Campbell v. W. H. Long & Co.
Headline: New Treasury rule blocked from canceling long-standing denatured-alcohol permits; Court upheld that existing permits remain valid unless surrendered or revoked under the statute’s required procedure, protecting manufacturers and plant operators.
Holding: The Court held that permits to operate denaturing plants and to use specially denatured alcohol remain valid until surrendered or revoked under the statute’s prescribed procedure, and cannot be ended by a general regulation.
- Prevents agency from cancelling existing denatured-alcohol permits by general regulation.
- Keeps current plant and manufacturer permits valid until statutory revocation or surrender.
- Limits administrative power to revoke unexpired permits without the law’s required process.
Summary
Background
A group of businesses that operate denaturing plants and a maker of toilet preparations held long-standing federal permits issued before October 1, 1927. Those permits said they would remain in force "until surrendered by the holder or cancelled by the Commissioner." After new Treasury regulations set a future expiration date for such permits, the companies applied for renewals, were denied, and sued to stop the Government from ending their permits by regulation.
Reasoning
The Court addressed whether permits for denaturing alcohol and using specially denatured alcohol could be ended by a general regulation that made all such permits expire on a set date. The Justices ruled these permits authorize converting alcoholic liquor into a product not fit for drinking, so they are not the simple one-year "liquor" permits the statute limits. More importantly, the permits were issued under the Prohibition Act, and that Act prescribes an exclusive procedure for revoking permits. The Court held that an administrative regulation cannot cut short unexpired permits without following the statutory revocation steps.
Real world impact
The ruling keeps the existing permits in force until the holder gives them up or the Government revokes them using the specific statutory process. It limits the agency’s power to cancel previously issued permits by sweeping regulations, though the Court declined to decide whether the new rules apply to future applicants. Operators of denaturing plants and manufacturers using specially denatured alcohol are directly protected for now.
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