Nebbia v. New York
291 U.S. 502 (1934)

  • New York established price controls for milk at 9 cents per quart. Nebbia sold some milk for less, and was fined. He appealed.
    • At the time, the retail price of milk was below the production cost, so New York milk producers were going out of business.
    • Nebbia argued that price controls were an unconstitutional interference with the freedom of contract included within the Due Process Clause of the 14th Amendment.
  • The US Supreme Court upheld the price control law.
    • The US Supreme Court found that government can interfere with freedom of contract only to serve a valid police purpose of protecting public health, public safety or public morals.
    • In this case, the Court found that milk is essential to good health, and can’t be stored or shipped easily, so there was a public health issue because New York needed to ensure that local farmers would continue to produce milk for the people.
      • “In the absence of other constitutional restrictions, a State is free to adopt whatever economic policy may reasonably be deemed to promote public welfare, and to enforce that policy by legislation adapted to its purpose…If the laws passes are neither arbitrary nor discriminatory, the requirements of due process are satisfied.”