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Brief Fact Summary.
The state of New York passed a statute regulating the price of Vermont Milk.
Synopsis of Rule of Law.
States must not violate the dormant commerce clause through the use of its police power.
Certain milk distributors sell its product at different prices to different buyers. The State of New York passed the Milk Control Act. This law states that milk can not be sold to a New York farmer at a higher price than is sold to Vermont farmers. This law is constitutionally challenged.
Whether a statute that violates the Dormant Commerce Clause may be upheld under an Economic Welfare exception.
No. States are not allowed to pass legislation that specifically discriminates against out-of-stators. If allowed, most states will not hesitate against using the law for economic retaliation. New York argues they are doing this to ensure wholesome milk for its citizens, and that this is connected to the welfare. They also argue that the economic motive is secondary. While states are allowed to legislate under its police power for the health safety and welfare of its citizens, this court will not permit states to carve an exception that allows them to discriminate against other states. The police power can not be used to squash competition.
This statute would allow New York to have control over the price of Milk from Vermont as if it was customs agents. This would have worked like a custom duty on a boarder, which states are not allowed to have against one another.