Paul v. United States, 371 U.S. 245 (1963)
Paul v. United States
No. 19
Argued October 17-18, 1962
Decided January 14, 1963
371 U.S. 245
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
Syllabus
California attempted to enforce her minimum wholesale price regulations with respect to milk sold to the United States at three military installations in the State. Such milk was purchased for strictly military consumption, for resale at federal commissaries, for use at various military clubs, or for resale in various post exchanges. The United States sued in a Federal District Court to enjoin enforcement of the regulations on the grounds that (a) the military installations were subject to the exclusive jurisdiction of the United States, and (b) such regulations unconstitutionally burdened the United States in the exercise of its constitutional power to establish and maintain the Armed Forces and to acquire and manage federal enclaves. A three-judge Court was convened, and it enjoined California officials from enforcing the regulations as to such milk. An appeal was taken directly to this Court.
Held:
1. The issue as to whether or not the state regulatory scheme burdened the exercise by the United States of its constitutional powers to maintain the Armed Services and to regulate federal territory was a substantial federal question; the suit was one "required" to be heard by a three-judge court; and the case was properly brought to this Court by direct appeal under 28 U.S.C. § 1253. Pp. 249-250.
2. The California price-fixing regulations cannot constitutionally be applied to purchases of milk for strictly military consumption or for resale at federal commissaries, since the state regulations are in conflict with federal statutes and regulations governing the procurement with appropriated funds of goods for the Armed Services. Pp. 250-263.
(a) The federal statutes and regulations require competitive bidding or negotiations that reflect active competition; whereas the state milk regulations would defeat this purpose by having a state officer fix the price on the basis of factors not specified in the federal law. Pp. 250-255.
(b) A different conclusion is not required by 10 U.S.C. § 2306(f), as amended Sept. 10, 1962, which requires contractors to submit cost or pricing data for any negotiated contract, but makes that requirement inapplicable where "prices are set by law or regulation." P. 256.
(c) Nor is a different conclusion required by § 2304(g), also added in 1962, which refers to negotiated procurements in excess of $2,500 "in which rates or prices are not fixed by law or regulation." Pp. 256-261.
(d) The statutes and regulations governing procurements for the Armed Services apply to purchases of milk for resale at federal commissaries, as well as to purchases of milk for mess hall use. Pp. 261-263.
3. Insofar as the judgment below pertains to purchases of milk with nonappropriated funds for use at various military clubs or for resale at post exchanges, it is vacated, and the case is remanded to the District Court for further proceedings. Pp. 263-270.
(a) If the District Court finds that California’s basic milk price control law was in effect when the various tracts of land in question were acquired, judgment as to this class of purchases and sales should be for appellants. Pp. 264-269.
(b) If the District Court finds that California’s basic milk price control law was not in effect when such tracts were acquired, then it must make particularized findings as to where the purchases and sale of milk with nonappropriated funds are made, and whether or not such tracts are areas over which the United States has "exclusive" jurisdiction, within the meaning of Art. I, § 8, cl. 17, of the Constitution. Pp. 269-270.
190 F.Supp. 645 affirmed in part and vacated and remanded in part.