WASHINGTON COMMISSION MERCHANTS ACT -- COMMISSION FIRMS -- LIVESTOCK -- INTERSTATE AND INTRASTATE COMMERCE
A livestock commission firm operating in Washington, licensed by the Federal Government, and engaged in intrastate as well as interstate commerce, is subject to chapter 197, Laws of 1939, to the extent of its intrastate activities.
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October 2, 1951
Honorable Sverre N. Omdahl
Department of Agriculture
Olympia, Washington Cite as: AGO 51-53 No. 142
On August 31, 1951, you inquired whether chapter 197, Laws of 1939, (Rem. Rev. Stat. 8292 et seq., 1940 Supp.) the Washington Commission Merchants Act, is applicable to a livestock commission firm registered under the Federal Packers and Stockyards Act, but which, while operating within this State, is engaged in intrastate as well as interstate commerce?
We reply that such a firm is subject to the Washington statutes.
A commission firm dealing in livestock moving in interstate commerce is governed by the Federal Packers and Stockyards Act of 1921, as amended. (7 U.S.C.A. § 181 et seq.) This law is constitutional. Stafford v. Wallace, 258 U.S. 497, 66 L.Ed. 735, 23 A.L.R. 229; Morgan v. U. S., 8 F. Supp. 766, (reversed on other grounds, 298 U.S. 468, 80 L.Ed. 1288.) As said in the former case, at 66 L.Ed. 741:
"The commission men are essential in making the sales without which the flow of the [livestock] current would be obstructed * * *."
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Such a firm, if engagedsolely in interstate activities, would not be amenable to state regulatory statutes. See 11 Am.Jur., Commerce, section 10, and cases therein cited.
It has long been the rule that a commission firm engaged in intrastate commerce is subject to state regulation. 22 Am.Jur., Factors, section 8; State v. Bowen, 86 Wash. 23, 149 Pac. 330; Northern Cedar Company v. French, 131 Wash. 394, 230 Pac. 837;Garretson v. Robinson, 178 Wash. 601, 35 P. (2d) 504;State v. Dillon, 188 Wash. 265, 62 P. (2d) 38. As Congress has no power over the internal commerce of a state, 11 Am.Jur., Commerce, section 14, and cases therein cited, the Federal Packers and Stockyards Act is inapplicable to the intrastate activities of a livestock commission company.
We are of the opinion that the legislature intended chapter 197,supra, to encompass livestock commission firms engaged in intrastate commerce within this state. We note that section 14 provides:
"* * * [N]o person [Firm ‑ see section 4] shall receive or purchase within this state, sell or offer for sale within this state, promote the sale of, or solicit consignments for sale on commission within this state, or for the purpose of resale or processing within this state, any agricultural product [Livestock ‑ see section 5] without a license as provided in this act." (Emphasis supplied.)
and section 15 mandates:
"Every person in this state receiving agricultural products for sale on commission, or for the purpose of resale, shall annually, on or before January 1, file an application with the director for a license to do business as a commission merchant * * *." (Emphasis supplied.)
Section 13 buttresses our conclusion. It contains the exemptions from chapter 197, supra, and livestock commission firms, as such, are conspicuous by the absence of any reference to them.
It has been decided in this State that a commission firm trafficking in interstateand intrastate commerce, is subject to State regulation to the extent of the intrastate character of its business. Northern Cedar Co. v. French, supra. At 131 Wash. 416 417, appears:
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"The complaint of the Northern Cedar Company alleges that a large portion of its business is of an interstate nature, and that since this act, by necessary inference, includes that character of business, it is violative of the Federal constitution giving to Congress exclusive jurisdiction over interstate commerce. The fact remains, however, that a part of the business of the cedar company is intrastate, and if the act is valid otherwise, it ought, in any event, to apply to that portion of the company's business. Such being true, it was error to overrule the demurrer. From this viewpoint the question of interference with interstate commerce is not necessarily before us; but since the matter has been elaborately argued, we deem it advisable to dispose of this feature.
"The Federal government has never been disposed to be despotic in the enforcement of its rights against the states, and the supreme court of the United States has consistently held that, while the states may not directly tax, burden or interfere with interstate commerce, statutes enacted by them in the exercise of their reserved police power are not invalid simply because they may indirectly and to a slight extent ‑ incidentally ‑ affect such commerce. Cargill Co. v. State of Minnesota, supra;Asbell v. State of Kansas, 209 U.S. 251; Brodnax v. State of Missouri, 219 U.S. 285; Hennington v. State of Georgia, 163 U.S. 299. See, also,State ex rel. Brewster v. Mohler, 98 Kan. 465, 158 Pac. 408;Northern Pacific R. Co. v. Schoenfeldt, 123 Wash. 579, 213 Pac. 26. This statute was not passed for the purpose of affecting interstate commerce, and if it does so, it is purely in an incidental manner and does not trench on the rights given to Congress. To hold that a state law which incidentally affects interstate commerce is invalid would be to hold that the state may not regulate warehouses if they handle interstate commerce and may not enforce criminal statutes, because so to do might tend to obstruct such commerce." (Emphasis supplied.)
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The holding in theNorthern Cedar case, supra, finds sanction in the federal decisions. In theMinnesota Rate Cases (Simpson v. Shepard), 230 U.S. 352, 57 L.Ed. 1511, the Supreme Court of the United States held that the Interstate Commerce Act didnot deprive the States of the right to prescribe reasonable rates for the exclusively internal traffic on interstate carriers. See alsoHartford Accident and Indemnity Co. v. Illinois, 80 L.Ed. 1099 (and the annotation appended thereto), 298 U.S. 155, deciding that a state statute regulating consignment and/or commission sales is constitutional, irrespective of federal law upon the same subject, so long as it does not directly regulate or burden interstate commerce.
The dual character of a company, that of engaging in intrastate and interstate commerce, subjects it, if otherwise subjectable, to state and federal regulation. As is said in 11 Am.Jur., Commerce, section 21:
"Regulation of the intrastate business of an instrumentality employed in both interstate and intrastate commerce is valid as against a contention that it violates the commerce clause. State supervision and regulation of the local structures and activities of a corporation engaged in interstate commerce and the imposition of the reasonable expense thereof upon such corporation are not a burden upon, or regulation of, interstate commerce in violation of the commerce clause of the Constitution. * * *"
We conclude, therefore, that federally licensed livestock firms, to the extent of their intrastate activities within the State of Washington, are controlled by chapter 197, supra. However, the case ofKelly v. State ex rel. Foss Co., 302 U.S. 1, 82 L.Ed. 3, reversing 186 Wash. 589, 59 P. (2d) 373; gives rise to the following caution: Where the repugnance or confliction between the Federal Packers and Stockyards Act and the Washington Commission Merchants Act is such that the two acts cannot be properly reconciled, the latter is superseded by the former.
Very truly yours,
ROBERT A. COMFORT
Assistant Attorney General