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Parker v. Brown

Supreme Court of the United States · 1943 · Constitutional Law

Constitutional LawCommerce ClauseAntitrustFederal PreemptionState ActionSherman Actstate actionCalifornia Agricultural Prorate Act

Facts

California's Agricultural Prorate Act authorized state officials to create and enforce commodity marketing programs designed to restrict competition among growers and maintain prices. Under the 1940 raisin program for Raisin Proration Zone No. 1, producers had to deliver raisins to receiving stations, where large portions of the crop were placed into surplus and stabilization pools controlled by a state-created committee, and only 30 percent of standard raisins could be sold freely subject to certificates and fees. The program was adopted through state statutory machinery, approved by the state commission and by a producer referendum required by the statute, and enforced with criminal and civil sanctions. Although most California raisins ultimately moved in interstate or foreign commerce, packers bought raisins in California, processed and packed them there, and only then shipped them interstate.

Issue

Whether California's 1940 raisin proration program was invalid because it violated the Sherman Act, was superseded or conflicted with the Agricultural Marketing Agreement Act of 1937, or imposed a burden on interstate commerce forbidden by the Commerce Clause. More specifically, the Court considered whether a restraint imposed by the state itself as sovereign is covered by the Sherman Act and whether this intrastate marketing regulation impermissibly regulated interstate commerce.

Rule

The Sherman Act prohibits individual and private combinations in restraint of trade, not restraints imposed by a state acting as sovereign through its legislature and officials. In the absence of conflicting congressional legislation, a state may regulate matters of local concern, including intrastate sales and production arrangements occurring before interstate commerce begins, even if the regulation substantially affects interstate commerce, so long as the regulation serves legitimate local ends and does not discriminate against interstate commerce. A federal agricultural marketing statute does not itself displace state programs unless a federal order has been issued or the state program conflicts with federal policy.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

The Oregon legislature creates the Berry Market Commission, staffed by state appointees, to cap the percentage of blueberries that growers may sell to in-state processors during harvest season. The program takes effect only after a grower referendum required by statute, and violations are punishable by fines and license suspension imposed by state officials.

A grower argues that the program is a per se unlawful restraint of trade under § 1 of the Sherman Act because it suppresses price competition among growers. What is the best answer?

Explanation. Under the majority opinion, the Sherman Act targets contracts, combinations, and conspiracies of private parties, not restraints imposed by a state acting as sovereign through legislative command and official enforcement. A statutory referendum does not convert the program into a private combination; it is merely a condition chosen by the state for the regulation's operation.