Nebbia v. New York

The Court upheld milk price regulation, signaling the end of rigid judicial scrutiny of economic legislation.

Overview

New York set minimum milk prices to combat destructive price wars during the Depression, and store owner Leo Nebbia was convicted of selling two bottles below the floor. The Court, over dissent, upheld the law, holding that due process is violated only if a price regulation is arbitrary or discriminatory, and that states may regulate any business affected with a public interest. Nebbia loosened the liberty of contract straitjacket, and within a few years the Court stopped scrutinizing economic regulation under substantive due process entirely, clearing the way for the New Deal and the modern regulatory state.