310 U.S. 381 (1940), 804, Sunshine Anthracite Coal Co. v. Adkins

Docket Nº:No. 804
Citation:310 U.S. 381, 60 S.Ct. 907, 84 L.Ed. 1263
Party Name:Sunshine Anthracite Coal Co. v. Adkins
Case Date:May 20, 1940
Court:United States Supreme Court

Page 381

310 U.S. 381 (1940)

60 S.Ct. 907, 84 L.Ed. 1263

Sunshine Anthracite Coal Co.



No. 804

United States Supreme Court

May 20, 1940

Argued April 29, 1940




1. The 19 1/2% tax imposed by § 3(b) of the Bituminous Coal Conservation Act (1937) on sales of such coal by producers, "which would be subject to the application of the conditions and provisions of the code provided for in § 4, or of the provisions of § 4A," applies to producers who are not members of the code, although under § 4, the provisions of the code are for code members only. P. 391.

A contrary construction would read the 19 1/2% tax out of the Act, (since, by § 3(b), code members are exempt from it); the essential sanction of the Act would then disappear, and its effectiveness would be seriously impaired. Section 4 is made expressly applicable "only to matters and transactions in or directly affecting interstate commerce." It seems plain that the tax was intended to apply only to those sales by noncode members which "would be" subject to regulation under § 4. P. 392.

2. The constitutionality of the Act is upheld over the contentions that the 19 1/2% tax is not a tax, but a penalty; that Congress lacks power to fix minimum prices for bituminous coal sold in interstate commerce; that there has been an invalid delegation of legislative and judicial power, and that the division of bituminous coal into code and noncode classes is improper. Pp. 393 et seq.

3. The taxing power of Congress may be used as a sanction for the exercise of another granted power. P. 393.

4. The regulatory provisions of the Act are within the commerce power; they apply only to sales or transactions in, or intimately affecting, interstate commerce. P. 393.

5. Price control is a means available to Congress for the protection and promotion of the public economy. P. 394.

Courts are not concerned with the wisdom, policy, or appropriateness of this legislation. But the state of the bituminous coal industry and its history and public importance plainly support the judgment of Congress that price-fixing and the elimination of unfair competitive practices were appropriate methods for prevention of the financial ruin, low wages, poor working conditions, strikes, and disruption of the channels of trade which followed in the wake of the demoralized price structures. P. 394.

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6. Congress may modify the prohibitions of the Sherman Act by placing the machinery of price-fixing in the hands of public agencies. P. 396.

7. Congress may single out a particular industry and remove as to it the penalties of the Sherman Act . P. 396.

8. The commerce clause empowers Congress to stabilize an interstate industry through a process of price-fixing which safeguards the public interest by placing price control in the hands of its administrative representative. P. 396.

9. The standards specified by § 4, II(c) of the Bituminous Coal Act to control the Commission in fixing maximum and minimum prices binding code members, are adequate, and there is no invalid delegation of legislative power. P. 397.

10. In the matter of price-making, code members are subordinated by the Act to the Commission, so that there is no delegation of legislative authority to the industry. P. 399.

11. The definition of bituminous coal in the Act, § 17(b), is adequate as a standard for the Commission's action in determining what coal is subject to the Act. P. 399.

12. The Act makes no invalid delegation of judicial power to the Commission for determining whether a particular coal producer falls within its provisions, and it grants sufficient judicial review. P. 400.

13. A contention that the Act, by classifying the coal as code and noncode and applying the 19 1/2% tax to the latter alone, violates the Fifth Amendment is rejected, since the procedural features satisfy due process, and the Fifth Amendment has no equal protection clause; nor is uniformity required by the commerce clause. P. 400.

14. A judgment sustaining on review a determination by the Bituminous Coal Commission that a producer's coal is "bituminous" within the meaning of § 17(b) of the Bituminous Coal Conservation Act, thus subjecting him to the 19 1/2% tax laid on sales by producers who have not joined the code, is res judicata in a suit by the producer to enjoin the Commissioner of Internal Revenue from collecting the tax. P. 401.

15. Where Congress has created a special administrative procedure for determining the status of persons and companies under a regulatory Act, and has prescribed a procedure satisfying due process, that remedy is exclusive. P. 404.

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16. In the circumstances of this case, appellant is not entitled to relief from payment of taxes accrued during the litigation since the date fixed by the decree below. P. 404.


Appeal from a decree of the District Court dismissing a bill to enjoin the collection of taxes. See also 31 F.Supp. 125 and 105 F.2d 559.

Page 387

DOUGLAS, J., lead opinion

MR. JUSTICE DOUGLAS delivered the opinion of the Court.

The labor provisions of the Bituminous Coal Conservation Act of 1935 (49 Stat. 991) were held unconstitutional by this Court in Carter v. Carter Coal Co., 298 U.S. 238. The Bituminous Coal Act of 1937 (50 Stat. 72) was thereupon enacted. It eliminated those provisions of the earlier Act and made other substantive and structural changes.1 The basic problem here involved is the constitutionality of the 1937 Act.

That Act provides for the regulation of the sale and distribution of bituminous coal by the National Bituminous Coal Commission2 with the cooperation of the bituminous

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coal industry. Its aim is the stabilization of the industry primarily through [60 S.Ct. 910] price-fixing and the elimination of unfair competition. It is provided in § 4 that the coal producers, accepting membership, shall be organized under the Bituminous Coal Code. Some twenty district boards of code members are provided for, which are to operate as an aid to the Commission, but subject to its pervasive surveillance and authority. The statute specifies in detail the methods of their organization and operation, the scope of their functions, and the jurisdiction of the Commission over them. The Commission is empowered to fix minimum prices for code members in accordance with stated standards. Under § 4, II(a), each board shall, "on its own motion or when directed by the Commission," propose minimum prices pursuant to prescribed statutory standards. These may be approved, disapproved, or modified by the Commission as the basis for the coordination of minimum prices. Somewhat comparable machinery is provided for such coordination of minimum prices "in common consuming market areas upon a fair competitive basis," § 4, II(b), and for establishment of rules and regulations incidental to the sale and distribution of coal by code members. § 4, II(a). The Commission is also given power by § 4, II(c), to establish maximum prices for code members pursuant to standards prescribed therein. The sale, delivery, or offer for sale of coal below the minimum or above the maximum prices established by the Commission is made a violation of the code. § 4, II(e). So are numerous practices specified in § 4, II(i) as unfair methods of competition. And contracts for the sale of coal at prices below the prescribed minimum or above the maximum are invalid and unenforceable. § 4, II(e). The Commission may, after hearing, revoke the code membership of any coal producer for willful violation of the code or of any regulation made thereunder. § 5(b).

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Sec. 3(a) imposes an excise tax of 1 cent per ton of two thousand pounds upon the sale or other disposition by the producer of bituminous coal produced in the United States.3 Sec. 3(b) imposes an additional 19 1/2% tax (based on sale price or in certain cases on fair market value) on sales of bituminous coal by producers "which would be subject to the application of the conditions and provisions of the code provided for in section 4 or of the provisions of section 4-A."4 Producers who are members of the code are exempt from that tax. As we shall see, the interpretation of § 3(b) is a subject of controversy. But if, as the government contends, the 19 1/2% tax is applicable to sales by nonmembers, there are strong inducements for joining the code.

Machinery is provided in § 4-A for obtaining exemptions. A producer who believes that any commerce in coal is not, or may not be made, subject to the provisions of § 4 may file an application for exemption with the Commission. Subject to qualifications not material here, the filing of such application "in good faith" exempts the applicant from any "obligation, duty or liability" imposed by § 4 pending action by the Commission on the application. The Commission shall grant the application or,

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after notice and opportunity for hearing, shall deny or otherwise dispose of it. An applicant aggrieved by such denial or [60 S.Ct. 911] other disposition may obtain a review of the order in the Court of Appeals for the District of Columbia or in the Court of Appeals in the circuit where he resides or has his principal place of business. § 6(b). The findings of the Commission as to the facts, if supported by substantial evidence, are conclusive.

Appellant is lessee of coal lands in Arkansas, and is engaged in the business of mining and shipping coal. It has not subscribed to or accepted the provisions of the Bituminous Coal Code provided for in § 4 of the Act. In August, 1937, it filed an application for exemption on the...

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