Supreme Court Won't Hear Challenge to Federal Milk Price-Fixing

In April 2012, libertarian-leaning Judge Janice Rogers Brown of the U.S. Court of Appeals for the District of Columbia Circuit caused a stir by voting to uphold a federal price-fixing scheme for milk while simultaneously railing against the Supreme Court precedents that, in her view, mandated this unfortunate outcome. Thanks to a series of rulings dating back to the New Deal, Brown explained, economic regulations are granted extreme deference by the judiciary, an approach known to lawyers as the rational-basis test. "The practical effect of rational basis review of economic regulation is the absence of any check on the group interests that all too often control the democratic process," Brown wrote. In fact, she declared in conclusion, "Rational basis review means property is at the mercy of the pillagers. The constitutional guarantee of liberty deserves more respect—a lot more."

The case in question is known as Hettinga v. United States, and I am sorry to report that Judge Brown's powerful complaints about the Supreme Court's judicial surrender have gone unheeded. This morning the Supreme Court announced its refusal to hear the appeal filed by dairy farmer Hein Hettinga and his wife Ellen, who argue that the government's price controls are not a legitimate health or safety regulation, but are instead a protectionist scheme designed to benefit certain large, politically-connected dairy firms.

The Hettingas have good reason to charge the government with malfeasance. As The Washington Post reported in 2006, "a coalition of giant milk companies and dairies, along with their congressional allies, decided to crush Hettinga's initiative. For three years, the milk lobby spent millions of dollars on lobbying and campaign contributions and made deals with lawmakers, including incoming Senate Majority Leader Harry M. Reid (D-Nev.)."

This lobbying paid off. As I explained in a recent column on the Hettinga case:

The result was the Milk Regulation Equity Act of 2005, which, among other things, imposed minimum milk pricing on all producer-handlers operating out of Arizona that distribute at least 3,000,000 pounds of fluid milk per month. Not coincidentally, [the Hettinga-owned] Sarah Farms is the only producer-handler in the entire state that fits that description. The 2005 law also imposed new minimum price rules on all handlers selling prepackaged milk in California—a provision that also applied to just one existing business, the Arizona-based bottling facility GH Dairy, which also happens to be owned and operated by the Hettingas.

Had the Supreme Court opted to hear the case rather than simply deferring to Congress, the justices might have considered whether such regulations truly serve the public interest. Thanks to the rubber-stamp nature of the rational-basis test, no such scrutiny will occur.