the Oklahoma statute, said Justice McKenna, "a singular situation might result. Pennsylvania might keep its coal, the Northwest its timber, the mining States their minerals. And why may not the products of the field be brought within the principle? * * * And yet we have said that 'in matters of foreign and interstate commerce there are no State lines.' In such commerce, instead of the States, a new power appears and a new welfare, a welfare which transcends that of any State. But rather let us say it is const.i.tuted of the welfare of all the States and that of each State is made greater by a division of its resources, * * *, with every other State, and those of every other State with it. This was the purpose, as it is the result, of the interstate commerce clause of the Const.i.tution of the United States."[960] In Pennsylvania _v._ West Virginia[961] the same doctrine was enforced in disallowance of a West Virginia statute whereby that State sought to require that a preference be accorded local consumers of gas produced within the State. West Virginia's argument that the supply of gas within the State was waning and no longer sufficed for both the local and the interstate markets, and that therefore the statute was a legitimate measure of conservation in the interest of the people of the State, was answered in the words just quoted.

In the above cases the State prohibition overturned was directed specifically to shipments beyond the State. In two other cases the State enactments involved reached all commerce, both domestic and interstate without discrimination. In the first of these, Sligh _v._ Kirkwood,[962]

the Court upheld the application to oranges which were intended for the interstate market of a Florida statute prohibiting the sale, shipment, or delivery for shipment of any citrus fruits which were immature or otherwise unfit for consumption. The burden thus imposed upon interstate commerce was held by the Court to be incidental merely to the effective enforcement of a measure intended to safeguard the health of the people of Florida. Moreover, said the Court, "we may take judicial notice of the fact that the raising of citrus fruits is one of the great industries of the State of Florida. It was competent for the legislature to find that it was essential for the success of that industry that its reputation be preserved in other States wherein such fruits find their most extensive market."[963] In Lemke _v._ Farmers Grain Co.,[964] on the other hand, a North Dakota statute which confined the purchase of grain within that State to those holding licenses from the State and which regulated prices, was p.r.o.nounced void under the commerce clause. To the argument that such legislation was "in the interest of the grain growers and essential to protect them from fraudulent purchases, and to secure payment to them of fair prices for the grain actually sold," the Court answered that, "Congress is amply authorized to pa.s.s measures to protect interstate commerce if legislation of that character is needed."

The differentiation of the above two cases is twofold. The statute under review in the earlier one was of the ordinary type of inspection law and was applied without discrimination to fruits designed for the home and the interstate market. The North Dakota act was far more drastic, approximating an attempt on the part of the State to license interstate commerce. What is even more important, however, the later case represents a new rule of law, and one which at the time the Florida act was before the Court had not yet been heard of. This is embodied in the head note of the case in the following words: "The business of buying grain in North Dakota, practically all of which is intended for shipment to, and sale at, terminal markets in other States, conformably to the usual and general course of business in the grain trade, is interstate commerce."[965] The application of this rule in the field of state taxation was mentioned on a previous page.[966]

STATE CONSERVATION AND EMBARGO MEASURES: THE MILK CASES

Certain recent cases have had to deal with State regulation of the milk business. In Nebbia _v._ New York,[967] decided in 1934, that State's law regulating the price of milk was sustained by the Court against objections based on the due process clause of Amendment XIV. A year later, in Baldwin _v._ Seelig[968] the refusal of a license under the same act to a dealer who had procured his milk at a lower minimum price than producers were guaranteed in New York, was set aside as an unconst.i.tutional interference with interstate commerce. However, a Pennsylvania statute requiring dealers to obtain licenses was sustained as to one who procured milk from neighboring farms and shipped it all into a neighboring State for sale.[969] The purpose of the act, explained Justice Roberts, was to control "a domestic situation in the interest of the welfare of the producers and consumers," and its application to the kind of case before the Court was essential to its effective enforcement and affected interstate commerce only incidentally.[970] But when a distributor of milk in Ma.s.sachusetts, who already had two milk stations in Eastern New York, was refused a license for a third on the ground, among others, that the further diversion of milk to Ma.s.sachusetts would deprive the local market of a supply needed during the short season, a narrowly divided Court interposed its veto on the basis of Oklahoma _v._ Kansas Natural Gas Co.[971]

STATE CONSERVATION AND EMBARGO MEASURES: THE SHRIMP CASES

Meantime, Geer _v._ Connecticut has been somewhat overcast by subsequent rulings. In a case, decided in 1928, it was held that a Louisiana statute which permitted the shipment of shrimp taken in the tidal waters of Louisiana marshes only if the heads and hulls have been previously removed was unconst.i.tutional.[972] Distinguishing Geer _v._ Connecticut the Court said: "As the representative of its people, the State might have retained the shrimp for [local] consumption and use therein." But the object of the Louisiana statute was in direct opposition to the conservation of a local food supply. Its object was to favor the canning of shrimp for the interstate market. "* * * by permitting its shrimp to be taken and all the products thereof to be shipped and sold in interstate commerce, the State necessarily releases its hold and, as to the shrimp so taken, definitely terminates its control. * * * And those taking the shrimp under the authority of the act necessarily thereby become ent.i.tled to the rights of private ownership and the protection of the commerce clause."[973] On the same reasoning a South Carolina statute which required that owners of shrimp boats, fishing in the marine waters off the coast of the State, dock at a State port and unload, pack and stamp their catch with a tax stamp before shipping or transporting it to another State, was p.r.o.nounced void in 1948.[974]

However, a California statute which restricted the processing of fish, both that taken in the waters of the State and that brought into the State in a fresh condition, was found by the Court to be purely a food conservation measure, and hence valid.[975] The application of the act to fish brought from outside was held to be justified "by rendering evasion of it less easy."[976]