Although the dispute which was the origin of the controversy
involved less than $2,000, where the controversy presented by the
bill involves the right of enforcement of statutory penalties
against complainant of over $2,000, and also its right to carry on
interstate business within the state, which is worth more than
$2,000, the circuit court has jurisdiction so far as the amount in
controversy is concerned.
A suit brought by a railway company against the members of a
state railway commission to restrain them from interfering with
complainant's property and interstate business under a state
statute alleged in the bill to be unconstitutional as imposing
burdens on interstate commerce is not a suit against the state
within the meaning of the Eleventh Amendment.
The interstate transportation of cars from another state which
have not been delivered to the consignee, but remain on the track
of the railway company in the condition in which they were
originally brought into the state, is not completed, and they are
still within the protection of the commerce clause of the
Constitution.
While a state in the exercise of its police power may confer
power on ar administrative agency to make reasonable regulations as
to the place, time, and manner of delivery of merchandise moving in
channels of interstate commerce, any regulation which directly
burdens interstate commerce is a regulation thereof, and repugnant
to the federal Constitution, and so
held that an order of
the North Carolina Corporation Commission requiring a railway
company to deliver cars from another state to the consignee on a
private siding beyond its own right of way was a burden on
interstate commerce, and void.
Quaere whether such an order applicable solely to state
business would be repugnant to the due process clause of the
Constitution.
An injunction granted by the final decree should not be broader
than the necessities of the case require, and if broader than that,
it will be modified, as in this case, by this Court.
Page 202 U. S. 544
The Southern Railway Company, a corporation organized under the
laws of the State of Virginia, operates, among others, a line of
railway passing through Greensboro, North Carolina. At that place,
the Greensboro Ice & Coal Company, during the times hereafter
mentioned, had a coal and wood yard, located some distance from the
main track and right of way of the railroad. From this main track,
however, there was a private siding or spur track extending across
the land of private persons to the establishment of the ice and
coal company. In consequence of the views expressed in the opinion,
it is unnecessary to review the facts as to the construction of
this spur track or to detail the course of dealing between the
parties concerning it prior to the origin of this controversy.
Certain it is that, at one time, the railroad delivered cars
consigned to the ice and coal company from its main track onto the
spur track in question. A dispute arose between the railway company
and the ice and coal company concerning demurrage on thirteen cars
containing coal and wood consigned to the latter company. In
consequence of the refusal of the ice and coal company to pay these
charges, the railway, on October 12, 1903, notified the ice and
coal company that, after October 17, 1903, it would only deliver
cars consigned to the ice and coal company on the public tracks of
the railway company at a place known as the team track, set aside
for the delivery to the public generally of merchandise of that
character. After receiving this notice, the ice and coal company
ordered four cars of coal from points in the States of
Pennsylvania, West Virginia, and Tennessee. These cars reached
Greensboro between October 18, 1903, and October 22, 1903, were
placed upon the team track, and delivery was tendered to the ice
and coal company. That company, however, declined to receive or
unload the cars elsewhere than on the siding above referred to. An
informal complaint on the subject was made by letter on October 20,
1903, to the North Carolina Corporation Commission, composed of the
appellants Franklin McNeill, Samuel L. Rogers, and Eugene C.
Beddingfield. After conversations had with
Page 202 U. S. 545
officers of the railway company, the commission, on October 31,
1903, made an order requiring the railway company, upon payment of
freight charges, to make delivery of the cars beyond its right of
way and on the siding referred to. Hearing was had on exceptions
filed on behalf of the railway company, and on December 10, 1903,
the commission made an order overruling the exceptions. The railway
company appealed to the Circuit Court of Guilford County.
In the meantime, on November 2, 1903, after demurrage or car
service charges had attached in respect to the four cars of coal,
and to prevent unnecessary interference with its other business,
the railway company removed the cars in question from the team
track and placed them on a distant siding.
By chapter 164 of the Public Laws of North Carolina for 1899,
creating the corporation commission, and by the acts amendatory
thereof, as contained in chapter 20, revisal of 1905, as amended in
1905, it was provided as follows:
"1086. For Violating Rules. -- If any railroad company doing
business in this state, by its agents or employees, shall be guilty
of a violation of the rules and regulations provided and prescribed
by the commission, and if, after due notice of such violation,
given to the principal officers thereof, if residing in the state,
or, if not, to the manager or superintendent or secretary or
treasurer, if residing in the state, or, if not, then to any local
agent thereof, ample and full recompense for the wrong or injury
done thereby to any person or corporation, as may be directed by
the commission, shall not be made within thirty days from the time
of such notice, such company shall incur a penalty for each offense
of $500. (1899, c. 164, § 15.)"
"1087. Refusing to Obey Orders of Commission. -- Any railroad or
other corporation which violates any of the provisions of this
chapter or refuses to conform to or obey any rule, order, or
regulation of the corporation commission shall, in addition to the
other penalties prescribed in this chapter, forfeit and
Page 202 U. S. 546
pay the sum of $500 for each offense, to be recovered in an
action to be instituted in the Superior Court of Wake County, in
the name of the State of North Carolina on the relation of the
corporation commission, and each day such company continues to
violate any provision of this chapter, or continues to refuse to
obey or perform any rule, order, or regulation prescribed by the
corporation commission shall be a separate offense. (1899, c. 164,
§ 23.)"
"
* * * *"
"1091. Violation of Rules, Causing Injury; Damages; Limitation.
-- If any railroad company doing business in this state shall, in
violation of any rule or regulation provided by the commission,
inflict any wrong or injury on any person, such person shall have
the right of action and recovery for such wrong or injury in any
court having jurisdiction thereof, and the damages to be recovered
shall be the same as in an action between individuals, except that,
in case of willful violation of law, such railroad company shall be
liable to exemplary damages; Provided, that all suits under this
chapter shall be brought within one year after the commission of
the alleged wrong or injury. (1899, c. 164, § 16.)"
On January 5, 1904, the bill in this case was filed in the
Circuit Court of the United States for the Eastern District of
North Carolina to perpetually enjoin the bringing of actions by the
ice and coal company and by the commission to recover penalties or
damages under the authority of the aforesaid statutory provisions
because of the noncompliance of the railway company with the order
of the commission. As grounds for the relief prayed, it was averred
that the railway company had a common defense based upon the
commerce clause of the Constitution of the United States, the
provisions of the act of Congress to regulate commerce, and the due
process clause of the Constitution, and also because the
corporation commission was an illegal body, as it was empowered to
exercise judicial, executive, and legislative functions, contrary
to the Constitutions of the state and of the United States. After
the filing
Page 202 U. S. 547
of answers, the cause was referred to a master to report the
testimony and findings of fact to the court. The court, concluding
that the order of the corporation commission was repugnant to the
commerce clause of the Constitution, entered a decree in favor of
the railway company, and perpetually enjoined the enforcement of
the order of the corporation commission and the bringing of actions
to recover penalties or damages for a violation of that order. 134
F. 82. The corporation commission and the ice and coal company
appealed, and the railway company prosecuted a cross-appeal upon
the ground that the court below erred in not deciding that the
corporation commission was an unconstitutional body because of the
alleged mixed and peculiar character of the functions conferred
upon it by the state statutes.
Page 202 U. S. 558
MR. JUSTICE WHITE, after making the foregoing statement,
delivered the opinion of the Court.
The legal principle which controls the determination of this
cause renders it unnecessary to state many of the facts contained
in this voluminous record or to consider and pass upon a number of
the legal propositions urged in the cause. But three questions are
essential to be passed upon. They are: first, whether the record
discloses that the matter in dispute exceeds, exclusive of interest
and costs, the sum or value of $2,000; second, whether, as to the
individual defendants below, this cause in fact was a suit against
the State of North Carolina; third, whether the order and decision
of the Corporation Commission of North Carolina and the statutes of
that state upon which the same was based were void because in
conflict with the commerce clause of the Constitution and the act
of Congress to regulate commerce.
1. It was urged in argument on behalf of the commission and the
ice and coal company that the extra cost or expense, if any, of
placing the four cars of coal on the siding was the matter in
controversy. In the court below, it would seem to have been claimed
that the $146 demurrage was the question at issue. However this may
be, as said by the trial court, although the demurrage dispute may
have been the origin of the litigation, there is involved in the
controversy presented by the bill not only the right to enforce
against the railway company the payment of statutory penalties much
in excess of $2,000, but also the right of that company to carry on
interstate commerce in North Carolina without becoming subject to
such orders and directions of the corporation commission which so
directly burdened such commerce as to amount to a regulation
thereof. This latter right is alleged in the bill to be of the
necessary jurisdictional value, the averment was supported by
testimony, and the master and the court below have found such to be
the
Page 202 U. S. 559
fact. There is no merit in the contention that there is a want
of jurisdiction to entertain the writ of error.
2. We think the real object of the bill may properly be said to
have been the restraining of illegal interferences with the
property and interstate business of the railway company, the
asserted right to interfere, which it was the object of the bill to
enjoin, being based upon the assumed authority of a state statute,
which the bill alleged to be in violation of rights of the railway
company protected by the Constitution of the United States. In this
aspect, the suit was not in any proper sense one against the state.
Scott v. Donald, 165 U. S. 107,
165 U. S. 112;
Fitts v. McGhee, 172 U. S. 529,
172 U. S.
530.
3. The cars of coal not having been delivered to the consignee,
but remaining on the tracks of the railway company in the condition
in which they had been originally brought into North Carolina from
points outside of that state, it follows that the interstate
transportation of the property had not been completed when the
corporation commission made the order complained of.
Rhodes v.
Iowa, 170 U. S. 412.
By § 1066 of the revisal of 1905, the general powers of the
North Carolina Corporation Commission were thus defined:
"1066. General Powers. -- The corporation commission shall have
such general control and supervision of all railroad, street
railway, steamboat, canal, express and sleeping car companies or
corporations, and of all other companies or corporations engaged in
the carrying of freight or passengers, of all telegraph and
telephone companies, of all public and private banks, and all loan
and trust companies or corporations, and of all building and loan
associations or companies, necessary to carry into effect the
provisions of this chapter and the laws regulating such companies.
(1899, c. 164; 1901, c. 679.)"
By § 1100, it was provided as follows:
"1100. Demurrage; Storage; Placing and Loading of Cars. -- The
commission shall make rules, regulations, and rates governing
demurrage and storage charges by railroad companies and other
transportation companies, and shall make rules governing
Page 202 U. S. 560
railroad companies in the placing of cars for loading and
unloading and in fixing time limit for delivery of freights after
the same have been received by the transportation companies for
shipment. (1903, c. 342.)"
Under these circumstances, it is undoubted that, by a circular,
numbered 36 and dated July 9, 1903, the corporation commission
promulgated rules fully regulating the right of railway companies
to exact and the amount of charges which might be made for storage,
demurrage, etc. And the pleadings make it clear that the order of
the corporation commission complained of was not made upon the
assumption of any supposed contract right which the corporation
commission, as a judicial tribunal, was enforcing as between the
ice and coal company and the railway company, but was exclusively
rested upon the general administrative authority which the
corporation commission deemed it had power to exercise in virtue of
the rights delegated to it by the statutes of North Carolina, as
above stated. Thus, in paragraph 12 of the answer, the corporation
commission averred as follows:
"These defendants are advised that the orders made by them,
hereinbefore referred to, do not constitute an interference with
interstate commerce, as alleged in said paragraph 12 (referring to
bill of complaint); nor with the right of the complainant to
conduct its business according to its reasonable rules and
regulations, except so far as the corporation commission has the
right and power to control its rules and regulations by virtue of
said act creating the corporation commission, and the amendment
thereto, contained in chapter 342, Public Laws 1903, whereby the
power is expressly conferred upon the North Carolina Corporation
Commission, by subsection 26, 'to make rules governing railroad
companies in the placing of cars for loading and unloading, and in
fixing time limit for the delivery of freights after the same have
been received by the transportation companies for shipment.' And
these defendants further say that, having full power to provide for
placing cars for unloading, and in conformity with the rules of the
said North
Page 202 U. S. 561
Carolina corporation commission, the orders complained of in the
bill were in strict conformity to the law, and finally adjudged and
made after the complainant company had full opportunity to make
defense as to its alleged rights in the premises."
Without at all questioning the right of the State of North
Carolina, in the exercise of its police authority, to confer upon
an administrative agency the power to make many reasonable
regulations concerning the place, manner, and time of delivery of
merchandise moving in the channels of interstate commerce, it is
certain that any regulation of such subject made by the state, or
under its authority, which directly burdens interstate commerce is
a regulation of such commerce, and repugnant to the Constitution of
the United States.
Houston & Texas Central Ry. Co. v.
Mayes, 201 U. S. 321;
American Steel & Wire Co. v. Speed, 192 U.
S. 500.
Not being called upon to do so, we do not pass upon all the
general regulations formulated by the commission on the subject
stated, but are clearly of opinion that the court below rightly
held that the particular application of those regulations with
which we are here concerned was a direct burden upon interstate
commerce, and void. Viewing the order which is under consideration
in this case as an assertion by the corporation commission of its
general power to direct carriers engaged in interstate commerce to
deliver all cars containing such commerce beyond their right of way
and to a private siding, the order manifestly imposed a burden so
direct and so onerous as to leave no room for question that it was
a regulation of interstate commerce. On the other hand, treating
the order as but the assertion of the power of the corporation
commission to so direct in a particular case in favor of a given
person or corporation, the order not only was in its very nature a
direct burden and regulation of interstate commerce, but also
asserted a power concerning a subject directly covered by the act
of Congress to regulate commerce and the amendments to that act,
which forbid and provide remedies to prevent unjust
discriminations
Page 202 U. S. 562
and the subjecting to undue disadvantages by carriers engaged in
interstate commerce.
The direct burden and resulting regulation of interstate
commerce operated by an alleged assertion of state authority
similar in character to the one here involved was passed upon by
the Circuit Court of Appeals for the Sixth Circuit in
Central
Stock Yards Co. v. Louisville & Nashville R. Co., 118 F.
113. The court in that case was called upon to determine whether
certain laws of Kentucky imposed a direct burden upon interstate
commerce and were a regulation of such commerce, upon the
assumption that those laws compelled a common carrier engaged in
interstate commerce transportation to deliver cars of livestock,
moving in the channels of interstate commerce at a particular place
beyond its own line, different from the general place of delivery
established by the railway company. In pointing out that, if the
legislation in question was entitled to the construction claimed
for it, it would amount to a state regulation of interstate
commerce, it was aptly and tersely said (p. 120):
"It is thoroughly well settled that a state may not regulate
interstate commerce, using the terms in the sense of intercourse
and the interchange of traffic between the states. In the case at
bar, we think the relief sought pertains to the transportation and
delivery of interstate freight. It is not the means of making a
physical connection with other railroads that is aimed at, but it
is sought to compel the cars and freight received from one state to
be delivered to another at a particular place and in a particular
way. If the Kentucky Constitution could be given any such
construction, it would follow it could regulate interstate
commerce. This it cannot do."
As we conclude that the court below rightly decreed that the
order complained of was invalid because amounting to an unlawful
interference with interstate commerce, we deem it unnecessary to
consider the contentions made on the cross-appeal of the railway
company. And because we confine our decision to the issue which
necessarily arises, we do not intimate any
Page 202 U. S. 563
opinion upon the question pressed at bar as to whether an order
which was solely applicable to purely state business, directing a
carrier to deliver property upon a private track beyond the line of
the railway company, would be repugnant to the due process clause
of the Constitution.
The final decree which the circuit court entered and the writ of
perpetual injunction issued thereon were, however, much broader
than the necessities of the case required, and should be limited so
as to adjudge the invalidity of the order complained of, restrain
the institution by the defendant of suits or actions for the
recovery of penalties or damages founded upon the disobedience of
such order, and forbid future interferences, under like
circumstances and conditions, with the interstate commerce business
of the railway company. As so modified, the decree below is
Affirmed.
