Bowles v. Seminole Rock & Sand Co.

Supreme Court of the United States · 1945 · Administrative Law

Administrative LawAdministrative interpretation of regulationsPrice controlsagency deferenceregulatory interpretationOPAMaximum Price Regulation No. 188highest price charged during March 1942

Facts

Respondent manufactured crushed stone subject to Maximum Price Regulation No. 188. It had contracted in October 1941 to supply Seaboard Air Line Railway at 60 cents per ton, and stone under that contract was actually delivered in March 1942. Respondent had also contracted in January 1942 to sell stone to V.P. Loftis Co. at $1.50 per ton, but after a small January delivery of a different grade, no further delivery under that contract occurred until August 1942. After the regulation took effect, respondent sold stone to Seaboard at 85 cents and $1.00 per ton, and the dispute was whether the March 1942 ceiling price was 60 cents or $1.50.

Issue

Under Maximum Price Regulation No. 188, what counts as the seller's 'highest price charged during March, 1942' for purposes of fixing the ceiling price? Specifically, does rule (i) apply whenever goods were actually delivered during March, even if the sale or charge was made earlier, or must both the charge and delivery occur during March?

Rule

When interpreting an administrative regulation, the court looks to the agency's construction if the regulation's meaning is in doubt, and that administrative interpretation is of controlling weight unless it is plainly erroneous or inconsistent with the regulation. Under Maximum Price Regulation No. 188, the phrase 'highest price charged during March, 1942' in rule (i) means the highest price charged for goods actually delivered during March 1942, regardless of when the sale or charge was made; rule (ii) applies only if no such delivery was made during March.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

The Federal Materials Board issues a pricing regulation for roofing tiles. The regulation says the seller's ceiling is the 'highest price charged during April 1943,' and the agency has consistently explained in bulletins that this means the highest price charged for goods actually delivered during April. In a dispute in Phoenix, Desert Span Supply argues the phrase instead means only prices on sales made during April.

If the regulation's text is genuinely doubtful, how should a court treat the agency's interpretation?

Explanation. When the meaning of an administrative regulation is in doubt, the court looks to the agency's construction. That interpretation is controlling unless it is plainly erroneous or inconsistent with the regulation. The majority treated the agency's contemporaneous and consistent interpretation of its own price regulation as controlling on that basis.