Northern Pacific Ry. Co. v. North Dakota - 236 U.S. 585 (1915)
U.S. Supreme Court
Northern Pacific Ry. Co. v. North Dakota, 236 U.S. 585 (1915)
Northern Pacific Railway Company v. North Dakota
Nos. 420, 421
Argued October 19 and 20, 1914
Decided March 8, 1915
236 U.S. 585
This Court takes the facts as found by the state court as established, unless
(1) A federal right has been denied as the result of a finding shown by the record to be unsupported by evidence, or
(2) A conclusion of law as to a federal right and a finding of fact are so commingled as to make it necessary to analyze the latter.
Neither of those conditions exists in this case.
Railroad property is private property devoted to public use, and the state has a broad field for the exercise of its discretion in prescribing reasonable rates for common carriers within its jurisdiction.
It is not necessary there should be uniform rates or the same percentage of profits on every sort of business; there is room for reasonable classification.
Despite this range of permissible action, the state has no arbitrary power over rates; the devotion of the carrier's property to public use is qualified by the carrier's right to a reasonable reward; the state
may not select a commodity on a class of traffic, even if of a low grade, and, instead of fixing a reasonable rate, require the carrier to transport it at less than cost or for merely nominal compensation
Public interest cannot be invoked as a justification for demands passing the limits of constitutional protection.
This Court does not sit as a revisory board to substitute its judgment for that of the legislature or its administrative agent.
This Court is not required to concern itself with mere details of a schedule; or to review a particular tariff which yields substantial compensation, when the profitableness of the intrastate business as a whole is not involved. But a different question arises when the state has segregated a commodity, or a class of traffic, and has attempted to compel the carrier to transport it at a loss or without substantial compensation.
There is a presumption that rates fixed by the state for intrastate traffic are reasonable and just, but it is one that may be rebutted by the carrier's showing, as in this case, that it is noncompensatory.
As the maximum intrastate rates on coal in carload lots fixed by ch. 51 of the laws of North Dakota are unreasonable, either requiring the carrier to transport the commodity at a loss or for a merely nominal compensation after taking into account the entire traffic to which the rates apply, the state exceeded its authority in enacting the statute which amounts to an attempt to take the property of the carrier without due process of law in violation of the Fourteenth Amendment.
26 N.D. 438 reversed.
The facts, which involve the validity under the due process provision of the Fourteenth Amendment of a statute of North Dakota fixing maximum intrastate rates for transportation of coal by railroad companies, are stated in the opinion.