The New York legislature created the New York Milk Control Board in 1933, which decreed it unlawful for milk to be sold retail at less than nine cents per quart. Leo Nebbia owned and operated a small grocery store in Rochester, New York, where he was convicted of a misdemeanor criminal violation for selling two bottles of milk at a lower price. The U.S. Supreme Court affirmed the conviction on appeal from the New York Court of Appeals. The majority held that New York’s price fixing scheme did not abridge Nebbia’s right to due process or equal protection under the Fourteenth Amendment, with four justices dissenting.
The case held that a state’s police power permitted it to regulate and fix prices where the state deemed that a public interest in the long-term stability of milk prices outweighed the private rights of consumers and business owners to be free of state interference in trade. The Court rested its holding on the principle that a
state is free to adopt whatever economic policy may be reasonably deemed to promote public welfare, and to enforce that policy by legislation adapted to its purpose. The courts are without authority either to declare such policy, or, when it is declared by the legislature, to override it.
Although this principle of judicial restraint was viewed as a significant departure from substantive due process precedent by the dissenting justices, it is now viewed as a precursor of decisions upholding key elements of the New Deal. Nebbia remains the archetype of contemporary constitutional adjudication with respect to economic liberties.
LAWRENCE G. SALZMAN
See also Economic Regulation; Economic Rights in the Constitution; Substantive Due Process