The respondent challenged the New York law that provides that there shall be no sale within the state of milk brought outside unless the price paid to the producers was one that would be lawful upon a like transaction within the state.
Subject to the paramount power of the Congress, a State may regulate the importation of unhealthy or decayed foods. A state may protect its inhabitants against the fraudulent substitution by deceptive coloring or otherwise of one article for another.
G.A.F. Seeling, engaged in business as a milk dealer in New York, buys its milk in Vermont from the Seelig Creamery Corporation, which in turn buys from the producers on the neighboring farms. The milk is transported to New York by rail. The New York Milk Control Act has set up a system of minimum prices to be paid by dealers to producers. To keep the system unimpaired by competition from out of state, the Act has a provision whereby protective prices are extended to that part of the supply which comes from other states. Seelig buys its milk from the Creamery in Vermont at prices lower that the minimum payable to producers in New York. Seelig brought a suit to restrain the enforcement of the Act.
Was the district court right to grant order restraining the enforcement of the New York Act in so far as sales are made by the complainant while the milk is in the cans in which it was brought into New York?
Yes, an injunction was properly granted restraining the enforcement of the Act in its application to sales in the original packages. The New York Act, if implemented, will set a barrier to traffic between one state and another as effective as if customs duties, equal to the price differential, were imposed upon transportation. Because commerce between the states is unduly burdened when one state regulates by indirection the prices to be paid to producers in another, the Act at issue is unconstitutional.
The price differential resulted from the state statute is unlawful because it discriminates against the merchandise because of its origin in another state. The New York law thereby places itself in a position of economic isolation. They set up what is equivalent to a rampart of customs duties designed to neutralize advantages belonging to the place of origin. The importer must be free from imposts designed for the purpose of suppressing competition. If the Court is to allow New York to implement the law based on her objective of promoting the economic welfare of farmers and stabilizing the price, that would invite a speedy end of our national solidarity.