336 U.S. 525 (1949)
H.P. Hood & Sons, Inc., a Massachusetts corporation, has long distributed milk and its products to inhabitants of Boston.1 That city obtains about 90% of its fluid milk from states other than Massachusetts.2 Dairies located in New York State since about 1900 have been among the sources of Boston's supply, their contribution having varied but during the last ten years approximating 8%.3
The company has operated three receiving depots in New York State under licenses from the Commissioner of Agriculture and Markets.4 At these depots raw milk from farmers is weighed, tested, cooled if necessary, and shipped the same day as fluid milk to Boston without any processing in New York.5
On January 30, 1946, Hood applied for an extension of its license to operate an additional receiving plant at Greenwich, New York.6 Greenwich is ten miles from Salem and twelve miles from Eagle Bridge.7 Hood proposed to divert to the plant at Greenwich milk deliveries of producers living in that vicinity who were then delivering to its more distant plants at Eagle Bridge and Salem.8
Hood also planned to take on at Greenwich twenty or thirty additional producers then delivering to competing dealers in the vicinity of Greenwich.9 At the administrative hearing, competing milk dealers opposed the application.10 They complained that Hood, by reason of conditions under which it sold in Boston, had competitive advantages under applicable federal milk orders, Boston health regulations, and OPA ceiling prices.11 There was also evidence of a temporary shortage of supply in the Troy, New York market during the fall and winter of 1945-46.12
The Commissioner found that the proposed Greenwich plant would reduce volumes received at other plants and increase handling costs there.13 He also found that it would tend to deprive local markets such as Troy of needed supplies during short seasons.14 The Commissioner concluded that issuance of the license would tend to a destructive competition in a market already adequately served and would not be in the public interest.15 Denial of the license was sustained by the New York Supreme Court and Appellate Division, and then by the Court of Appeals, which rejected Hood's constitutional objections under the Commerce Clause.16 The United States Supreme Court granted certiorari because of the importance of the questions involved.17
Whether New York may deny a license for an additional milk receiving plant on the grounds that issuance would tend to destructive competition in a market already adequately served, and would not be in the public interest, where the applicant's entire business is interstate commerce?18
The Commerce Clause prohibits a state from denying facilities for interstate commerce on the sole grounds that the license would tend to destructive competition in a market already adequately served, or would not be in the public interest.19 Such economic protectionism for local interests burdens the free flow of commerce among the states.20
No. The rule forbids state denial of interstate facilities when the sole grounds are protection of local markets from competition.21 The Commissioner's findings explicitly rested on reduction of volumes at other plants, increased costs, deprivation of supplies to Troy, and destructive competition in an adequately served market.22 All of these grounds seek economic advantages for local interests rather than health or safety measures.23
Hood's entire business in New York is conceded to be interstate commerce consisting of purchases and immediate shipment to Boston.24 The denial directly limits expansion of those purchases to shield local dealers and consumers.25 The Commissioner's order therefore imposes an economic barrier on the movement of milk in interstate commerce for the benefit of New York interests.26 This barrier is prohibited by the Commerce Clause even in the absence of congressional action.27
New York may not deny the license on the stated grounds because the denial violates the Commerce Clause by burdening interstate commerce for local economic protection.28
Related opinions on this issue
Joined by Justice Murphy
Justice Black dissented on the ground that the New York statute validly exercises the state's police power to prevent destructive competition among milk dealers.29 The statute thereby protects both public health through an adequate milk supply and the economic welfare of farmers.30 The statute operates without any discrimination against interstate commerce.31
He maintained that the Commissioner's findings addressed local supply and demand relationships applicable to all dealers regardless of destination.32 He argued that the majority's new formula would immunize local business practices from any regulation.33
Black concluded that the Court should leave the New York law undisturbed because Congress had not occupied the field and the state regulation supplements rather than conflicts with federal milk orders.34
Joined by Justice Rutledge
Justice Frankfurter dissented on the ground that the case presented a question of degree requiring a balance between the state's interest in preventing destructive competition and the burden on interstate commerce.35 He argued that the record was insufficient to decide without remand for further findings on market capacity, price structure effects, and the necessity of the restriction.36
He distinguished Baldwin v. Seelig because New York here sought only to curb competition from whatever source rather than to project its price regulations into another state.37 He noted that the buying of milk for out-of-state shipment had been characterized as essentially local business in Eisenberg.38
Frankfurter concluded that the case should be remanded to the state courts to develop facts showing whether the denial of the license for destructive-competition reasons alone would survive constitutional scrutiny.39