The mere existence of federal power does not, while dormant,
preclude the reasonable exercise of state authority as to those
matters of interstate or foreign commerce which are distinctly
local in character in order to meet the needs of suitable local
protection until Congress does act.
Congress may regulate interstate transportation by ferry as well
as other interstate commercial intercourse, but, until it does, a
state may prevent unreasonable charges for ferriage from a point of
departure within its borders.
A state may, in the absence of any action by Congress, prevent
through proper orders of its Railroad Commission, exorbitant
charges for transportation having both origin and termination
within the state and none of it being within any other state,
although a part of it may be over the high seas.
166 Cal. 741 affirmed.
The facts, which involve the power of the State Railroad
Commission of California to regulate rates of transportation
Page 236 U. S. 152
between intrastate points where part of the transportation is on
the high seas, are stated in the opinion.
MR. JUSTICE HUGHES delivered the opinion of the Court.
The Wilmington Transportation Company, a corporation organized
under the laws of the State of California, is engaged as a common
carrier of passengers and goods by sea between San Pedro, on the
mainland, and Avalon, on Santa Catalina Island, both places being
within the County of Los Angeles, in that state. Merchants at
Avalon, insisting that the rates charged for this transportation
were unreasonable, presented their complaint to the railroad
commission of the State of California and asked that reasonable
rates be fixed under the Public Utilities Act of 1911. Stat. (Cal.)
1911, Ex.Sees., p. 18. The Transportation Company challenged the
authority of the commission upon the ground that the business was
subject exclusively to the regulating power of Congress. The
Commission overruled the contention, and its authority to prescribe
reasonable rates between these ports of the state was sustained on
writ of review by the state court. 166 Cal. 741. The case has been
brought here on error.
The vessels of the plaintiff in error, in their direct passage
between the ports named, must traverse the high seas for upwards of
20 miles. Adopting the statement of the Commission, the supreme
court of the state puts the case thus:
"They do not touch at any other port,
Page 236 U. S. 153
either of the United States or of any foreign country. They do
not transfer their passengers or freight to any other vessel, or
receive the same from any other vessel in their course. They do not
on the voyage take on or put off any article of commerce. While a
portion of the voyage is on the high seas, the navigation thereof
is merely incidental to the real purpose of the voyage, which is to
ply between two ports, both of which are located in the same county
in this state."
Relying upon
Lord v. Steamship Co., 102 U.
S. 541, the plaintiff in error contends that
transportation over the high seas is "commerce with foreign
nations" in the constitutional sense.
See Lehigh Valley R. Co.
v. Pennsylvania, 145 U. S. 192,
145 U. S. 203;
The Abby Dodge, 223 U. S. 166,
223 U. S. 176.
But if it be assumed for the present purpose that the power of
Congress extends to the subject of this controversy, the fact
remains that the power has not been exercised. The provisions of
the federal statutes relating to vessels do not go so far, and the
Interstate Commerce Commission has not been authorized to prescribe
rates for water transportation unconnected with transportation by
railroad. 36 Stat. 539, 545. In this aspect, the question is
whether the mere existence of the federal power -- that is, while
it is dormant -- precludes the exercise of state authority to
prevent exorbitant charges with respect to this traffic which has
its origin and destination within the limits of the state.
It is urged that the fixing of rates is a regulation of the
commerce involved, and hence, of necessity is repugnant to the
federal authority, although the latter be unexercised. This
proposition, however, as has frequently been pointed out, is too
broadly asserted if no regard be had to the differences in the
subject which, by virtue of the commerce clause, are within the
control of Congress. Thus, vessels engaged in foreign commerce have
been compelled to submit to state requirements as to pilotage and
quarantine since the foundation of the government,
Page 236 U. S. 154
although it could not be denied that these requirements were
regulations which Congress could at any time displace.
Cooley v. Port
Wardens, 12 How. 299,
53 U. S. 317,
53 U. S. 319;
Ex Parte
McNiel, 13 Wall. 236,
80 U. S. 240;
Wilson v.McNamee, 102 U. S. 572;
Anderson v. Pacific Coast S.S. Co., 225 U.
S. 187,
225 U. S. 195;
Morgan S.S. Co. v. Board of Health, 118 U.
S. 455,
118 U. S. 465;
Compagnie Francaise v. Board of Health, 186 U.
S. 380,
186 U. S. 387.
In these cases, it was apparent that the subject was of a local
nature, admitting of diversity of treatment according to local
necessities, and it could not be supposed that it was the intention
to deny to the states the exercise of their protective power, in
the absence of federal action. It is not necessarily determinative
that the vessels, in the course of the transportation in question
pass, beyond the boundary of the state.
See The Hamilton,
207 U. S. 398,
207 U. S. 405.
In the case of ferries over boundary waters, it has always been
recognized that ferriage from the shore of a state is peculiarly a
matter of local concern, and, while undoubtedly Congress may
regulate interstate transportation by ferry as well as other
interstate commercial intercourse, still, because of the nature of
the transportation and the local exigency, a state, in the absence
of federal regulation, may prevent unreasonable charges for
carriage by ferry from a point of departure within its borders.
Port Richmond Ferry v. Hudson County, 234 U.
S. 317,
234 U. S. 332;
Sault Ste. Marie v. International Transit Co.,
234 U. S. 333,
234 U. S. 342. The
rule which the plaintiff in error invokes is not an arbitrary rule,
with arbitrary exceptions, but is one that has its basis in a
rational construction of the commerce clause. As repeatedly stated,
it denies authority to the state in all cases where the subject is
of such a nature as to demand that, if regulated at all, its
regulation should be through a general or national system, and that
it should be free from restraint or direct burdens save as it is
constitutionally governed by Congress, and, on the other hand, as
to those matters which
Page 236 U. S. 155
are distinctively local in character, although embraced within
the federal authority, the rule recognizes the propriety of the
reasonable exercise of the power of the states, in order to meet
the needs of suitable local protection, until Congress intervenes.
Cooley v. Port
Wardens, 12 How. 299,
53 U. S.
317-319;
Ex Parte
McNiel, 13 Wall. 236,
80 U. S. 240;
Welton v. Missouri, 91 U. S. 275,
91 U. S. 280;
Mobile County v. Kimball, 102 U.
S. 691,
102 U. S. 697;
Gloucester Ferry Co. v. Pennsylvania, 114 U.
S. 196,
114 U. S. 204;
Bowman v. Chicago &c. Ry., 125 U.
S. 465,
125 U. S. 481;
Minnesota Rate Cases, 230 U. S. 352,
230 U. S.
399-403;
Port Richmond Ferry v. Hudson County,
supra.
It was by the application of these principles that it was
decided that a state could not prescribe rates for interstate
railroad transportation, even with respect to that portion of the
route which was within its own territory. As was said by Mr.
Justice Miller, in delivering the opinion of the Court upon this
question (
Wabash &c. Ry. v. Illinois, 118 U.
S. 557,
118 U. S.
577), after recognizing the authority of the state to
prescribe intrastate rates:
"But when it is attempted to apply to transportation through an
entire series of states a principle of this kind, and each one of
the states shall attempt to establish its own rates of
transportation, its own methods to prevent discrimination in rates,
or to permit it, the deleterious influence upon the freedom of
commerce among the state and upon the transit of goods through
those states cannot be overestimated. That this species of
regulation is one which must be, if established at all, of a
general and national character, and cannot be safely and wisely
remitted to local rules and local regulations, we think is clear
from what has already been said."
And the same conclusion has been reached with respect to the
fixing of rates for railroad transportation which, while beginning
and ending in the same state, passes through the territory of
another state. The regulation of such rates cannot be "split up"
according to the jurisdiction of the respective states
Page 236 U. S. 156
over the track; there must be one rate fixed by one authority.
Hanley v. Kansas City Southern Ry., 187 U.
S. 617,
187 U. S.
620.
We are not here dealing with the case of property which is in
course of continuous transportation to another state or to a
foreign country.
The Daniel
Ball, 10 Wall. 557;
Ohio Railroad Commission v.
Worthington, 225 U. S. 101;
Texas & N.O. R. Co. v. Sabine Tram Co., 227 U.
S. 111,
227 U. S. 124;
Railroad Commission v. Texas & Pacific Ry.,
229 U. S. 336. It
must be assumed upon this record that the state claims the right to
exercise its authority only as to transportation between the
mainland and the island, and solely with respect to such shipments
over this route as are local to the state, both as to the beginning
and the end of the transportation. There is no passage through the
territory of another state; the transportation, in its entire
course, is subject to a single authority -- either that of Congress
or that of the state -- and the latter would yield to the exercise
of the former. The sovereignty of no other jurisdiction is
encountered. It is plainly of importance to the people of the state
that this local traffic should be carried upon reasonable terms,
and if, in the case of a ferry, a state may protect its people from
extortion although the ferriage is to the shore of another state,
there is, in our judgment, no ground for saying that, where the
transportation is between two places in the same state, it is less
a subject for local action, in the absence of federal
interposition, because the voyage is over a stretch of open sea.
Congress has not attempted to intervene, and we find no basis for
the conclusion that the subject is one which must be deemed to be
wholly free from regulation unless Congress deals with it. On the
contrary, it is precisely of that local character which permits it
to be left appropriately to the care of the state.
A different conclusion was reached at circuit in
Pacific
Coast Steamship Co. v. Railroad Commissioners, 18 Fed.
Page 236 U. S. 157
10, but, for the reasons stated, we are unable to agree with it.
The judgment of the Supreme Court of California is affirmed.
Judgment affirmed.