For invalidity of regulation -- Chief Justice Weintraub, and Justices Burling, Jacobs, Francis, Proctor, Hall and Schettino. Opposed -- None. The opinion of the court was delivered by Francis, J.
Plaintiff Hamilton Farms, Inc., a licensed wholesale milk dealer of this State, instituted a declaratory judgment proceeding in the Superior Court, Appellate Division, in order to obtain a declaration as to the validity of a regulation of the Office of Milk Industry which prohibits the wholesale delivery of milk on Sunday in certain milk marketing areas of the State. At about the same time Hamilton also took an appeal under R.R. 4:88-8 challenging the legality of the regulation. The Appellate Division consolidated the actions and granted leave to take such additional testimony in the Law Division as the parties desired to submit in support of their respective claims. (In this connection, attention is called to the preference in R.R. 4:88-9 and 11 for the taking of such testimony before the agency.) Upon completion of the record and before argument in the Appellate Division, we certified the matter on our own motion for determination in this court.
In approaching the issue presented, a few preliminary observations may be helpful for purposes of perspective. For a long time it has been settled in this State that the milk industry has sufficient identification with the public interest to warrant regulation. Abbotts Dairies v. Armstrong, 14 N.J. 319 (1954). The current statutes on
the subject, N.J.S.A. 4:1-24 et seq. and 4:12 A -1 et seq., establish the Office of Milk Industry and provide for its operation under the supervision of a Director. Power is conferred upon him to "regulate conditions and terms of sale; establish and require observance of fair trade practices; supervise, regulate and control the entire milk industry of the State of New Jersey, including the * * * disposal, sale or resale * * * of milk as defined in [the] act * * * in those matters and in every way necessary to carry out the purposes of [the] act and necessary to control or prevent unfair, unjust, destructive or demoralizing practices which are likely to result in the demoralization of agricultural interest in this State engaged in the production of milk or interfere with the maintenance of a fresh, wholesome supply of sanitary milk for the consumers of this State; * * *." N.J.S.A. 4:12 A -21. When a regulation promulgated by him comes under attack, its support must be found within the scope of the statutory authority thus granted and, of course, it cannot be arbitrary, unreasonable or discriminatory. Personal or property rights of those engaged in the industry cannot be curtailed by fiat of the Director unless supportive power therefor is found expressly or by implication in the legislative language. Abbotts Dairies v. Armstrong, supra, 14 N.J. at p. 329; In re Port Murray Dairy Co., 6 N.J. Super. 285, 302 (App. Div. 1950); Garden State Farms v. Armstrong, 31 N.J. Super. 61 (App. Div. 1954); Sherry v. Schomp, 31 N.J. Super. 267 (App. Div. 1954).
On March 14, 1958 the Director issued amended Regulation F-22, which is the subject of the appeal. The original F-22, which is challenged in the declaratory judgment action, was adopted August 10, 1950, and so far as the plaintiff is concerned the provision with respect to Sunday operations has been the same since that time. The 1958 amendment made some changes in parts of the regulation which do not affect its business. Since it is obvious from the record that plaintiff has known of the rule for at least eight years
and, in fact, once paid a fine for a violation, the Attorney General contends that the proceeding for declaratory judgment should be dismissed under R.R. 4:88-15(a) for lack of timeliness. Although much may be said for the criticism, since the matter is one in which the entire industry has indicated an interest and since in a license suspension or revocation proceeding, the defense of invalidity of F-22 could be raised, we have concluded that a decision should be reached on the merits of the controversy. See R.R. 4:88-15(c).
Regulation F-22 says (so far as here pertinent):
"1. No wholesale deliveries of milk and/or milk products may be made on Sunday, in any week, in Milk Marketing Areas One and Three except as follows: In the area beginning at the junction of the Garden State Parkway and Route U.S. No. 9 south of South Amboy and continuing along the western boundary of the Garden State Parkway in a southern direction to the point where the Garden State Parkway crosses the Mullica River." (Emphasis added)
In the excepted territory between May 15 and September 15 such deliveries are authorized to be made under the regulation on every day of the week, including Sunday. And in this area between September 15 and May 15 such deliveries are restricted to a maximum of six days a week, one of which may be Sunday, according to the wish of the dealer.
"In Milk Marketing Area Two, the maximum number of days in a week that milk or milk products may be ...