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Nebbia v. N. Y. Case Brief

Summary of Nebbia v. N. Y.
S. Ct. 1934

Business Regulations Relating to Prices/Economic Issues – Reasonable Relation to Leg. Purpose

Relevant Facts: Nebbia is the owner of a grocery store who is alleged to have sold milk at a price below the minimum fixed price establish by NY statute.  The legislature held hearings and determined that economic conditions and destructive trade practices jeopardized and adequate milk supply at reasonable prices to consumers and producers.  They determined price controls would regulate that potential disparity.

Legal Issue(s): Whether the statute setting the minimum price for the sale of milk violates the due process of law provisions of the 14th Amendment?

Court’s Holding:   No.

Procedure:  Statute is valid.  Upheld

Law or Rule(s): 5th and 14th Amendments.  Laws passed must have a reasonable relation to a proper legislative purpose AND are neither discriminatory nor arbitrary – thereby due process requirements are satisfied.

Court Rationale: The state is free to adopt whatever economic policy it deems to promote public welfare, and to enforce that policy by legislation adapted to that purpose.  The statute is a reasonable exertion of governmental authority.  The dairy industry is not a public utility.  The due process clause makes no mention of sales or of prices any more than it speaks of business or contracts or buildings or other incidents of property.  Price control is unconstitutional only if arbitrary or discriminatory.  The statute is neither, and it does not exceed the legislative power.

Plaintiff’s Argument: The control of milk prices has a reasonable relation to a proper legislative purpose – economic conditions and destructive trade practices that jeopardize adequate milk supply at reasonable prices to consumers and producers.

Defendant’s Argument: The statute setting a minimum price for milk deprives df of his due process rights under the law because df’s business is not bound to serve all who apply, it is a public utility {a business in its nature is a monopoly}.

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