Opinion of the Court. 307 U.S. be discussed later from the point of view of their legality under permissible classification. The court found that the conspiracy to obtain a monopoly was carried out by coercive tactics on the part of producers, under the leadership of the League and the Agency. These tactics consisted of threats to handlers that if they did not comply with the Order, the producers would withhold delivery of milk. These schemes, the lower court determined, were so successful in securing the drafting, adoption and acceptance of the Order that a conspiracy to monopolize interstate commerce contrary to the Sherman Act was established. It held that the occurrence of the incidents just detailed compelled refusal of the injunction. We do not agree. While considering the manner of the adoption of the Order, the validity of the Act and the provisions of the Order must be assumed. The Order was submitted to the producers for approval after the hearings specified in the statute. The full text of the Order with explanatory pamphlets was mailed each prospective voter. In the face of this fact, erroneous statements cannot be permitted to render the submission futile. There is no evidence that any producer misunderstood. A casual sentence in one of the pamphlets of the Department of Agriculture and a number of other statements in publications of the League and Agency were to the effect that dealers would pay all producers the uniform price for milk. Such assertions need the qualifications given in the Order that they are not applicable to milk sold outside the marketing area or to milk handled by coöperatives. The variation from the facts is not immaterial in view of the value or volume of milk involved. But the Order, Article VII, plainly stated that coöperatives were not covered by the payment requirements and it appeared, also, that milk sold outside the marketing area was not 533 Opinion of the Court. within its terms. A study of the official form of the Order would have cleared up any misconception created by the language. The Secretary of Agriculture declared that three-fourths of the producers affected by the Order approved its terms. The litigants do not deny that threefourths of the voters voted for the institution of the Order. There is no authority in the courts to go behind this conclusion of the Secretary to inquire into the influences which caused the producers to favor the resolution. The coercion by the League and the Agency, exercised upon the handlers after the adoption of the Order to force or induce them to acquiesce in its operation, is of the same indirect character as the alleged misrepresentation. It is the partisan coercion of the producer seeking to compel dealer support of the plan by the threat of the use of his economic power over his own milk. The coercion was ineffective upon these defendants. Producers' organizations urged in their papers and meetings diversion of milk from handlers to influence them to agree to the Order. Such efforts could not have had an effect on the prior vote of the producers. It is quite true that the League which itself cast two-thirds of the favorable votes was in a position to cast more than one-third of the total qualified vote against the Order. This arises from the provision of the Act, authorizing coöperatives to express the approval or disapproval for all of their members or patrons." This is not an unreasonable provision, as the coöperative is the marketing agency of those for whom it votes. If the power is in the Congress to put the order in effect, the manner of the demonstration of further approval is likewise under its control. These associations of producers of milk have a vital interest in the establishment of an efficient marketing system. This ade Opinion of the Court. 307 U.S. quately explains their interest in securing the adoption of an order believed by them to be favorable for this purpose. If ulterior motives of corporate aggrandizement stimulated their activities, their efforts were not thereby rendered unlawful.18 If the Act and Order are otherwise valid, the fact that their effect would be to give coöperatives a monopoly of the market would not violate the Sherman Act or justify the refusal of the injunction. Correlation of Order and Act. There is another phase of the argument against the Order which is not affected by the validity of the Act or its application in the Order and therefore is ready for disposition before the constitutional questions need be reached. Defendants contend there is no statutory basis for the sections of the Order exempting coöperatives from the payment of the uniform price 19 and authorizing payments to them and certain handlers from the producer settlement fund.20 The Government makes the point that none of the defendants, all handlers, can object to these terms of the Order because only producers delivering milk to coöperatives are affected by the exemption of coöperative handlers from the requirement to pay at not less than the uniform price and only producers are affected by the use of the pooled money for §§ 5 and 6 payments to coöperative and other handlers. Although three of the defendants cannot complain of the benefits conferred upon coöperatives, for they are coöperatives, the defendant Jetter Dairy Company has standing to raise the issue of want of statutory authority to except coöperative handlers from the payment of the uniform price. It is a proprietary corporation, a handler of milk, required by the Order 18 Cf. Isbrandtsen-Moller Co. v. United States, 300 U. S. 139, 145; California Water Service Co. v. Redding, 304 U. S. 252, 254. 533 Opinion of the Court. to pay uniform prices for the milk it purchases." This requirement to pay uniform prices arises from the provisions of Article IV that it shall pay minimum prices. The two are the same except for the deduction of certain service payments. The coöperatives are excepted from the payment. The burden of payment is laid directly upon Jetter while others are excepted. None of the defendants, on the other hand, is in a position to raise the issue of lack of statutory authority for the payments authorized by Article VII, §§ 5 and 6. Whether coöperative or not, the defendant corporations have no financial interest in the producer settlement fund. All defendants pay into, or draw out of, that fund in accordance with their utilization of the milk delivered to them by their patrons. The defendants' profit or loss depends upon the spread each receives between the class price and sale price. If the deductions from the fund are small or nothing, the patron receives a higher uniform price but the handler is not affected.22 We now consider whether the Act authorizes the exception of the coöperatives from the uniform payment provisions of Article VII, § 1. This authority, if it exists, is in § 8c (5) (F) of the Act. The earlier paragraphs provide for minimum prices to be paid by handlers to producers and associations of producers, subject to usual quality and location differentials not important here. These would require minimum prices to be paid by coöperatives when, as here, they were handlers under the definition of the Order,23 were it not for the exception of "Currin v. Wallace, 306 U. S. 1, 18; Chicago Board of Trade v. Olsen, 262 U. S. 1, 42; Oliver Iron Mining Co. v. Lord, 262 U. S. 172, 181; Gorieb v. Fox, 274 U. S. 603, 606; cf. Carmichael v. Southern Coal Co., 301 U. S. 495, 513; Steward Machine Co. v. Davis, 301 U. S. 548, 598. Opinion of the Court. 307 U.S. these same coöperatives under subsection (F): "Nothing . . . shall . . . prevent a coöperative. from .. making distribution thereof [net proceeds] . . . in accordance with the contract between the association and its producers." This language specifically permits, indeed requires, the Order to except coöperatives from the requirement of paying minimum prices to producers. As the minimum price is paid to the producer through the payment of the uniform price, after equalization in the pool, there is authority in the Act to except the coöperative from the payment of the uniform price. 1. Terms of the Order. Certain provisions of the Order were found by the District Court to show unconstitutional discrimination against one or more of the defendants. The discriminations of which complaint is made arise from the application to the New York problem of § 8c (5) of the Act relating to milk. A. Uniform Price.—The Jetter Dairy Company, a proprietary handler, urges that as milk coöperatives need not pay producers a uniform price, it is unreasonably discriminatory and violative of the due process clause of the Fifth Amendment to require it to pay this uniform price. In § 8c (5) (F) there is a definition of the type of coöperative permitted to settle with its members in accordance with the membership contract. The general characteristics of coöperatives are well understood. The CapperVolstead Act defines such coöperatives as associations of producers, corporate or otherwise, with or without capital stock, marketing their product for the mutual benefit of the members as producers with equal voting privileges, restricted dividends on capital employed and dealings limited to 50 percent non-member products.24 Different 24 42 Stat. 388. |