United States v. Central Eureka Mining Company/Dissent Harlan

by John Marshall Harlan II

United States Supreme Court

357 U.S. 155

United States  v.  Central Eureka Mining Company

 Argued: Jan. 7, 1958. --- Decided: June 16, 1958

Mr. Justice HARLAN, dissenting.

I dissent because I believe that the Fifth Amendment to the Constitution requires the Government to pay just compensation to the respondents for the temporary 'taking' of their property accomplished by WPB Order L-208.

The Court views L-208 as a normal regulatory measure of the WPB, which had authority to allocate critical materials during the late war. It holds that this was the character of the administrative Order even though the Court of Claims found that L 208 was actually designed to cause a shift of gold miners to other nonferrous metal mines, rather than to control the allocation of mining equipment in short supply, as the Order on its face purported to do. In so holding, the Court emphasizes that the 'manpower' objective was simply one of the purposes of L-208. I am unable to reconcile the Court's conclusions with the findings of the Court of Claims. Finding 46 of the Court of Claims states that reallocation of gold miners by forced closure of the gold mines was 'The dominant consideration * * * in the issuance of * * * L-208.' (Italics supplied.) That this finding reflected the conclusion that the 'manpower' purpose was the sole objective of the Order seems clear from the fact that the Court of Claims struck from this finding, as submitted to it by the hearing officer, the following two sentences:

'Another consideration in the issuance of the order was as stated in the preamble that the fulfillment of requirements for the defense of the United States had created a shortage in the supply of critical materials which had been used in the maintenance and operation of gold mines.

'Both objectives (the other being 'manpower') were in some measure accomplished with the closing of the plaintiffs' gold mines pursuant to the order.'

On the basis of its findings, the Court of Claims concluded in its opinion:

'From the language of the order itself (L-208) and from the circumstances surrounding its promulgation, it is apparent that its only purpose was to deprive the gold mine owners and operators of their right to make use of their mining properties.'

These conclusions, which seem to me to be convincingly supported by the evidence in the record, require that L-208 be regarded as having no other purpose than to effect the closing of respondents' mines in order to free gold mine labor for essential war work. The Government acknowledges that during the war it lacked any legal authority to order the transfer of civilian manpower.

Viewing L-208 in this light, I cannot agree with the Court's conclusion that the Order was simply a 'regulation' incident to which respondents happened to suffer financial loss. Instead, I believe that L-208 effected a temporary 'taking' of the respondents' right to mine gold which is compensable under the Fifth Amendment.

L-208 was the only order promulgated during World War II which by its terms required a lawful and productive industry to shut down at a severe economic cost. See S.Rep. No. 1605, 82d Cong., 2d Sess. 3. As a result of the Order the respondents were totally deprived of the beneficial use of their property. Any suggestion that the mines could have been used in such a way (that is, other than to mine gold) so as to remove them from the scope of the Order would be chimerical. Not only were the respondents completely prevented from making profitable use of their property, but the Government acquired all that it wanted from the mines their complete immobilization and the resulting discharge of the hardrock miners. It is plain that as a practical matter the Order led to consequences no different from those that would have followed the temporary acquisition of physical possession of these mines by the United States.

In these circumstances making the respondents' right to compensation turn on whether the Government took the ceremonial step of planting the American flag on the mining premises, cf. United States v. Pewee Coal Co., 341 U.S. 114, 116, 71 S.Ct. 670, 671, 95 L.Ed. 809, is surely to permit technicalities of form to dictate consequences of substance. In my judgment the present case should be viewed precisely as if the United States, in order to accomplish its purpose of freeing gold miners for essential work, had taken possession of the gold mines and allowed them to lie fallow for the duration of the war. Had the Government adopted the latter course it is hardly debatable that respondents would have been entitled to compensation. See United States v. Pewee Coal Co., supra.

As the Court recognizes, governmental action in the form of regulation which severely diminishes the value of property may constitute a 'taking.' See United States v. Kansas City Life Ins. Co., 339 U.S. 799, 70 S.Ct. 885, 94 L.Ed. 1277; United States v. Causby, 328 U.S. 256, 66 S.Ct. 1062, 90 L.Ed. 1206; Richards v. Washington Terminal Co., 233 U.S. 546. 'The general rule at least is, that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.' Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415, 43 S.Ct. 158, 160, 67 L.Ed. 322. In my opinion application of this principle calls here for the conclusion that there was a 'taking,' for it is difficult to conceive of a greater impairment of the use of property by a regulatory measure than that suffered by the respondents as a result of L-208.

None of the cases relied on by the Government precludes our acknowledging the confiscatory nature of L-208 and according respondents just compensation. Except in the extraordinary situation where private property is destroyed by American armed forces to meet the exigencies of the military situation in a theatre of war, see United States v. Caltex (Philippines), Inc., 344 U.S. 149, 73 S.Ct. 200, 97 L.Ed. 157, no case in this Court has held that the Government is excused from providing compensation when property has been 'taken' from its owners during wartime in the interest of the common good. Cases such as Yakus v. United States, 321 U.S. 414, 64 S.Ct. 660, 88 L.Ed. 834; Bowles v. Willingham, 321 U.S. 503, 64 S.Ct. 641, 88 L.Ed. 892; Lichter v. United States, 334 U.S. 742, 68 S.Ct. 1294, 92 L.Ed. 1694, involving the wartime regulation of prices, rents, and profits, are wide of the mark. In all of them the Government was administering a nationwide regulatory system rather than a narrowly confined order directed to a small, singled-out category of individual concerns. Furthermore, none of the regulations involved in those cases prohibited the profitable exploitation of a legal business. And in none of them did the Government, following issuance of its edict, stand virtually in the position of one in physical possession of the property.

Also beside the point are the wartime prohibition cases. Hamilton v. Kentucky Distilleries & Warehouse Co., 251 U.S. 146, 40 S.Ct. 106, 64 L.Ed. 194, dealt with the consequences of the Act of November 21, 1918, 40 Stat. 1045, 1046, which placed upon the property owners a burden not nearly so onerous as the one imposed on respondents by L-208. That Act permitted unrestricted sale ofliquor for more than seven months from the date of its passage, and even after that time there was no restriction on sale for export or on local sale for other than beverage purposes. Moreover, the prohibition cases arose only after congressional action dealing specifically with the sale of liquor, and the Court in Hamilton particularly adverted to the fact that Congress might properly conclude that such sale should be halted 'in order to guard and promote the efficiency' of the armed forces and defense workers. Hamilton v. Kentucky Distilleries & Warehouse Co., supra, 251 U.S. at page 155, 40 S.Ct. at page 107. This latter factor was also the premise of Jacob Ruppert, Inc., v. Caffey, 251 U.S. 264, 40 S.Ct. 141, 64 L.Ed. 260. Not only has there been no comparable congressional finding that gold mining was injurious, but the Senate Committee on the Judiciary, which conducted a thorough analysis of the operation of L-208, recognized that 'Issuance of the order was an administrative error * * * and may, furthermore, have been illegal.' S.Rep. No. 1605, 82d Cong., 2d Sess. 3.

The question whether there has been a taking cannot of course be resolved by general formulae, but must turn on the circumstances of each particular case. As I have shown, the present case is plainly outside the run of past decisions. In those cases the Court was rightfully reluctant to sanction compensation for losses resulting from wartime regulatory measures which, under conditions of total mobilization, have ramifications touching everyone in one degree or another. But where the Government proceeds by indirection, and accomplishes by regulation what is the equivalent of outright physical seizure of private property, courts should guard themselves against permitting formalities to obscure actualities. As Mr. Justice Holmes observed in Pennsylvania Coal Co. v. Mahon, supra, 260 U.S. at page 416, 43 S.Ct. at page 160: 'We are in danger of forgetting that a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change.'

We should treat L-208 as being what in every realistic sense it was, a temporary confiscation of respondents' property. The Government is not absolved from providing just compensation here because the WPB may have lacked authority to 'take' respondents' mines in order to free the miners for essential work in other mines. See International Paper Co. v. United States, 282 U.S. 399, 406, 51 S.Ct. 176, 177, 75 L.Ed. 410; cf. Hatahley v. United States, 351 U.S. 173, 76 S.Ct. 745, 100 L.Ed. 1065. I need hardly add that we should not be deterred from according respondents their due because their claims and those of others similarly situated may run into sizable amounts. The Court of Claims, certainly not given to the easy allowance of demands upon the public treasury, faced up to what the Constitution plainly requires in this instance. We should affirm its judgment.

Notes