Highland Farms Dairy, Inc. v. Agnew

Background

A Virginia law called the Milk and Cream Act set up a state Milk Commission to create local market areas and to fix minimum and maximum prices for milk and cream. A Washington, D.C. creamery that buys Virginia milk and the Virginia retailer who buys its bottled milk sued to stop the Commission from enforcing the law after a market for Arlington-Alexandria was designated and price minimums exceeded past selling prices. Neither company applied for a license and the Commission warned of enforcement. A three-judge federal court ruled for the state, and the case was appealed.

Reasoning

The Court considered whether the law unlawfully delegated power, improperly burdened interstate trade, left licensing standards undefined, or allowed private groups to cancel price rules. Relying on the state high court’s prior decision and on the statute’s text and administrative practice, the Court held the law lawful. It said the Commission may set market areas and prices after hearings, the cancellation clause has not been exercised and is hypothetical, licensing serves supervisory purposes, and the law does not reach interstate sales before those goods are resold inside a Virginia market.

Real world impact

The ruling lets Virginia authorities regulate milk prices inside the market areas the Commission creates. Distributors and retailers selling in those areas must follow price rules and licensing requirements, while sellers whose transactions remain in interstate commerce are not affected until resale within a designated market. The decision affirms enforcement power subject to the statute’s built-in protections.

Dissents or concurrances

Four Justices did not agree that the State may fix minimum and maximum milk prices, though they joined the opinion on other points.