Source: https://supreme.justia.com/cases/federal/us/295/330/
Timestamp: 2019-04-21 15:03:42+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 295 › Railroad Retirement Board v. Alton Railroad Co.
1. The power of Congress to regulate interstate commerce is subject to the guaranty of due process in the Fifth Amendment. P. 295 U. S. 347.
2. A railroad's assets, though dedicated to public use, remain the private property of its owners, and cannot be taken without just compensation. P. 295 U. S. 357.
3. There is no warrant for taking the property or money of one interstate carrier and transferring it to another without compensation, whether the object of the transfer be to build up the transferee or to pension its employees. P. 295 U. S. 357.
4. A declaration in a statute that invalid provisions shall not operate to destroy it entirely creates a presumption of severability, but cannot empower the court to rewrite the statute and give it an effect altogether different from that sought by the measure viewed as a whole. P. 295 U. S. 361.
5. The Railroad Retirement Act of June 27, 1934, is unconstitutional because it contains inseverable provisions that violate the due process clause, and because it is not, in purpose or effect, a regulation of interstate commerce within the meaning of Art. I, § 8. Pp. 295 U. S. 347, 295 U. S. 362.
(1) All persons who were in carrier service within one year prior to the passage of the Act (about 146,000) would be entitled under it to pensions, whether reemployed or not. Among them would be those who had been discharged for cause, or had been retired, or had resigned to the other gainful employment, or whose positions had been abolished, or whose employment was temporary. These person were not in carrier service at the date of the Act, and it is certain thousands of them never again will be. To place such a burden upon the carriers is arbitrary in the last degree, and the claim that such largess would promote efficiency or safety in the future operation of the railroads is without rational support. P. 295 U. S. 348.
(2) If any one of the million or more living persons who left the service more than a year before the date of the Act were reemployed by any carrier at any time, for any period, and in any capacity, his prior service would count, under the Act, in computing the annuity payable upon his attaining 65 years of age. This provision would impose vast future burdens never contemplated by the earlier contracts of employment, and would take from the railroads' future earnings to pay for services already fully compensated; as to some of the railroads, it constitutes a naked appropriation of private property upon the basis of transactions with which the owners of the property were never connected. The contention that economy, efficiency, or safety of operation would be thereby increased is without rational basis. P. 295 U. S. 349.
(3) Upon attaining 65 years of age, any person who had been in carrier service, however briefly, and even though he had been discharged for speculation or gross negligence, would be entitled to a pension. In thus substituting legislative largess for private bounty, the Act, instead of improving the kind of "morale" among the employees which works for efficiency, loyalty, and continuity of service, would surely destroy it. P. 295 U. S. 351.
having contributed to the fund. This enormous exaction is plainly irrelevant to efficiency and safety of operation. The claim that it would prevent incompetent men being kept in service is a bare assumption, without evidence to support it. P. 295 U. S. 352.
(5) The Act would allow any employee who had served 30 years to retire on pension (reduced 1/15 for each year he lacked of 65), without regard to his competency, and wholly at his own option. This again adds to the carriers' burden without promoting economy, efficiency, or safety of their operations. P. 295 U. S. 352.
(6) The Act would credit those who were in carrier employment at the date of its passage with their past service without requiring them to make corresponding contribution. There can be no constitutional justification for thus arbitrarily imposing upon the carriers vast additional liabilities in respect of transactions which were long ago closed and fully paid for on a basis of cost to which the carriers' rates and their fiscal affairs were adjusted. P. 295 U. S. 353.
(7) The provision entitling representatives of employee organizations to retire from carrier service and receive pensions by paying in future amounts equal to the sum of the contributions of an employee and of an employer is arbitrary and unreasonable. P. 295 U. S. 354.
(8) The scheme of pooling the contributions of all the carriers and treating all as though there were one employer operates unconstitutionally (a) by discrimination against carriers having relatively few, if any, superannuated employees (p. 295 U. S. 355); (b) by requiring solvent carriers to contribute for employees of the insolvent (p. 295 U. S. 356); (c) by forcing carriers to pay for past service of employees of carriers no longer in existence (p. id.), and (d) by forcing them to insure repayment, to employees or their estates, of the amounts of the employees' contributions (p. id.).
(9) The provisions of the Act which disregard the private and separate ownerships of the several carriers, treat all as a single employer, and pool their assets regardless of their individual obligations and of the varying conditions found in their respective enterprises cannot be reconciled with due process of law. P. 295 U. S. 357.
have obviously no reasonable relation to the business of interstate transportation. P. 295 U. S. 362.
(11) As for the other declared purpose -- viz., to promote efficiency and safety in interstate transportation -- it is clear from overwhelming evidence and from the face of the Act that, though the plan might bring about social benefits to employees, it can have no relation to the promotion of efficiency, economy, or safety by separating the unfit from the industry. P. 295 U. S. 363.
(12) The power of Congress to regulate interstate commerce at the expense of the carriers cannot be extended to regulations related merely to the social welfare of the worker upon the theory that, by engendering contentment and a sense of personal security, they will induce more efficient service. P. 295 U. S. 367.
(13) Safety Appliance Acts, Employers' Liability Acts, and Workmen's Compensation Acts afford no precedent or justification for the Act here in question, which seeks to attach to the relation of employer and employee a new incident, without reference to any existing obligation or legal liability, solely in the interest of the employee, with no regard to the conduct of the business or its safety or efficiency, but purely for social ends. P. 295 U. S. 368.
(14) Assuming that a pension system established voluntarily by a carrier may, by exciting the loyalty of employees, promote efficiency and continuity in service, it is palpable that this attitude and those effects are destroyed when the pension becomes an imposition planned by Congress and forced upon all employers in favor of all employees, without regard to how long they have served, or how long for any one employer. P. 295 U. S. 371.
(15) The fact that carriers, for their own purposes, have adopted voluntary pension systems cannot extend the power to regulate interstate commerce, and thus enable Congress to compel all carriers to accept any pension system it devises. P. 295 U. S. 373.
This Court has repeatedly had occasion to say that the railroads, though their property be dedicated to the public use, remain the private property of their owners, and that their assets may not be taken without just compensation. [Footnote 7] The carriers have not ceased to be privately operated and privately owned, however much subject to regulation in the interest of interstate commerce. There is no warrant for taking the property or money of one and transferring it to another without compensation, whether the object of the transfer be to build up the equipment of the transferee or to pension its employees.
claim is that, in fixing carrier contributions, any attempt to give consideration to difference in age, classification, and service periods of employees would involve grave administrative difficulties and unduly increase the cost of administration. With these considerations in view, the petitioners urge that our decisions sanction the exercise of the power involved in the pooling feature of the statute. They rely upon the New England Divisions Case, 261 U. S. 184. That case, however, dealt purely with rates, and, while the policy of awarding a larger share of the division of a joint rate to the weaker carrier, in consideration of its need for revenue, was approved, the approval was definitely conditioned upon the circumstance that the share or division of the joint rate awarded to the stronger carrier was not so low as to require it to serve for an unreasonable rate. Thus, the principle that Congress has no power to confiscate the property of one carrier for the benefit of another was fully recognized.
Dayton-Goose Creek R. Co. v. United States, 263 U. S. 456, approved the provision of the Transportation Act 1920 which required the carriers to contribute one-half of their excess earnings to a revolving fund to be used by the Interstate Commerce Commission for making loans to carriers to meet capital expenditures and to refund maturing obligations, or to purchase equipment and facilities which might be leased to carriers. This case is relied upon as sustaining the principle underlying the Pension Act, but we think improperly. The provision was sustained upon the ground that it must be so administered as to leave to each carrier a reasonable return upon its property devoted to transportation, and the holding is clear that, if this principle were not observed in administration, the Act would invade constitutional rights.
the law as a whole. [Footnote 8] Such a declaration provides a rule which may aid in determining the legislative intent, but is not an inexorable command. Dorchy v. Kansas, 264 U. S. 286. It has the effect of reversing the presumption which would otherwise be indulged, of an intent that, unless the Act operates as an entirety, it shall be wholly ineffective. Williams v. Standard Oil Co., 278 U. S. 235, 278 U. S. 242; Utah Power & Light Co. v. Pfost, 286 U. S. 165, 286 U. S. 184. But, notwithstanding the presumption in favor of divisibility which arises from the legislative declaration, we cannot rewrite a statute and give it an effect altogether different from that sought by the measure viewed as a whole. Compare Hill v. Wallace, 259 U. S. 44, 259 U. S. 70. In this view, we are confirmed by the petitioners' argument that, as to some of the features we hold unenforceable, it is "unthinkable" and "impossible" that the Congress would have created the compulsory pension system without them. They so affect the dominant aim of the whole statute as to carry it down with them.
"Experience seems to have proved, moreover, that older workers cause fewer accidents than do younger; hence there is little necessity for removing them on that ground. [Footnote 10]"
The Safety Appliance Acts, the Employers' Liability Acts, hours of service laws, and others of analogous character, cited in support of this Act, have a direct and intimate connection with the actual operation of the railroads. No less inapposite are the statutes which deal with exchange of facilities, joint facilities, joint rates, etc. For these have an obvious and direct bearing on the obligations of public service incident to the calling of the railroads. The railway labor act was upheld by this Court upon the express ground that to facilitate the amicable settlement of disputes which threatened the service of the necessary agencies of interstate transportation tended to prevent interruptions of service, and was therefore within the delegated power of regulation. It was pointed out that the Act did not interfere with the normal right of the carrier to select its employees or discharge them. Texas & New Orleans R. Co. v. Railway Clerks, 281 U. S. 548, 281 U. S. 570-571. The legislation considered in Wilson v. New, 243 U. S. 332, was drafted to meet a particular exigency, and its validity depended upon circumstances so unusual that this Court's decision respecting it cannot be considered a precedent here.
See Gibbons v. Ogden, 9 Wheat. 1, 22 U. S. 196-197; Monongahela Navigation Co. v. United States, 148 U. S. 312, 148 U. S. 336; Lottery Case, 188 U. S. 321, 188 U. S. 362-363; United States v. Chicago, M., St. P. & P. R. Co., 282 U. S. 311, 282 U. S. 327.
When the question is whether the Congress has properly exercised a granted power, the inquiry is whether the means adopted bear any reasonable relation to the ostensible exertion of the power. Mugler v. Kansas, 123 U. S. 623, 123 U. S. 661; Hammer v. Dagenhart, 247 U. S. 251, 247 U. S. 276; Bailey v. Drexel Furniture Co., 259 U. S. 20, 259 U. S. 37. When the question is whether legislative action transcends the limits of due process guaranteed by the Fifth Amendment, decision is guided by the principle that the law shall not be unreasonable, arbitrary, or capricious, and that the means selected shall have a real and substantial relation to the object sought to be attained. Nebbia v. New York, 291 U. S. 502, 291 U. S. 525.
Interstate Commerce Commission v. Oregon-Washington R. Co., 288 U. S. 14, 288 U. S. 40, and cases cited.
And the exercise of the power thus broadly defined has had the widest range in dealing with railroads, which are engaged as common carriers in interstate transportation. As their service is vital to the nation, nothing which has a real or substantial relation to the suitable maintenance of that service, or to the discharge of the responsibilities which inhere in it, can be regarded as beyond the power of regulation. The Shreveport Case, 234 U. S. 342, 234 U. S. 351; Dayton-Goose Creek Ry. Co. v. United States, 263 U. S. 456, 263 U. S. 478; Colorado v. United States, 271 U. S. 153, 271 U. S. 163-164; New York Central Securities Corp. v. United States, 287 U. S. 12, 287 U. S. 24-25.
suffers from a failure to meet the reasonable demands of justice. An absolute duty to furnish safety appliances has been imposed, restrictions of hours of continuous service have been prescribed, standards of a day's work have been established for work and wages, the liability of carriers for injuries to employees has been regulated by the abrogation of the fellow servant rule and the limitation of defenses as to contributory negligence and assumption of risk, and provisions have been enacted to facilitate the amicable settlement of disputes and to protect employees in their freedom to organize for the purpose of safeguarding their interests. St. Louis, I.M. & S. R. Co. v. Taylor, 210 U. S. 281; Baltimore & Ohio R. Co. v. Interstate Commerce Comm'n, 221 U. S. 612; Wilson v. New, 243 U. S. 332; Texas & New Orleans R. Co. v. Railway Clerks, 281 U. S. 548.
See Stephenson v. Binford, 287 U. S. 251, 287 U. S. 272.
railroad employees, 90% of those employed in cable, telephone, and telegraph companies, and about one-half of those in the service of electric railways, light, heat, and power companies under formal pension plans, [Footnote 2/1] with the extensive recognition by national, state and local governments of the benefit of retirement and pension systems for public employees in the interest of both efficiency and economy, [Footnote 2/2] it is evident that there is a widespread conviction that the assurance of security through a pension plan for retired employees is closely and substantially related to the proper conduct of business enterprises.
outstanding national importance, might well be considered as an additional reason for the adoption of a compulsory plan. Wilson v. New, supra, pp. 243 U. S. 347-348. There was also testimony (by Mr. Eastman) that "the experience with the voluntary pension systems has been unsatisfactory," that "the depression brought clearly to light their many weaknesses and uncertainties."
Id., p. 243 U. S. 244. We followed the reasoning which had led to the upholding of state laws imposing assessments on state banks generally in order to create a guaranty fund to make good the losses of deposits in insolvent banks. Noble State Bank v. Haskell, 219 U. S. 104. See Abie State Bank v. Weaver, 282 U. S. 765.
Id., pp. 261 U. S. 189-191.
This object of adequately maintaining the whole transportation system may be served in more than these two ways. The underlying principle is that Congress has the power to treat the transportation system of the country as a unit for the purpose of regulation in the public interest, so long as particular railroad properties are not subjected to confiscation. In the light of that principle, and of applications which have been held valid, I am unable to see that the establishment of a unitary system of retirement allowances for employees is beyond constitutional authority. Congress was entitled to weigh the advantages of such a system, as against inequalities which it would inevitably produce, and reach a conclusion as to the policy best suited to the needs of the country. See Atlantic Coast Line R. Co. v. Riverside Mills, 219 U. S. 186, 219 U. S. 203; Railroad Commission v. Southern Pacific Co., 264 U. S. 331, 264 U. S. 343-344.
be a part of it are based upon the limitations of that statute, and do not define the scope of constitutional authority as to employees of interstate carriers. Illinois Central R. Co. v. Behrens, 233 U. S. 473, 233 U. S. 477; Chicago & Northwestern Ry. Co. v. Bolle, 284 U. S. 74, 284 U. S. 78.

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