Baldwin v. Seelig
In Baldwin v. Seelig, 294 U.S. 511 (1935), the Metropolitan Milk District in the State of New York obtained about 70% of its supplies from New York sources, the remaining 30% from other States.
The New York law forbade the sale in New York of milk obtained by a distributor from other States unless the distributor had paid a price which would be lawful under the New York price regulations. This provision was attacked by a New York milk distributor, all of whose milk supply was purchased in Vermont for less than the established New York price.
Remarking that the New York law aimed at keeping "the system unimpaired by competition from afar," 294 U.S., at 519, the Court struck down this provision as an impermissible burden upon interstate commerce. New York could not outlaw Vermont milk purchased at below New York prices, for to do so would "set a barrier to traffic between one state and another as effective as if customs duties, equal to the price differential, had been laid upon the thing transported," 294 U.S., at 521-which is forbidden to the States by the Constitution, Art. I, 10, cl. 2, and reserved to Congress by Art. I, 8, cl. 3. Nice distinctions between direct and indirect burdens were said to be irrelevant.
"when the avowed purpose of the obstruction, as well as its necessary tendency, is to suppress or mitigate the consequences of competition between the states. . . . A chief occasion of the commerce clauses was `the mutual jealousies and aggressions of the States, taking form in customs barriers and other economic retaliation.' Farrand, Records of the Federal Convention, vol. II, p. 308; vol. III, pp. 478, 547, 548; The Federalist, No. XLII; Curtis, History of the Constitution, vol. 1, p. 502; Story on the Constitution, 259. If New York, in order to promote the economic welfare of her farmers, may guard them against competition with the cheaper prices of Vermont, the door has been opened to rivalries and reprisals that were meant to be averted by subjecting commerce between the states to the power of the nation." 294 U.S., at 522.
To the argument that the law was in reality a health measure, since farmers must be protected from competition if they are to provide the reliable supply of healthful milk which the locality is entitled to have, the Court said,
"Let such an exception be admitted, and all that a state will have to do in times of stress and strain is to say that its farmers and merchants and workmen must be protected against competition from without, lest they go upon the poor relief lists or perish altogether. To give entrance to that excuse would be to invite a speedy end of our national solidarity. The Constitution was framed under the dominion of a political philosophy less parochial in range. It was framed upon the theory that the peoples of the several states must sink or swim together, and that in the long run prosperity and salvation are in union and not division." 294 U.S., at 523.
In Baldwin New York's price control removed any economic incentive for a local distributor to purchase out-of-state milk and thereby encouraged its distributors first to consume the local supply of milk before turning to out-of-state sources.
Out-of-state milk was denied an equal opportunity to compete with New York-produced milk to the extent that the out-of-state supply bore additional transportation charges.
The Florida controls preempt for the Florida producers a large share of the Florida market, especially the most lucrative fluid milk market. Out-of-state milk may not participate in this part of the Florida market, unless local production is inadequate, and given the exclusive domain of the Florida producers over Class I sales, out-of-state milk may not profitably serve the remainder of the Florida market, since it is relegated to the surplus market alone. These barriers are precisely the kind of hindrance to the introduction of milk from other States which Baldwin condemned as an "unreasonable clog upon the mobility of commerce. They set up what is equivalent to a rampart of customs duties designed to neutralize advantages belonging to the place of origin. They are thus hostile in conception as well as burdensome in result." 294 U.S., at 527.