Pine Hill Coal Co. v. United States

Background

A coal producer sued the United States after sales made from September 1917 through January 1919. The producer made large sales at government-set prices and smaller sales at other prices. He said the prices fixed by the Fuel Administration were unfair and produced receipts below production cost. Relying on a paragraph of the wartime statute, he claimed the United States had promised indemnity—paying additional money to make up a just return. The Court of Claims dismissed the case, and that dismissal was appealed to the Supreme Court.

Reasoning

The central question was whether the statute’s language created a general guarantee that the federal government would make up losses on private sales. The Court examined the statute, which gave the President and the Federal Trade Commission power to fix prices and to take over mines, and included a provision about paying seventy-five percent in certain situations. The Court concluded that the specific seventy-five percent clause applied to government takings or requisitions and related compensation, not to ordinary sales to private buyers. The Justices emphasized that imposing broad liability on the government requires very clear words and that the specific provision controls over the general phrase “the prices so fixed.” The result was that the producer’s claim could not stand.

Real world impact

Producers who sold coal to private buyers at government-influenced prices cannot rely on this statutory paragraph for extra federal payment. The decision affirms the dismissal of this particular indemnity claim and makes clear the law limits government responsibility for private sales under the wartime price rules.