Dusinberre v. Noyes, 284 N.Y. 305 (1940)

The Commissioner of Agriculture and Markets has broad discretion to deny a milk dealer license if granting it would lead to destructive competition in an adequately served market, negatively impacting producers and the public interest.

Summary

Dusinberre and Oaks, two Guernsey milk producers, applied for a license to operate a pasteurizing and bottling plant. The Commissioner of Agriculture and Markets denied their application, citing potential destructive competition in an already adequately served market. The Appellate Division initially annulled the Commissioner’s determination, but the Court of Appeals reversed, holding that the Commissioner has the authority to consider the potential market impact and deny licenses when necessary to maintain market stability and protect producer returns. The court emphasized that it should not substitute its judgment for that of the Commissioner, who is entrusted by the legislature with this responsibility.

Facts

Eugene Dusinberre and Nathan Oaks, Jr., were Guernsey milk producers. Dusinberre sold his milk to White Springs Dairy in Geneva, while Oaks shipped his milk to Syracuse, with a small amount sold retail at his farm. They planned to build a pasteurizing and bottling plant on Dusinberre’s farm at an estimated cost of $6,000-$6,500. They aimed to sell milk to stores in nearby hamlets and directly to consumers at the farm for nine cents a quart, requiring a bottle deposit. Retailers in Geneva sold milk for twelve cents a quart. Oaks believed the new venture would improve his returns, though he was not dissatisfied with his current market.

Procedural History

The Commissioner of Agriculture and Markets denied Dusinberre and Oaks’ application for a milk dealer license. The Appellate Division annulled the Commissioner’s determination. The Court of Appeals reversed the Appellate Division’s order and confirmed the Commissioner’s determination.

Issue(s)

Whether the Commissioner of Agriculture and Markets acted within his authority in denying a milk dealer license to the applicants based on the potential for destructive competition in an already adequately served market.

Holding

Yes, because the Commissioner is entrusted by the legislature to determine whether granting a license will tend to destructive competition in a market already adequately served and whether it is in the public interest; if substantial evidence supports the Commissioner’s findings and conclusion, a court should not substitute its judgment.

Court’s Reasoning

The Court of Appeals emphasized the Commissioner’s role in determining whether granting a milk dealer license aligns with the public interest and avoids destructive competition. The court cited Agriculture and Markets Law § 258-c, which states that a license should not be granted if “the issuance of the license will not tend to a destructive competition in a market already adequately served, and that the issuance of the license is in the public interest.” The court found substantial evidence supporting the Commissioner’s conclusion that granting the license would destabilize the market, decrease returns to producers, and lead to destructive competition, stating, “The matters which may properly be considered by the Commissioner cannot be determined by any rigid general rule applicable in all cases.” The court deferred to the Commissioner’s judgment, stating that when findings are reasonably supported by evidence, “a court should not substitute its judgment for the judgment of the Commissioner charged by the Legislature with responsibility.”