Mayflower Farms, Inc. v. Ten Eyck
56 S. Ct. 457, 1936 U.S. LEXIS 526, 297 U.S. 266 (1936)
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Rule of Law:
A state law that grants a price differential to businesses that were in operation before an arbitrary date, while denying that same advantage to businesses entering the industry after that date, violates the Equal Protection Clause of the Fourteenth Amendment as an unreasonable and arbitrary classification.
Facts:
- In 1933, New York enacted the Milk Control Act, which authorized a board to fix minimum prices for milk.
- The Act included a provision allowing dealers 'not having a well advertised trade name' to sell milk at a price one cent per quart below the fixed minimum.
- Mayflower Farms, Inc., a milk dealer without a well-advertised trade name, began its business in Brooklyn in the autumn of 1933.
- In 1934, the Act was amended to limit the one-cent price differential to only those dealers who had been continuously in business since April 10, 1933.
- Because Mayflower Farms had entered the business after the cutoff date, it was ineligible for the price differential under the amended law.
- Despite its ineligibility, Mayflower Farms sold milk at the lower price, which led to the denial of its license application.
Procedural Posture:
- Mayflower Farms, Inc. applied for a milk dealer's license under the amended 1934 New York Milk Control Act.
- The New York Department of Agriculture and Markets denied the application.
- Mayflower Farms obtained a certiorari order from the New York Supreme Court (a state trial-level court) to review the denial.
- The Appellate Division of the New York Supreme Court (an intermediate appellate court) confirmed the department's order.
- The New York Court of Appeals (the state's highest court) affirmed the judgment of the Appellate Division.
- The United States Supreme Court granted review of the decision of the New York Court of Appeals.
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Issue:
Does a provision of the New York Milk Control Act, which allows milk dealers without a well-advertised trade name who were in business before April 10, 1933, to sell milk at one cent per quart less than the fixed minimum price, while denying this same price differential to similarly situated dealers who entered the business after that date, violate the Equal Protection Clause of the Fourteenth Amendment?
Opinions:
Majority - Justice Roberts
Yes, the provision violates the Equal Protection Clause. The classification, based solely on the date of entry into the business, is arbitrary and unreasonable. The Court found no rational basis for the discrimination related to public health, welfare, or the prevention of monopoly. The legislative history offered no justification for the April 10, 1933 cutoff date. The Court rejected the state's suggested rationales, reasoning that the law's practical effect was not to regulate the industry for the public good, but to give an economic advantage to an arbitrary class of existing businesses and effectively bar new competitors from entering the market. Unlike permissible 'grandfather clauses' in professional licensing or zoning laws, this provision was not for public protection but was an attempt to create a favored economic class.
Dissenting - Justice Cardozo
No, the provision does not violate the Equal Protection Clause. The legislature faced a complex economic problem and had a rational basis for its decision. The dissent argued that the law was a temporary experiment to protect existing small dealers from being driven out of business during the Great Depression. Lawmakers could have reasonably concluded that extending the price differential to newcomers would destabilize the market and unfairly penalize established brands. The dissent emphasized judicial deference, stating that courts should not strike down a legislative classification if 'any state of facts reasonably may be conceived to justify it.' The majority, in the dissent's view, improperly substituted its own policy judgment for that of the legislature, which is charged with balancing competing economic interests.
Analysis:
This case is a key example of the Supreme Court using the Equal Protection Clause to strike down economic regulation it deemed arbitrary, reflecting the substantive due process jurisprudence of the pre-1937 era. It established that while legislatures can make classifications, they cannot create a closed, favored class of businesses based on an arbitrary date without a rational connection to a legitimate public purpose. The decision places limits on 'grandfather clauses,' suggesting they are suspect when used for pure economic protectionism rather than for public welfare. This ruling contrasts sharply with the highly deferential 'rational basis' review that the Court would later apply to most economic legislation following the constitutional shift of 1937.
