United States v. Pewee Coal Co.

Background

A coal mine owner sued the United States to recover operating losses for the period May 1 to October 12, 1943, when the Government seized and ran the mine to prevent a nationwide miners’ strike. The Secretary of the Interior operated the mines under a Presidential order, and the War Labor Board ordered higher wages for miners that took effect during federal control. The Court of Claims had awarded compensation only for the part of the losses it found caused by government operation.

Reasoning

The Court considered whether the Government’s temporary seizure amounted to a “taking” that requires payment under the Fifth Amendment, which says private property taken for public use must be paid for. The Supreme Court concluded there was a taking and that the owner is entitled to compensation. But the Court agreed with the Court of Claims that losses not caused by the government’s seizure could not be recovered; only operating losses attributable to the government’s operation—specifically the wage increases ordered during federal control—were compensable. The opinion was written by Justice Black and joined by several colleagues.

Real world impact

This decision allows owners whose property was temporarily seized for a public purpose to recover economic losses that were actually caused by the government’s operation. It denies recovery for unrelated business losses that happened to coincide with the seizure. Because the ruling affirms the lower court’s careful limitation, compensation claims must show a direct link between government action and the loss being claimed.

Dissents or concurrances

Three Justices wrote separately in agreement, one wrote a separate concurrence, and four Justices dissented, disagreeing with the majority’s view on compensation limits.