US SUPREME COURT DECISIONS

1. Producers of tobacco, challenging the constitutionality of provisions of the Agricultural Adjustment Act of 1938, sought to enjoin warehousemen from deducting penalties under the Act from the sales price of tobacco to be sold on behalf of the plaintiffs, in excess of their respective quotas.

Held:

(1) The suit is within § 24(8) Jud.Code, which confers jurisdiction upon District Courts "of all suits and proceedings arising under any law regulating commerce," irrespective of citizenship of parties or amount in controversy. P. 307 U. S. 46.

(2) The suit is not forbidden by R.S. 3224, which applies only to restraint of assessment or collection of a tax. P. 307 U. S. 46. chanrobles.com-red

Page 307 U. S. 39

(3) Upon the averments of the bill the case is of equitable cognizance, for want of adequate legal remedy. P. 307 U. S. 46.

2. Title III of the Agricultural Adjustment Act of 1938, reciting, inter alia, the importance to the Nation of the marketing of tobacco; that tobacco is sold on a national market -- almost wholly in interstate and foreign commerce, and that, without federal assistance, tobacco farmers are unable to bring about orderly marketing, with the consequence that excessive supplies are produced and dumped on the market, bringing burdens and obstructions to interstate and foreign commerce -- directs that, when in any year, on November 15th, the Secretary of Agriculture finds that the total supply of tobacco, as of July 1st, exceeded the reserve supply level which is defined in the Act, he shall proclaim the total supply, and a national marketing quota shall be in effect throughout the marketing year which commences the following July 1st, but not if more than one-third of the producers of the crop of the preceding year, at a referendum held by the Secretary, oppose the imposition of such quota. The quota for any year is to be first apportioned among the States, largely on the basis of past production, and each state allotment is to be apportioned among the farms largely on the basis of past production and marketing. Each farmer is to be notified of his marketing quota, and if tobacco in excess of the quota for any farm on which it was produced is marketed through a warehouseman, the latter must pay to the Secretary a penalty equal to fifty percent. of the market price of the excess, and may deduct an amount equivalent to the penalty from the price paid the producer.

Held:

(1) The statute does not purport to control production, but regulates commerce in tobacco through marketing. P. 307 U. S. 47.

(2) Where marketing conditions are such that regulation as to sales in interstate and foreign commerce cannot be effective unless extended to sales in intrastate commerce also, such extension of regulation is constitutional. P. 307 U. S. 47.

(3) In order to foster, protect and conserve interstate commerce, or to prevent the flow of that commerce from working harm to the people, the amount of a given commodity which may be transported in it may be limited. P. 307 U. S. 48.

(4) The motive of Congress in asserting the power is irrelevant to the validity of the legislation. P. 307 U. S. 48.

(5) The provisions under review do not amount to unconstitutional delegation of the legislative power to the Secretary of Agriculture. P. 307 U. S. 48. chanrobles.com-red

Page 307 U. S. 40

Definite standards are laid down in the Act to govern the Secretary in fixing the quota and in its allotment amongst the States and farms. He is directed to adjust allotments so as to allow for specified factors which have abnormally affected the production of the State or the farm in question in test years. Congress has indicated in detail the considerations to be held in view in making these adjustments, and, in order to protect against arbitrary action, has afforded both administrative and judicial review to correct errors.

3. In its application to the marketing year 1938, the above-mentioned Act provided that the national marketing quota should be proclaimed within 15 days from February 16, 1938, the date of the Act's approval. Subsequent steps were so far delayed that producers of flue-cured tobacco in Georgia and Florida, who had begun preparations in the preceding December for their 1938 crops, and at great expense had brought them to harvest, curing and grading, were not notified of their quotas, which were below the quantities produced, until a few days before the markets opened.

Held, that, in being subjected to the statutory penalty on the excess, they were not deprived of property without due process, through retroactive operation of the statute. Pp. 307 U. S. 49, 307 U. S. 51.

The statute operated not on production, but prospectively on marketing, the activity regulated. It did not prevent any producer from holding over the excess of tobacco produced, or from processing and storing it for sale in a later year, and the circumstance that the producers in Georgia and Florida had not provided facilities for these purposes is not of legal significance.

24 F.Supp. 919, affirmed.

APPEAL from a decree of a three-judge District Court which dismissed the bill in a suit brought by tobacco farmers to enjoin warehousemen from deducting and remitting to the Secretary of Agriculture the penalties inflicted by the Agricultural Adjustment Act of 1938 on tobacco sold for the plaintiffs in excess of the quotas assigned to their respective farms. The suit was begun in the Superior Court of Georgia. The defendants removed the case to the federal court. The United States intervened under the Act of August 24, 1937. chanrobles.com-red

Page 307 U. S. 41