Page 281 U. S. 421
of unjust discrimination against interstate commerce by reason
of the intrastate rates and, reserving the question of the validity
and consequence of such a finding if one were made by the
Interstate Commerce Commission, the Court decided that there was no
ground for invalidating the action of the state. Dealing with the
interblending of operations in the conduct of interstate and local
business by interstate carriers, the Court said that these
considerations were for the practical judgment of Congress, and
that if adequate regulation of interstate rates could not be
maintained without imposing requirements as to such intrastate
rates as substantially affected the former, it was for Congress,
within the limits of its constitutional authority over interstate
commerce, to determine the measure of the regulation it should
apply. It was not the function of the court to provide a more
comprehensive scheme of regulation than Congress had decided upon,
nor, in the absence of federal action, to deny effect to the laws
of the state enacted within the field which it was entitled to
occupy until its authority was limited through the exertion by
Congress of its paramount constitutional power. On the assumption
that § 3 of the Interstate Commerce Act should be construed as
applicable to unreasonable discriminations between localities in
different states, as well when arising from an intrastate rate as
compared with an interstate rate as when due to interstate rates
exclusively, the Court was of the opinion that the controlling
principle governing the enforcement of the act should be applied to
such cases, and that the question of the existence of such a
discrimination would be primarily for the investigation and
determination of the Interstate Commerce Commission, and not for
the courts.
Id., p.
230 U. S.
419.
The controlling principle thus invoked was derived from a
consideration of the nature of the question and of the inquiry and
action required for its solution. The
Page 281 U. S. 422
inquiry would necessarily relate to technical and intricate
matters of fact, and the solution of the question would demand the
exercise of sound administrative discretion. The accomplishment of
the purpose of Congress could not be had without the comprehensive
study of an expert body continuously employed in administrative
supervision. Only through the action of such a body could there be
secured the uniformity of ruling upon which appropriate protection
from unreasonable exactions and unjust discriminations must depend.
Id., pp.
230 U. S.
419-420.
See Great Northern Railway Co. v.
Merchants' Elevator Co., 259 U. S. 285,
259 U. S.
291.
The application of this principle had frequent illustration
before the question arose as to unjust discriminations against
interstate commerce through the fixing of intrastate rates. In
Texas & Pacific Railway Co. v. Abilene Cotton Oil Co.,
204 U. S. 426, the
Court decided that a shipper could not maintain an action because
of the exaction of an alleged unreasonable rate on interstate
shipments when the rate had been duly filed and published by the
carrier and had not been found to be unreasonable by the Interstate
Commerce Commission. The Court found an indissoluble unity between
the provision for the maintenance of rates as established in
accordance with the statute and the prohibitions against
preferences and discriminations, and declared that, to maintain the
just relation which the statute was intended to conserve, it was
essential that there should be uniformity of decision and that
redress should be sought primarily through the administrative
powers entrusted to the Interstate Commerce Commission. In
Baltimore & Ohio Railroad Co. v. United States ex rel.
Pitcairn Coal Co., 215 U. S. 481,
complaint was made by the coal company of the method of
distribution of coal cars, which was said to amount to an unjust
discrimination. The Court considered the controversy to be
controlled
Page 281 U. S. 423
by the decision in the
Abilene Case, supra, and that
the grievances of which complaint was made were primarily within
the administrative competency of the Interstate Commerce
Commission. The Court said that the amendments of 1906 of the
Interstate Commerce Act rendered, if possible, more imperative the
construction which had been given to the act in this respect. After
adverting to the case of
Interstate Commerce Commission v.
Illinois Central Railroad Co., 215 U.
S. 452, the Court again pointed out "the destructive
effect upon the system of regulation adopted by the Act to Regulate
Commerce" if it were construed as
"giving authority to the courts, without the preliminary action
of the Commission, to consider and pass upon the administrative
questions which the statute has primarily confided to that
body."
Baltimore & Ohio R. Co. v. U.S. ex rel. Pitcairn Coal
Co., 215 U.S. p.
215 U. S. 496.
The question was again considered in
Robinson v. Baltimore
& Ohio Railroad Co., 222 U. S. 506,
where the Court held that no action for reparation for
discriminatory exactions for freight payments could be maintained
in any court, federal or state, in the absence of an appropriate
finding and order of the Interstate Commerce Commission. Referring
to the
Abilene case,
supra, the Court said:
"It is true that, . . . in that case, the complaint against the
established rate was that it was unreasonable, while here the
complaint is that the rate was unjustly discriminatory. But the
distinction is not material."
Id., p.
222 U. S. 511.
[
Footnote 2]
Page 281 U. S. 424
The grounds for invoking this principle of preliminary resort to
the Interstate Commerce Commission are even stronger when the
effort is made to invalidate intrastate rates upon the ground of
unjust discrimination against interstate commerce. Not only are the
questions as to the effect of intrastate rates upon interstate
rates quite as intricate as those relating to discrimination in
interstate rates, not only is there at least an equal need for the
comprehensive, expert, and continuous study of the Interstate
Commerce Commission, and for the uniformity obtainable only through
its action, but in addition there is involved a prospective
interference with state action within its normal field in relation
to the domestic concern of transportation exclusively intrastate.
The Court found no warrant for the contention that Congress, in
enacting the Interstate Commerce Act, intended that there should be
such an interference before the fact of unjust discrimination had
been established by competent inquiry on the part of the
administrative authority to which Congress had intrusted the
solution of that class of questions.
What was lacking in the
Minnesota Rate Cases, supra,
had been supplied in the
Shreveport Case, 234 U.
S. 342. [
Footnote 3]
There, the Interstate Commerce Commission had found that there was
an unjust discrimination arising out of the relation of intrastate
rates, maintained under state authority, to interstate rates which
had been upheld as reasonable. The Court decided that Congress, in
exercising its constitutional authority, could correct the evil of
this discrimination against interstate commerce, and that, in so
doing, Congress was entitled to secure the maintenance of its own
standard of interstate rates. Having this power, Congress could
provide for its exercise through the aid of a subordinate body. The
removal of the discrimination
Page 281 U. S. 425
was within the authority granted to the Interstate Commerce
Commission, and the decision rested upon the ground that this
authority had been exercised.
Id., pp.
234 U. S.
357-358.
See also American Express Co. v. South
Dakota ex rel. Caldwell, 244 U. S. 617,
244 U. S. 625;
Illinois Central Railroad Co. v. State Public Utilities
Commission, 245 U. S. 493,
245 U. S. 506;
Arkansas Railroad Commission v. Chicago, R. I. & P. R.
Co., 274 U. S. 597,
274 U. S.
599.
In the Transportation Act 1920, Congress enacted express
provisions with respect to intrastate rates, regulations and
practices.
Id., § 416. Amending § 13 of the Act to
Regulate Commerce, Congress authorized the Interstate Commerce
Commission to confer with state regulatory bodies with respect to
"the relationship between rate structures and practices of carriers
subject to the jurisdiction of such state bodies and of the
Commission," and to hold joint hearings. It was provided that
whenever, in any such investigation, after full hearing, the
Commission finds that any rate, regulation, or practice
"causes any undue or unreasonable advantage, preference, or
prejudice as between persons or localities in intrastate commerce,
on the one hand, and interstate or foreign commerce, on the other
hand, or any undue, unreasonable, or unjust discrimination against
interstate or foreign commerce, which is hereby forbidden and
declared to be unlawful,"
the Commission shall prescribe the rate, regulation, or practice
"thereafter to be observed, in such manner as, in its judgment,
will remove" the discrimination. The order of the Commission is to
bind the carriers, parties to the proceeding, "the law of any state
or the decision or order of any state authority to the contrary
notwithstanding." [
Footnote
4]
Page 281 U. S. 426
There can be no doubt that Congress thus intended to recognize
and incorporate in legislative enactment the principle of the
Shreveport Case, supra. [
Footnote 5] We find no
Page 281 U. S. 427
basis for the conclusion that it was the purpose of Congress to
interdict a state rate, otherwise lawfully established for
transportation exclusively intrastate, before appropriate action by
the Interstate Commerce Commission. On the contrary, Congress
sought to provide a more satisfactory administrative procedure
which would
Page 281 U. S. 428
elicit the cooperation of the state regulatory bodies, and
insure a full examination of all the questions of fact which such
bodies might raise, before any finding was made in such a case as
to unjust discrimination against interstate commerce or any order
was entered superseding the rate authorized by the state. In
sustaining the authority of the Commission under § 13 as thus
amended, the Court said, in
Railroad Commission of Wisconsin v.
Chicago, Burlington & Quincy Railroad Co., 257 U.
S. 563,
257 U. S.
590-591:
"It is said that our conclusion gives the Commission unified
control of interstate and intrastate commerce. It is only unified
to the extent of maintaining efficient regulation of interstate
commerce under the paramount power of Congress. It does not involve
general regulation of intrastate commerce. Action of the Interstate
Commerce Commission in this regard should be directed to
substantial disparity which operates as a real discrimination
against, and obstruction to, interstate commerce, and must leave
appropriate discretion to the
Page 281 U. S. 429
state authorities to deal with intrastate rates as between
themselves on the general level which the Interstate Commerce
Commission has found to be fair to interstate commerce."
See Arkansas Railroad Commission v. Chicago, R. I. & P.
R. Co., supra.
When, before the amendments of 1910 of the Interstate Commerce
Act, the question arose as to the propriety of judicial action in
granting injunctions against the maintenance of interstate rates,
filed and published by carriers as provided by law, pending the
decision of the Interstate Commerce Commission whether such rates
were unreasonable or unjustly discriminatory, there was a conflict
of opinion in the lower federal courts, but the weight of decision
was that such relief, although temporary in character, could not be
granted prior to an appropriate finding by the Interstate Commerce
Commission, and this ruling accorded with the principle declared by
this court in the
Abilene and other cases,
supra.
[
Footnote 6] Congress, in 1910,
authorized the Interstate Commerce Commission, on the filing of
rates by interstate carriers with the Commission, to suspend the
operation of the rates for a stated period, and this provision has
been continued in later legislation. Interstate Commerce Act §
15(7); 36 Stat. 552; 41 Stat. 486, 487. This power of suspension
was entrusted to the Commission only. There
Page 281 U. S. 430
is no similar provision for the suspension of intrastate rates
established by state authority.
It is said that the interlocutory injunction granted below was
in aid of the proceedings pending before the Interstate Commerce
Commission. But the injunction necessarily has the effect of
preventing the state from enforcing the rates it has prescribed,
which are lawful rates until the Interstate Commerce Commission
finds that they cause an unjust discrimination against interstate
commerce. A judicial restraint of the enforcement of intrastate
rates, although limited to the pendency of proceedings before the
Interstate Commerce Commission, is nonetheless essentially a
restraint upon the power of the state to establish rates for its
internal commerce, a power the exercise of which in prescribing
rates otherwise valid is not subject to interference upon the sole
ground of injury to interstate commerce, save as Congress has
validly provided. Congress has so provided only in the event that,
after full hearing in which the state authorities may participate,
the Interstate Commerce Commission finds that unjust discrimination
is created. Congress forbids the unjust discrimination through the
fixing of intrastate rates, but entrusts the appropriate
enforcement of its prohibition primarily to its administrative
agency.
It is urged that the restraining power of the court is needed to
prevent irreparable injury. But, in this class of cases, the
question whether there is injury, and what the measures shall be to
prevent it, is committed for its solution preliminarily to the
Interstate Commerce Commission.
For these reasons, the order of the district court is reversed,
and the cause remanded with direction to dismiss the bill of
complaint.
It is so ordered.
[
Footnote 1]
The provision relating to the investigation is as follows:
"That the Interstate Commerce Commission is authorized and
directed to make a thorough investigation of the rate structure of
common carriers subject to the interstate commerce act in order to
determine to what extent and in what manner existing rates and
charges may be unjust, unreasonable, unjustly discriminatory, or
unduly preferential, thereby imposing undue burdens or giving undue
advantage as between the various localities and parts of the
country, the various classes of traffic, and the various classes
and kinds of commodities, and to make, in accordance with law, such
changes, adjustments, and redistribution of rates and charges as
may be found necessary to correct any defects so found to exist. In
making any such change, adjustment, or redistribution the
commission shall give due regard, among other factors, to the
general and comparative levels in market value of the various
classes and kinds of commodities as indicated over a reasonable
period of years to a natural and proper development of the country
as a whole, and to the maintenance of an adequate system of
transportation. In the progress of such investigation, the
commission shall, from time to time and as expeditiously as
possible, make such decisions and orders as it may find to be
necessary or appropriate upon the record then made in order to
place the rates upon designated classes of traffic upon a just and
reasonable basis with relation to other rates. Such investigation
shall be conducted with due regard to other investigations or
proceedings affecting rate adjustments which may be pending before
the commission."
43 Stat. 801.
[
Footnote 2]
See also United States v. Pacific & Arctic Co.,
228 U. S. 87,
228 U. S.
107-108;
Mitchell Coal Co. v. Pennsylvania R.
Co., 230 U. S. 247,
230 U. S. 259;
Texas & Pacific Railway Co. v. American Tie & Timber
Co., 234 U. S. 138,
234 U. S. 147;
Pennsylvania R. Co. v. Puritan Coal Co., 237 U.
S. 121,
237 U. S. 131;
Pennsylvania R. Co. v. Clark Coal Co., 238 U.
S. 456,
238 U. S. 469;
Northern Pacific Railway Co. v. Solum, 247 U.
S. 477,
247 U. S. 483;
Director General of Railroads v. Viscose Co., 254 U.
S. 498,
254 U. S. 504;
Great Northern Railway Co. v. Merchants' Elevator Co.,
259 U. S. 285,
259 U. S. 291,
259 U. S. 295;
Terminal R. Ass'n v. United States, 266 U. S.
17,
266 U. S. 31;
Western & Atlantic Railroad v. Georgia Public Service
Commission, 267 U. S. 493,
267 U. S.
497.
[
Footnote 3]
Houston, East & West Texas Railway Co. v. United
States, 234 U. S. 342.
[
Footnote 4]
The text of the provisions thus added to § 13 is as follows:
"Sec. 13."
"
* * * *"
"(3) Whenever, in any investigation under the provisions of this
Act or in any investigation instituted upon petition of the carrier
concerned, which petition is hereby authorized to be filed, there
shall be brought in issue any rate, fare, charge, classification,
regulation, or practice, made or imposed by authority of any state,
or initiated by the President during the period of federal control,
the Commission, before proceeding to hear and dispose of such
issue, shall cause the state or states interested to be notified of
the proceeding. The Commission may confer with the authorities of
any state having regulatory jurisdiction over the class of persons
and corporations subject to this Act with respect to the
relationship between rate structures and practices of carriers
subject to the jurisdiction of such state bodies and of the
Commission, and, to that end, is authorized and empowered, under
rules to be prescribed by it, and which may be modified from time
to time, to hold joint hearings with any such state regulating
bodies on any matters wherein the Commission is empowered to act
and where the rate-making authority of a state is or may be
affected by the action taken by the Commission. The Commission is
also authorized to avail itself of the cooperation, services,
records, and facilities of such state authorities in the
enforcement of any provision of this Act."
"(4) Whenever in any such investigation the Commission, after
full hearing, finds that any such rate, fare, charge,
classification, regulation, or practice causes any undue or
unreasonable advantage, preference, or prejudice as between persons
or localities in intrastate commerce on the one hand and interstate
or foreign commerce on the other hand, or any undue, unreasonable,
or unjust discrimination against interstate or foreign commerce,
which is hereby forbidden and declared to be unlawful, it shall
prescribe the rate, fare, or charge, or the maximum or minimum, or
maximum and minimum, thereafter to be charged, and the
classification, regulation, or practice thereafter to be observed,
in such manner as, in its judgment, will remove such advantage,
preference, prejudice, or discrimination. Such rates, fares,
charges, classifications, regulations, and practices shall be
observed while in effect by the carriers parties to such proceeding
affected thereby, the law of any State or the decision or order of
any State authority to the contrary notwithstanding.'"
[
Footnote 5]
In presenting these amendments to the Committee of the Whole
House, Mr. Esch, Chairman of the Committee on Interstate and
Foreign Commerce of the House of Representatives, said:
"We also provide for the enactment into law of what is popularly
known as the decision of the Supreme Court in the
Shreveport case. Where intrastate rates constitute an
undue burden, advantage, preference, or prejudice against
interstate rates, such rates are declared to be unlawful. We have
incorporated into law the decision of the Court. When, by reason of
the low level of the intrastate rates, an undue burden is cast upon
the interstate traffic, the citizens and the shippers of other
states are compelled to pay higher interstate freight rates than
they would have had to pay had that state enacted or put into force
and effect proper intrastate rates. We give this power of
determination to the Interstate Commerce Commission, but, in order
that the state commissions may have a proper hearing, we provide
that the state commissions may, to use a phrase of the street, 'sit
in' with the Interstate Commerce Commission. It can sit with the
Interstate Commerce Commission; it can hear the testimony, and can
present its full case, through its legally constituted authority.
It can present the full case, but the final adjudication is to rest
with the Interstate Commerce Commission, and not with the state
regulatory body. We believe that this getting together of the
interstate and State regulatory bodies will lessen the number of
Shreveport cases, better the feeling between the
interstate and the State commissions, and promote the commercial
interests of the country."
Cong.Rec., 66th Cong., 1st Sess., Vol. 58, pt. 8, p. 8317.
Senator Cummins, Chairman of the Committee on Interstate
Commerce of the Senate, made the following statement to the
Committee of the Whole of the Senate:
"I need not follow that case [the
Shreveport case] in
all its phases, but it finally reached the Supreme Court of the
United States, and the Supreme Court held that the authority of the
federal Government, as it could be vested in the Interstate
Commerce Commission, extended to the removal of a discrimination
between the interstate rates and the intrastate rates, but no
authority had been given by Congress to the commission to declare
what the intrastate rate should be in comparison with the
interstate rate. . . ."
"The committee has attempted simply to express the decisions of
the Supreme Court of the United States. We have not attempted to
carry the authority of Congress beyond the exact point ruled by the
Supreme Court in the cases to which I have referred, and the only
thing we have done in the matter has been to confer upon the
Interstate Commerce Commission the authority to remove the
discrimination when established in a proper proceeding before that
body -- an authority which it does not not have. . . ."
"The Supreme Court held that Congress had not conferred upon the
Interstate Commerce Commission the right to prescribe a rate in the
stead of one which had been condemned; but, so far as the
condemnation of the rates is concerned, the power of the Interstate
Commerce Commission is already ample, and it has succeeded in one
way or another in removing the discriminations which have come
under its notice without the statute which we now propose."
Cong.Rec., 66th Cong., 2d Sess., Vol. 59, pt 1, pp. 142,
143.
[
Footnote 6]
See Atlantic Coast Line R. Co. v. Macon Grocery Co.,
166 F. 206;
Columbus Iron & Steel Co. v. Kanawha & M.
Ry. Co., 178 F. 261;
Wickwire Steel Co. v. New York
Central R. Co., 181 F. 316.
Compare Jewett Bros. v.
Chicago, M. & St. P. Ry. Co., 156 F. 160;
Kiser Co. v.
Central of Georgia R. Co., 158 F. 193; 236 F. 573;
Northern Pacific R. Co. v. Pacific Coast Lumber Mfrs.'
Ass'n, 165 F. 1;
Great Northern Ry. Co. v. Kalispell
Lumber Co., 165 F. 25.