Hillside Dairy, Inc. v. Lyons

PETITIONER: Hillside Dairy, Inc.
RESPONDENT: Lyons
LOCATION: Dr. Nguyen's Office

DOCKET NO.: 01-950
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 539 US 59 (2003)
DECIDED: Jun 09, 2003
ARGUED: Apr 22, 2003

ADVOCATES:
Barbara B. McDowell - Department of Justice, argued the cause for the United States, as amicus curiae, supporting the petitioners
Mark J. Urban - Sacramento, California, argued the cause for the respondents
Roy T. Englert, Jr. - Argued the cause for the petitioners

Facts of the case

California regulates the minimum price paid to dairy farmers producing raw milk by establishing price minimums and requiring contributions to a price equalization pool. After it became profitable for some California processors to buy raw milk from out-of-state producers, the California Department of Food and Agriculture amended its regulations to require contributions to the price equalization pool on some out-of-state purchases. Four dairy farms in Nevada filed suit, alleging that the amendment unconstitutionally discriminated against them. Without reaching the merits, the District Court dismissed both cases. In affirming, the Court of Appeals held that the Federal Agriculture Improvement and Reform Act of 1996 immunized California's milk pricing and pooling laws from Commerce Clause challenge. The appellate court also held that the individual petitioners' Privileges and Immunities Clause claims failed because the amendment did not create classifications based on any individual's residency or citizenship.

Question

Does the Federal Agriculture Improvement and Reform Act of 1996 exempt California's milk pricing and pooling regulations from scrutiny under the Commerce Clause? Are individual claims under the Privileges and Immunities Clause against California's required contributions to the price equalization pool on some out-of-state purchases foreclosed because those regulations do not discriminate on their face on the basis of state citizenship or state residence?

Media for Hillside Dairy, Inc. v. Lyons

Audio Transcription for Oral Argument - April 22, 2003 in Hillside Dairy, Inc. v. Lyons

Audio Transcription for Opinion Announcement - June 09, 2003 in Hillside Dairy, Inc. v. Lyons

William H. Rehnquist:

The opinion of the Court in No. 01-950, Hillside Dairy Inc. versus Lyons and the companion case will be announced by Justice Stevens.

John Paul Stevens:

The California Legislature has created a milk marketing structure that requires that the prices for milk produced, processed, or sold in California by creating an equalization pool that in essence shifts revenue from processors of high value milk products to processors or low-value milk products.

In 1997, California changed its marketing structure to require the contributions to this equalization pool be made on some out-of-state purchases.

Petitioners are out-of-state milk producers that challenge this law on the grounds that it violate the Dormant Commerce Clause and the Privileges and Immunities Clause of the Constitution.

The District Court did not reach the merits of these cases but dismissed them both.

The Court of Appeals for the Ninth Circuit affirmed holding that a federal statute enacted in 1996 had immunized California's milk pricing and pooling laws from Commerce Clause challenge and that the Privileges and Immunities Clause claim failed because of the 1997 amendments did not, on their face, create classifications based on citizenship.

Today, in an opinion filed with the Clerk of Court, we vacate the judgment of the Ninth Circuit.

The federal statute at issued covers California laws regulating the composition and labelling of fluid milk but does not clearly express any intent to insulate California's milk pricing laws from Commerce Clause challenge.

The Court of Appeals therefore erred in relying on this federal statute to dismiss the Commerce Clause challenge.

With respect to petitioner's Privileges and Immunities Clause claim, the Court of Appeals relied on the absence of an expressed statement in the California statute discriminating on the base of citizenship to bar petitioner's claim.

That holding however is inconsistent with the decision of this Court, the case decided back in 1919.

But on expressing an opinion on the merits of the Previleges and Immunities claim, we find that the absence an expressed statement regarding citizenship is not a sufficient basis for rejecting this claim.

The judgment of the Court of Appeals is vacated and these two cases are remanded for further proceedings consistent with this opinion.

Justice Thomas has filed an opinion concurring in part and dissenting in part.