Bowles v. Seminole Rock & Sand Co. - 325 U.S. 410, 65 S. Ct. 1215 (1945)

Rule:

The ultimate criterion is the administrative interpretation, which becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation. The Court's tools, therefore, are the plain words of the regulation and any relevant interpretations of the administrator.

Facts:

Respondent was a manufacturer of crushed stone, a commodity subject to Maximum Price Regulation No. 188. Respondent contracted to furnish the Seaboard Air Line Railway crushed stone on demand at 60 cents per ton; the stone was delivered in March 1942. Subsequently, and after the effective date of Maximum Price Regulation No. 188, respondent made new contracts to sell crushed stone to Seaboard at 85 cents and $1.00 per ton. Alleging that the highest price at which respondent could lawfully sell crushed stone of the kind sold to Seaboard was 60 cents a ton, since that was asserted to be the highest price charged by respondent during the crucial month of March, 1942, the Administrator of the Office of Price Administration brought the present action to enjoin respondent from violating the Act and Maximum Price Regulation No. 188. The District Court dismissed the action on the ground that $1.50 a ton was the highest price charged by respondent during March, 1942, and that this ceiling price had not been exceeded. The Fifth Circuit Court of Appeals affirmed the judgment.

Issue:

By charging 85 cents and $1.00 per ton after the effective date of Maximum Price Regulation No. 188, did respondent violate the regulation?

Answer:

Yes.

Conclusion:

The Court noted that under Rule (i) of § 1499.163 (a) (2) of Maximum Price Regulation No. 188, issued by the Administrator of the Office of Price Administration under § 2 (a) of the Emergency Price Control Act of 1942, a seller's ceiling price for an article which was actually delivered during March 1942 was the highest price charged for the article so delivered, regardless of when the sale or charge was made. According to the Court, in interpreting an administrative regulation, a court must necessarily look to the administrative construction of the regulation if the meaning of the words used was in doubt. The ultimate criterion was the administrative interpretation, which became of controlling weight unless it was plainly erroneous or inconsistent with the regulation. The Court concluded that the respondent’s highest price charged during the period was the highest price charged for stone actually delivered during that month. The Court concluded that the two courts below erred in their interpretation of the regulation and that the judgment below was accordingly reversed.