The significance of the case of Senn v. Tile Layers Protective Union[162] as an indicator of the range of the alteration of the Court's views concerning the constitutionality of State labor legislation derives in part from the fact that the statute upheld therein was not appreciably different from that voided in Truax v. Corrigan.[163] Both statutes were alike in that they withheld the remedy of injunction; but by reason of the fact that the invalidated act did not contain the more liberal and also more precise definition of a labor dispute set forth in the later enactment and, above all, did not affirmatively purport to sanction peaceful picketing only, the Court was enabled to maintain that Truax v. Corrigan, insofar as "the statute there in question was * * * applied to legalize conduct which was not simply peaceful picketing," was distinguishable. Specifically, the Court in the Senn Case gave its approval to the application of a Wisconsin statute which authorized the giving of publicity to labor disputes, declared peaceful picketing and patrolling lawful, and prohibited the granting of injunctions against such conduct to a controversy in which the matter at issue was the refusal of a tiling contractor employing nonunion workmen to sign a closed shop agreement unless a provision requiring him to abstain from working in his business as a tile layer or helper should be eliminated. Inasmuch as the enhancement of job opportunities for members of the union was a legitimate objective, the State was held competent to authorize the fostering of that end by peaceful picketing, and the fact that the sustaining of the union in its efforts at peaceful persuasion might have the effect of preventing Senn from continuing in business as an independent entrepreneur was declared to present an issue of public policy exclusively for legislative determination.[164]

The policy of many State legislatures in recent years, however, has been to adopt legislation designed to control the abuse of the enormous economic power which previously enacted protective measures enabled labor unions to amass; and it is the constitutionality of such restrictive measures that has lately concerned the Court. Thus, in Railway Mail Association v. Corsi,[165] section 43 of New York's Civil Rights Law which forbids a labor organization to deny any person membership by reason of race, color, or creed, or to deny any member, on similar grounds, equal treatment in designation for employment, promotion, or dismissal by an employer was sustained, when applied to an organization of railway mail clerks, as not interfering unlawfully with the latter's right to choose its members nor abridging its property rights, or liberty of contract. Inasmuch as it held "itself out to represent the general business needs of employees" and functioned "under the protection of the State," the union was deemed to have forfeited the right to claim exemption from legislation protecting workers against discriminatory exclusion.[166] Similarly approved as constitutional in Lincoln Union v. Northwestern Co.[167] and American Federation of Labor v. American Sash Co.[168] were State laws outlawing the closed shop; and when labor unions invoked in their own defense the freedom of contract doctrine that hitherto had been employed to nullify legislation intended for their protection, the Court, speaking through Justice Black announced its refusal "to return, * * * to * * * [a] due process philosophy that has been deliberately discarded. * * * The due process clause," it maintained, does not "forbid a State to pass laws clearly designed to safeguard the opportunity of nonunion workers to get and hold jobs, free from discrimination against them because they are nonunion workers."[169] Also in harmony with the last mentioned pair of cases is Auto Workers v. Wisconsin Board[170] in which was upheld enforcement of the Wisconsin Employment Peace Act which proscribed as an unfair labor practice efforts of a union, after collective bargaining negotiations had become deadlocked, to coerce an employer through a "slow-down" in production achieved by the irregular, but frequent, calling of union meetings during working hours without advance notice to the employer or notice as to whether or when the employees would return, and without informing him of the specific terms sought by such tactics. "No one," declared the Court, can question "the State's power to police coercion by * * * methods" which involve "considerable injury to property and intimidation of other employees by threats."[171] Finally, in Giboney v. Empire Storage Co.,[172] the Court acknowledged that no violation of the Constitution results when a State law forbidding agreements in restraint of trade is construed by State courts as forbidding members of a union of ice peddlers from peacefully picketing a wholesale ice distributor's place of business for the sole purpose of inducing the latter not to sell to nonunion peddlers.

REGULATION OF CHARGES; "BUSINESSES AFFECTED WITH A PUBLIC INTEREST"

History

In endeavoring to measure the impact of the due process clause upon efforts by the States to control the charges exacted by various businesses for their services, the Supreme Court, almost from the inception of the Fourteenth Amendment, has devoted itself to the examination of two questions: (1) whether that clause precluded that kind of regulation of certain types of business, and (2) the nature of the restraint, if any, which this clause imposes on State control of rates in the case of businesses as to which such control exists. For a brief interval following the ratification of the Fourteenth Amendment, the Supreme Court appears to have underestimated the significance of this clause as a substantive restraint on the power of States to fix rates chargeable by an industry deemed appropriately subject to such controls. Thus, in Munn v. Illinois,[173] the first of the "Granger" cases, in which maximum charges established by a State legislature for Chicago grain elevator companies were challenged, not as being confiscatory in character, but rather as a regulation beyond the power of any State agency to impose, the Court, in an opinion that was largely an obiter dictum, declared that the due process clause did not operate as a safeguard against oppressive rates, that if regulation was permissible, the severity thereof was within legislative discretion and could be ameliorated only by resort to the polls. Not much time was permitted to elapse, however, before the Court effected a complete withdrawal from this position; and by 1890[174] it had fully converted the due process clause into a positive restriction which the judicial branch is duty bound to enforce whenever State agencies seek to impose rates which, in its estimation, are arbitrary or unreasonable.

In contrast to the speed with which the Court arrived at those above mentioned conclusions, more than fifty years were to elapse before it developed its currently applicable formula for determining the propriety of subjecting specific businesses to State regulation of their prices or charges. Prior to 1934, unless a business were "affected with a public interest," control of its prices, rates, or conditions of service was viewed as an unconstitutional deprivation of liberty and property without due process of law. During the period of its application, however, this standard, "business affected with a public interest," never acquired any precise meaning; and as a consequence lawyers were never able to identify all those qualities or attributes which invariably distinguished a business so affected from one not so affected. The best the Court ever offered by way of enlightenment was the following classification of businesses subject to regulation, prepared by Chief Justice Taft.[175] These were said to comprise: "(1) Those [businesses] which are carried on under the authority of a public grant of privileges which either expressly or impliedly imposes the affirmative duty of rendering a public service demanded by any member of the public. Such are the railroads, other common carriers and public utilities. (2) Certain occupations, regarded as exceptional, the public interest attaching to which, recognized from earliest times, has survived the period of arbitrary laws by Parliament or Colonial legislatures for regulating all trades and callings. Such are those of the keepers of inns, cabs and grist mills. * * * (3) Businesses which though not public at their inception may be fairly said to have risen to be such and have become subject in consequence to some government regulation. They have come to hold such a peculiar relation to the public that this is superimposed upon them. In the language of the cases, the owner by devoting his business to the public use, in effect grants the public an interest in that use and subjects himself to public regulation to the extent of that interest although the property continues to belong to its private owner and to be entitled to protection accordingly."

Through application of this now outmoded formula the Court found it possible to sustain State laws regulating charges made by grain elevators,[176] stockyards,[177] and tobacco warehouses,[178] and fire insurance rates[179] and commissions paid to fire insurance agents.[180] Voided, because the businesses sought to be controlled were deemed to be not so affected, were State statutes fixing the price at which gasoline may be sold,[181] or at which ticket brokers may resell tickets purchased from theatres,[182] and limiting competition in the manufacture and sale of ice through the withholding of licenses to engage therein.[183]

Nebbia v. New York

In upholding, by a vote of five-to-four, a depression induced New York statute fixing prices at which fluid milk might be sold, the Court, in 1934, finally shelved the concept of "a business affected with a public interest."[184] Older decisions, insofar as they negatived a power to control prices in businesses found not "to be clothed with a public use" were now reviewed as resting, "finally, upon the basis that the requirements of due process were not met because the laws were found arbitrary in their operation and effect. Price control, like any other form of regulation, is [now] unconstitutional only if arbitrary, discriminatory, or demonstrably irrelevant to the policy the legislature is free to adopt, and hence an unnecessary and unwarranted interference with individual liberty." Conceding that "the dairy industry is not, in the accepted sense of the phrase, a public utility"; that is, a "business affected with a public interest," the Court in effect declared that price control henceforth is to be viewed merely as an exercise by the State of its police power, and as such is subject only to the restrictions which due process of law imposes on arbitrary interference with liberty and property. Nor was the Court disturbed by the fact that a "scientific validity" had been claimed for the theories of Adam Smith relating to the "price that will clear the market." However much the minority might stress the unreasonableness of any artificial State regulation interfering with the determination of prices by "natural forces,"[185] the majority was content to note that the "due process clause makes no mention of prices" and that "the courts are both incompetent and unauthorized to deal with the wisdom of the policy adopted or the practicability of the law enacted to forward it."

Having thus concluded that it is no longer the nature of the business which determines the validity of a regulation of its rates or charges but solely the reasonableness of the regulation, the Court had little difficulty in upholding, in Olsen v. Nebraska,[186] a State law prescribing the maximum commission which private employment agencies may charge. Rejecting the contentions of the employment agencies that the need for such protective legislation had not been shown, the Court held that differences of opinion as to the wisdom, need, or appropriateness of the legislation "suggest a choice which should be left to the States"; and that there was "no necessity for the State to demonstrate before us that evils persist despite the competition" between public, charitable, and private employment agencies. The older case of Ribnik v. McBride,[187] which founded the invalidation of similar legislation upon the now obsolete concept of a "business affected with a public interest" was expressly overruled.