Safeway Stores, Inc. v. State Board of Agriculture

LATOURETTE, C. J.,

specially concurring.

I concur in the majority opinion written by Mr. Justice Bossman, as well as in the specially concurring opirnon of Mr. Justice Warner.

The preamble to the milk control bill, ch. 72, Oregon Laws, Second Special Session, 1933, follows:

“Whereas the production and distribution of milk and cream is a paramount industry upon which to a substantial degree the prosperity and health of the people of the state of Oregon depend; and the present economic emergency is in a large part the result of the disparity between the prices of milk and cream and other commodities, which disparity has diminished the power of milk producers to purchase industrial products, has broken down the orderly production and marketing of milk and cream and has seriously impaired the agricultural *100 assets supporting the credit structure of the state and the local political subdivision thereof; and

“Whereas unhealthful, unfair, unjust, destructive and demoralizing economic trade practices have grown up and are now carried on in the production, sale and distribution of milk and cream and milk and cream products in the state which impair the dairy industry in the state and the constant supply of pure wholesome milk to the inhabitants thereof, and constitute a menance to the health and welfare of the inhabitants of the state * *

It is evident from the above that the act was directed to the alleviation of the economic distress of milk producers occasioned by the then depression and to insure a constant supply of pure wholesome milk to consumers and was not for the benefit of processors, such as the order of the Director in the present case appears to be directed. (In passing I call attention to the fact that the depression of the ’30s has long since passed.)

The record in this case discloses that the plaintiff purchases its milk from the processors already operating in the Salem area who buy from the producers, and then sells it to consumers. The plaintiff requests permission from the Director to purchase milk directly from the producers in the Salem area instead of from the processors, process it in its plant in Portland, and return it to Salem for distribution to consumers. It is obvious that by such a procedure the producer would not be affected one way or another since the volume of milk sold by him would not be diminished.

The processors in the Salem area are now distributing to the consumer 3.5 per cent butterfat milk. Plaintiff, if given a distributor’s license in such area, will manufacture 3.8 per cent butterfat milk and sell it to the consumer in cartons at its stores at a price *101 of one cent less than that now paid by consumers to the process distributors. It is again clear that the consumers will not be adversely affected by such procedure, but will be benefitted two-fold in increased butter and at a lower price. In other words, plaintiff’s proposal is not detrimental to either the producer or the consumer. If the license were granted to plaintiff, this would be one of the rare instances in which the consumer, often the forgotten man, would be given a break; however, the Director, without any substantial reason disclosed by the record, has denied plaintiff a license, thereby creating a monopoly in the present Salem processors, two of which control the bullí of the trade. This, in my humble opinion, strikes at the very root of the free enterprise system which the American people have enjoyed since the founding of our government.

It is interesting to note that the “Independent Producers”, a group from which plaintiff would purchase milk in this area, if permitted, appeared at the hearing and joined sides with plaintiff in the controversy, and, I believe, for a good reason. It is well known that the supply of butterfat greatly exceeds the demand; consequently, the government, in order to support the butterfat market, has purchased millions of pounds of butter now reposing in government warehouses, creating a problem as to its disposal. If turned back into the trade or to the public, this, indeed, would affect the producers injuriously, tending to beat down the price of the butterfat. If destroyed, it would create an economic waste. This butterfat glut on the market is occasioned in part by the fact that the processors who manufacture 3.5 per cent butterfat content for milk, instead of 3.8 per cent, sell the excess butterfat to the creameries, which, in turn, sell it to the govern *102 ment. Would it not, therefore, promote the general welfare of the inhabitants and relieve the overstocked butter market, inuring to the benefit of the farmers producing milk, if plaintiff were permitted to pass on to the public the increased butter content of milk.

It is apparent to me that the order of the Director is arbitrary, unreasonable, is neither within the spirit nor the terms of tlm act, nor is it founded on facts sufficient to sustain such order.