Savage v. Jones, 225 U.S. 501 (1912)
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Savage v. Jones
No. 68
Argued January 18, 1912
Decided June 7, 1912
225 U.S. 501
APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES
FOR THE DISTRICT OF INDIANA
Syllabus
Where appellant, as complainant below, attacked as unconstitutional a state statute under which the sale of his product was interfered with by the state officer enforcing the statute, and a general demurrer for want of equity is sustained, this Court has jurisdiction of the appeal; nor will the appeal be dismissed because the bill, in one of its allegations, asserted that complainant’s product was not one of those specified in the act, if, as in this case, the bill also alleged that the proper state officer had construed the statute as applicable thereto.
Sales made in one state to be delivered free on board at a point therein, to be delivered to consumers in another state in the original unbroken packages, freight to be paid by purchaser, constitutes interstate commerce.
Commerce among the states is not a technical legal conception, but a practical one drawn from the course of business. Protection accorded to interstate commerce by the federal Constitution extends to the sale by the receiver of the goods in the original packages.
An attack by state authorities upon purchasers of goods manufactured in and shipped from another state inflicts injury upon the manufacturer by reducing the interstate sales, and if this result can only be prevented by complying with illegal demands, under an unconstitutional state statute, equity will grant relief.
Regulating the sale of food for domestic animals is properly within the scope of the state police power, and the vendors of such food are not deprived of their property without due process of law by a regulation requiring disclosure of ingredients and minimum percentage of fat and proteins, disclosure of the formula for combination not being required, and so held as to the statute of Indiana of 1907.
Quaere whether a state can require disclosure of formulas for trade secret for mixture of a harmless article whose value depends upon the mixture.
While the state cannot, under cover of exerting its police power, directly regulate or burden interstate commerce, a police regulation which has real relation to the proper protection of the people, and is reasonable in its terms, and does not conflict with any valid act of Congress, is not unconstitutional because it may incidentally affect interstate commerce.
Where a state police statute involving inspection of goods is enforced by the affixing of stamps, it will not be held unconstitutional as a revenue measure in disguise if the bill does not allege any facts to show that the charge for stamps is unreasonable and the total sale is so much in excess of the cost of inspection as to impute bad faith.
One whose sales are so large as to require stamps far in excess of the minimum amount to be issued is not prejudiced by the requirement to purchase such minimum amount of stamps.
No state statute which even affects incidentally interstate commerce is valid if it is repugnant to the Federal Food and Drugs Act of June 30, 1906, the object of which is to prevent adulteration and misbranding and keep adulterated and misbranded articles out of interstate commerce.
Where an act of Congress relating to a subject on which the state may act also, limits its prohibitions, it leaves the subject open to state regulation as to the prohibitions which are unenumerated.
In determining whether a federal act overrides a state law, the entire scheme must be considered, and that which needs must be implied has no less force than that which is expressed.
The intent of Congress to supersede the exercise by the states of their police power will not be inferred unless the Act of Congress, fairly interpreted, is in actual conflict with the law of the state.
The statute of Indiana regulating the sale, and requiring formula of ingredients of, concentrated commercial food for stock is a proper and reasonable exercise of legislative police authority for the protection of the people of the state. The act is not unconstitutional as depriving a vendor of such food who lives in another state and ships it therefrom to Indiana either as a regulation of, or burden upon, interstate commerce, as depriving any vendor thereof of his property without due process of law, or as a revenue measure beyond the power of the state, nor does the requirement for publishing the ingredients conflict in any manner with the Food and Drugs Act of 1906.
Although the Food and Drugs Act prohibits misbranding, it does not require publication of ingredients, and in that respect the field is left open for state legislation.
This is an appeal from a decree of the circuit court sustaining a demurrer to the bill for want of equity. The suit was brought by Marion W. Savage, a citizen of Minnesota, to restrain the defendant, the state chemist of Indiana, from taking proceedings to enforce an act of the general assembly of that state (Acts 1907, chapter 206) as applied to the sales of the complainant’s product, a preparation for domestic animals known as "International Stock Food." The act is set forth in the margin.{1}
The bill alleges that the complainant has for many years been engaged in Minnesota in the manufacture of medicinal preparations, one of which is called "International Stock Food," and is sold in every state in the Union as well as in many foreign countries; that he has invested large amounts of money in building up a lucrative trade in Indiana among the retail druggists, many hundreds of whom were "buying, carrying in stock, and retailing to the public" the complainant’s preparations; that the complainant’s gross annual sales in Indiana amount to many thousands of dollars; that the "International Stock Food" possesses effective curative properties for various diseases of domestic animals, and is composed of medicinal roots, herbs, seeds, and barks, combined by a secret formula of great value, and that the disclosure to his competitors of the proportion of the ingredients and the manner of combination would seriously injure his business; that the commercial designation "International Stock Food" is not used by the complainant as descriptive of feed of any kind, and is not so understood by retail druggists and purchasers, but is well known to the public as a tradename of a medicine for domestic animals, protected under trademarks in the United States; that, on investigations made by the United States Internal Revenue Department, it was determined that the preparation was not feeding stuff nor a condimental stock food, but was a proprietary or patent medicine within the meaning of the revenue laws of 1863 and 1898, and that subsequent to the enactment by Congress of the food and drugs Act of 1906 (June 30, 1906, 34 Stat. 768, c. 3915), the administrative officers of the United States government duly determined that it was a medicine, and not a food, within the meaning of that act.
The bill then avers the passage of the act above mentioned by the legislature of Indiana, and sets forth the provisions of §§ 1, 2, 8, 9, and 11. It is alleged that the defendant, the state chemist of Indiana, is asserting that the complainant’s manufacture is one of the concentrated commercial feeding stuffs covered by the act, and that it is the duty of the complainant to comply with its provisions with reference to its sale in Indiana,
and has stated and declared to your orator, and now threatens that, unless your orator has attached in a conspicuous place on the outside of each package of your orator’s said medicinal preparation offered for sale within the State of Indiana, a printed statement, clear and truthful, certifying, among other things, the name of the manufacturer and shipper, the place of manufacture, the place of business, and chemical analysis, stating the percentage of crude protein, crude fat, and crude fiber contained in said preparation, and have all its constituents determined by the methods adopted by the session of official agricultural chemists, and shall also state upon said package the names of each ingredient of which said preparation is composed, he will cause the arrest and prosecution of every person dealing or trading in the medicinal preparation of your orator within the State of Indiana.
That the defendant has sent, or caused to be sent, broadcast throughout the State of Indiana to dealers and others who are customers, directly or indirectly, of complainant, many thousand circular letters warning them against the sale of said preparation, and threatening that prosecution will be instituted against all persons engaged in the sale thereof unless and until the complainant shall have complied with the provisions of said act.
It is also alleged that the sales made by the complainant
in the State of Indiana are made at the City of Minneapolis, State of Minnesota, to be delivered free on board of cars at Minneapolis, Minnesota, and delivered to purchasers and consumers within the State of Indiana in the original unbroken packages, freight being paid thereon by the consumers and purchasers.
That, unless restrained, the defendant will continue to annoy and intimidate the numerous persons engaged in selling the preparation in Indiana by threats of criminal prosecution, and will report to the various prosecuting attorneys of the state the sales that may come to his notice, and instigate prosecutions of the sellers as violators of the statute, thereby obstructing the complainant in the conduct of his business in the State of Indiana and interfering with his property rights, to his irreparable injury, for which there is no adequate legal remedy. That many hundreds of persons engaged in selling the preparation have already discontinued their purchases and sales because of the fear of criminal prosecution induced by the defendant’s threats, and that large numbers of those who are still handling it will be induced by such threats to discontinue its sale.
The bill further avers that the complainant’s preparation is not in any sense either concentrated commercial feeding stuff, or condimental stock feed, or a patent proprietary stock feed within the proper construction of the act of Indiana, and is not advertised as possessing nutritive properties or used except as medicine; that the complainant does not "claim that said medicinal preparation contains any crude protein or crude fat;" that it does not contain, nor is it claimed on behalf of the defendant that it contains, any ingredient that is deleterious or injurious to animal life or health; that it is prescribed and administered in small doses as medicine, and
that the only nutritive substance or ingredients . . . are employed as diluents in so small an amount as to produce no feeding effect whatever, but for the sole purpose of rendering medicinal bitter roots, herbs, barks, and seeds more acceptable to the animal stomach;
that directions for use accompany each package, and in every case there is a statement plainly showing that the preparation is to be used to cure disease, and not in place of or as a substitute for any grain or feed. That nevertheless, the defendant, who, in his official capacity, is charged by law with the enforcement of the statute, has construed it to apply to complainant’s product.
That, under § 3 of the statute of Indiana, the state chemist is to register the facts set forth in the certificate required by § 1 as a permanent record, and to furnish stamps or labels, showing such registration, to manufacturers or agents desiring to sell the concentrated commercial feeding stuff so registered in amounts not less than the value of five dollars or multiples of five dollars for any one such product; that, by § 5, the state chemist is to receive one dollar for each one hundred stamps, and that the proceeds thus derived are to be paid into the treasury of the Indiana Agricultural Experiment Station, to be expended in carrying out the provisions of the statute and for any other expenses of such station, as authorized by law.
That the statute, and particularly §§ 1, 2, 7, 8, and 9, are repugnant to the Fourteenth Amendment of the Constitution of the United States in that they require manufacturers of proprietary stock feed and condimental feeds, arbitrarily, without compensation, and without due process of law, whether such preparation contain any poisonous or deleterious element or ingredient, to disclose the formulae by which they are compounded, and the ingredients and proportions thereof, which embody valuable trade secrets, and that, if the act is enforced against the complainant, he will be deprived of his property contrary to the said Amendment.
That the statute also violates § 8 of Article I of the Constitution of the United States as an unreasonable interference with interstate commerce in which the complainant is engaged.
That further, the statute is invalid under § 19 of Article IV of the Constitution of the State of Indiana in that the title does not express the requirement that manufacturers or dealers shall disclose the formulae by which their products are manufactured, or the ingredients or proportions.
That, for many years, the complainant’s preparation has been offered for sale in packages of different sizes, holding respectively 24 ounces, 3 pounds, 6 pounds, and 25 pounds; that, under the terms of the statute, the complainant would be required to pay the same amount of tax for a package of 24 ounces that other commodities and manufacturers thereof pay for a package of one hundred pounds, and that this discrimination is unreasonable and unconstitutional.
That the enforcement of the requirement as to the affixing of stamps and payment therefor is a tax upon the complainant’s property and business, and is not a license fee determined by any reasonable requirement, or for the purpose of carrying out the inspection required, but, on the contrary, under the guise of a police regulation, constitutes a measure for raising revenue for the general work and expense of the Indiana Agricultural Experiment Station. That the act is contrary to § 10 of article 1 of the Constitution of the United States, that no state shall, without the consent of Congress, lay any imposts or duties on imports except what may be absolutely necessary for executing its inspection law.
The bill prays that the defendant may be enjoined from taking any action against the complainant, interfering with his right to vend and convey his preparations in the State of Indiana, from instituting any proceedings to punish him for failure to comply with the defendant’s demands, from giving out orally or in writing to the various prosecuting officers of the state, or to any other agents thereof charged with the enforcement of its law, or to the public, any threats of prosecution, or information upon which prosecutions are requested or may be based, and from otherwise seeking to prevent the conduct of the complainant’s business in the state, or to discredit the reputation of his remedy.
The defendant demurred to the bill upon the ground that it was wholly without equity, and that the court was without jurisdiction. Upon the former ground, the bill was dismissed.