Pacific Coast Dairy, Inc. v. Department of Agriculture of Cal.

delivered the opinion of the Court.

The appellant challenges a judgment of the Supreme Court of California1 dismissing a writ of alternative mandamus and denying a permanent writ to prevent the Department of Agriculture of the State from conducting a proceeding to revoke its license as a distributor of milk. The court, in denying relief, overruled several contentions, based upon the federal Constitution which are here renewed.

Chapter 10 of the Agricultural Code of California2 provides a plan for the “stabilization and marketing of fluid milk and fluid cream.” It declares their production and distribution a business affected with a public interest, and the regulation of the business an exercise of the police power; states that existing unjust, unfair, destructive and demoralizing practices menace the health and welfare of the people, despite sanitary regulations; and that it is necessary to promote intelligent production and orderly marketing by eliminating the evil practices existing in the industry.

The law empowers the Director of Agriculture to license distributors and to establish marketing areas within which uniform prices and regulations for the sale of milk shall prevail.

The appellant was a licensed distributor doing business in the Santa Clara County marketing area, in which there were in effect a stabilization and marketing plan and schedules of minimum wholesale and retail prices. It entered into a contract with the War Department of the United States, signed by the Quartermaster’s Department of Moffett Field, to sell milk to the Department at Moffett Field, which lies within the boundaries of the Santa Clara County marketing area, at less than the minimum price fixed for the area. Sales and deliveries under the contract took place on Moffett Field.

A complaint was filed with the Department of Agriculture charging the appellant violated § 736.3 (a) (6) of the Code which provides that an unfair practice, warranting revocation of license or prosecution is:

“The purchasing, processing, bottling, transporting, delivering or otherwise handling in any marketing area of any fluid milk or fluid cream which is to be or is sold or otherwise disposed of by such distributor at any place in the geographical area within the outer, outside and external boundaries or limits of such marketing area, whether such place is a part of the marketing area or not, at less than the minimum wholesale and minimum retail prices effective in such marketing area.”

This section did not appear in the Code until 1941,3 when it was added as an amendment. California recognized its lack of power to fix retail prices for milk sold within federal enclaves located in the State.4 But the legislature desired to accomplish this. In 1941 it memorialized Congress, requesting passage of a federal law requiring purchasing officers of the armed services purchasing food supplies for troops or agencies of the United States located in the State to refuse bids for milk at prices below those fixed under the California Milk Stabilization Law or amendments thereof.5 The memorial was referred to the Committee on Agriculture of the House and to the Committee on Agriculture and Forestry of the Senate,6 but was never acted upon by either committee. Congress having failed to act, § 736.3 (a) (6) and others were added to the Code, July 16,1941, for the purpose of reaching sales on federally owned lands.

Moffett Field was acquired by the United States under an Act of Congress,7 and it is conceded that it has always been under the exclusive jurisdiction of the federal government.88

The appellant sought a writ of mandamus from the court below to restrain the Department of Agriculture from procéeding to hear and act upon the pending complaint. An alternative writ issued. After return by the appellees, setting up only that the complaint failed to state facts sufficient to constitute a cause of action, the court discharged the alternative writ and denied a preemptory writ. The facts we have recited appear in the petition for the writ or are matters of which the court below and this court take judicial notice.

The Supreme Court of California overruled the appellant’s contentions that the state’s conceded control of activities within its jurisdiction gave it no authority to penalize transactions occurring on Moffett Field; that the state law violates the commerce clause of Article I, § 8 of the federal Constitution; that it runs afoul of Congressional action embodied in the federal Agricultural Marketing Agreement Act,9 and that it unlawfully burdens a federal instrumentality. We find it necessary to consider only the contention first stated.

The exclusive character of the jurisdiction of the United States on Moffett Field is conceded. Article I, § 8, clause 17 of the Constitution of the United States declares the Congress shall have power “To exercise exclusive Legislation in all Cases whatsoever, over” the District of Columbia, “and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings; . . .”

When the federal government acquired the tract, local law not inconsistent with federal policy remained in force until altered by national legislation.10 The state statute involved was adopted long after the transfer of sovereignty and was without force in the enclave. It follows that contracts to sell and sales consummated within the enclave cannot be regulated by the California law. To hold otherwise would be to affirm that California may ignore the Constitutional provision that “This Constitution, and the laws of the United States which shall be made in Pursuance thereof; .... shall be the supreme Law of the Land; ....” *11 It would be a denial of the federal power “to exercise exclusive Legislation.”12 As respects such federal territory Congress has the combined powers of a general and a state government.13

The answer of the State and of the court below is one of confession and avoidance, — confession that the law in fact operates to affect action by the appellant within federal territory, but avoidance of the conclusion of invalidity by the assertion that the law in essence is the regulation of conduct wholly within the state’s jurisdiction.

The court below points out that the statute regulates only the conduct of California’s citizens within its own territory; that it is the purchasing, handling, and processing by the appellant in California of milk to be sold below the fixed price — not the sale on Moffett Field — which is prohibited, and entails the penalties prescribed by the statute. And reliance is placed upon the settled doctrine that a state is not disenabled from policing its own concerns, by the mere fact that its regulations may beget effects on those living beyond its borders.14 We think, however, that it is without application here, because of the authority granted the federal government over Moffett Field.

In the light of the history of the legislation, we are constrained to find that the true purpose was to punish California’s own citizens for doing in exclusively federal territory what by the law of the United States was there lawful, under the guise of penalizing preparatory conduct occurring in the State, — to punish the appellant for a transaction carried on under sovereignty conferred by Art. I, § 8, clause 17 of the Constitution, and under authority superior to that of California by virtue of the supremacy clause.

We have this day held in Penn Dairies v. Milk Control Commission, ante, p. 261, that a different decision is required where the contract and the sales occur within a state’s jurisdiction, absent specific national legislation excluding the operation of the state’s regulatory laws. The conclusions may seem contradictory; but in preserving the balance between national and state power, seemingly inconsequential differences often require diverse results. This must be so, if we are to accord to various provisions of fundamental law their natural effect in the circumstances disclosed. So to do is not to make subtle or technical distinctions or to deal in legal refinements. Here we are bound to respect the relevant constitutional provision with respect to the exclusive power of Congress over federal lands. As Congress may, if it find the national interest so requires, override the state milk law of Pennsylvania as respects purchases for the Army, so it may, if not inimical to the same interest subject its purchasing officers on Moffett Field to the restrictions of the milk law of California. Until it speaks we should enforce the limits of power imposed by the provisions of the fundamental law.

The judgment is reversed and the cause remanded for further proceedings not inconsistent with this opinion.

Reversed.

While we have joined in the opinion of the Court, we are also of the view that the judgment below should be reversed for the additional reason set forth in the dissenting opinion in Penn Dairies v. Milk Control Commission, ante, p. 261.