Reversing several precedents, the Supreme Court held that the Fourteenth Amendment did not prohibit the states from regulating most aspects of any business open to the public.

Responding to the decline of milk prices during the Great Depression, the New York legislature passed the Milk Control Law of 1933, which created a board to fix the retail prices of milk. Leo Nebbia, proprietor of a small grocery store in Rochester, was convicted for selling two quarts of milk below the established price of nine cents each. By a 5-4 vote, the Supreme Court upheld both the conviction and the constitutionality of the law. Writing for the majority, Justice Owen J. RobertsRoberts, Owen J.;Nebbia v. New York[Nebbia v. New York] abandoned the “affected with a public interest” doctrine, which had prevented states from regulating numerous categories of business establishments. Although Roberts wrote that “a state is free to adapt whatever economic policy may reasonably be deemed to promote public welfare,” the decision did not reject the freedom of contract doctrine in regard to labor policy.Fourteenth AmendmentBusiness, regulation of;Nebbia v. New York[Nebbia v. New York]Fourteenth Amendment

In dissent, Justice James C. McReynoldsMcReynolds, James C.[MacReynolds, James C.];Nebbia v. New York[Nebbia v. New York] invoked the doctrine of substantive due process, and he argued that the New York statute interfered arbitrarily with the liberty of small businesspeople and consumers to negotiate prices in an open market.[case]Nebbia v. New York[Nebbia v. New York]

Commerce, regulation of

Due process, substantive

Munn v. Illinois

Wolff Packing Co. v. Court of Industrial Relations