Source: https://supreme.justia.com/cases/federal/us/270/466/
Timestamp: 2019-04-26 05:41:52+00:00

Document:
1. A construction of a statute which makes its constitutionality doubtful is to be avoided if possible. P. 270 U. S. 471.
2. Section 208(a) of the Transportation Act, 1920, provided (1) that all rates, fares and charges, and all classifications, regulations and practices in any wise changing, affecting, or determining any part or the aggregate of rates, fares or charges, or the value of the service rendered which, on February 29, 1920, were in effect on lines of carriers subject to the Interstate Commerce Act, should continue in force until "thereafter" changed by state or federal authority, or pursuant to authority of law; (2) that, prior to September 1, 1920, no such rate, fare, or charge should be reduced, and no regulation, etc., should be changed in such manner as to reduce any such rate, etc., unless such reduction or change were approved by the Interstate Commerce Commission.
(1) That a provision in a baggage tariff filed by the Director General of Railroads during federal control limiting liability for misdelivery of baggage is within the purview of this section. P. 270 U. S. 468.
(2) The primary purpose of the second clause was, by safeguarding rates, to protect the United States from liability on its six months' guaranty of a "standard return" to carriers when released from federal control. P. 270 U. S. 472.
(3) The purpose of the first clause was to remove doubts as to what tariffs were to be applicable after termination of federal control by declaring that the existing tariffs, largely initiated by the Director General, should be deemed operative except insofar as changed after February 29, 1920, pursuant to law. Pp. 270 U. S. 472, 270 U. S. 475.
of trunk after September 1, 1920, were governed by the state statute. P. 270 U. S. 476.
263 S.W. (Mo.) 495 affirmed.
Certiorari to a judgment of the St. Louis Court of Appeals affirming a judgment against the railroad for the full value of baggage which it failed to deliver to Boone, an intrastate passenger.
§ 208(a) of Transportation Act Feb. 28, 1920, c. 91, 41 Stat. 456, 464, this limitation had remained in force as applied to intrastate commerce, because the provision for unlimited liability contained in § 9941 of the Missouri Revised Statutes had not been reenacted after the termination of federal control.
"All rates, fares, and charges, and all classifications, regulations, and practices, in any wise changing, affecting, or determining, any part or the aggregate of rates, fares, or charges, or the value of the service rendered, which on February 29, 1920, are in effect on the lines of carriers subject to the Interstate Commerce Act shall continue in force and effect until thereafter changed by state or federal authority, respectively, or pursuant to authority of law; but, prior to September 1, 1920, no such rate, fare, or charge shall be reduced, and no such classification, regulation, or practice shall be changed in such manner as to reduce, any such rate, fare, or charge unless such reduction or change is approved by the Commission."
The trial court entered judgment for $1,000 and interest. The judgment was affirmed by the St. Louis Court of Appeals, the highest court of the state in which a decision in the suit could be had. 263 S.W. 495. The court held that, under the law of Missouri, misdelivery of the trunk was a conversion which rendered the carrier liable for its full value, and that the state law governed, because the journey was intrastate. This Court granted a writ of certiorari. 266 U.S. 600. Under the federal law, misdelivery is not deemed a conversion depriving a carrier of the benefit of the provision limiting liability. American Railway Express Co. v. Levee, 263 U. S. 19. The sole question for decision is the construction and effect to be given § 208(a).
legislation by the state on the subject after the termination of federal control. The state had confessedly power to restore the full statutory liability as applied to intrastate commerce unless the Interstate Commerce Commission should, for the purpose of preventing discrimination against interstate commerce, issue an order under Transportation Act 1920 to the contrary. See Wisconsin Railroad Commission v. Chicago, Burlington & Quincy R. Co., 257 U. S. 563; New York v. United States, 257 U. S. 591. There was no such order. Compare Chicago, Milwaukee & St. Paul Ry. Co. v. Public Utilities Commission, 242 U. S. 333. The precise question is whether the state provision, which had been suspended by the filing of the tariffs of the Director General, became operative on September 1, 1920, without reenactment, or whether affirmative action by the state after February 29, 1920, was necessary to restore the full liability theretofore created by its statute and which it had not repealed. The analogy of state insolvent laws suspended by the enactment of a bankruptcy act, and again becoming operative upon its repeal, was relied upon. See Tua v. Carriere, 117 U. S. 201; Butler v. Goreley, 146 U. S. 303.
constitutional question. Under the settled practice, a construction which does so will not be adopted where some other is open to us. United States v. Delaware & Hudson Co., 213 U. S. 366, 213 U. S. 408; Federal Trade Commission v. American Tobacco Co., 264 U. S. 298, 264 U. S. 307. An examination of the section in the light of the then existing federal and state law will make clear that another and reasonable construction is open to us, and that it should prevail.
Section 208(a) contains two clauses. Each was to take effect immediately. Each dealt with rates, fares, charges, classifications, regulations and practices. But, in purpose, character, and scope, the two clauses differ widely. The primary purpose of the second clause was to protect the United States from liability on its guaranty to the carriers of the standard return. It sought to do so by prohibiting any reduction of rates, fares, or charges without the consent of the Interstate Commerce Commission. The prohibition applied alike to intrastate and to interstate rates. It extended to reductions made by the carriers, as well as to those made by the states. But the prohibition was limited to reductions. Increases might be made. The prohibition was confined to the first six months after the surrender of the railroads to their owners, because the government guaranty was limited to that period.
Act. It was important that carriers and the public should know whether, and to what extent, these changed rates, fares, charges, classifications, regulations, and practices would continue in force after the return of the railroads to their owners. This information the first clause supplied by specifying what tariffs were applicable. To facilitate the conduct of business by this means was an appropriate exercise of the power of Congress. To have undertaken to do so by means of abrogating all rates, fares, and charges established by the several states in respect to intrastate commerce, and all classifications and regulations affecting them, would not have been. It is not lightly to be assumed that Congress would have resorted to means so extraordinary for securing workable tariffs.
have restored, as of September 1, 1920, its rates, fares, and charges and all classifications, regulations, and practices affecting them no matter what change the Director General had made. In those states where the ratemaking power was vested in a regulatory body in continuous session, a like result could have been attained through a single order. On the other hand, in those states where the local law did not permit such prompt action by the ratemaking authority, the restoration of rates by state action would necessarily have been deferred. It is not to be assumed that Congress intended to adopt a means of protection which would have been indirect, fortuitous, and largely futile, and which would obviously have produced such inequalities among the states, when direct, certain, and better means of protection were available.
Moreover, there was no purpose in Congress to maintain in force, after the expiration of the six months' guaranty period, either the interstate or the intrastate rates which had been established by the Director General. It was recognized when Transportation Act 1920 was enacted that these were not high enough to yield to the carriers adequate revenues. Means of increasing them were specifically provided by those sections of Transportation Act 1922 which prescribe the essentials of a fair return and empower the Commission, upon notice to the states and with their cooperation, to prevent discrimination against interstate commerce resulting from unduly low intrastate rates, fares, and charges. See §§ 415, 416, and 422. Proceedings were in contemplation by means of which it was proposed to establish largely increased rates on the expiration of the government's guaranty, September 1, 1920. The order for such general increase made by Ex parte 74, Increased Rates, 1920, 58 I.C.C. 220, on July 29, 1920, followed extensive hearings in which commissions representing the states participated.
Proceedings were instituted in the states before September 1, 1920, to secure corresponding increases of the intrastate rates. And further proceedings were had before the federal commission to remove obstacles to increases of the intrastate rates which existed in same of the states. [Footnote 4] The six months' prohibition of reductions provided for by the second clause of § 208(a) afforded carriers and the Interstate Commerce Commission ample opportunity to take such action as might be deemed advisable for carrying out the new policy established by Transportation Act 1920.
Even under Transportation Act 1920, the power inheres in the carriers to initiate increases or decreases of rates, fares, and charges, subject, of course, to the control of the appropriate regulatory body. Increases or decreases of interstate rates may, without action by the Interstate Commerce Commission, become operative after 30 days' notice by the simple act of filing, unless the Commission suspends them. See Interstate Commerce Act, § 6(3) and § 15(7). The power of the carrier to initiate intrastate rates, fares, and charges is even broader in many states. See William E. McCurdy, "The Power of a Public Utility to Fix its Rates and Charges in the Absence of Regulatory Legislation," 38 Harv.Law Rev. 202.
Compare Willamette Valley Lumbermen's Assn. v. Southern Pacific Co., 51 I.C.C. 250; Johnston v. Atchison, Topeka & Santa Fe Ry. Co., 51 I.C.C. 356, 361; California Canneries Co. v. Southern Pacific Co., 51 I.C.C. 500; Natchez Chamber of Commerce v. Louisiana & Arkansas Ry. Co., 52 I.C.C. 105, 130; Public Service Commission of Washington v. Alabama & Vicksburg Ry. Co., 53 I.C.C. 1; Illinois Coal Traffic Bureau v. Director General, 56 I.C.C. 426, 431; Utilities Development Corp. v. Pittsburgh, Cincinnati, Chicago & St. Louis Ry. Co. et al., 56 I.C.C. 694; American Wholesale Lumber Assn. v. Director General, 66 I.C.C. 393, 396; Alabama Co. v. Director General, 78 I.C.C. 561.
See General Order No. 28, issued May 25, 1918, U.S. Railroad Administration Bulletin No. 4 (Revised), p. 285; reduced tariff rates on building materials, April 11, 1919, Supplement to Bulletin, p. 25. "The rates were made by filing the tariffs with the commission. The orders were directions of the Director General to his officials." Compare Atlantic Coast Line Ry. Co. v. Railroad Commission of Georgia, 281 F. 321, 325; Anaconda Copper Mining Co. v. Director General, 57 I.C.C. 723, 726; Lehigh Valley Coal Co. v. Director General, 69 I.C.C. 535, 539.
See Annual Report of the Interstate Commerce Commission, December 1, 1920, pp. 6-10; Rates, Fares, and Charges of New York Central R. Co., 59 I.C.C. 290; Intrastate Rates within Illinois, 59 I.C.C. 350; Wisconsin Passenger Fares, 59 I.C.C. 391; Wisconsin Railroad Commission v. Chicago, Burlington & Quincy R. Co., 257 U. S. 563; New York v. United States, 257 U. S. 591; In re Steam Railroads, P.U.R.1920F, 7; In re Northern P. Ry. Co., P.U.R.1920F, 11; In re Railroads, P.U.R.1920F, 17; In re Railroads, P.U.R.1920F, 33; In re Freight Rates of Carriers, P.U.R.1921A, 399.

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