1. A rule of a state public service commission that railroad
switching service to which shippers are entitled by law or by rule
of the commission, whether or not granted voluntarily by the
railroad, shall not be discontinued without the consent of the
commission after notice and hearing is reasonable and within the
police power of the state. P.
267 U. S.
496.
2. An order of a state commission requiring a railroad to
continue to furnish switching service to a shipper on an
established industrial siding does not deprive the railroad of
property without due process, in violation of the Fourteenth
Amendment, merely because the switching, separately considered, may
not be profitable to the railroad, or may even involve a loss. P.
267 U. S.
496.
3. Under § 402 of the Transportation Act, 1920, the power to
order establishment or abandonment of such side tracks, though
employed largely for interstate commerce, is not with the
Interstate Commerce Commission, but with the states. P.
267 U. S.
497.
4. A bill to enjoin a state commission from enforcing an order
requiring the plaintiff railroad to maintain service on an
industrial switch track will not lie upon the ground that the
service creates undue discrimination between interstate shippers in
cost of transportation, since this is a question which must be
presented to the Interstate Commerce Commission. P.
267 U. S.
497.
Affirmed.
Appeal from a decree of the district court refusing a temporary
injunction in a suit to restrain the appellee commission from
enforcing an order requiring the appellant railroad to maintain
service on an industrial side track.
Page 267 U. S. 494
MR. CHIEF JUSTICE TAFT delivered the opinion of the Court.
The Western & Atlantic Railroad Company, an interstate
common carrier, filed this bill in the District Court of the United
States for the Northern District of Georgia against the Georgia
Public Service Commission and its members to enjoin the enforcement
of an order of the Commission requiring the railroad to furnish
switching service on an industrial siding to the National Bonded
Warehouse, Inc., of Atlanta, Georgia.
In accordance with the limitations of § 266 of the Judicial
Code, an application was made for a temporary injunction to a court
consisting of a Circuit and two district judges. The application
was denied and this appeal was taken.
The industrial siding in question diverges from the main line of
the railroad company, and was built many years ago for the
convenience of industries then located on it. At the present time,
J. K. Shippey and the National Bonded Warehouse are the only
industries served by it. The siding is all upon the right of way of
the railroad company.
On August 2, 1923, the railroad company notified the warehouse
company that, unless it signed a standard form of contract in
respect to the side track, its use and maintenance, which had been
submitted to it, the service would be discontinued after August
15th. The warehouse company made complaint to the Public Service
Commission. The Commission advised the railroad company that no
application from the company had been made to the Commission for
such authority, which, under its Rule 14, was necessary before the
service could be discontinued. However, on August 28th, a full
hearing was held by the Commission, with the parties present, and,
as a result of such hearing, it was ordered that, effective
Page 267 U. S. 495
immediately on receipt of the order, the railroad company should
restore the service. Thereupon this bill was filed.
The bill avers that the warehouse company's premises are two
city blocks, or 1,600 feet, from the railroad's public team tracks,
which are adequate in size and construction conveniently and
properly to handle all the public business, including that of the
warehouse company, and that, since the discontinuance of switching
service on August 15th, conformably to the notice given, the
railroad has been ready to serve that industry on public team
tracks, and that industrial sidings like the one in question have
been put in without any care to avoid undue discrimination between
interstate shippers in cost of transportation. It says that, of the
business done over the side track, 85 percent is interstate. The
railroad company therefore avers that, if it does not continue the
service as required by the order, it will be subject to penalty
under the Georgia state law, and that, if it obeys the order, it
will be guilty of undue discrimination under the interstate
commerce law, and so will be subject to a heavy penalty in the
federal jurisdiction.
The bill further alleges that the side track is out of repair,
and that, in order to put it in proper condition, it will require
an expenditure of $440, that the receipts from the switching are
but only a small part of the cost of it, and that enforced
compliance with the order will thus deprive the company of its
property without due process of law.
The order made by the Commission was based on its General Order
14, promulgated December 23, 1909, which provided that any and all
facilities and privileges enjoyed by shippers to which they were
entitled by law or any rule of the Commission, whether granted by
voluntary action on behalf of the railroad companies or otherwise,
should not be discontinued without the consent of the Railroad
Commission.
Page 267 U. S. 496
The three-judge court refused the application, on the ground
that Rule 14 had not been complied with. Rule 14 is a reasonable
rule, and the Commission was fully justified in refusing to
sanction a discontinuance of service until a petition had been
filed with the Commission and a showing made . The doubt which
arises in our minds is whether the Public Service Commission, by
its consent to a full hearing of the issue without a formal
petition and an order based on the merits, did not waive the defect
of a petition. The action of the company in discontinuing the
service without a petition was arbitrary and defiant, but the
subsequent action of the Commission seems to have condoned the
fault in such a way as to prevent our making it a reason for not
looking farther into the issues now raised by the company in its
bill.
It is said that the requirement of the continuance of the
service deprived the company of its property without due process of
law, in violation of the Fourteenth Amendment, because the service
rendered by the side track was much greater in out-of-pocket cost
than the compensation. This cannot be sustained. The service has
been rendered for years. It was a voluntary arrangement, and, under
its statutory powers (§ 2664, Georgia Civil Code 1910), was made
irrevocable by the Public Service Commission under Rule 14 except
by consent of the Commission. The spur track was for a public
purpose.
Union Lime Co. v. C. & N.W. Ry. Co.,
233 U. S. 211. The
requirement that such a service should not be discontinued without
notice and hearing was clearly within the police power of the
state.
Chicago & Northwestern R. Co. v. Ochs,
249 U. S. 416;
Lake Erie & Western R. Co. v. State ex rel. Cameron,
249 U. S. 422;
Railroad Commission v. L. & N. R. Co., 148 Ga. 442.
Even if the cost of the switching is more than what is received for
it, we cannot determine on any showing made by the company that the
switching does not work a benefit
Page 267 U. S. 497
in the increased business that the company gets or may get by
reason of the added facilities furnished by the switching. The
switch is a small part of the whole railway, and the mere fact that
the switching may not be profitable by itself cannot be held to be
a confiscation of property, even if it involves a loss.
See Ft.
Smith Light & Traction Co. v. Bourland, ante, p.
267 U. S. 330.
It seems to be the contention of the company that, since 85
percent of the business done on the side track is interstate
commerce, the power to order its establishment or abandonment is
vested in the Interstate Commerce Commission, and that the state
commission is without authority in the premises. Such a claim is in
the teeth of the Transportation Act of 1920, 41 Stat. 456, c. 91, §
402, par. 22, which provides that the authority of the Commission
conferred by § 402 over the extension or abandonment of interstate
railway lines shall not extend to the construction of spur
industrial or side tracks.
See Railroad Commission v. Southern
Pacific Co., 264 U. S. 331,
264 U. S.
345.
The question whether the continuance of the service on this
industrial track violates the Interstate Commerce Act as unduly
discriminatory is one that involves issues not primarily for the
courts, but is for the Interstate Commerce Commission. It requires
a consideration by experts of the benefit of the use of such a
siding as compared with that of other sidings in connection with
the rates in interstate commerce to determine whether there is
undue discrimination between shippers. The railroad company is
therefore in no position to appeal to the courts on this ground
until it has invoked the investigation and decision of the
Interstate Commerce Commission upon the concrete facts in a proper
manner.
See Great Northern Railway v. Merchants Elevator
Co., 259 U. S. 285,
259 U. S. 291,
and the cases cited on page
259 U. S. 295.
If
Page 267 U. S. 498
and when the Commission shall have made such an investigation
and have found the existence of undue discrimination, its order may
well not be a specific direction against a continuance of service
on a particular siding, but an order upon the company to remove the
undue discrimination between interstate shippers giving discretion
to the company to adopt a satisfactory method of meeting the
requirement.
Compare Houston East & West Texas Railway v.
United States, 234 U. S. 342,
234 U. S. 360;
American Express Co. v. State ex rel. Caldwell,
244 U. S. 617,
244 U. S. 624.
In any event, relief cannot be had by this bill, on the ground of
undue discrimination at the present stage of the controversy.
Affirmed.