Opinion
December 29, 1961
Present — Bergan, P.J., Coon, Herlihy, Reynolds and Taylor, JJ.
This is a proceeding pursuant to article 78 of the Civil Practice Act for the review of a decision of respondent, the Commissioner of Agriculture and Markets of the State of New York, denying petitioner's application for an extension of its milk dealer's license to sell and deliver milk to stores known as "Central Markets" operated by the Golub Corporation in the counties of Schenectady, Rensselaer and Fulton. Petitioner holds a milk dealer's license to sell and deliver milk at both retail and wholesale with certain restrictions in the counties surrounding the Capitol District. Under its license it is limited in the counties of Schenectady, Rensselaer and Fulton to the sale and delivery of milk to ice cream stores of the Stewart Ice Cream Company, an affiliate of petitioner. In July of 1960 petitioner entered into an agreement to sell milk to the Golub Corporation under Golub's private brand name, "Sweet Life", for exclusive sale in the Central Markets. Delivery of the milk to the Golub Corporation took place at petitioner's plant at Saratoga Springs. The Golub Corporation delivered the milk to its Central Markets in leased trucks. There is no dispute that technically such arrangement did not violate the Agriculture and Markets Act. In August of 1960, within a month after it began supplying the Golub Corporation, petitioner requested an extension of its license to permit it to sell and deliver milk to the Central Markets stores in Schenectady, Rensselaer and Fulton Counties. After a full hearing the Commissioner denied the extension on the ground that it would "tend to a destructive competition in a market already adequately served, and would not be in the public interest". (Agriculture and Markets Law, § 258-c.) The record supports the Commissioner's determination that in the counties involved there are presently licensed dealers who have an ample milk supply to meet the needs of the area and ample facilities to expand their present volume should the necessity arise and that under these circumstances petitioner's entrance into the market would create "destructive competition" ( Matter of Friendship Dairies v. Du Mond, 284 App. Div. 147, 155). Appellant urges, however, that the present case is different from the typical license application since "Sweet Life" milk is already in the market and thus all that it is requesting is the right to deliver to the customer in its trucks rather than have the customer pick up the milk at its Saratoga plant. The effect of what petitioner is attempting is obvious. The Commissioner has no statutory authority to prevent the Golub Corporation from buying milk from a licensed dealer and transporting it anywhere in the State even when the effect of such action would tend to destroy competition. The effect of his statutory licensing control is to prevent petitioner from selling or making deliveries to the Golub Corporation in the counties in question. What petitioner has attempted to do in the instant case is to present the Commissioner with a "fait accompli" that it is selling milk in Schenectady, Rensselaer and Fulton Counties without his approval and then to request him to sanction such action by granting it a license to make its own deliveries. To require the Commissioner to take such action, would in our opinion, seriously impair the Commissioner's ability to control the milk industry. Approval of the methods here employed by the petitioner would permit every dealer to claim the right to extend its license to every part of the State and would be in derogation of the legislative policy of control over the milk industry (Agriculture and Markets Law, §§ 254, 258-k). In our view the determination of the Commissioner is sustained by substantial evidence and should not be disturbed. Decision unanimously confirmed, without costs.