United States v. John J. Felin & Company/Dissent Jackson

by Robert H. Jackson

United States Supreme Court

334 U.S. 624

United States  v.  John J. Felin & Company

 Argued: Nov. 18, 19, 1947. --- Decided: June 14, 1948

Mr. Justice JACKSON, with whom Mr. Justice DOUGLAS joins, dissenting.

It would appear that this Court in this case is exceeding the limitation placed by Congress on its review of Court of Claims decisions. 28 U.S.C. § 288, 28 U.S.C.A. § 288, 53 Stat. 75. The Court does not decide, as Congress has authorized it to do, that any finding of the Court of Claims is not supported by substantial evidence, or that the ultimate findings lack support in evidentiary findings, or that there has been a failure to make findings on the material issues. Instead, in effect it sets aside the judgment below on its own interpretation of 'recognized facts in the meat industry.' Of these it takes judicial notice on the basis of an assortment of publications which, whatever their merits if called to the attention of the court below, should not in this Court outweigh specific findings of fact by the Court of Claims based on evidence before it.

Taking the facts as found by the Court of Claims, the case is this: Claimant was a meat packer and among its products were pork chops. The Government set a maximum price at which pork chops could be sold. It set no maximum price on the two principal factors in the cost of pork chops, viz: live hogs and labor. The result was that claimant's uncontrolled costs mounted until, on what is found to be a fair allocation of costs between chops and other products of the hog, it was costing more to produce the pork chops than the price for which claimant was permitted to sell them. But there were certain collateral benefits derived from supplying old patrons, even at a loss, to avoid heavier losses from shutting down the business and to keep customer good will for the hoped-for day of normal business.

However, the Government decided to buy claimants' chops. It offered the maximum OPA price. As there was no such compensating advantage to the packer in selling its choice cuts to the Government at a loss, as in keeping its business going with its general customers, it refused the offer. The Government then seized its pork chops and the company now claims the 'just compensation' which the Constitution guarantees to those whose private property is taken for public use. The Government contends, and the practical effect of the Court's holding is, that the company can recover only the maximum price fixed for its products by the Office of Price Administration, in spite of the finding that this is less than it cost to produce or to replace them.

It is hard to see how just compensation can be the legal equivalent of a controlled price, unless a controlled price is also always required to equal just compensation. It never has been held that in regulating a commodity price the Government is bound to fix one that is adequately compensatory in the constitutional sense, so long as the owner is free to keep his property or to put it on the market as he chooses. If the Government were required to do so, the task of price regulation would be considerably, if not disastrously, complicated and retarded. It seems quite indispensable to the Government itself, for the long-range success of price controls, that fixed prices for voluntary sales be not identified with the just compensation due under the Constitution to one who is compelled to part with his property.

The war did not repeal or suspend the Fifth Amendment. United States v. New River Collieries, 262 U.S. 341, 343, 43 S.Ct. 565, 566, 67 L.Ed. 1014; United States v. L. Cohen Grocery Co., 255 U.S. 81, 88, 41 S.Ct. 298, 299, 65 L.Ed. 516. But it is obvious that the constitutional guaranty of just compensation for private property taken for public use becomes meaningless if the Government may first, under its 'war powers,' fix the market price and then make its controlled figure the measure of compensation. ^[1]

It must be remembered that market price, as such, is not controlling. The Fifth Amendment's 'exact limitation on the power of the Government' ^[2] is not market price-it is just compensation. The former is relevant and this Court has so considered it, only because, in a free market, it is perhaps the best key to value at the time of taking. Original cost and replacement cost yield to it only because of that factor. But here, there is no true market price ^[3] to provide the usually accepted standard of value. The relevance of original cost and replacement cost, even in this situation, cannot seriously be denied. In the absence of an over-riding free-market price, the courts must turn to the soundest standards otherwise available.

We think the Court of Claims made no error of law in thinking that the controlled market price for voluntary sales was not the measure of just compensation for the seized pork chops. Limiting our review to the scope which Congress has authorized, we find no error in its calculation of just compensation for the purposes of complying with the constitutional requirements.

Notes

1. Such a rule hardly squares with the doctrine laid down by this Court more than fifty years ago that 'the compensation must be a full and perfect equivalent for the property taken,' Monongahela Navigation Company v. United States, 148 U.S. 312, 326, 13 S.Ct. 622, 626, 37 L.Ed. 463, or later expressions that 'the owner shall be put in as good a position pecuniarily as he would have been if his property had not been taken,' Seaboard Air Lin R. Co. v. United States, 261 U.S. 299, 304, 43 S.Ct. 354, 356, 67 L.Ed. 664; Olson v. United States, 292 U.S. 246, 54 S.Ct. 704, 78 L.Ed. 1236; United States v. Miller, 317 U.S. 369, 63 S.Ct. 276, 87 L.Ed. 336.
2. '* * * in this fifth amendment there is stated the exact limitation on the power of the government to take private property for public uses.' Monongahela Navigation Co. v. United States, 148 U.S. 312, 325, 13 S.Ct. 622, 626, 37 L.Ed. 463.
3. The price approved as just compensation in L. Vogelstein & Co. v. United States, 262 U.S. 337, 43 S.Ct. 564, 67 L.Ed. 1012, was fixed by agreement between the Government and the producers, represented by a committee whose members Vogelstein had nominated, and helped to elect, to represent the industry. Thus that price is not comparable to the Government-dictated price involved in this case. In the Vogelstein case, this Court said: 'Appellant's contention that there was no market price other than that fixed by the fiat of the United States is without support. * * *' 262 U.S. at page 339, 43 S.Ct. at page 565, 67 L.Ed. 1012. And, further, 'The finding of the Court of Claims is plain and cannot be read as referring to a mere fiat price.' 262 U.S. at page 340, 43 S.Ct. at page 565, 67 L.Ed. 1012.