February 25, 1976
GREAT ATLANTIC & PACIFIC TEA CO., INC
COTTRELL, HEALTH OFFICER OF MISSISSIPPI
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
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MR. JUSTICE BRENNAN delivered the opinion of the Court.
Section 11 of Mississippe's Regulation Governing the Production and Sale of Milk and Milk Products in Mississippi, promulgated by the Mississippi State Board of Health (1967), provides, among other things, that "[m]ilk and milk products from... [another State] may be sold in... Mississippi... provided... that the regulatory agency [of the other State that] has jurisdiction accepts Grade A milk and milk products produced and processed in Mississippi on a reciprocal basis."*fn1
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The question presented by this case is whether Mississippi, consistently with the Commerce Clause, Art. I, § 8, cl. 3, of the Constitution,*fn2 may, pursuant to this regulation, constitutionally deny a Louisiana milk producer the right to sell in Mississippi milk satisfying Mississippi's health standards solely because the State of Louisiana has not signed a reciprocity agreement with the State of Mississippi as required by the regulation. A three-judge District Court in the Southern District of Mississippi rejected appellant's Commerce Clause challenge, holding that "[s]section 11 is within the permissible limits of state police powers even though it incidentally or indirectly involves or burdens interstate commerce." 383 F. Supp. 569, 575 (1974). We noted probable jurisdiction of appellant's appeal, 421 U.S. 961 (1975). We reverse.*fn3
Appellant, The Great Atlantic & Pacific Tea Co., Inc. (A&P), Maryland corporation, owns and operates 38 outlets in Mississippi that engage in the retail sale
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of milk and milk products. A&P also operates at Kentwood, La., a plant for the processing of raw milk into milk and milk products for delivery to its retail outlets. A&P invested over $1 million in the Kentwood processing facilities, intending that part of the dairy products produced at the facility would supply its retail outlets in Mississippi. However, A&P's application on August 28, 1972, to the Mississippi State Board of Health for a permit to distribute the products from its Kentwood facility for sale in Mississippi was denied by the Board because A&P failed to submit the reciprocal agreement between Louisiana and Mississippi required by § 11.*fn4 Appellant thereupon brought this action.
Evidence was stipulated before the District Court which conclusively established that the milk produced at the Kentwood plant fully complied with the requirements of § 11 in all respects save the required reciprocity agreement. The Kentwood plant had received milk sanitation-compliance ratings in excess of 90% in all respects following each inspection by Louisiana officials. These sanitation-compliance ratings were published in the Sanitation Compliance and Enforcement Ratings of Interstate Milk Shippers, a list compiled by the Public Health Service and the Food and Drug Administration of the United States Department of Health, Education, and Welfare (HEW), which includes only processors receiving compliance ratings from state officials who have been certified by the Public Health
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Service. Further, the parties stipulated that the Supervisor of the Milk Control Program of the Mississippi State Board of Health testified, on the basis of an inspection by Louisiana officials of the Kentwood plant reported on an HEW form, that Kentwood milk would be acceptable in Mississippi as the Louisiana regulations were substantially equivalent to Mississippi's within the meaning of § 11. Thus only the lack of a reciprocity agreement between the two States prevented appellant from marketing its Kentwood milk at its Mississippi retail outlets.*fn5
Mississippi's answer to appellant's Commerce Clause challenge is that the reciprocity requirement of § 11 is a reasonable exercise of its police power over local affairs, designed to assure the distribution of healthful milk products to the people of its State. We begin our analysis by again emphasizing that "[t]he very purpose of the Commerce Clause was to create an area of free trade among the several States." McLeod v. J. E. Dilworth Co., 322 U.S. 327, 330 (1944). And at least since Cooley v. Board of Wardens, 12 How. 299 (1852), it has been clear that "the Commerce Clause was not merely an authorization to Congress to enact laws for the protection and encouragement of commerce among the States, but by its own force created an area of trade free from interference by the States.... [T]he Commerce
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Clause even without implementing legislation by Congress is a limitation upon the power of the States." Freeman v. Hewit, 329 U.S. 249, 252 (1946). It is no less true, of course, that under our constitutional scheme the States retain "broad power" to legislate protection for their citizens in matters of local concern such as public health, H. P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 531-532 (1949), and that not every exercise of local power is invalid merely because it affects in some way the flow of commerce between the States. Freeman v. Hewit, supra, at 253; Milk Control Board v. Eisenberg Farm Products, 306 U.S. 346, 351-352 (1939). Rather, in areas where activities of legitimate local concern overlap with the national interests expressed by the Commerce Clause - where local and national powers are concurrent - the Court in the absence of congressional guidance is called upon to make "delicate adjustment of the conflicting state and federal claims," H. P. Hood & Sons, Inc. v. Du Mond, supra, at 553 (Black, J., dissenting), thereby attempting "the necessary accommodation between local needs and the overriding requirement of freedom for the national commerce." Freeman v. Hewit, supra, at 253. In undertaking this task the Court, if it finds that a challenged exercise of local power serves to further a legitimate local interest but simultaneously burdens interstate commerce, is confronted with a problem of balance: S
"Although the criteria for determining the validity of state statutes affecting interstate commerce have been variously stated, the general rule that emerges can be phrased as follows: Where the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly
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excessive in relation to the putative local benefits. Huron Cement Co. v. Detroit, 362 U.S. 440, 443. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities." Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970).I*fn6
Adjudication of Commerce Clause challenges to the validity of local milk regulations burdening interstate milk is not a novel experience for this Court. See, e.g., Polar Ice Cream & Creamery Co. v. Andrews, 375 U.S. 361 (1964); Dean Milk Co. v. Madison, 340 U.S. 349 (1951); H. P. Hood & Sons, Inc. v. Du Mond, supra; Milk Control Board v. Eisenberg Farm Products, supra; Baldwin v. G. A. F. Sellig, Inc., 294 U.S. 511 (1935).
The District Court seems to have concluded that Dean Milk Co. v. Madison, supra, while especially pertinent to a decision upon the validity of the reciprocity provision
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of § 11, did not require the conclusion that the requirement rendered the section violative of the Commerce Clause. We disagree. Dean Milk involved a Madison, Wis., ordinance that forbade the sale of milk in the city unless it had been pasteurized and bottled at an approved plant located within five miles of the center of the city. Although agreeing that sanitary regulation of milk originating in remote areas is a "'matter... which may appropriately be regulated in the interest of the safety, health and well-being of local communities,'" 340 U.S., at 353, the Court held that the Madison ordinance could not withstand challenge under the Commerce Clause, "even in the exercise of [the city's] unquestioned power to protect the health and safety of its people, if reasonable nondiscriminatory alternatives, adequate to conserve legitimate local interests, are available." Id., at 354. Inquiry whether adequate and less burdensome alternatives exist is, of course, important in discharge of the Court's task of "accommodation" of conflicting local and national interests, since any "'realistic' judgment" whether a given state action "unreasonably" trespasses upon national interests must, of course, consider the "consequences to the state if its action were disallowed." Dowling, Interstate Commerce and State Power, 27 Va. L. Rev. 1, 22 (1940).
Dean Milk identified as adequate to serve local interests, and yet less burdensome to the flow of interstate commerce, the alternatives of either inspection of the distant plants by city officials, or reliance on milk ratings obtained by officials in localities having standards as high as those of Madison, the enforcement of which could be verified by reliance on the United States Public Health Service's system of checking local ratings. This latter alternative reflected the recommendation of the United States Public Health Service based on § 11 of the
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Model Milk Ordinance proposed by the Service, Dean Milk, supra, at 355 n. 5, that the local "health officer approve milk or milk products from distant points without his inspection if they are produced and processed under regulations equivalent to those of this ordinance, and if the milk or milk products have been awarded by the State control agency a rating of 90 percent or more on the basis of the Public Health Service rating method." The Illinois producer's milk involved in Dean Milk was processed in plants inspected by the public health authorities in Chicago on the basis of the Public Health Service rating method.
The District Court in the instant case acknowledged that "[i]nterestingly enough Section 11 of the Mississippi regulation, but for the reciprocal clause, is identical in every material aspect to Section 11 of the U.S. Public Health Service Ordinance" discussed in Dean Milk. 383 F. Supp., at 574. Accordingly, the District Court concluded that § 11 was "free of any constitutional infirmity," "insofar as it follows Section 11 of the U.S. Public Health Service Milk Ordinance." Id., at 575. The District Court held further that the reciprocity clause of Mississippi's § 11 - not found in HEW's proposed Model Milk Ordinance § 11 -- did not constitute a sufficient burden on interstate commerce to violate the Commerce Clause. Mississippi, said the District Court, may constitutionally "enforce its own standards, either through inspections at the source of the processed milk, although such may require out-of-state inspections, or through reciprocal agreements..." and "[a]s long as Mississippi mutually exchanges standards of inspection with other states, there can be no burden on interstate trade." 383 F. Supp., at 575. Further, said the District Court, "Mississippi adopted the reciprocity clause to avoid the expense of out-of-state inspections,"
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standards. Therefore this is a case where the "burden imposed on [interstate] commerce is clearly excessive in relation to the putative local benefits." Pike v. Bruce Church, Inc., 397 U.S., at 142.
Mississippi next argues that the reciprocity clause somehow enables Mississippi to assure itself that the reciprocating State's (here Louisiana's) health standards are the "substantial equivalent" of Mississippi's.*fn8 But even if this were true, and the premise may be disputed,*fn9 there are means adequate to serve this interest
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that are substantially less burdensome on commerce, and, therefore, Dean Milk teaches that the burden of the mandatory reciprocity clause cannot be justified in view of the character of the local interest and these available methods of protecting it. In the absence of adequate assurance that the standards of a sister State, either as constituted or as applied, are substantially equivalent to its own, Mississippi has the obvious alternative of applying its own standards of inspection to shipments of milk from a nonreciprocating State.*fn10 Dean Milk, 340 U.S., at 355, expressly supported the adequacy of this alternative: "[S]ch inspection is readily open to it without hardship for it could charge the actual and reasonable cost of such inspection to the importing producers and processors."*fn11 Cf. Evansville-Vanderburgh Airport Page 378} Authority District v. Delta Airlines, Inc., 405 U.S. 707 (1972).
Mississippi argues that apart from the putative health-related interests served by the clause, the reciprocity requirement is in effect a free-trade provision, advancing the identical national interest that is served by the Commerce Clause.
The argument is two-pronged. First, Mississippi argues that the reciprocity requirement serves to help eliminate "hypertechnical" inspection standards that vary between different States.*fn12 Such hypertechnical standards are said to burden commerce by requiring costly duplicative or out-of-state inspection in instances where, for truly health-related purposes, the standards of the different States are "substantially equivalent." The Court has recognized that mutually beneficial objectives may be promoted by voluntary reciprocity agreements, and that the existence of such an agreement between two or more States is not a per se violation of the Commerce Clause of which citizens of nonreciprocating States who do not receive the benefits conferred by the agreement may complain. See Kane v. New Jersey, 242 U.S. 160, 167-168 (1916); cf. Bode v. Barrett, 344 U.S. 583
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(1953).*fn13 But we have not held that acceptance of offered reciprocity is required from other States, see Kane v. New Jersey, supra, at 168, or that a State may threaten complete isolation as the alternative to acceptance of its offer of reciprocity. Mississippi may offer reciprocity to States with substantially equivalent health standards, and insist on enforcement of its own, somewhat different, standards as the alternative. But Mississippi may not use the threat of economic isolation as a weapon to force sister States to enter into even a desirable reciprocity agreement.
The second prong of appellee's argument that the reciprocity requirement promotes trade between the States draws upon Mississippi's allegations that Louisiana is itself violating the Commerce Clause by refusing to admit milk produced in Mississippi. Mississippi asserts that Louisiana has refused reciprocity with Mississippi in bad faith, and in fact has erected economic barriers to the sale of Mississippi milk in Louisiana under the guise of health and inspection regulations. Hence, the reciprocity agreement, it is argued, is a legitimate means by which Mississippi may seek to gain access to Louisiana markets for its own producers as a condition to allowing Louisiana milk to be sold in Mississippi. We cannot agree.
First, to the extent, if any, that Louisiana is unconstitutionally burdening the flow of milk in interstate commerce by erecting and enforcing economic trade barriers
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to protect its own producers from competition under the guise of health regulations, the Commerce Clause itself creates the necessary reciprocity: Mississippi and its producers may pursue their constitutional remedy by suit in state or federal court challenging Louisiana's actions as violative of the Commerce Clause.
Second, to the extent that Louisiana is legitimately exercising its local powers in the interest of the health of its citizens by refusing reciprocity and consequently the admission of milk deemed in good faith by state officials to be of insufficient quality, Mississippi is not privileged under the Commerce Clause to force its own judgments as to an adequate level of milk sanitation on Louisiana at the pain of an absolute ban on the interstate flow of commerce in milk. However available such methods in an international system of trade between wholly sovereign nation states, they may not constitutionally be employed by the States that constitute the common market created by the Framers of the Constitution. To allow Mississippi to insist that a sister State either sign a reciprocal agreement acceptable to Mississippi or else be absolutely foreclosed from exporting its products to Mississippi would plainly "invite a multiplication of preferential trade areas destructive of the very purpose of the Commerce Clause." Dean Milk, 340 U.S., at 356. No "parochial legislative [p]olicy," H. P. Hood & Sons, Inc. v. Du Mond, 336 U.S., at 538, could be more precisely calculated to open "the door... to rivalries and reprisals that were meant to be averted by subjecting commerce between the states to the power of the nation." Baldwin v. G.A.F. Seelig, Inc., 294 U.S., at 522. S
"The Constitution was framed under the dominion of a political philosophy less parochial in range. It was framed upon the theory that the peoples of the several states must sink or swim together, and
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that in the long run prosperity and salvation are in union and not division." Id., at 523.I
The mandatory reciprocity provision of § 11, insofar as justified by the State as an economic measure, is "precisely the kind of hindrance to the introduction of milk from other States... condemned as an 'unreasonable clog upon the mobility of commerce.... [It is] hostile in conception as well as burdensome in result.'" Polar Ice Cream & Creamery Co. v. Andrews, 375 U.S., at 377.
Accordingly, we hold that the mandatory character of the reciprocity requirement of § 11 unduly burdens the free flow of interstate commerce and cannot be justified as a permissible exercise of any state power. The judgment of the District Court is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
MR. JUSTICE STEVENS took no part in the consideration or decision of this case.