Nebbia v. New York (291 U.S. 502)

Facts:

The Legislature of New York established, by Chapter 158 of the Laws of 1933, a Milk Control Board with power, among other things, to “fix minimum and maximum . . . retail prices to be charged by . . . stores to consumers for consumption off the premises where sold.” The Board fixed nine cents as the price to be charged by a store for a quart of milk. Nebbia, the proprietor of a grocery store in Rochester, sold two quarts and a five cent loaf of bread for eighteen cents, and was convicted for violating the Board’s order. At his trial, he asserted the statute and order contravene the equal protection clause and the due process clause of the Fourteenth Amendment, and renewed the contention in successive appeals to the county court and the Court of Appeals. Both overruled his claim and affirmed the conviction.

Issue:

Whether or not the milk industry is a public utility subject to the fixing of its selling price.

Ruling: YES.

Many other decisions show that the private character of a business does not necessarily remove it from the realm of regulation of charges or prices. In the further discussion of the principle, it is said that, when one devotes his property to a use “in which the public has an interest,” he, in effect, “grants to the public an interest in that use,” and must submit to be controlled for the common good.

It is clear that there is no closed class or category of businesses affected with a public interest, and the function of courts in the application of the Fifth and Fourteenth Amendments is to determine in each case whether circumstances vindicate the challenged regulation as a reasonable exertion of governmental authority or condemn it as arbitrary or discriminatory.  The phrase “affected with a public interest” can, in the nature of things, mean no more than that an industry, for adequate reason, is subject to control for the public good. But there can be no doubt that, upon proper occasion and by appropriate measures, the state may regulate a business in any of its aspects, including the prices to be charged for the products or commodities it sells.

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