Williams v. Standard Oil Co. of La.
Headline: Tennessee law letting state officials set gasoline retail and wholesale prices is struck down, blocking mandatory price controls and protecting private gasoline dealers’ right to set their own prices.
Holding:
- Blocks Tennessee from enforcing mandatory gasoline price controls by state officials.
- Prevents the state from requiring price-based permits for gasoline sellers.
- Invalidates related permit fees and administrative funding tied to price-fixing.
Summary
Background
Two out-of-state corporations that had long been selling gasoline in Tennessee sued state officers to stop enforcement of a 1927 Tennessee law. The law created a Division of Motors and Motor Fuels in the state finance department, required dealers to get permits approved by state officials, authorized officials to fix wholesale and retail gasoline prices, banned rebates and price differences, and made violations a misdemeanor punishable by fine or imprisonment. A three-judge federal court granted an injunction blocking enforcement of the law.
Reasoning
The central question was whether the state could empower its officials to fix gasoline prices. The Court said the answer depended on whether selling gasoline is a business “affected with a public interest.” Relying on prior decisions, the Court concluded gasoline is an ordinary commodity and selling it is ordinary private commerce, not a public use that justifies price-fixing. The Court also found no adequate showing of monopoly. Because the price-fixing purpose failed, the Court held the rest of the act could not stand: the permit requirements, data collection, and special taxes were merely tools to carry out the price controls and were therefore inseparable and invalid.
Real world impact
The ruling prevents Tennessee officials from enforcing the statute’s mandatory price controls and related permitting and funding scheme. Sellers of gasoline in Tennessee keep the right to set their own prices free from state-set mandates. The decision affirms the lower court’s injunction and leaves the underlying legal question resolved against price-fixing in this statute.
Dissents or concurrances
Justice Holmes dissented. Justices Brandeis and Stone agreed with the result but separately concurred.
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