Capital City Dairy Co. v. Ohio

Background

A company incorporated in Ohio to make and sell oleomargarine was charged by the State’s attorney general in 1898 with repeatedly making and selling a product that imitated butter, using coloring matter, failing to mark packages properly, and refusing to give samples to a state inspector. Ohio had several laws requiring samples on demand, requiring true labeling of dairy products, forbidding oleomargarine colored to look like butter, and banning certain dyes. The Ohio Supreme Court found the company had violated those laws, ordered the corporation dissolved, and appointed trustees to wind up its affairs.

Reasoning

The key question before the Justices was whether the Ohio laws violated the U.S. Constitution. The Court explained that the company’s acts concerned oleomargarine made and handled inside Ohio before it became the subject of interstate trade, so the commerce power did not block the state rules. The Court also noted that the Fifth Amendment limits apply to the federal government and were not controlling here. Relying on prior decisions about states’ power to prevent fraud, the Court held Ohio’s ban on coloring oleomargarine and its labeling and sample rules were reasonable police regulations to protect consumers and prevent deception. Some federal claims about due process, equal protection, and contract impairment were not decided because they were not adequately raised below.

Real world impact

The decision affirms a state’s power to forbid coloring and require clear labeling and samples to prevent consumer deception. The particular company remained dissolved under the state judgment. The Court left unanswered certain broader federal constitutional questions because they were not properly presented to the state court.