As shown thus far, the Michigan Supreme Court heard a number of cases in which certain state actions were argued to meet the “public purpose” requirement, including railroads, streetcars, corn and sugar production and art museums. Each case presented a challenge to the question from a slightly different angle. But in each case, for nearly a three-quarters of a century, the court upheld the precedent established by Justice Cooley’s opinion in Salem. So, it is somewhat surprising that the case that eventually led the court to overturn this precedent and significantly expand the definition of public purpose was one that was very similar to earlier cases.
This new case involved apples. In 1939, the Legislature passed the Baldwin Apple Act, which applied a tax on apple growers. The proceeds of this tax were to be used to fund the newly created Michigan State Apple Commission, whose mission was to aid the industry and promote the sale of Michigan-grown apples. A group of apple growers sued and won their case in lower courts.
The case was very similar to the Michigan Corn Improvement Association v. Auditor General, a case from 1907. In that case, the Legislature attempted to appropriate money to the MCIA for the purpose of promoting corn in Michigan. Citing a similar case from seven years prior involving subsidies for sugar producers, the court had ruled the corn appropriation to be unconstitutional, because only private interests in the corn industry would directly benefit.
Despite the similarities with these previous cases, in Miller v. Michigan State Apple Commission, the Michigan Supreme Court, in a 6-2 decision, overturned the lower courts’ ruling and declared the Baldwin Apple Act’s tax constitutional. The decision relied on establishing a new approach to what meets the definition of public purpose.
The majority argued that the question was not whether the advertising and promotion of Michigan apples — an act which would directly benefit only apple growers — is a public purpose, but rather whether the result of that advertising was a public purpose. Here, the court relied on the assumption that giving tax dollars to a commission charged with promoting Michigan-grown apples would result in the increased use of apples.
Then the court cited Justice’s Cooley’s decision in Salem, calling it the “leading authority … as to what constitutes a public purpose.” This was surprising, of course, because that decision established the strict definition of public purpose that previous courts had relied on for decades in deciding against similar attempts to expend public resources. What this court did was cherry-pick from Justice Cooley’s opinion, citing only the prelude leading up to his decision. That section of his written opinion had discussed the broad parameters of what constitutes a public purpose. But the rest of Salem argued that private benefits are not public purposes, and it ultimately decided that state funds used to benefit private businesses were unconstitutional.
So, while the court in Miller quoted Justice Cooley saying the power to tax for public purposes was not “narrow or illiberal” and did not “preclude the Legislature from taking broad views of State interest,” it ignored what he later declared: “It is conceded, nevertheless, that there are certain limitations upon this power, not prescribed in express terms by any constitutional provision, but inherent in the subject itself, which attend its exercise under all circumstances, and which are as inflexible and absolute in their restraints as if directly imposed in the most positive form of words.” And the majority opinion omitted Justice Cooley’s judgement that spending tax dollars where “the benefit to the public is to be secondary and incidental, like that which springs from the building of a grist-mill, the establishment of a factory, the opening of a public inn, or from any other private enterprise which accommodates a local want and tends to increase local values” is unconstitutional.
After quoting Justice Cooley in this piecemeal way, the majority argued that the size of the apple industry in Michigan was so large as to constitute a public purpose. Evidence of this was provided: The average annual value of apples produced in Michigan over the previous 10 years surpassed that of peaches, pears, grapes, cherries and plums, combined. The court then reasoned: “We perceive that the stimulation of so large and important an industry will result in a benefit to the general public well-being, the increased prosperity of the entire apple growing industry of necessity being reflected throughout the commonwealth. … We hold that the tax is for a public purpose.”
This line of reasoning had been addressed and explicitly rejected by Justice Cooley in Salem. He stated that the Legislature had no authority to use public funds to promote certain professions or occupations, no matter how essential they were perceived to be: “The necessity may be pressing, and to supply it may be, in a certain sense, to accomplish a ‘public purpose;’ but it is not a purpose for which the power of taxation may be employed.” He punctuated this point by claiming that it would even be unconstitutional to used public funds to support a doctor in an area with pressing medical needs. Further, he argued: “[T]he term ‘public purposes,’ as employed to denote the objects for which taxes may be levied, has no relation to the urgency of the public need, or to the extent of the public benefit which is to follow.” In other words, the size of the positive impact certain state spending might have — the very rationale used in the Miller decision — should not factor into determining whether it is a public purpose.
It is difficult to identify exactly what led the court to depart so significantly and abruptly from the precedent established in Salem and upheld in the seven decades that followed. A pair of law review articles published shortly after the Miller decision, however, suggest some possible explanations. An unauthored article in the The University of Chicago Law Review published in June 1941 states: “The court undoubtedly was influenced by the fact that seven states expend money to advertise their leading products under statutes similar to the one in question, and that none of these statutes has been declared unconstitutional.” A similar review of the case published in Notre Dame Law Review and authored by Thomas W. Cain connects the Miller decision to a Florida court case from 1937 that ruled that state support for the Florida Citrus Commission for the purpose of advertising Florida-grown fruit was legal.
There’s a reasonably chance these legal scholars were on to something. The majority opinion in Miller, in fact, references the advertising of citrus fruit in building its case that advertising apples would have a positive effect on apple production and therefore benefit the public broadly and constitute a public purpose. The court wrote: “Statistics indicate that the consumption of apples has shown a marked decrease while that of citrus fruits, extensively advertised, has correspondingly increased.” Further, it approvingly cited a case from Florida where a court there ruled “that the protection of the citrus industry is a matter within the police power of the state.”
It is worth emphasizing how the reasoning of this court decision differed so dramatically from that used by Justice Cooley in Salem. He had acknowledged that:
By common consent also a large portion of the most urgent needs of society are relegated exclusively to the law of demand and supply. It is this in its natural operation, and without the interference of the government, that gives us the proper proportion of tillers of the soil, artisans, manufacturers, merchants and professional men.”
One could reasonably assume Justice Cooley would have no qualms adding apple growers to that list. But here in the Miller case, the majority is basing its opinion on the idea that it knows that more apples being grown and sold in Michigan will produce beneficial outcomes for the general welfare. Without a doubt, the majority in Miller seems to have willfully ignored Justice Cooley’s larger point about the proper division between public and private spheres.
This point was not lost on the dissenting members of the court. Justice Wiest stated: “The tax here involved is not in any sense for government purposes but an unauthorized tax to aid a particular private industry,” and he quoted Justice Cooley’s supply-and-demand language. He also forewarned: “If this tax is sustained it opens the door to like legislation in innumerable instances.”
The law review articles penned shortly after the case was decided also questioned and criticized the ruling. One of the reviews argued that the court’s assumption — advertising Michigan-grown apples will necessarily produce a positive public benefit — was suspect:
Whether or not the aid proposed will operate to bring Michigan apple sales back to "normal" and thus serve a public purpose is a question which the court hurriedly answered in the affirmative. Actually, the end result of the advertising program is quite doubtful. If the Michigan apple advertising program is successful and Michigan apples become established as a "super" brand, the economic effect will be to increase the demand for Michigan apples at the expense of other kinds of apples, other kinds of fruit, and apple substitutes. There will probably be more extensive advertising schemes by all states concerned, each tending to counteract the effect of the other. The final result from Michigan’s point of view is apt to be an apple market approximately the same in size as at present with increased production costs because of money spent for advertising.
Cain concluded his article in the Notre Dame Law Review with this evaluation:
If the courts decide that a small group of farmers who are engaged in the occupation of apple production, constitute a public, there is nothing to bar the legislature from enacting taxes, not general taxes, but specific taxes, upon any one specialized branch of agricultural pursuit. It is indeed an ingenious means of taxation, but the Constitutionality, although decided upon by the court, is far from obvious.