North Carolina v. United States,
325 U.S. 507 (1945)

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U.S. Supreme Court

North Carolina v. United States, 325 U.S. 507 (1945)

North Carolina v. United States

No. 56O

Argued April 23, 24, 1945

Decided June 11, 1945*

325 U.S. 507


1. An order of the Interstate Commerce Commission, under § 13(4) of the Interstate Commerce Act, authorized railroads in North Carolina to establish and maintain intrastate passenger coach fares at levels not lower than interstate fares, which in effect increased the state-prescribed basic fare of 1.65 cents per mile to the interstate level of 2.2 cents per mile.

Held: that the order was not based on adequate findings supported by evidence, and that the District Court should have enjoined its enforcement. Pp. 325 U. S. 509, 325 U. S. 520.

2. The Interstate Commerce Commission is empowered to nullify a state-prescribed intrastate rate only when the Commission, after full hearing, finds that such rate causes (1) undue or unreasonable advantage, preference, or prejudice as between persons or localities in intrastate commerce, on the one hand, and interstate commerce, on the other, or (2) undue, unreasonable, or unjust discrimination against interstate commerce, and the Commission is without authority to set aside a state-prescribed intrastate rate unless there are clear findings, supported by evidence, of each element essential to its exercise of that power. Pp. 325 U. S. 510-511.

3. A mere finding that interstate passengers paid higher fares than intrastate passengers for the same service does not adequately support a statewide order nullifying a state-prescribed rate as unduly prejudicial to interstate passengers and requiring all intrastate passengers to pay the higher intrastate rate. Pp. 325 U. S. 512, 325 U. S. 514.

4. The findings of the Commission that the 2.2 cents interstate rate was just and reasonable; that the same trains in general carried both interstate and intrastate passengers, and that the railroads affected would have received $525,000 more annual income from the passengers they carried had the 2.2 cents rate been applied, did not support the conclusion that the intrastate traffic was not contributing

Page 325 U. S. 508

its fair share of the revenue required to enable the railroads to render adequate and efficient transportation service, and did not support the order on the ground that the intrastate rates discriminated against interstate commerce. P. 325 U. S. 514.

5. The power of the Commission to require a State to raise intrastate rates depends on whether the intrastate traffic is contributing its fair share of the earnings required to meet maintenance and operating costs and to yield a fair return on the value of property directed to the transportation service, both interstate and intrastate. P. 325 U. S. 520.

6. The Commission cannot require intrastate rates to be raised above a reasonable level. P. 325 U. S. 520.

7. Where, as here, there is evidence from which the Commission could have found that a rate of 2.2 cents was far above a reasonable rate level for the intrastate coach traffic of the railroads, the Commission must make findings on that issue, which findings are supported by evidence, before entering an order supplanting the state authority. Without such findings supported by evidence, the Commission was not authorized to find that the intrastate rates discriminated against interstate commerce. P. 325 U. S. 520.

56 F.Supp. 606, reversed.

Appeals from a decree of a district court of three judges denying an injunction and dismissing the complaint in a suit to enjoin and set aside an order of the Interstate Commerce Commission.

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