Michigan Pub. Util. Comm'n v. Duke, 266 U.S. 570 (1925)

U.S. Supreme Court

Michigan Pub. Util. Comm'n v. Duke, 266 U.S. 570 (1925) Michigan Public Utilities Commission v. Duke

No. 283

Argued November 21, 1924

Decided January 12, 1925

266 U.S. 570

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES

FOR THE EASTERN DISTRICT OF MICHIGAN

Syllabus

1. A state law imposing upon all persons engaged in transportation for hire by motor vehicle over the public highways of the state the burdens and duties of common carriers, and requiring them to furnish indemnity bonds to secure payment of claims and liabilities.resulting from injury to property carried, when applied to a private carrier without special franchise or power of eminent domain and engaged exclusively in hauling from a place within the state to a place in another state the goods of particular factories under standing contracts with their owners violates the Commerce Clause by taking from the carrier use of instruments by means of which he carries on interstate commerce, and by imposing on him

Page 266 U. S. 571

unreasonable condition precedent to his right to continue to carry on interstate commerce. P. 266 U. S. 576.

2. To convert property used exclusively in the business of a private carrier into a public utility, or to make the owner a public carrier by legislative fiat, is beyond the power of a state, since it would be taking property for public use without just compensation, in violation of the Due Process Clause of the Fourteenth Amendment. P. 266 U. S. 577.

Affirmed.

Appeal from a decree of the district court granting an interlocutory injunction. See 294 F. 703.

Page 266 U. S. 573

MR. JUSTICE BUTLER delivered the opinion of the Court.

This is an appeal under § 266, Judicial Code, from an order granting an interlocutory injunction restraining appellants from enforcing against appellee, plaintiff below, Act No. 209, Public Acts of 1923 of Michigan. The act provides that no person shall engage or continue

Page 266 U. S. 574

in the business of transporting persons or property by motor vehicle for hire upon the public highways of the state over fixed routes or between fixed termini unless he shall have obtained from the Michigan Public Utilities Commission a permit so to do. The permit shall be issued in accordance with the public convenience and necessity, and may be withheld when it appears that the applicant is not able to furnish adequate, safe, or convenient service to the public. Sections 1, 2. Section 3 provides that:

"Any and all persons . . . engaged . . . in the transportation of persons or property for hire by motor vehicle, upon or over the public highways of this state . . . shall be common carriers, and, so far as applicable, all laws of this state now in force or hereafter enacted, regulating . . . transportation . . . by other common carriers, including regulation of rates, shall apply with equal force and effect to such common carriers . . . by motor vehicle. . . ."

Section 7 provides that:

"Any and all common carriers under this act shall carry insurance for the protection of the . . . property carried by them in such amount as shall be ordered by said commission . . . or shall furnish an indemnity bond . . . conditioned upon the payment of all just claims and liabilities resulting from injury to . . . property carried by such carrier, and in a company authorized to do business in this state, in an amount to be fixed and approved by said commission."

A rule adopted by the commission requires all common carriers, defined by the act, to take out such an indemnity bond, and the commission has announced that no permit will be given until there has been filed with it a certificate of the bonding company showing that such bond had been issued. The act imposed upon every such carrier a fee for the privilege of engaging in the business defined in § 1, and appropriates all fees to the general highway fund. And it prescribes punishment

Page 266 U. S. 575

by fine or imprisonment or both for violations of the act or of any lawful order, rule or regulation of the commission.

At the time of the passage of the act, plaintiff had three contracts to transport from Detroit, Michigan, to Toledo, Ohio, automobile bodies made at the plants of three manufacturers in Detroit and intended for the use of an automobile manufacturer at Toledo. He had been doing such hauling for some years, and had a large investment in property used exclusively for that purpose. He employed 75 men and operated 47 motor trucks and trailers upon the public highways of Michigan, which formed a part of the route between Detroit and Toledo. He had no other business, and did not hold himself out as a carrier for the public. It was shown that defendants intended to enforce the act against him, and that, unless he obtained the permits required, they would cause his vehicles to be stopped on the highways by state police and local officers, and the prescribed penalties to be imposed upon him. Plaintiff alleged that the enforcement of the act would cause him irreparable injury, the loss of his contracts, the destruction of his business, and the loss of a substantial part of his capital investment. He assailed the act as invalid, and, among other things, averred that it contravenes the commerce clause of the Constitution of the United States, that it is repugnant to the due process clause of the Fourteenth Amendment, and that it violates the Constitution of Michigan because it contains a plurality of objects, and its real object is not expressed in the title. The lower court held that § 7, providing for indemnity bonds imposes a direct burden on interstate commerce, and that the provisions of § 3 applicable to private carriers are foreign to the title of the act and fall under the condemnation of the state constitution. See opinion of the same judges in Liberty

Page 266 U. S. 576

Highway Co. v. Michigan Public Utilities Commission, 294 F. 703, 706, 708, decided the same day that the injunction was granted in this case.

Plaintiff is a private carrier. His sole business is interstate commerce, and it is limited to the transportation covered by his three contracts. He has no power of eminent domain or franchise under the state, and no greater right to use the highways than any other member of the body public. He does not undertake to carry for the public, and does not devote his property to any public use. He has done nothing to give rise to a duty to carry for others. The public is not dependent on him or the use of his property for service, and has no right to call on him for transportation. The act leaves it to the commission to require plaintiff, if he is to use the highways, to be prepared to furnish adequate service to the public. It would make him a common carrier and subject him to all the duties and burdens of that calling, and would require him to furnish bond for the protection of those for whom he hauls.

This Court has held that, in the absence of national legislation covering the subject, a state may rightfully prescribe uniform regulations necessary for public safety and order in respect to the operation upon its highways of all motor vehicles -- those moving in interstate commerce as well as others -- that a reasonable, graduated license fee imposed by a state on motor vehicles used in interstate commerce does not constitute a direct burden on interstate commerce, and that a state which, at its own expense, furnishes special facilities for the use of those engaged in intrastate and interstate commerce may exact compensation therefor, and if the charges are reasonable and uniform, they constitute no burden on interstate commerce. Hendrick v. Maryland, 235 U. S. 610, 235 U. S. 622; Kane v. New Jersey, 242 U. S. 160, 242 U. S. 167. Such regulations are deemed to be reasonable and to affect

Page 266 U. S. 577

interstate commerce only incidentally and indirectly. But it is well settled that a state has no power to fetter the right to carry on interstate commerce within its borders by the imposition of conditions or regulations which are unnecessary and pass beyond the bounds of what is reasonable and suitable for the proper exercise of its powers in the field that belongs to it. Sioux Remedy Co. v. Cope, 235 U. S. 197, 235 U. S. 201. One bound to furnish transportation to the public as a common carrier must serve all, up to the capacity of his facilities, without discrimination and for reasonable pay. The act would put on plaintiff the duty to use his trucks and other equipment as a common carrier in Michigan, and would prevent him from using them exclusively to perform his contracts. This is to take from him use of instrumentalities by means of which he carries on the interstate commerce in which he is engaged as a private carrier, and so directly to burden and interfere with it. See Kansas Southern Ry. v. Kaw Valley District, 233 U. S. 75, 233 U. S. 78-79; Atlantic Coast Line v. Wharton, 207 U. S. 328, 207 U. S. 334; Illinois Central Railroad Co. v. Illinois, 163 U. S. 142, 163 U. S. 153. And it is a burden upon interstate commerce to impose on plaintiff the onerous duties and strict liability of common carrier, and the obligation of furnishing such indemnity bond to cover the automobile bodies hauled under his contracts as conditions precedent to his right to continue to carry them in interstate commerce. See Barrett v. New York, 232 U. S. 14, 232 U. S. 33. Clearly, these requirements have no relation to public safety or order in the use of motor vehicles upon the highways, or to the collection of compensation for the use of the highways. The police power does not extend so far. It must be held that, if applied to plaintiff and his business, the act would violate the commerce clause of the Constitution.

Moreover, it is beyond the power of the state by legislative fiat to convert property used exclusively in the

Page 266 U. S. 578

business of a private carrier into a public utility, or to make the owner a public carrier, for that would be taking private property for public use without just compensation, which no state can do consistently with the due process of law clause of the Fourteenth Amendment. Producers Transportation Co. v. Railroad Commission, 251 U. S. 228, 251 U. S. 230; Wolff Co. v. Industrial Commission, 262 U. S. 522, 262 U. S. 535. On the facts above referred to, it is clear that, if enforced against him, the act would deprive plaintiff of his property in violation of that clause of the Constitution.

The Supreme Court of Michigan has not decided whether the act contravenes the state constitution, and as we hold that the enforcement of the act against plaintiff would deprive him of his rights under the federal Constitution, and that therefore the decree must be affirmed, we do not pass on state questions. Pacific Tel. Co. v. Kuykendall, 265 U. S. 196, 265 U. S. 204.

Decree affirmed.