The Dairy Diary and the American Dream

Re the American dairy industry, I’m with Monty Python: “Blessed are the cheesemakers.” Still, it’s fair to observe that throughout history,  the industry has been responsible for truly horrendous legislative schemes and atrocious “landmark” judicial decisions sustaining those schemes—prohibitive taxes on oleomargarine (McCray v. United States, 1904), price controls (Nebbia v. New York, 1934), de facto prohibitions against filled milk (Carolene Products, 1938). For a bracing account of the gutter politics that passed “rational basis” review in Carolene Products, see Geoffrey Miller’s True Story of that case.

The sordid history is brought to mind by an April 13 D.C. Circuit decision, brought to my attention by Aaron Nielson and Jeff Clark (Kirkland & Ellis), sustaining yet another piece of federal dairy regulation against constitutional challenge.

Background: the Department of Agriculture’s splendid efforts to protect “orderly market conditions” by controlling milk prices between producers and handlers doesn’t easily fit firms that produce and handle milk, an inconvenience for which the law provides various exemptions. A producer-handler in Arizona built its business model on such an exemption, which handed it a cost advantage and, in turn, led to lower dairy prices in its sales region. Somewhere along the way, Congress authorized the USDA to wipe out the exemption, and the Department proceeded to do so. When the producer-handler challenged that decision, Congress on the eve of a judicial hearing on the matter wrote the wipe-out—which applied to only this one firm—into law. Our Congress is dysfunctional, but not across the board: when it comes to ruining markets and screwing producers, it can act with alacrity and, as in this case, bipartisanship.

The firm’s new, constitutional challenge to this enactment (on bill of attainder, equal protection, and due process grounds) was quickly dismissed by a district court, and the D.C. Circuit has now confirmed that decision in a laconic per curiam opinion—predictably so: there isn’t anything in current constitutional law that would render the plaintiff’s complaints remotely plausible.

The case nonetheless merits attention on account of a concurring opinion by Judge Brown, joined by Chief Judge Sentelle. The decision is a searing indictment of the unconstrained interest group politics that produce this sort of legislation, and of an equally unquestioned and questionable constitutional jurisprudence that, far from erecting barriers, celebrates factional wrangling and exploitation as “democracy” in action. “Rational basis review,” concludes Judge Brown’s cri de coeur, “means property is at the mercy of the pillagers. The constitutional guarantee of liberty deserves more respect—a lot more.”