H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525 (1949)

A state may not discriminate against interstate commerce, even under the guise of promoting local economic interests, by denying a license to a business seeking to operate in interstate commerce if the sole reason for the denial is to protect local businesses from competition.

Summary

H.P. Hood & Sons sought a license to operate an additional milk receiving depot in New York to ship milk to Boston. New York denied the license, arguing it would reduce the supply of milk available to local consumers and harm existing local milk dealers. The Supreme Court held that New York’s denial of the license unconstitutionally burdened interstate commerce. The Court emphasized that the Commerce Clause prohibits states from enacting protectionist measures that benefit in-state businesses at the expense of out-of-state competitors, even if the state’s intentions are to stabilize the local economy.

Facts

1. H.P. Hood & Sons, a milk distributor based in Boston, Massachusetts, already operated three milk receiving depots in New York.
2. Hood sought a license from the New York Commissioner of Agriculture and Markets to operate a fourth depot in Greenwich, New York.
3. The proposed Greenwich depot was intended to increase the volume of milk Hood could ship to Boston.
4. Existing milk dealers in the area protested the granting of the license, arguing it would divert milk from local markets.
5. The Commissioner denied the license, finding that the additional competition would “tend to a destructive competition in a market already adequately served” and would be contrary to the public interest.

Procedural History

1. The Commissioner of Agriculture and Markets denied Hood’s application.
2. The decision was affirmed by the New York courts.
3. The Supreme Court granted certiorari to review the decision.

Issue(s)

1. Whether New York’s denial of a license to operate a milk receiving depot, based on the grounds that it would increase competition and divert milk from local markets, constitutes an unconstitutional burden on interstate commerce in violation of the Commerce Clause of the U.S. Constitution.

Holding

1. Yes, because a state cannot discriminate against interstate commerce to protect local economic interests, even if the stated purpose is to ensure an adequate supply of milk for local consumers or to prevent destructive competition among milk dealers.

Court’s Reasoning

The Court reasoned that the Commerce Clause was designed to prevent states from erecting trade barriers that would Balkanize the national economy. New York’s denial of the license was explicitly intended to protect local milk dealers from competition, thereby impeding the flow of milk in interstate commerce. The Court stated, “Our system, fostered by the Commerce Clause, is that every farmer and every craftsman shall be encouraged to produce by the certainty that he will have free access to every market in the Nation, that no home embargoes will withhold his exports, and no foreign state will by customs duties or regulations exclude them.” The Court acknowledged the state’s legitimate interest in regulating the milk industry but emphasized that such regulation could not be used as a tool for economic protectionism. The Court further noted that the “Constitution when ‘read in the light of our whole experience’ forbids a state to promote its own economic advantages by curtailment or burdening of interstate commerce.” The Court concluded that New York’s actions directly violated the Commerce Clause’s prohibition against state laws that discriminate against or unduly burden interstate commerce, even if motivated by local economic concerns.