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The measuring stick to which legislative acts must conform in order to satisfy due process is as follows: regulatory legislation affecting ordinary commercial transactions is not to be pronounced unconstitutional unless, in light of the known facts, it is of such a character as to preclude the assumption that it rests upon some rational basis within the knowledge and experience of the legislators. The constitutionality of a statute predicated upon a certain state of facts may be challenged by showing to the court that those facts have ceased to exist.
Plaintiff corporation’s product was a reconstituted milk product the interstate shipment of which was prohibited under the Filled Milk Act, 21 U.S.C.S. §§ 61-64. The corporation when operating under a different name was twice convicted of violations of the Act and the United States Supreme Court twice upheld the validity of the Act. After the corporation's convictions, the United States Secretary of Health, Education, and Welfare allowed products of the corporation's competitors nearly identical to the corporation's product to be placed in interstate commerce. Subsequently, the plaintiff filed an action for declaratory judgment, asking the court to declare that the plaintiff’s product was not within the purview of the provisions of 21 U.S.C. §§ 61-64; or, in the alternative, to declare that Act unconstitutional on the ground that it violated the provisions of the Fifth Amendment to the Constitution of the United States. The parties filed cross motions for summary judgments.
The court granted the corporation's motion and denied the Secretary's motion. The court, at the outset, held that the corporation's product was filled milk within the meaning of 21 U.S.C.S. § 61. The court then held that the corporation's convictions did not bar its action under the doctrines of res judicata or collateral estoppel where changed circumstances warranted a reexamination of the issues decided in the criminal proceedings. The court concluded that the Act as applied to the corporation violated its Fifth Amendment due process rights where the Secretary allowed products nearly identical to the corporation's products to enter interstate commerce but prohibited the corporation's product from such entry.