Olsen v. Nebraska ex rel. Western Reference & Bond Association/Opinion of the Court

In reliance upon Ribnik v. McBride, 277 U.S. 350, 48 S.Ct. 545, 72 L.Ed. 913, 56 A.L.R. 1327, the Supreme Court of Nebraska held, one judge di senting, that a statute of that state fixing the maximum compensation which a private employment agency might collect from an applicant for employment was unconstitutional under the due process clause of the Fourteenth Amendment. State ex rel. Western Reference & Bond Ass'n v. Kinney, 138 Neb. 574, 293 N.W. 393. The case is here on a petition for certiorari which we granted because of the importance of the constitutional question which was raised.

The action is for a peremptory writ of mandamus ordering petitioner, Secretary of Labor of Nebraska, to issue a license to the relator to operate a private employment agency for the year commencing May 1, 1940. The license was withheld because of relator's refusal to limit its maximum compensation, as provided by the statute, to ten per cent of the first month's salary or wages of the person for whom employment was obtained. The petition in mandamus challenged the constitutionality of those provisions of the act. The answer sought to sustain them by alleging that the business of a private employment agency is 'vitally affected with a public interest' and subject to such regulation under the police power of the state. The relator's motion for judgment on the pleadings was sustained and it was ordered that a peremptory writ of mandamus should issue.

We disagree with the Supreme Court of Nebraska. The statutory provisions in question do not violate the due process clause of the Fourteenth Amendment.

The drift away from Ribnik v. McBride, supra, has been so great that it can no longer be deemed a controlling authority. It was decided in 1928. In the following year this Court held that Tennessee had no power to fix prices at which gasoline might be sold in the state. Williams v. Standard Oil Co., 278 U.S. 235, 49 S.Ct. 115, 73 L.Ed. 287, 60 A.L.R. 596. Save for that decision and Morehead v. People of State of New York ex rel. Tipaldo, 298 U.S. 587, 56 S.Ct. 918, 80 L.Ed. 1347, 103 A.L.R. 1445, holding unconstitutional a New York statute authorizing the fixing of women's wages, the subsequent cases in this Court have given i creasingly wider scope to the price-fixing powers of the states and of Congress. Tagg Bros. & Moorhead v. United States, 280 U.S. 420, 50 S.Ct. 220, 74 L.Ed. 524, decided in 1930, upheld the power of the Secretary of Agriculture under the Packers and Stockyards Act to determine the just and reasonable charges of persons engaged in the business of buying and selling in interstate commerce livestock at a stockyard on a commission basis. In 1931 a New Jersey statute limiting commissions of agents of fire insurance companies was sustained by O'Gorman & Young, Inc., v. Hartford Fire Ins. Co., 282 U.S. 251, 51 S.Ct. 130, 75 L.Ed. 324, 72 A.L.R. 1163. A New York statute authorizing the fixing of minimum and maximum retail prices for milk was upheld in 1934. Nebbia v. New York, 291 U.S. 502, 54 S.Ct. 505, 78 L.Ed. 940, 89 A.L.R. 1469. And see Hegeman Farms Corp. v. Baldwin, 293 U.S. 163, 55 S.Ct. 7, 79 L.Ed. 259; Borden's Farm Products Co., Inc., v. Ten Eyck, 297 U.S. 251, 56 S.Ct. 453, 80 L.Ed. 669. Cf. Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511, 55 S.Ct. 497, 79 L.Ed. 1032, 101 A.L.R. 55; Mayflower Farms, Inc., v. Ten Eyck, 297 U.S. 266, 56 S.Ct. 457, 80 L.Ed. 675. In 1937 Adkins v. Children's Hospital, 261 U.S. 525, 43 S.Ct. 394, 67 L.Ed. 785, 24 A.L.R. 1238, was overruled and a statute of Washington which authorized the fixing of minimum wages for women and minors was sustained. West Coast Hotel Co. v. Parrish, 300 U.S. 379, 57 S.Ct. 578, 81 L.Ed. 703, 108 A.L.R. 1330. In the same year Townsend v. Yeomans, 301 U.S. 441, 57 S.Ct. 842, 81 L.Ed. 1210, upheld a Georgia statute fixing maximum warehouse charges for the handling and selling of leaf tobacco. Cf. Mulford v. Smith, 307 U.S. 38, 59 S.Ct. 648, 83 L.Ed. 1092; Currin v. Wallace, 306 U.S. 1, 59 S.Ct. 379, 83 L.Ed. 441. The power of Congress under the commerce clause to authorize the fixing of minimum prices for milk was upheld in United States v. Rock Royal Co-Operative, Inc., 307 U.S. 533, 59 S.Ct. 993, 83 L.Ed. 1446, decided in 1939. The next year the price-fixing provisions of the Bituminous Coal Act of 1937, 15 U.S.C.A. §§ 828-851, were sustained. Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381, 60 S.Ct. 907, 84 L.Ed. 1263. And at this term we upheld the minimum wage and maximum hour provisions of the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq.; United States v. F. W. Darby Lumber Co., 312 U.S. 100, 61 S.Ct. 451, 85 L.Ed. --. These cases represent more than scattered examples of constitutionally permissible price-fixing schemes. They represent in large measure a basic departure from the philosophy and approach of the majority in the Ribnik case. The standard there employed, following that used in Tyson & Brother v. Banton, 273 U.S. 418, 430 et seq., 47 S.Ct. 426, 428 et seq., 71 L.Ed. 718, 58 A.L.R. 1236, was that the constitutional validity of price-fixing legislation, at least in absence of a so-called emergency, was dependent on whether or not the business in question was 'affected with a public interest'. Cf. Brazee v. Michigan, 241 U.S. 340, 36 S.Ct. 561, 60 L.Ed. 1034. It was said to be so affected if it had been 'devoted to the public use' and if 'an interest in effect' had been granted 'to the public in that use'. Ribnik v. McBride, supra, 277 U.S. at page 355, 48 S.Ct. at page 545, 72 L.Ed. 913, 56 A.L.R. 1327. That test, labelled by Mr. Justice Holmes in his dissent in the Tyson case, 273 U.S. at page 446, 47 S.Ct. at pages 433, 434, 71 L.Ed. 718, 58 A.L.R. 1236, as 'little more that a fiction', was discarded in Nebbia v. New York, supra, 291 U.S. at pages 531-539, 54 S.Ct. at pages 513-516, 78 L.Ed. 940, 89 A.L.R. 1469. It was there stated that such criteria 'are not susceptible of definition and form an unsatisfactory test of the constitutionality of legislation directed at business practices or prices', and that the phrase 'affected with a public interest' can mean 'no more than that an industry, for adequate reason, is subject to control for the public ood.' Id., 291 U.S. at page 536, 54 S.Ct. at page 515, 78 L.Ed. 940, 89 A.L.R. 1469. And see the dissenting opinion in Ribnik v. McBride, supra, 277 U.S. at page 359, 48 S.Ct. at page 547, 72 L.Ed. 913, 56 A.L.R. 1327.

The Ribnik case, freed from the test which it employed, can no longer survive. But respondents maintain that the statute here in question is invalid for other reasons. They insist that special circumstances must be shown to support the validity of such drastic legislation as price-fixing, that the executive, technical and professional workers which respondents serve have not been shown to be in need of special protection from exploitation, that legislative limitation of maximum fees for employment agencies is certain to react unfavorably upon those members of the community for whom it is most difficult to obtain jobs, that the increasing competition of public employment agencies and of charitable, labor union and employer association employment agencies have curbed excessive fees by private agencies, and that there is nothing in this record to overcome the presumption as to the result of the operation of such competitive, economic forces. And in the latter connection respondents urge that since no circumstances are shown which curb competition between the private agencies and the other types of agencies, there are no conditions which the legislature might reasonably believe would redound to the public injury unless corrected by such legislation.

We are not concerned, however, with the wisdom, need, or appropriateness of the legislation. Differences of opinion on that score suggest a choice which 'should be left where * *  * it was left by the Constitution-to the states and to Congress.' Ribnik v. McBride, supra, 277 U.S. at page 375, 48 S.Ct. at pages 552, 553, 72 L.Ed. 913, 56 A.L.R. 1327, dissenting opinion. There is no necessity for the state to demonstrate before us that evils persist despite the competition which attends the bargaining in this field. In final analysis, the only constitutional prohibitions or restraints which respondents have suggested for the invalidation of this legislation are those notions of public policy embedded in earlier decisions of this Court but which, as Mr. Justice Holmes long admonished, should not be read into the Constitution. Tyson & Brother v. Banton, supra, 273 U.S. at page 446, 47 S.Ct. at page 433, 71 L.Ed. 718, 58 A.L.R. 1236; Adkins v. Children's Hospital, supra, 261 U.S. at page 570, 43 S.Ct. at page 405, 67 L.Ed. 785, 24 A.L.R. 1238. Since they do not find expression in the Constitution, we cannot give them continuing vitality as standards by which the constitutionality of the economic and social programs of the states is to be determined.

The judgment is reversed and the cause is remanded to the Supreme Court of Nebraska for proceedings not inconsistent with this opinion.

It is so ordered.

Reversed and remanded.