Griffiths v. Robinson , 181 Wash. 438 ( 1935 )

In considering the legal problem involved in legislation of this character, we are apt to be biased by traditional modes of thought. Since the organization of independent government in this country, it has been its uniform policy, as it had been in England from the time of Queen Elizabeth, to condemn and punish as criminal, restraints upon the free traffic in commodities, particularly when these restraints had as their end the increase of prices. All artificial restraints tending to raise prices were considered to be against public policy and inimical to the consuming public. This has been for so long the accepted formula that we are disposed to regard it as the only legitimate justification for governmental intervention in respect to price control.

But the power to bind implies the power to loose. Logically, power adequate at one time to restrain practices deemed inimical to public welfare as tending to increase the level of prices may, at another time, under different conditions, and with another conception of public policy, be exercised in the interest of large groups of producers to raise the level of prices.

And so we have now, in the numerous acts of the character here involved, Federal and state, a reversal of the historic policy with respect to price control and a deliberate attempt by government, through the employment, under its sanction and supervision, of certain restraints and combinations having as their declared purpose the raising of the prices of agricultural products "to a level and a purchasing power on a parity with the things those engaged in agriculture are required to purchase."

Laws of the character here involved are said to be enacted under the police power, which is but another name for the sovereign right of the state to govern men and things. This power is adequate to meet all the needs of organized society. At one time, it may find occasion for its appropriate exercise in laws designed to repress combinations and restraints tending to raise prices; at another, it may find its appropriate expression in laws and regulations having as their end the raising of price levels; the purpose being in either case to do what at the time is thought best and needful for the common welfare.

"Governmental power must be flexible and adaptive. Exigencies arise, or even conditions less peremptory, which may call for or suggest legislation, and it may be a struggle in judgment to decide whether it must yield to the higher considerations expressed and determined by the provisions of the Constitution. .. . The point where particular interests or principles balance ``cannot be determined by any general formula in advance.'"Eubank v. Richmond, 226 U.S. 137, 33 S.Ct. 76, Ann. Cas. 1914B 192, 42 L.R.A. (N.S.) 1123.

The instant case involves the regulation and control of the production and sale of milk, having as its end the raising of prices to a standard fixed in the act. The director, through the regulations adopted for the milk industry, seeks to attain this standard of prices and justifies his regulations by reference to the powers granted in the act. But the act itself is not limited to the milk industry. It applies as well to other basic agricultural products. In so far as this case is concerned, the legislative act, and the regulations of the director with certain exceptions in the matter of detail, could be sustained upon the authority of Nebbia v. New York, 291 U.S. 502, 54 S.Ct. 505, 89 A.L.R. 1469.

But I do not think the court should rest its opinion upon the narrow basis of the paramount importance of the milk industry. In the Nebbia case, the court considered the production and distribution of milk as affected with a public interest, but, as the court said, it is clear that there is no closed class or category of businesses affected with a public interest. And so the businesses of supplying bread, meat or other essential foods, if they differ in importance from the business of supplying milk, do so only in degree, and not in principle. The agricultural adjustment act is not enacted solely in the interest of one agricultural product or one group of producers, but has for its purpose the price stabilization of all the basic products of agriculture coming within its purview.

Reading the act as a whole, having in mind its declared purpose and particular provisions, I am unable to escape the conclusion that the price fixing power is granted. Indeed, without this power the act would prove abortive. Any plan for the control of production and distribution would fail of its purpose if the producers and distributors were left free to engage in destructive competition. This general view of the act is fortified by reference to its particular provisions. Section 2 declares its purpose to be to re-establish prices at a standard there established; and § 7 provides that, in order to effectuate and carry out the declared policy of the state, the director shall be empowered to make rules and regulations governing, among other things, the sale and distribution of agricultural products.

Assuming the act contemplates price fixing, I do not think that, as so construed, it violates the constitution. In discussing price fixing, Judge Roberts, in the Nebbia case [p. 529], said:

"Legislation concerning sales of goods, and incidentally affecting prices, has repeatedly been held valid. In this class fall laws forbidding unfair competition by the charging of lower prices in one locality than those exacted in another, by giving trade inducements to purchasers, and by other forms of price discrimination. The public policy with respect to free competition has engendered state and federal statutes prohibiting monopolies, which have been upheld. On the other hand, where the policy of the state dictated that a monopoly should be granted, statutes having that effect have been held inoffensive to the constitutional guarantees. . . . The due process clause makes no mention of sales or of prices any more than it speaks of business or contracts or buildings or other incidents of property. The thought seems nevertheless to have persisted that there is something peculiarly sacrosanct about the price one may charge for what he makes or sells, and that, however able to regulate other elements of manufacture or trade, with incidental effect upon price, the state is incapable of directly controlling the price itself. This view was negatived many years ago."

To the objection that the act violates Art. XII, § 22 of the state constitution prohibiting monopolies and trusts, it is sufficient to say that the combinations and restraints authorized by the act are intended to further the declared public policy of the state itself. The combinations and restraints inhibited by the constitution are obviously those private in their nature, having for their purpose the exploitation of the public for private gain. Here, while the director before making his order may consult producers and distributors, the order, when made, becomes the public act of the director, enjoined by the provisions of the statute.

"The monopoly interdicted by the constitution is one whose activities are hostile and oppressive to the common welfare, rather than those which at all times are subject to the dominion, judgment and immediate regulation by the state." State ex rel.Department of Public Works v. Inland Forwarding Corp., 164 Wn. 412,2 P.2d 888.

I infer from the opinions of Judge Holcomb in this and theUhden case that he concedes broadly that the legislature possesses the power, if properly exercised, to do what the act contemplates, but that the act is invalid, in that it fixes no standards and attempts to delegate to the director of agriculture undefined powers. It seems to me that this is giving with one hand and taking away with another. If we concede a right in the legislature itself to do what is necessary to attain the end sought by this act, then it is manifest that some agency must be created to manage the details of any effective plan. The utmost the legislature can do is to declare its purpose and, in broad outline, the ends to be accomplished. The extent to which power may be delegated is dependent upon the circumstances and necessities of the particular situation. This problem was discussed by Chief Justice Taft in Hampton Co. v. UnitedStates, 276 U.S. 394 [406], 48 S.Ct. 348, where he said:

"In determining what it [the legislature] may do in seeking assistance from another branch, the extent and character of that assistance must be fixed according to common sense and the inherent necessities of the governmental co-ordination.

"The field of Congress involves all and many varieties of legislative action, and Congress has found it frequently necessary to use officers of the Executive Branch, within defined limits, to secure the exact effect intended by its acts of legislation, by vesting discretion in such officers to make public regulations interpreting a statute and directing the details of its execution, even to the extent of providing for penalizing a breach of such regulations."

And in Interstate Commerce Commission v. Goodrich TransitCo., 224 U.S. 194, 32 S.Ct. 436, it is said:

"The Congress may not delegate its purely legislative power to a commission, but, having laid down the general rules of action under which a commission shall proceed, it may require of that commission the application of such rules to particular situations and the investigation of facts, with a view to making orders in a particular matter within the rules laid down by the Congress."

In the Hampton case, Judge Taft quoted with approval from the opinion of Judge Mitchell in State v. Chicago, M. St. P.Ry. Co., 38 Minn. 281, 37 N.W. 782, as follows:

"``If such a power is to be exercised at all, it can only be satisfactorily done by a board or commission, constantly in session, whose time is exclusively given to the subject, and who, after investigation of the facts, can fix rates with reference to the peculiar circumstances of each road, and each particular kind of business, and who can change or modify these rates to suit the ever-varying conditions of traffic. . . . Our legislature has gone a step further than most others, and vested our commission with full power to determine what rates are equal and reasonable in each particular case. Whether this was wise or not is not for us to say; but in doing so we cannot see that they have transcended their constitutional authority. They have not delegated to the commission any authority or discretion as to what the law shall be, — which would not be allowable, — but have merely conferred upon it an authority and discretion, to be exercised in the execution of the law, and under and in pursuance of it, which is entirely permissible. The legislature itself has passed upon the expediency of the law, and what it shall be. The commission is intrusted with no authority or discretion upon these questions.'"

Numerous cases might be cited from our own courts sustaining delegation of power to administrative board and officers. InVail v. Seaborg, 120 Wn. 126, 207 P. 15, the court sustained a law vesting in the state fisheries boards

". . . ``the power from time to time to make, adopt, amend and promulgate, in the manner provided by law, rules and regulations governing the possession, disposal and sale of food fishes within the state of Washington, whether taken within or without the state of Washington, fixing the times when the possession, disposal or sale of the several classes of, or all, food fishes is prohibited.' Rem. Comp. Stat., § 5753."

In Larsen v. Rice, 100 Wn. 642, 171 P. 1037, the court sustained the minimum wage law for women, authorizing the industrial welfare commission to

". . . establish such standards of wages and conditions of labor for women and minors employed within the state of Washington, as shall be held hereunder to be reasonable and not detrimental to the health and morals, and which shall be sufficient for the decent maintenance of women." [Rem. Rev. Stat., § 7624 1/2.]

Whether this law is wise or unwise, it is not for us to say. The court is only concerned with the question of power.

Believing that the legislature possesses the power to enact the agricultural adjustment act, and that the administrative functions devolved upon the director are defined by sufficient standards, I am constrained to dissent from the majority, and am of the opinion that the judgment of the lower court should be affirmed.