Bowles, Price Administrator, v. Seminole Rock & Sand Co.

Background

The dispute is between the federal price regulator and a manufacturer of crushed stone. The maker had an October 1941 contract to deliver stone to a railroad at 60 cents per ton, and those deliveries occurred in March 1942. The maker also had a January 1942 contract to sell stone to a government contractor at $1.50 per ton, but most of those deliveries did not occur until later in the year. The regulator sued, arguing that the seller’s ceiling price should be set at the highest price charged during March 1942, and the lower courts held for the seller, treating the $1.50 offering as the ceiling.

Reasoning

The Court addressed what "highest price charged during March 1942" means in the agency’s regulation. The regulation provides three methods, but the Court focused on the first: the highest price charged to a purchaser of the same class for delivery during March. The Court read that phrase to require actual delivery in March and to adopt the price charged for such deliveries, regardless of when the sale agreement was made. The Court pointed to the agency’s bulletins and reports that emphasized actual March deliveries, not contract dates or mere offers, and applied that construction to the facts.

Real world impact

Applying this reading, the Court held the maker’s March deliveries at 60¢ per ton established the ceiling. Sellers of building materials must therefore use prices for goods actually delivered in March 1942 to set wartime ceilings, and the federal agency may enforce those ceilings; sellers retain available hardship procedures under the regulation.

Dissents or concurrances

Justice Roberts would have affirmed the lower court, adopting the reasoning of the Court of Appeals.