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U.S. Supreme Court

Louisville & Nashville R. Co. v. Garrett, 231 U.S. 298 (1913)

Louisville & Nashville Railroad Company v. Garrett*

No. 23

Argued April 4, 1912

Decided December 1, 1913

231 U.S. 298


The same rule by which the federal court has jurisdiction to determine all the questions, local as well as federal, when a federal question is raised by the bill governs the application for preliminary injunction under the Act of June 18, 1910, c. 309, 36 Stat. 539, 557.

Unless the case imperatively demands such a decision, this Court is reluctant to adjudge a state statute to be in conflict with the state constitution before that question has been considered by the state chanrobles.com-red

Page 231 U. S. 299

tribunals to which the question properly belongs. Michigan Central R. Co. v . Powers, 201 U. S. 245.

Prescribing rates for the future is a legislative and not a judicial act.

In prescribing intrastate rates, the legislature of a state may act directly or, in the absence of constitutional restriction, it may commit the authority to do so to a subordinate body, and held that the Legislature of Kentucky, by the Act of March 10, 1900, properly authorized the Railroad Commission of that state, under certain conditions, to fix reasonable intrastate rates for railroad transportation in conformity with the provisions of the constitution of the state.

The legislature may determine what are reasonable rates either directly or through a subordinate body and use methods like those of judicial tribunals to elicit facts without invading the province of the judiciary. Prentis v. Atlantic Coast Line, 211 U. S. 210.

In this case, it does not appear that the state Railroad Commission acted in an arbitrary manner in fixing intrastate railroad rates; nor was it necessary to give legality to its order as to particular rates established to require a reduction in other rates.

Failure in a state statute establishing a railroad commission and giving it authority to fix reasonable rates to provide for an appeal from orders of the commission does not deny the carrier right of access to the courts to review an order that fixes rates so unreasonably low as to be confiscatory, and is not an unconstitutional denial of due process of law under the Fourteenth Amendment.

Presumably the state, as well as the federal, courts are open to a carrier to test the constitutionality of an order made by a railroad commission and to obtain protection by bill in equity against its enforcement if unconstitutional. Home Telephone Co. v. Los Angeles, 211 U. S. 265.

Penalties which are so unreasonable and severe as to be an unconstitutional denial of due process of law will not render a rate statute unconstitutional if they are separable, as in this case.

The right of the carrier to make its own intrastate rates is subject to the constitutionally enacted law of the state; in the absence of a legislative rate, courts apply the common law in passing upon the reasonableness of the rates, but after legislative rates have been established, the courts apply those rates unless there are constitutional objections.

So long as the legislature acts within its proper sphere, courts cannot substitute their judgment with respect to reasonableness of the established rates.

While a state may permit appeals to the courts from the ratemaking chanrobles.com-red

Page 231 U. S. 300

orders of it railroad commission, Prentis v. Atlantic Coast Line, 211 U. S. 210, failure to provide for such an appeal doe not deny the carrier due process of law a guaranteed by he Fourteenth Amendment.

Loss in revenue generally follows reduction in rates, but that does not necessarily prove that the reduced rates are confiscatory; there must be further proof that they do not allow a fair return for service rendered.

An order of the Railroad Commission of Kentucky made under the Act of March 10, 1900, is a legislative act under delegated power, and has the same force a if made by the legislature, and is for this reason a law passed by the state within the meaning of the contract clause of the federal Constitution.

A charter provision is not violated under the contract clause by a subsequent state law otherwise legal if, prior to the enactment of the latter, the chartered corporation has subjected itself to the operation of an amendment to the state constitution reserving the power to alter, amend, and repeal charters and franchises.

Minnesota Rate Cases, 230 U. S. 352, followed to the effect that the establishment of railroad rates wholly intrastate by a state Railroad Commission is not an unwarrantable interference with, or a regulation of, interstate commerce.

In an equity suit by a carrier against the members of a state railroad commission to restrain enforcement of a rate order under a statute which provided for awards of reparation for failure to comply with the order, the court should not pass upon the validity of any of such award made to parties not before the court.

186 F.1d 6 affirmed.

The facts, which involve the constitutionality under the Constitution of Kentucky and also under the Constitution of the United States of the state Railroad Commission Statute of Kentucky and the legality of orders made by the Commission, are stated in the opinion. chanrobles.com-red

Page 231 U. S. 301


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