So this is kind of a consumer protection law, although that term was not popular yet. The end is to protect the public, and the means is to prohibit the sale (interstate) of filled milk. But the antecedent question is this: why do you need regulation at all? We only need regulation when there's something wrong with the alternative: the market.
The market malfunctions here because of an information problem: consumers won't realize that this product doesn't have the qualities of whole milk/condensed milk. Another major problem is assymmetry of information. (This is familiar from contracts: fraud and unconscionability deal with unequal information. Another contracts issue-- duress-- is analogous to the problem of monopoly. Illegal contract is sort of like externality. Incapacity is about information once again).
Contracts was all about when we enforce transactions, and when transactions are suspect. And that's actually sort of like this case: the legislature has made a determination that some transactions can't take place.
Now, if the problem was information, the solution could be information as well: congress could have just required labels. But that wasn't satisfactory, because this product is often an ingredient in others. Also, people might not really understand the labels: where products are difficult to understand, sticking a label on may not make a difference.
Now anyone attacking the legislation is going to assert that there's something else going on besides what the government asserts (i.e., it's lobbying, not just consumer protection). And you can make a case that this is bad for consumers insofar as it removes a cheaper option from the market and raises what they have to pay. People were byuing Milnut because it was cheaper, and we have no way of knowing whether they would have continued to do so had they had perfect information.
Now, probably consumers didn't have much of an opinion of this legislation, because they didn't even know about it. That kind of information costs something to get, and the incremental benefits are so low that it's not worth acquiring.
As a result, we have a dormant majority, and the participants in the political process are the milk producers. The net result is that they are the "consumer protectors" in this instance. Does that make this a bad law? Not necessarily, it just means that it's a difficult balance because there are tricky parties on both sides.
The court is not stupid: they see the flaws in what they're looking at. And it's pretty obvious that the consumers themselves aren't really even involved here. But the bottom line is that even at their most ambitious, the courts can only review so much legislation, so if they put themselves in that position, they're doomed.
The Coase theorem. Ronald Coase is an economist who looked at law and proposed the following ("The Coase Theorem"):
The issue has nothing to do with the initial assignment of property rights-- if the market were frictionless, you'd always get the same result. It's all about transaction costs.
Now suppose there were such a thing as a frictionless political process: everyone knows what their representative is going to do, everyone gets to the ballot box, etc. And let's assume we've got an honest, but ignorant political process. How are decisions made? By listening to the various sides. In a frictionless system, concerned parties will give the correct amount of information, and we get a sensible result. In real life, however, there are problems with the way that people participate.
In the political process, who gets heard? The one who is motivated to put forth the information. This is like the small claims problem: the cost of litigating (a transaction cost) might outweigh the benefits of victory. As a result, we can't trust the political process to solve all our problems, because they're more or less guaranteed to get assymetrical information.
Now if we're comparing the political process to the courts, the political process has better access to expert competence and also the opinions of the parties. The court is limited by the dynamics of litigation: who is going to file a suit. Plus, scale: they are a very limited resource.
So here, regulation is protecting against minoritarian bias, in the sense that there's a dormant majority. Now, does this case mean a recognition by the court that regulation is good, and doesn't need to be struck down so much? Not really, but maybe it's a recognition that the courts aren't the right place to wage war against the legislature.
What constitutional doctrines are at work here?
Anyway, this stuff is read as saying that there are minimal standards to which the relationship between ends and means must rise, in order for a law to be constitutional. Now every statute, in some way, impinges on life, liberty, or property (or some combination thereof), and they all affect individuals differently: so you can characterize every law as violative of the constitution in some way. The question, therefore, is which violations can be taken up in court: what will get heard.
Now the constitutional issue is not whether the market is better than the political process. It's who decides which is better. When the legislature acts, it's saying, "the legislature should decide this." When the court strikes that down, it's disagreeing. Both are imperfect, and the real question is which is less imperfect.
Footnote 4. There are 3 paragraphs:
So ¶ 2 is about minoritarian bias (making the majority dormant), and ¶ 3 is about majoritarian bias. Voting is an antidote to minoritarian bias, but it is sensitive to cost.
The courts, in other words, will be more likely to intervene where they see an increase in the chances/severity of political malfunction.
Every state constitution has the ability to scrutinize the connection between means and ends, but it's always limited by the fact that the courts can only hear so many cases. This is why legislative enactments get a huge presumption of validity.
Now a legislative enactment creates a requirement for procedural due process. But 14A: "no state shall... deprive of... without due process." That doesn't distinguish between legislative and administrative acts. That's sort of a practical matter, though: what kind of due process could there be (notice? hearings?) for legislative enactments?
Looking at the decision, we know what the court said, but prior to this, how do we know whether the decision is legislative or administrative? What is a legislative decision? A decision by the legislature. Which this is. So, as advocates for Fasano, we need to argue that it's administrative-like. How do we know whether we have a winning argument? Ask ourselves when it makes sense to have procedural due process and judicial review. In other words, is there a form of political malfunction which the court might see as justifying intervention? If we can find that, our "administrative-like" proposition will look more appealing. And here, it's minoritarian bias: the developers tend to prevail, and if they're over-represented, we've got minoritarian bias.
If you want increased judicial review, you need to do two things. First, you need to characterize the issue as minoritarian bias. Second, you need to show that this is the sort of issue that the courts handle well (i.e., it's within their competence, they won't be overwhelmed by scale; dynamics of litigation aren't too important here). In other words, this is something they can be competent in, and it's not the vast set of zoning cases in general.
Happily, administrative decisions tend to have fewer parties, and not be the thorniest questions. So by saying it's administrative-like, the court is being told that the issues are tractable and that they'd be reviewing the sort of decision they ought to be suspicious of.