Nebbia v. New York
291 U.S. 502 · Supreme Court of the United States · 1934
Facts
The New York Legislature established a Milk Control Board in 1933, granting it power to fix minimum and maximum retail milk prices for stores. The Board set a minimum price of nine cents per quart for milk sold by stores. Nebbia, a grocery store proprietor in Rochester, sold two quarts of milk and a five-cent loaf of bread for eighteen cents, which violated the Board's order by effectively selling milk below the mandated minimum. This legislation was enacted after a severe decline in milk prices in 1932, which fell below production costs and caused desperate conditions for dairy farmers. A legislative committee investigated and found destructive trade practices and economic maladjustments in the milk industry, leading to the belief that price regulation was necessary to protect the industry and consumers.
Procedural history
Nebbia was convicted for violating the Milk Control Board's order. He challenged the statute and order as unconstitutional under the Fourteenth Amendment. His contention was overruled by the county court and the Court of Appeals, both of which affirmed his conviction.
Issue
The legal question is whether the Federal Constitution prohibits a state from fixing the selling price of milk, specifically whether New York's statute and the Milk Control Board's order violate the equal protection or due process clauses of the Fourteenth Amendment.
Holding
The Court affirmed Nebbia's conviction, holding that the Federal Constitution does not prohibit a state from fixing the selling price of milk. The New York statute and the Milk Control Board's order do not violate the due process clause of the Fourteenth Amendment.
Rule
The Fifth and Fourteenth Amendments do not prohibit governmental regulation for the public welfare, provided the means selected have a real and substantial relation to the object sought and are not unreasonable, arbitrary, or capricious. There is no closed class of businesses "affected with a public interest" that can be price-regulated; rather, any industry, for adequate reason, is subject to control for the public good. A state is free to adopt any economic policy reasonably deemed to promote public welfare and enforce it by legislation, so long as the laws have a reasonable relation to a proper legislative purpose and are neither arbitrary nor discriminatory. Price control is unconstitutional only if arbitrary, discriminatory, or demonstrably irrelevant to a legitimate legislative policy.
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