United States v. Reading Co.

Background

Five coal companies and one railroad company asked the Court to change an earlier ruling that required cancellation of a set of “sixty-five percent” coal contracts. The petitioning firms described five individual contracts they wanted excluded from cancellation. The United States, through the Attorney General, answered the petitions. The Government agreed that one contract—a March 1, 1902 agreement between the Pennsylvania Coal Company and the Elk Hill Coal & Iron Company—was different and consented to dismissing cancellation for that contract. Three Justices did not take part in this order.

Reasoning

The central question was whether those specific contracts should be carved out from the earlier cancellation order. The Government opposed relief for the other four contracts and argued they fit within the condemned series. The Court found the transcript and briefs unclear and declined to decide the factual similarities on the present record. The Court therefore modified its mandate: it excluded the listed contracts from the blanket cancellation direction and remanded the disputes about those contracts to the District Court for full hearings and final decisions on the merits.

Real world impact

As a result, one contract was expressly withdrawn from cancellation with the Government’s consent, and several other disputed contracts are no longer automatically canceled. Those contracts will be reconsidered in the lower court, which must hear evidence and enter appropriate decrees. This order changes immediate outcomes for the named companies but does not resolve the broader legal questions about the whole series of sixty-five percent contracts.