United States v. John J. Felin Co.

Background

A meat packer refused to deliver four specific pork products at government ceiling prices set by the Office of Price Administration under wartime price controls. The Government then ordered and seized those products for war purposes. An administrative agency awarded payment at the ceiling prices; the packer rejected that award and sued under the Fifth Amendment seeking “just compensation,” arguing replacement cost was higher than the ceiling prices. The Court of Claims found replacement cost greater and awarded the difference; the packer had been paid half the amount claimed on account.

Reasoning

The central question was whether the packer should be paid replacement cost or only the ceiling-price value established under the price-control program. The Supreme Court reversed the Court of Claims and directed entry of judgment for the unpaid balance of the products’ value at the government ceiling prices, with interest on that ceiling-price total from the date of taking to the date of the administrative award. The Court concluded the packer failed to prove any actual loss on the specific seized items. Several Justices issued separate opinions: the majority announced by Justice Frankfurter (with the Chief Justice and Justice Burton joining); Justice Reed, joined by Justices Black and Murphy, agreed with the result but not the reasoning; Justice Rutledge said he partially agreed with both groups.

Real world impact

The decision confines recovery for goods taken under price controls to the agency-set ceiling prices rather than higher replacement costs in these circumstances. Meat packers and other sellers who refuse controlled-price sales may be unable to recover extra losses when replacement costs exceed ceilings. The Court also required interest on the ceiling-price value from the taking to the administrative award.

Dissents or concurrances

Justice Jackson, joined by Justice Douglas, dissented, arguing the Court of Claims properly refused to treat the controlled sale price as the sole measure of just compensation and that the lower court’s calculation met constitutional requirements.