Bowles v. Seminole Rock & Sand Co.
| What is deference in the context of the administrative state? Deference, or judicial deference, is a principle of judicial review in which a federal court yields to an agency's interpretation of a statute or regulation. The U.S. Supreme Court has developed several forms of deference in reviewing federal agency actions, including Chevron deference, Skidmore deference, and Auer deference. Learn about state-level responses to deference here. |
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| Bowles v. Seminole Rock & Sand Co. | |
| Reference: 325 U.S. 410 | |
| Term: 1945 | |
| Important Dates | |
| Argued: April 26-27, 1945 Decided: June 4, 1945 | |
| Outcome | |
| United States Court of Appeals for the 5th Circuit reversed | |
| Majority | |
| Chief Justice Harlan Stone • Hugo Black • Stanley Reed • Felix Frankfurter • William Douglas • Frank Murphy • Robert H. Jackson • Wiley Rutledge | |
| Dissenting | |
| Owen Roberts | |
- See also: Kisor v. Wilkie
Bowles, Administrator, Office of Price Administration, v. Seminole Rock & Sand Co., or Bowles v. Seminole Rock & Sand Co., is a case that was decided on June 4, 1945, by the United States Supreme Court that established the Seminole Rock deference doctrine, also known as Auer deference. Under Seminole Rock deference, a federal court defers to an administrative agency's interpretation of a regulation that the agency administers. The case involved a dispute between Seminole Rock & Sand Co. and the Office of Price Administration (OPA) regarding a rule that established price ceilings pursuant to the Emergency Price Control Act of 1942.[1][2]
Why it matters: The ruling in Bowles v. Seminole Rock established the precedent for Seminole Rock deference, a judicial deference procedure in which a federal court defers to an administrative agency's interpretation of a regulation that the agency administers unless the agency's interpretation is "plainly erroneous," according to the opinion. Seminole Rock deference is often referred to as Auer deference—named for the Supreme Court's 1997 ruling in Auer v. Robbins that cited the Seminole Rock opinion.
Background
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The Emergency Price Control Act of 1942 created the Office of Price Administration (OPA), which was charged with establishing price controls for the duration of World War II in an effort to promote economic stability. The OPA established a price ceiling under Maximum Price Regulation No. 188 that prohibited sellers from charging delivery prices for items that exceeded the highest delivery prices charged in March 1942.[3][4]
Seminole Rock & Sand Co. had delivered a shipment of crushed rock in March 1942 to a purchaser at the rate of 60 cents per ton. Though the delivery occurred in March 1942, Seminole Rock had charged the purchaser for the crushed rock delivery in October 1941. The company later charged another purchaser $1.50 per ton in January 1942 for a crushed rock delivery that occurred in August 1942. For this reason, Seminole Rock argued that the OPA's price ceiling of 60 cents per ton for the delivery of crushed rock should not apply since the company had charged the purchaser for the delivery several months prior to March 1942 and had charged a higher delivery rate to another purchaser earlier in the year. The OPA administrator disagreed and claimed that the rule pertained to all March 1942 deliveries, regardless of when the delivery charge occurred.[1][4]
The OPA administrator filed suit against Seminole Rock to prevent the company from delivering shipments of crushed rock at rates of 80 cents per ton and $1.00 per ton, both of which exceeded the OPA's price control of 60 cents per ton but adhered to Seminole Rock's understanding of the price control at $1.50 per ton. The district court agreed with Seminole Rock and dismissed the action. The United States Court of Appeals for the 5th Circuit upheld the district court's ruling on the grounds that the highest delivery price charged by Seminole Rock in March 1942 was $1.50 per ton. The OPA administrator appealed the decision to the Supreme Court.[1]
Oral argument
Oral arguments were held from April 26 to April 27, 1945. The case was decided on June 4, 1945.[2]
Decision
The Supreme Court decided 8-1 against Seminole Rock. The majority opinion was written by Justice Frank Murphy and joined by Chief Justice Harlan Stone and Justices Hugo Black, Stanley Reed, Felix Frankfurter, William Douglas, Robert H. Jackson, and Wiley Rutledge. Justice Owen Roberts dissented.[1]
Opinions
Opinion of the court
Writing for the majority, Justice Frank Murphy argued that the OPA's interpretation of the regulation based the price ceiling on the highest price charged for a delivery that occurred in March 1942, regardless of when the charge occurred. As such, the OPA's price ceiling of 60 cents per ton for the delivery of crushed rock was consistent with the agency's interpretation of Minimum Price Regulation No. 188:[1]
| “ | The regulation recognizes the fact that more than one meaning may be attached to the phrase 'highest price charged during Mach, 1942.' The phrase might be construed to mean only the actual charges or sales made during March, regardless of the delivery dates. Or it might refer only to the charges made for actual delivery in March. Whatever may be the variety of meanings, however, rule (i) adopts the highest price which the seller 'charged ... for delivery' of an article during March, 1942. The essential element bringing the rule into operation is thus the fact of delivery during March. If delivery occurs during that period the highest price charged for such delivery becomes the ceiling price. Nothing is said concerning the time when the charge or sale giving rise to the delivery occurs.[5] | ” |
| —Justice Frank Murphy, majority opinion in Bowles v. Seminole Rock &Sand Co. (1945)[1] | ||
Justice Murphy's opinion set the precedent for Seminole Rock deference, in which a federal court defers to an administrative agency's interpretation of a regulation that the agency administers unless the agency's interpretation is "plainly erroneous," according to the opinion:
| “ | Since this involves an interpretation of an administrative regulation a court must necessarily look to the administrative construction of the regulation if the meaning of the words used is in doubt. The intention of Congress or the principles of the Constitution in some situations may be relevant in the first instance in choosing between various constructions. But the ultimate criterion is the administrative interpretation, which becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation.[5] | ” |
| —Justice Frank Murphy, majority opinion in Bowles v. Seminole Rock &Sand Co. (1945)[1] | ||
Dissenting opinion
Justice Owen Roberts dissented from the majority and argued that the Supreme Court ought to have affirmed the circuit court's ruling. He made note of two inconsistent interpretations of the rule made by the OPA administrator in August and December of 1942, respectively. Roberts concluded, "Indeed, the fact that the Administrator found it necessary to make such amendments is some evidence that, under the rules here in issue, the price established under a previous contract is the maximum price if that was the highest price for goods actually delivered during March, 1942."[1]
Impact
The ruling in Bowles v. Seminole Rock established the precedent for Seminole Rock deference, a judicial deference procedure in which a federal court defers to an administrative agency's interpretation of a regulation that the agency administers unless the agency's interpretation is "plainly erroneous," according to the Seminole Rock opinion. The Supreme Court went on to cite the Seminole Rock case twenty times between 1945 and 1996 concerning the application of judicial deference.[4][6]
In 1997, the Supreme Court revisited the principle of Seminole Rock deference in its opinion for Auer v. Robbins, a case concerning the interpretation of a salary regulation administered by the U.S. Department of Labor. The Supreme Court deferred to the secretary of Labor's interpretation of the regulation and cited Seminole Rock as the grounds for deference. Seminole Rock deference, therefore, is often referred to as Auer deference.[6]
See also
- Seminole Rock deference
- Auer deference
- Deference
- Supreme Court of the United States
- Ballotpedia's administrative state coverage
External links
- Full text of case syllabus and opinions (Justia)
- Supreme Court of the United States
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Footnotes
- ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Legal Information Institute, "BOWLES, Administrator, Office of Price Administration, v. SEMINOLE ROCK & SAND CO.," accessed May 14, 2018
- ↑ 2.0 2.1 JUSTIA, "Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945)," accessed May 14, 2018
- ↑ Gale Encyclopedia of U.S. Economic History, Emergency Price Control Act," accessed May 14, 2018
- ↑ 4.0 4.1 4.2 Congressional Research Service, "Seminole Rock Deference: Court Treatment of Agency Interpretation of Ambiguous Regulations," July 16, 2013
- ↑ 5.0 5.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ 6.0 6.1 Minnesota Law Review, "Defying Auer Deference," June 24, 205
