H. P. HOOD & SONS, INC. ET AL. v. UNITED

STATES ET AL.*

CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE FIRST CIRCUIT.

No. 772. Argued April 25, 26, 1939.-Decided June 5, 1939.

1. Objections, on constitutional grounds, to the Agricultural Marketing Agreement Act of 1937, and to certain features of an order of the Secretary of Agriculture made thereunder, overruled upon the authority of the Rock Royal case, ante, p. 533. P. 595. 2. The finding and proclamation required of the Secretary of Agriculture by § 8 (e) of the Agricultural Marketing Agreement Act of 1937 to justify an order based on purchasing power during the post-war period specified in that section rather than upon the pre-war period mentioned in § 2-that is to say, a finding and proclamation that the purchasing power of the commodity regulated can not be satisfactorily determined for the pre-war period from available statistics of the Department of Agriculture—need not be repeated in connection with an amendment of the order which does not involve any change of the base period, although it is declared by § 8 (17) that the provisions of § 8 (e) applicable to orders "shall be applicable to amendments to orders." P. 595. 3. A referendum to producers, under § 8c (9) (B) and § 8c (19) of the above-mentioned Act, of amendments to an order regulating the handling of milk in the marketing area of Boston and vicinity, was properly restricted to producers who sold their fluid milk to handling plants licensed by the state law to distribute or sell fluid milk in the marketing area and which had shipped milk or cream to that area during the representative period. So held, in the light of the object of the regulation, which was to remedy marketing evils caused by a surplus of fluid milk. P. 597.

The referendum election was not invalidated (a) by denying the vote to producers who sold to handlers not licensed to sell milk, but only cream, in the marketing area; (b) by allowing the vote to producers who sold their milk at plants which shipped only cream to the marketing area during the representative period,

*Together with No. 809, Whiting Mülk Co. v. United States et al., and No. 865, Branon v. United States et al., also on writs of certiorari to the Circuit Court of Appeals for the First Circuit.

but which were licensed to sell fluid milk in that area and could have done so; (c) by allowing the vote to producers not registered as required by the state law but whose milk was sold in the marketing area by licensed handlers; or (d) by permitting the vote to producers who sold to stations which shipped less than 50 per cent. of the milk to the area during the representative period. 4. At such a referendum a coöperative association of producers may vote for its members. P. 599.

5. An order of the Secretary of Agriculture which regulated the prices of milk sold by producers to licensed handlers for a marketing area, and which required such handlers to pay through an equalization fund-construed as including milk bought of unregistered farms and sold in violation of the state law. P. 599. 6. Assuming that, under the Agricultural Marketing Agreement Act of 1937, reinstatement of a suspended order should be supported by a finding that the reinstatement will tend to effectuate the policy of the Act, the omission can be supplied by an appropriate finding on repromulgation of the order with amendments. P. 602. 21 F. Supp. 321; 26 F. Supp. 672, affirmed.

CERTIORARI, 306 U. S. 627, 629, to review decrees of a District Court granting mandatory injunctions in two suits brought by the United States and the Secretary of Agriculture to enforce a marketing order regulating prices of milk and milk products in an area comprising the City of Boston and adjacent settlements. The original defendants were three milk dealers. Two milk producers, one of whom is the petitioner in No. 865, intervened as defendants. Upon interlocutory appeal the Circuit Court of Appeals gave an opinion which is reported as H. P. Hood & Sons, Inc. v. United States, 97 F. 2d 677. The writs of certiorari were issued while the cases were pending in that court upon appeals from the final decrees.

Mr. Charles B. Rugg, with whom Messrs. Edward F. Merrill, Warren F. Farr, H. Brian Holland, and Archibald Cox were on the brief, for petitioners in Nos. 772 and 865.

Opinion of the Court.

307 U.S.

Mr. John M. Raymond, with whom Messrs. Lawrence Foster and Augustin H. Parker, Jr. were on the brief, for petitioner in No. 809.

Solicitor General Jackson, with whom Assistant Attorney General Arnold and Messrs. Hugh B. Cox, James C. Wilson, and Robert K. McConnaughey were on a brief in Nos. 772 and 809, for respondents.

MR. JUSTICE REED delivered the opinion of the Court.

These cases involve the constitutionality of the Agricultural Marketing Agreement Act of 19371 as applied in an order of the Secretary of Agriculture regulating the handling of milk in the Greater Boston, Massachusetts, Marketing Area.

The petitioners, H. P. Hood & Sons, Inc., and Noble's Milk Company of No. 772 and Whiting Milk Company of No. 809, original defendants below, are engaged in handling milk in the marketing area in the current of interstate commerce or in a manner which burdens that commerce. Producers intervened as defendants, petitioner E. Frank Branon on the side of H. P. Hood & Sons and Chester D. Noyes beside the Whiting Company. The respondents, plaintiffs below, are the United States of America and the Secretary of Agriculture. The parties will be referred to as defendants and plaintiffs, respectively.

It is unnecessary to detail the facts of each case. They are two of many instituted by the plaintiffs to secure obedience to the Order. On October 1, 1937, bills of complaint were filed in the District Court for the District of Massachusetts, 21 F. Supp. 321, for the purpose of enjoining Hood & Sons, Noble's Milk Company and

588

Opinion of the Court.

Whiting Milk Company from violating the terms of Order No. 4 as amended. A temporary mandatory injunction issued on November 30, 1937. A supersedeas followed soon after, conditioned upon payment by the three handlers into the registry of the court of the amounts billed to them by the Market Administrator for equalization charges and marketing services under the Order. Answers to the bills asserted constitutional infirmities in the Act and fatal weaknesses in the Order as amended. A Special Master was charged with the duty of finding the facts in these and similar suits. His report was filed on January 27, 1939. Shortly thereafter, the District Court confirmed the report, sustained both the Act and the Order, and entered a decree for the plaintiffs. The defendants took an appeal to the Circuit Court of Appeals and, after the cases were docketed, filed petitions for writs of certiorari. The writs were granted because important questions of federal law undecided by this Court were involved and pending appeals in other cases with similar issues were ready for argument.

The pertinent provisions of the Marketing Act have been summarized in United States v. Rock Royal Cooperative, ante, p. 533. They will not be repeated here.

Order No. 4, as amended, which the plaintiffs seek to enforce, is the culmination of an extended effort by the Secretary to work out a plan to regulate the marketing of milk in the Boston area. Order No. 4 was originally issued on February 7, 1936, under the Agricultural Adjustment Act. All steps leading to its issuance were taken. On November 30, 1935, the Secretary gave notice of a public hearing on a proposed marketing agreement and order. Hearings were held. A marketing agreement was tentatively approved which handlers failed to accept.

2

Act of May 12, 1933, 48 Stat. 31, as amended August 24, 1935, 49 Stat. 750.

On January 25, 1936, the Secretary found and proclaimed that the purchasing power of milk could not be satisfactorily determined for the pre-war base period from available statistics in the Department of Agriculture, but could for the post-war period. August, 1919, to July, 1929, was declared the base period for the purpose of issuing an order. On February 5, 1936, the Secretary made a determination, as required by § 8c (9), as to the necessity for issuing an order. The President approved the determination, and the Order issued. It remained in effect until August 1, 1936, shortly after the District Court for the District of Massachusetts held that the Act under which the Order was issued was unconstitutional. On that day the Secretary suspended the Order for an indefinite time.

After the passage of the Marketing Act, the Secretary, on June 24, 1937, gave notice of a hearing upon proposed amendments to Order No. 4. On the following day he terminated the suspension of the formal and administrative provisions as of July 1, and of the pricefixing provisions as of August 1. Hearings were held. A proposed marketing agreement failed of approval by the handlers. On July 17, 1937, a referendum took place. It will be discussed later at some length because of contentions which question its validity. On July 27, 1937, acting pursuant to § 8c (9), the Secretary determined that the failure of the handlers to sign tended to prevent effectuation of the declared policy of the Act; that issuance of the proposed amendments to the Order was the only practical means of advancing the interests of milk producers in the area; and that the issuance was approved by over 70 percent of the producers who during May, 1937, were engaged in the production of milk for sale in the area. The President approved the determina

3 United States v. David Buttrick Co., 15 F. Supp. 655, reversed in 91 F.2d 66.