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Interstate Milk Handlers v. Hoffman

Decided: March 4, 1955.

INTERSTATE MILK HANDLERS, AN UNINCORPORATED ASSOCIATION, CLINTON MILK COMPANY, CONSUMERS DAIRY CO., INC., H. BAKER MILK COMPANY, INC., IDEAL DAIRY FARMS, LOTZ BROS. DAIRY, INC., RAY C. LOTZ, T/A MAPLECREST FARMS, MIDDLETOWN MILK AND CREAM COMPANY, INC., MILLER DAIRIES, INC., PURITAN DAIRY, PURITAN MILK COMPANY, PURITAN DAIRY PRODUCTS COMPANY, SHEFFIELD FARMS CO., INC., TUSCAN DAIRY FARMS, INC., AND TUSCAN FARM PRODUCTS COMPANY, PLAINTIFFS,
v.
FLOYD R. HOFFMAN, DIRECTOR OF THE OFFICE OF MILK INDUSTRY, DEFENDANT. SOUTH JERSEY MILK DEALERS ASSOCIATION, ET AL., INTERVENORS



Clapp, Jayne and Francis. The opinion of the court was delivered by Francis, J.A.D.

Francis

The Legislature has undertaken to regulate and control the production, distribution and sale of milk within the State of New Jersey. N.J.S.A. 4:12 A -1 et seq. The Office of Milk Industry (formerly the Milk Control Board, N.J.S.A. 4:12 A -2) was created to administer the act (N.J.S.A. 4:1-24, 4:1-25) and provision was made for the appointment of a chief administrative officer to be known as the Director. N.J.S.A. 4:12 A -4.

The Director was given authority to license processors and various types of dealers in milk (N.J.S.A. 4:12 A -28), to fix minimum prices to be charged for the sale of milk by the holders of licenses, to enforce the provisions of the act against the direct or indirect sale below the minimum prices established by him, and to suspend or revoke licenses for such violations after notice and hearing. N.J.S.A. 4:12 A -21; 4:12 A -22; 4:12 A -29; 4:12 A -30; 4:12 A -34; 4:12 A -35. The authority of the Director was extended to intrastate transactions and to those in interstate commerce to the extent that his regulations do not conflict with the "United States Constitution" and "the laws of the United States enacted pursuant thereto." N.J.S.A. 4:12 A -49; 4:12 A -50; Cf. Bankr. Waldron, etc., Inc. v. Milk Control Board , 131 N.J.L. 267 (Sup. Ct. 1944), affirmed 131 N.J.L. 388 (E. & A. 1944); United States v. Rock Royal Co-operative , 307 U.S. 533, 59 S. Ct. 993, 83 L. Ed. 1446 (1939); Townsend v. Yeomans , 301 U.S. 441, 57 S. Ct. 842, 81 L. Ed. 1210 (1937); Dean Milk Co. v. City of Madison , 340 U.S. 349, 71 S. Ct. 295, 95 L. Ed. 329 (1951); People of State of Cal. v. Zook , 336 U.S. 725, 69 S. Ct. 841, 93 L. Ed. 1005 (1949).

The plaintiffs herein applied for and obtained licenses under the act, thus evidencing that all or some part of their business operations were subject thereto and to the regulations of the Director.

On January 25, 1955 the Director issued an order requiring some of the plaintiffs, they being members of the Interstate Milk Handlers Association, to show cause why their licenses should not be suspended or revoked for violation of section 30 of the act (N.J.S.A. 4:12 A -30) which forbids secret arrangements or agreements resulting in the sale of milk below fixed prices.

Prior to the hearing date plaintiffs, claiming to be engaged in interstate commerce and that the sales which had brought about the impending suspension or revocation proceedings were therefore not subject to the price regulations of the Director, instituted an action in the Chancery Division to enjoin the hearing. In addition to the injunction, said to be justified to prevent the irreparable injury which will follow if the licenses are revoked, a judgment was sought declaring that regulation of the sales in question is invalid as in conflict with the paramount federal power over interstate commerce, and declaring that certain administrative orders associated therewith while generally valid are unconstitutional when applied to these sales.

The Chancery Division being of the opinion that the jurisdiction to hear and determine the matter was in the Appellate Division, transferred the cause here in the interest of an expeditious disposition of it. An interim stay was granted until the matter could be presented to us. Plaintiffs filed a notice of appeal from the order of transfer. Because of the order of transfer and the notice of appeal we have considered the action as if instituted here originally and also as one brought up by normal appeal.

It is true that in certain situations involving the abuse or threatened unconstitutional use of power by an administrative agency where an imminent invasion of property rights was threatened, Chancery has permitted its injunctive power

to be invoked. Abelson's, Inc. v. N.J. State Board of Optometrists , 3 N.J. Super. 332 (Ch. Div. 1949), modified 5 N.J. 412 (1950); N.J. Used Car Trade Assn. v. Magee , 1 N.J. Super. 371 (Ch. Div. 1948); Howard Co. Jewelers v. N.J. State Board of Optometrists , 133 N.J. Eq. 4 (Ch. 1943). But compare: Moresh v. O'Regan , 122 N.J. Eq. 388 (E. & A. 1937); Brunetto v. Town of Montclair , 87 N.J. Eq. 338 (E. & A. 1917).

But in our judgment the cases relied upon by plaintiffs do not justify the Chancery Division in entertaining this complaint. The law presumes that the Director is aware of the statutory boundaries of his authority so far as they relate to intrastate and interstate sales of milk. It is a fair inference that plaintiffs considered their operations in New Jersey were in some measure such as to necessitate the acquisition of licenses. And it is conceded that the order and regulation referred to in the complaint are valid, but the claim is that they are being unconstitutionally applied to the sales in question. Under the circumstances of this case, it cannot be assumed that the Director will not grant a full and fair hearing on the order to show cause or that he will suspend or revoke these licenses through an arbitrary and unconstitutional exercise of power.

The authority delegated by the Legislature to deal with the milk problem in the interest of the public welfare should not be interfered with by the courts in a situation like the one now presented. To do so in advance of hearing on an order to show cause why the regulations should not be en forced, on the assumption that the Director will act in an ultra vires ...


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