As Amended on Denial of Rehearing March 9, 1942.
Mr. Erle Pettus and Mr. Horace C. Wilkinson, both of Birmingham, Ala., for petitioner. [315 U.S. 148, 149] Messrs. Charles L. Rowe and William H. Loeb, Asst. Attys. Gen., for respondents.
Mr. Justice REED delivered the opinion of the Court.
The petitioner, Cloverleaf Butter Company, is engaged at Birmingham, Alabama, in the manufacture of process or renovated butter from packing stock butter. It obtains 25% of its supplies of packing stock butter from the farmers and country merchants of Alabama and 75% from those of other states, and it ships interstate 90% of its finished product. The production of renovated butter is taxed and regulated by the United States. Internal Revenue Code, c. 16, 2320 to 2327 inc., 26 U.S.C.A. Int.Rev. Code, 2320 to 2327. It is also regulated by Alabama Ala.Code 1940, Tit. 2, c. 1.
The respondents, Alabama officials charged with the duty of enforcing the Alabama laws in regard to renovated [315 U.S. 148, 151] butter, entered petitioner's factory and in a little more than a year seized on sixteen separate occasions a total of over twenty thousand pounds of packing stock butter, the material from which the finished product is made. Defendants also seized some butter moving to the factory in interstate commerce. There is no allegation that condemnation proceedings have been completed.
Alleging repeated seizures and danger of their continuance to the demoralization and financial impairment of its business, petitioners brought an action, Judicial Code 24(1), 28 U.S.C.A. 41(1) in the District Court to enjoin the defendants from acting under the Alabama statute either to determine the wholesomeness of renovated butter made from the raw material in petitioner's hands, to inspect its raw material and plant or to seize and to detain petitioner's packing stock butter. The theory of the bill is that the federal legislation and regulations concerning the manufacture of process or renovated butter exclude such state action. Cf. Hebe Co. v. Shaw, 248 U.S. 297 , 39 S.Ct. 125; Cor Products Refg. Co. v. Eddy, 249 U.S. 427 , 39 S.Ct. 325. There was a motion to dismiss on the ground that the complaint did not state a cause of action. A stipulation entitled as one of 'facts' was entered into. The District Court dismissed the bill, the Circuit Court of Appeals affirmed, 5 Cir., 116 F.2d 227, and we granted certiorari because of the important question of federal law involved in petitioner' contention that these federal statutes providing for regulation of production of a commodity excluded state action. 313 U.S. 551 , 61 S.Ct. 834.
The so-called stipulation of facts just mentioned is really a limitation of issues. One paragraph of the stipulation will crystallize the essential elements of the dispute. It reads: 'The parties to this cause stipulate and agree that the legal questions in dispute between the parties are: ... 2. Does the inspection of packing stock butter, in interstate commerce, used by the plaintiff in the manufac- [315 U.S. 148, 152] ture of process or renovated butter as alleged in the bill of complaint, made or directed to be made by the Secretary of Agriculture of the United States, pursuant to the Federal laws and regulations relating to renovated or process butter, have the effect in connection with said Federal laws of excluding the State of Alabama, its officers and agents, from inspecting or seizing or suspending the packing stock butter, in interstate commerce out of which renovated butter to be sold in interstate commerce as alleged in the complaint is manufactured by the plaintiff as alleged in the complaint?' As other paragraphs state variations of this controversy or conclusions of law not controlling on the courts, Estate of Sanford v. Comm'r, 308 U.S. 39, 51 , 60 S.Ct. 51, 59, we need not consider them further. The central question presented in the petition for certiorari accords with the excerpt from the stipulation.
Apparently there is no specific allegation or admission that the packing stock butter which Alabama inspected and seized was the property of the petitioning manufacturer at the time. It has, however, been so treated by the courts and parties and properly so, we conclude, from the allegations of the bill. 1 The reach of this decision is therefore limited to Alabama's inspection and seizure of packing stock butter, actually owned by petitioner and held in its own hands or those of its bailees, whether in factory, [315 U.S. 148, 153] warehouse or course of carriage, for manufacture into process or renovated butter for interstate or foreign commerce.
The test to be applied to the action of the state in seizing material intended solely for incorporation into a product prepared for interstate commerce is the effect of that action upon the national regulatory policy declared by the federal statute. Cf. Illinois Nat. Gas Co. v. Central Illinois Pub. Serv. Co., 314 U.S. 498 , 62 S.Ct. 384, 86 L.Ed. --, decided January 5, 1942. Not only [315 U.S. 148, 154] does Congressional power over interstate commerce extend, the 'Laws of any State to the Contrary notwithstanding,'2 to interstate transactions and transportation, but it reaches back to the steps prior to transportation and has force to regulate production 'with the purpose of so transporting' the product. United States v. Darby, 312 U.S. 100, 117 , 61 S.Ct. 451, 458, 459, 132 A.L.R. 1430. It extends to the intrastate activities which so affect commerce as to make regulation of them appropriate means to the attainment of a legitimate end, regulation of interstate commerce. Id., 312 U.S. 118 et seq., 61 S.Ct. 459, 132 A.L.R. 1430, and cases cited. By the regulatory provisions of Internal Revenue Code 2325, note 10, infra, the entire process of manufacture is subject to federal supervision. Thus so far as any situation here involved is concerned, the scope of Congressional power is such that it may override the exercise of state power and render impossible its application to petitioner's manufacturing processes.
This power of Congress to exercise exclusive control over operations in interstate commerce is not in dispute here. 3 Nor is this power limited to situations where national uniformity is so essential that lacking Congres- [315 U.S. 148, 155] sional permission all state action is inadmissible notwithstanding a complete absence of federal legislation. 4 Exclusive federal regulation may arise, also, from the exercise of the power of Congress over interstate commerce where in the absence of Congressional action the states may themselves legislate. It has long been recognized that in those fields of commerce where national uniformity is not essential, either the state or federal government may act. Willson v. Black-bird Creek Marsh Co., 2 Pet. 245; California v. Thompson, 313 U.S. 109, 114 , 61 S.Ct. 930, 932. Where this power to legislate exists, it often happens that there is only a partial exercise of that power by the federal government. In such cases the state may legislate freely upon those phases of the commerce which are left unregulated by the nation. 5 But [315 U.S. 148, 156] where the United States exercises its power of legislation so as to conflict with a regulation of the state, either specifically6 or by implication,7 the state legislation becomes inoperative and the federal legislation exclusive in its application.
When the prohibition of state action is not specific but inferable from the scope and purpose of the federal legislation, it must be clear that the federal provisions are inconsistent with those of the state to justify the thwarting of state regulation. 8
Apparently there are no cases of this Court dealing specifically with state interference with federally regulated manufacturing. It is evident, we think, that the same principles govern state action in this field as in the instances cited under note 7 to show the exclusive power of federal enactments in transportation, employers liabil- [315 U.S. 148, 157] ity, quarantine and aliens. The rule is clear that state action may be excluded by clear implication or inconsistency. Its application to individual cases creates difficulties. The differentiation between cases where the assumption of federal power is exclusive and where it admits state action is narrow. For example, in Oregon-Washington R. & Nav. Co. v. Washington, 270 U.S. 87 , 46 S.Ct. 279, Section 8 of the Plant Quarantine Act, 37 Stat. 315, 318, as amended 39 Stat. 1165, 7 U.S.C . 161, 7 U.S.C.A. 161, was held to exclude a state quarantine against plant infestation. Yet a little later in Mintz v. Baldwin, 289 U.S. 346 , at page 352, 53 S.Ct. 611, 614, a very similar statute, the Cattle Contagious Diseases Act was held to permit a state quarantine, because this latter act differed from the former, in that its provisions, 'by specification of the cases in which action under it shall be exclusive, disclose the intention of Congress that, subject to the limitations defined, state measures may be enforced. This difference is essential and controlling.' Cf 21 U.S.C. 126, 21 U.S.C.A. 126.
It is urged that the later Welch, Eichholz and Maurer cases, cited above, which allow state action when the federal statute does not cover the particular point regulated show a trend away from the doctrine of the Oregon-Washington R. & Nav. Co. decision. Other similar instances may be found in notes 3 and 5, supra. In all of these, however, it was the ruling of this Court that the federal enactment was consistent with the narrow regulation sought to be enforced by the state so that the state enactment did not stand 'as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.' Hines v. Davidowitz, 312 U.S. 52, 67 , 61 S.Ct. 399, 404. As the principle upon which the cases referred to in this paragraph are decided is clear, a single comparison will sufficiently illustrate the reasons which lead to a denial of state power. Savage v. Jones, 225 U.S. 501 , 32 S.Ct. 715, construed an Indiana statute requiring disclosure of formulas on foods offered [315 U.S. 148, 158] for sale in Indiana while in interstate commerce. The Pure Food and Drugs Act, 34 Stat. 768, prohibited, so far as here pertinent, interstate shipments if misbranded by bearing 'any statement, design or device ... false or misleading.' This Court said, at page 532 of 225 U.S., at page 725 of 32 S.Ct.: 'Congress has thus limited the scope of its prohibitions. It has not included that at which the Indiana statute aims. Can it be said that Congress, nevertheless, has denied to the state, with respect to the feeding stuffs coming from another state and sold in the original packages, the power the state otherwise would have to prevent imposition upon the public by making a reasonable and nondiscriminatory provision for the disclosure of ingredients, and for inspection and analysis?' The Indiana Act was upheld. On the other hand McDermott v. Wisconsin, 228 U.S. 115 , 33 S.Ct. 431, 47 L.R.A.,N.S., 984, Ann.Cas.1915A, 39, makes plain the basis for prohibiting interferences with federal power. In this latter case a Wisconsin law, Laws Wis.1907, c. 557, required glucose mixtures offered for retail sale to be labeled 'Glucose flavored with' the flavoring material. Any other 'designation or brand' on the package was prohibited. A glucose mixture was offered labeled 'Karo Corn Syrup' '10% Cane Syrup, 90% Corn Syrup.' Pointing out that federal authority, for the sake of efficiency in protecting the public against misbranding in interstate trade, extended far enough to regulate labeling on packages while being offered to consumers, and that the Pure Food and Drug Act tolerated the more euphemistic label prohibited by the state, this Court said, at page 133 of 228 U.S., at page 435 of 33 S.Ct., 47 L.R.A.,N.S., 984, Ann.Cas.1915A, 39: 'Conceding to the state the authority to make regulations consistent with the Federal law for the further protection of its citizens against impure and misbranded food and drugs, we think to permit such regulation as is embodied in this statute is to permit a state to discredit and burden legitimate Federal regulations of interstate commerce, to destroy rights arising out of the Federal statute [315 U.S. 148, 159] which have accrued both to the government and the shipper, and to impair the effect of a Federal law which has been enacted under the Constitutional power of Congress over the subject.' In the Savage case there was no conflict, inconsistency or interference; in the McDermott case there was. McDermott pointed out the distinction, and the inapplicability of the Savage rule to the Wisconsin situation. 228 U.S. 115, 131 , 132 S., 33 S.Ct. 431, 434, 435, 47 L.R.A.,N.S., 984, Ann.Cas.1915A, 39.
Turning to the statutes in question we find that the greater part of the legislation relating to process or renovated butter is in 2320 to 2327 of the Internal Revenue Code. 9 These sections define process or renovated butter, fix the rate of poundage tax upon it, as well as the amount of special tax upon its manufacturers and provide for their collection. They require manufacturers to file such notices and inventories, keep such books, render such returns, post such signs, affix such number to his factory, and furnish such bond as the Treasury Department may require. Wholesale dealers are required to keep books and render returns to the same department. Penalties are provided. Specific provisions are made for inspection of the places of manufacture or storage of the materials and the renovated butter itself. Power is given to confiscate the finished product. Sanitary provisions applicable for slaughtering, meat canning or similar establishments are extended to cover process and renovated butter factories. The sections necessary for the discussion are set out in the note below. 10 The references to animal and meat in- [315 U.S. 148, 160] spection statutes in 2327(b) made applicable to the butter in question the power of the Secretary of Agriculture to inspect and certify as wholesome for human food salt pork and bacon intended for exportation and the requirement that inspected carcasses of cattle, sheep and swine found unwholesome shall not be subjects of interstate transportation.
There are two provisions of law applicable to process and renovated butter production which may be conveniently considered and disposed of at this point. [315 U.S. 148, 161] (a) By section one of the Act of May 9, 1902, it is provided that importations of processed and renovated butter shall be subject to the laws of the state as though produced therein. 11 This is obviously an adaptation of the Wilson or Original Packages Act to the problem of butter substitutes, passed to overcome the force of some of the cases forbidding state prohibition of sales of these substitutes. 12 It is clearly inapplicable to the case now under consideration, but indicates a Congressional purpose not to hinder the free exercise of state power except as it may be inconsistent with the federal legislation. The argument that [315 U.S. 148, 162] it is improper to infer a restriction on confiscation of material when confiscation of product is permitted fails to give weight to the difference between a confiscation which interferes with production under federal supervision and confiscation after production because of a higher standard demanded by a state for its consumers. The latter type is permissible under all the authorities.
(b) By section four of the same Act, 26 U.S.C.A. Int.Rev.Code, 3282, R.S. 3243 was made to 'extend to and include and apply to' manufacture of processed and renovated butter. That section, now I.R.C. 3276, 26 U.S. C.A. Int.Rev.Code 3276, provides that the payment of the tax laid by the act under consideration 'shall not be held to exempt any person from any' state penalty 'or in any manner to authorize the commencement or continuance of such trade or business contrary to the laws of such State.' It is urged by respondent that this section makes it 'clear that the power of the States over the subject of the manufacture and sale of process and renovated butter within their respective limits was to be unrestricted, even though the effect of such regulation might be the imposition of an indirect burden upon interstate commerce.' This section without doubt manifests the will of Congress that federal taxation shall not, of itself, incapacitate the state. Austin v. Tennessee, 179 U.S. 343 , 21 S.Ct. 132; Plumley v. Massachusetts, 155 U.S. 461, 466 , 15 S.Ct. 154, 155. In our view, however, the section goes no farther than to make certain that federal taxation shall not paralyze state action. Other regulations may or may not supersede state laws. Cf. Merchants' Exchange v. Missouri, 248 U.S. 365, 368 , 39 S.Ct. 114, 115; Hartford Accident & Indemnity Co. v. Illinois, 298 U.S. 155, 159 , 56 S.Ct. 685, 686.
There are also two other elements of the federal legislation which may be considered from the negative viewpoint. This is not solely a revenue act. Respondent strongly urges that it must be treated as primarily for the purpose of increasing federal income and that therefore there should be no judicial deduction that the incidental [315 U.S. 148, 163] regulatory features are exclusive. For this there is support in the precedents. McCray v. United States, 195 U.S. 27 , 24 S.Ct. 769, 1 Ann.Cas. 561.13 While there has long been recognition of the authority of Congress to obtain incidental social, health or economic advantages from the exercise of constitutional powers,14 it has been said that such collateral results must be obtained from statutory provisions reasonably adapted to the constitutional objects of the legislation. Linder v. United States, 268 U.S. 5, 17 , 45 S.Ct. 446, 448, 39 A.L.R. 229. But here the respondent's contention is inapplicable because the regulatory provisions in controversy are authorized by the Commerce Clause. Pittsburgh Melting Co. v. Totten, 248 U.S. 1, 8 , 39 S.Ct. 3, 4; Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381 , 60 S.Ct. 907; United States v. Darby, supra, 312 U.S. 119 , 61 S.Ct. 459, 132 A.L.R. 1430.
Further, we agree with respondent's contention that there is no authority to confiscate or destroy materials under the renovated butter act. It should be noted that packing stock adulterated under the definitions of 402 of the Federal Food, Drug and Cosmetic Act, 52 Stat. 1046, 21 U.S.C.A. 342, when introduced into or while in interstate commerce may be confiscated under 304, 21 U.S.C.A. 334 while in interstate commerce or at any time thereafter. Cf. United States v. Nine Barrels of Butter, D.C., 241 F. 499. Petitioner argues that the provisions for meat inspection made applicable to process and renovated butter factories by I.R.C. 2327, note 10, supra, include Title 21, 72 of the United States Code, 21 U.S.C.A. 72. Section 72 does authorize the destruction of unfit carcasses of cattle, hogs and sheep intended for human consumption and we assume, if applicable, would authorize a similar destruction of the materials intended for butter [315 U.S. 148, 164] manufacture. Section 72, however, is derived from 34 Statutes at Large 674. The provisions which I.R.C. 2327 makes applicable are the sanitary provisions as set forth in the Act of June 30, 1906, c. 3913, 34 Stat. 676. 15 These relate only to inspection and not to condemnation or destruction. 16 Nor do we find such power in the regulatory provisions of 2325, note 10, supra, or any interpretation by the Department of Agriculture leading to that conclusion. The regulations contain no directions for condemnation. B.D.I. Order No. 1-Revised, December 24, 1936; 9 C.F.R. 301. The views of the Solicitors of Agriculture have long been in accord with our conclusion. Opinion No. 2829, October 18, 1940.17 [315 U.S. 148, 165] The state act which petitioners say conflicts and interferes with the Federal is the usual type of general food and drug regulation. Alabama Code 1940, Tit. 2, c. 1. Power is conferred on the state board of agriculture and industries to promulgate rules and regulations with the commissioner of agriculture and industries as the chief administrative official. The issue arises over action taken under 495, Code Ala.1940, Tit. 2, quoted so far as pertinent below.