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Messrs. John E. Benton, of Washington, D. C., and James Morris, of Carrington, N. D., for appellants.[ Bd. of R.R. Com'rs of State of North Dakota v. Great No. Ry. Co.
[281 U.S. 412, 414] Mr. R. J. Hagman, of St. Paul, Minn., for appellees.
Mr. Chief Justice HUGHES delivered the opinion of the Court.
On May 8, 1929, the Board of Railroad Commissioners of the State of North Dakota made an order prescribing intrastate class rates. The existing rates were reduced about 10 per cent, and the order was made effective on July 1, 1929. The appellees, common carriers engaged in interstate transportation and also in intrastate transportation in North Dakota, brought this suit on June 25, 1929, in the District Court to enjoin enforcement of the order pending the determination by the Interstate Commerce Commission of the question whether the intrastate rates, as thus prescribed, cause an undue or unreasonable discrimination against interstate commerce in violation of section 13 of the Interstate Commerce Act (49 USCA 13). The District Court, composed of three judges, as required by statute, granted an interlocutory injunction to this effect ( 33 F.(2d) 934), and the Railroad Commission of the State and the other state officials, who were defendants, have brought this appeal.
On August 26, 1920, the Interstate Commerce Commission, in a proceeding known as Ex parte 74, authorized a general advance in interstate freight rates throughout the United States. Increased Rates, 1920, 58 I. C. C. 220. The appellees then applied to the Board of Railroad Commissioners of North Dakota for authority to make [281 U.S. 412, 417] increases in the North Dakota intrastate class rates to correspond with the increases which had been made in the interstate class rates. The State Commission denied the application. Thereupon, in a proceeding (Docket No. 12,085) under section 13 of the Interstate Commerce Act the Interstate Commerce Commission made a finding that the interstate rates established by the carriers, as a result of the decision in Ex parte 74, were reasonable for interstate transportation and that the failure correspondingly to increase the intrastate rates within the state of North Dakota resulted in an undue preference to the shippers of intrastate traffic within that state and in an unjust discrimination against interstate commerce. On May 3, 1921, the Interstate Commerce Commission entered an order requiring these carriers to increase the intrastate freight rates in North Dakota so as to correspond with the advances in interstate rates. North Dakota Rates, Fares, and Charges, 61 I. C. C. 504. These increases were made, effective May 27, 1921
On June 5, 1922, the Board of Railroad Commissioners of North Dakota made an order reciting that the order of the Interstate Commerce Commission of May 3, 1921, practically deprived the State Commission of its power to regulate intrastate rates and that appropriate action should be taken to terminate the disability. Upon application by the State Commission, the Interstate Commerce Commission (July 22, 1922) vacated its order of May 3, 1921, in so far as it related to intrastate rates in North Dakota, stating that 'the existing increased intrastate rates and charges for freight services in said State will continue in force and effect until revoked, modified or superseded by appropriate lawful proceedings before said Board' (the State Commission) 'or as otherwise provided by law.' The State Commission was thus left free to exercise its lawful authority over intrastate rates. [281 U.S. 412, 418] The Congress, by Joint Resolution of January 30, 1925 (43 Stat. 801 ( 49 USCA 55)), directed the Interstate Commerce Commission to make an investigation of the rate structure of common carriers in order to determine to what extent and in what manner existing rates and charges might be unreasonable or unjustly discriminatory, and to make such changes, adjustments and redistribution of rates and charges as might be found to be necessary. The Commission was required to make from time to time such decisions as it might deem appropriate to establish a just and reasonable relation between rates upon designated classes of traffic. 1 Pursuant to this direction, the Inter- [281 U.S. 412, 419] state Commerce Commission on March 12, 1925, instituted the proceeding known as Docket No. 17000, 'Rate Structure Investigation,' and all common carriers subject to the Interstate Commerce Act were made respondents. Notice was sent to the Governor of each state and to the state regulatory commissions. The Interstate Commerce Commission thus undertook the investigation of the rate structure in the entire western district, including class rates in the region embracing the state of North Dakota. The Board of Railroad Commissioners of that state, with other state railroad commissions, have been cooperating in this investigation and the proceeding is still pending.
On May 29, 1925, the Board of Railroad Commissioners of North Dakota on its own motion began an investigation for the purpose of determining to what extent, if any, the North Dakota intrastate rates were unreasonable or unjustly discriminatory. In September, 1927, the State Commission directed that the record should be held open for further hearing after the Interstate Commerce Commission rendered a decision in its Docket No. 17000. A few months later, the State Commission resumed its general investigation, and a hearing was held in relation to class rates and certain other rates. This resulted in the order of May 8, 1929, now in question, reducing the existing intrastate class rates.
The appellees then filed a petition with the Interstate Commerce Commission alleging that the scale of class rates required by the State Commission would unjustly discriminate against persons and localities in interstate commerce, and would constitute an unreasonable burden on interstate commerce, in violation of section 13 of the Interstate Commerce Act, and asked the Interstate Commerce Commission to institute a proceeding to determine whether such unjust discrimination would result and to [281 U.S. 412, 420] prohibit it by prescribing the class rates to be charged by the carriers for intrastate transportation in North Dakota. Thereupon, this suit was brought. The interlocutory injunction, granted below, restrained the State Commission and other state officials from putting into effect the intrastate class rates prescribed by the order of May 8, 1929, until the Interstate Commerce Commission, either in its Docket No. 17000, or in the proceeding under section 13 of the Interstate Commerce Act which the plaintiffs (appellees) had petitioned the Interstate Commerce Commission to institute, determined the question of unjust discrimination with respect to interstate commerce, and until the further order of the court.
It should be observed at the outset that there is no contention on the part of the carriers that the intrastate rates fixed by the State Commission are confiscatory. There is no challenge of the authority of the State Commission under the Constitution and laws of the state to prescribe these rates for intrastate traffic, or of the validity or regularity of the proceedings which resulted in the order of the State Commission, aside from the alleged effect upon interstate commerce.
The question of the control of the state, as against an objection of this sort, over rates for transportation exclusively intrastate was considered in the Minnesota Rate Cases,
The controlling principle, thus invoked, was derived from a consideration of the nature of the question and of the inquiry and action required for its solution. The
[281 U.S. 412, 422]
inquiry would necessarily relate to technical and intricate matters of fact, and the solution of the question would demand the exercise of sound administrative discretion. The accomplishment of the purpose of Congress could not be had without the comprehensive study of an expert body continuously employed in administrative supervision. Only through the action of such a body could there be secured the uniformity of ruling upon which appropriate protection from unreasonable exactions and unjust discriminations must depend. Id., pages 419, 420, of 230 U. S., 33 S. Ct. 729, 48 L. R. A. (N. S.) 1151, Ann. Cas. 1916A, 18. See Great Northern Railway Co. v. Merchants' Elevator Co.,
The application of this principle had frequent illustration before the question arose as to unjust discriminations against interstate commerce through the fixing of intrastate rates. In Texas & Pacific Railway Co. v. Abilene Cotton Oil Co.,
What was lacking in the Minnesota Rate Cases, supra, had been supplied in the Shreveport Case,
In the Transportation Act 1920 (41 Stat. 484), Congress enacted express provisions with respect to intrastate rates, regulations and practices. Id. 416 (49 USCA 13). Amending section 13 of the Act to Regulate Commerce, Congress authorized the Interstate Commerce Commission to confer with state regulatory bodies with respect to 'the relationship between rate structures and practices of carriers subject to the jurisdiction of such State bodies and of the Commission,' and to hold joint hearings. It was provided that whenever in any such investigation, after full hearing, the Commission finds that any rate, regulation, or practice 'causes any undue or unreasonable advantage, preference, or prejudice as between persons or localities in intrastate commerce on the one hand and interstate or foreign commerce on the other hand, or any undue, unreasonable, or unjust discrimination against interstate or foreign commerce, which is hereby forbidden and declared to be unlawful,' the Commission shall prescribe the rate, regulation, or practice 'thereafter to be observed, in such manner as, in its judgment, will remove' the discrimination. The order of the Commission is to bind the carriers, parties to the proceeding, 'the law of any State or the decision or order of any State authority to the contrary notwithstanding.'
4
[281 U.S. 412, 426]
There can be no doubt that Congress thus intended to recognize and incorporate in legislative enactment the principle of the Shreveport Case, supra.
5
We find no
[281 U.S. 412, 427]
basis for the conclusion that it was the purpose of Congress to interdict a state rate, otherwise lawfully established for transportation exclusively intrastate, before appropriate action by the Interstate Commerce Commission. On the contrary, Congress sought to provide a more satisfactory administrative procedure which would
[281 U.S. 412, 428]
elicit the co-operation of the state regulatory bodies, and insure a full examination of all the questions of fact which such bodies might raise, before any finding was made in such a case as to unjust discrimination against interstate commerce or any order was entered superseding the rate authorized by the state. In sustaining the authority of the Commission under section 13 as thus amended, the court said in Railroad Commission of Wisconsin v. Chicago, Burlington & Quincy Railroad Co.,
When, before the amendments of 1910 of the Interstate Commerce Act, the question arose as to the propriety of judicial action in granting injunctions against the maintenance of interstate rates, filed and published by carriers as provided by law, pending the decision of the Interstate Commerce Commission whether such rates were unreasonable or unjustly discriminatory, there was a conflict of opinion in the lower federal courts, but the weight of decision was that such relief, although temporary in character, could not be granted prior to an appropriate finding by the Interstate Commerce Commission, and this ruling accorded with the principle declared by this court in the Abilene and other cases, supra. 6 Congress, in 1910, authorized the Interstate Commerce Commission, on the filing of rates by interstate carriers with the Commission, to suspend the operation of the rates for a stated period, and this provision has been continued in later legislation. Interstate Commerce Act 15(7); 36 Stat. 552; 41 Stat. 486, 487 (49 USCA 15(7). This power of suspension was intrusted to the Commission only. There [281 U.S. 412, 430] is no similar provision for the suspension of intrastate rates established by state authority.
It is said that the interlocutory injunction, granted below, was in aid of the proceedings pending before the Interstate Commerce Commission. But the injunction necessarily has the effect of preventing the state from enforcing the rates it has prescribed, which are lawful rates until the Interstate Commerce Commission finds that they cause an unjust discrimination against interstate commerce. A judicial restraint of the enforcement of intrastate rates, although limited to the pendency of proceedings before the Interstate Commerce Commission, is none the less essentially a restraint upon the power of the state to establish rates for its internal commerce, a power the exercise of which in prescribing rates otherwise valid is not subject to interference upon the sole ground of injury to interstate commerce, save as Congress has validly provided. Congress has so provided only in the event that, after full hearing in which the state authorities may participate, the Interstate Commerce Commission finds that unjust discrimination is created. Congress forbids the unjust discrimination through the fixing of intrastate rates, but intrusts the appropriate enforcement of its prohibition primarily to its administrative agency.
It is urged that the restraining power of the court is needed to prevent irreparable injury. But, in this class of cases, the question whether there is injury, and what the measures shall be to prevent it, is committed for its solution preliminarily to the Interstate Commerce Commission.
For these reasons, the order of the District Court is reversed, and the cause remanded with direction to dismiss the bill of complaint.
It is so ordered.
[ Footnote 1 ] The provision relating to the investigation is as follows:
[
Footnote 2
] See, also, United States v. Pacific & Arctic Co.,
[
Footnote 3
] Houston, East & West Texas Railway Co. v. United States,
[ Footnote 4 ] The text of the provisions thus added to section 13 is as follows:
[ Footnote 5 ] In presenting these amendments to the Committee of the Whole House, Mr. Esch, Chairman of the Committee on Interstate and Foreign Commerce of the House of Representatives, said:
Senator Cummins, Chairman of the Committee on Interstate Commerce of the Senate, made the following statement to the Committee of the Whole of the Senate:
[ Footnote 6 ] See Atlantic Coast Line R. R. Co. v. Macon Grocery Co. (C. C. A.) 166 F. 206; Columbus Iron & Steel Co. v. Kanawha & M. Ry. Co. (C. C. A.) 178 F. 261; Wickwire Steel Co. v. New York Central R. R. Co. (C. C. A.) 181 F. 316. Compare Jewett Bros. v. Chicago, M. & St. P. Ry. Co. (C. C.) 156 F. 160; Kiser Co. v. Central of Georgia R. R. Co. (C. C.) 158 F. 193; Id. (D. C.) 236 F. 573; Northern Pacific R. R. Co. v. Pacific Coast Lumber Mfrs.' Ass'n (C. C. A.) 165 F. 1; Great Northern Ry. Co. v. Kalispell Lumber Co. (C. C. A.) 165 F. 25.
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Citation: 281 U.S. 412
No. 364
Argued: April 17, 1930
Decided: May 19, 1930
Court: United States Supreme Court
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