38 N.Y.2d 6 (1975)
A party has standing to challenge administrative action if it demonstrates that the action will have a harmful effect and that the interest asserted is arguably within the zone of interest to be protected by the relevant statute.
Summary
Dairylea, a licensed milk dealer, challenged the Commissioner of Agriculture and Markets’ decision to extend Glen and Mohawk Milk Association’s license to include a larger sales area without a hearing. The court addressed whether Dairylea had standing to bring the suit. The Court of Appeals held that Dairylea had standing because the Agriculture and Markets Law aimed to prevent destructive competition, and Dairylea plausibly alleged that the Commissioner’s action would lead to such competition. The Court emphasized that judicial review is warranted when an agency acts adversely to a party, unless the legislature clearly intends to preclude such review.
Facts
Dairylea was a licensed milk dealer selling milk in several New York counties, including Rockland and Orange. Glen and Mohawk, another licensed milk dealer, applied to the Commissioner of Agriculture and Markets to extend its license to include all of Rockland County and the southern part of Orange County. The Commissioner approved Glen and Mohawk’s application without holding a hearing, as allowed by the Agriculture and Markets Law. Dairylea initiated a proceeding to challenge the Commissioner’s decision, arguing it would lead to destructive competition.
Procedural History
Dairylea commenced an Article 78 proceeding in the trial court to review the Commissioner’s determination. The trial court dismissed the proceeding, finding Dairylea lacked standing. The Appellate Division affirmed the trial court’s decision. Dairylea appealed to the New York Court of Appeals.
Issue(s)
Whether Dairylea has standing to challenge the Commissioner of Agriculture and Markets’ decision to extend Glen and Mohawk’s milk license, based on the argument that the decision would lead to destructive competition, despite not being a party entitled to notice or a hearing under the Agriculture and Markets Law.
Holding
Yes, Dairylea has standing because it has demonstrated that the administrative action will have a harmful effect on it, and the interest it asserts—protection from destructive competition—is arguably within the zone of interests the Agriculture and Markets Law aims to protect.
Court’s Reasoning
The Court of Appeals reasoned that the traditional “legal interest” test for standing, which focused on the invasion of legal rights, was outdated. Instead, it adopted the “zone of interest” test. To establish standing under this test, a petitioner must show that the administrative action will in fact have a harmful effect on the petitioner and that the interest asserted is arguably within the zone of interest to be protected by the statute. The Court acknowledged that Dairylea lacked a statutory or constitutional right to be heard in opposition to Glen and Mohawk’s application. However, it emphasized the importance of judicial review when a government agency acts adversely to a party. The Court stated that only a clear legislative intent negating review or a lack of injury in fact will justify denying standing. The Court found no such legislative intent in this case. The Court emphasized that the statute aims to prevent destructive competition, stating, “It is plain on the face of the statute that the purpose of the Legislature was an all-embracing one and that it was the intention of the Legislature to stabilize the entire distribution structure of the milk industry.” While competitive injury alone does not confer standing, it does when the statute reflects a legislative purpose to prevent destructive competition. The Court differentiated this case from cases where the relevant statute did not require consideration of economic competition. Denying Dairylea standing would risk “the subversion of the legislative goal of maintaining a healthy competitive atmosphere in the milk industry.” The Court emphasized the limited scope of judicial review, stating that it could only consider whether the agency exceeded its authority or disregarded the statutory standards.
Chief Judge Breitel dissented, arguing that the “zone of interest” doctrine concerned only federal administrative regulation and that the Agriculture and Markets Law confined the right to notice, opportunity for a hearing, and judicial review to those denied licenses. He argued that granting standing to competitors would lead to a proliferation of litigation and frustrate the ends of regulation. Breitel also stated that the purpose of Dairylea was to limit competition and not to benefit the consuming public.