Earl Warren: Mr. Grossman, you may continue.
Joseph F. Grossman: Mr. Chief Justice, may it please the Court. The question before this Court is whether the Commerce Clause of the Constitution, invoked by our respondents in defense of the right of transfer to operate motor vehicles for compensation in the City of Chicago without a license, should have been considered by the courts below before the exhaustion of state administrative and judicial remedies to determine whether the public convenience and necessity provisions of the 1955 ordinance are applicable to Transfer's operations. The Commerce Clause became the decisive issue in the Court of Appeals on the assumption that the standards for determining whether public convenience and necessity require additional terminal vehicle service, apply to Transfer's operation and were intended to grant Parmelee a monopoly of the use of the city streets for interstation transportation service. I refer to the opinion of the Court which is attached to the petition for -- petition for certiorari and on page 50 where the Court said, “We are convinced that those provisions that is in Section 28-31.1, which would, in effect, limit the number of terminal vehicle licenses to those held by Parmelee on July 26, 1955, and give Parmelee perpetual control thereof, constitute a designation of Parmelee by the counsel of the city, in lieu of Transfer, the instrumentality selected by the terminal lines rather than the exercise of the City's police power over traffic. In this critical aspect, the 1955 ordinance is invalid. If there were any doubt that this conclusion is correct, the legislative history of the ordinance dispels that doubt.
Speaker: Could I ask you a question at this point?
Joseph F. Grossman: Yes.
Speaker: I want to get myself focused. The effect of this ordinance, as I understand it, was on the one hand to make Parmelee eligible for an interstation license which it would not have been eligible -- which it would not have been eligible under the preceding ordinance. And in converse to require Transfer to obtain a license before it could operate under its contract with terminals, is that right?
Joseph F. Grossman: No, I could -- you have it turned around. The purpose of the new ordinance, the 1955 ordinance, which was an amendment of an old ordinance by which Parmelee did have a contract for the railroads to perform this interstation service in intrastate and interstate commerce. It was amended so that the Parmelee operation became a -- a local transportation service only. That is to carry passengers for cash fares from railroad stations or steamships dock to any place within the City of Chicago - within the central business district of the City of Chicago. And the Transfer operation was by contract with the railroads exclusively for the transfer of passengers between stations, to carry railroad passengers between these stations while on a -- on a through route ticket and a thoroughfare ticket.
Speaker: But under the --
Joseph F. Grossman: Do I make myself clear?
Speaker: But under the old ordinance, the old ordinance --
Joseph F. Grossman: Under the old ordinance --
Speaker: -- Transfer would not have had to get a license from the city.
Joseph F. Grossman: No.Under the old ordinance, Transfer -- Transfer couldn't get a license because railroad -- the railroads had an exclusive contract with Parmelee. They had an exclusive contract with Parmelee but the contract was not exclusively for the transfer of passengers.
Speaker: That was cancelled.
Joseph F. Grossman: That was cancelled.
Speaker: Let me put it this way. I'm still confused. I thought under the old ordinance, a carrier that a company that was simply carrying interstation passengers was not subject to any city regulation under the old ordinance.
Joseph F. Grossman: Yes, they were.
Speaker: They were.
Joseph F. Grossman: Parmelee was under -- Parmelee was under the city regulation and had city licenses.
Hugo L. Black: And had a contract with the railroad.
Joseph F. Grossman: And had a contract with the railroad.
Speaker: So doing both?
Joseph F. Grossman: Doing -- doing both. Yes.
Charles E. Whittaker: Parmelee did both a transportation of -- of passengers between terminals --
Joseph F. Grossman: That's right.
Charles E. Whittaker: Well as a local business to hotels.
Joseph F. Grossman: That's correct.
Charles E. Whittaker: And the amendment really consists of the elimination of the phrase “having a contract with the railroad”.
Joseph F. Grossman: That's correct.
Earl Warren: Mr. Grossman, would it bother you to -- to give a short recital of the facts chronologically here so we could all -- all be oriented? I think it's obvious that we're -- that we're not quite oriented on the facts.
Joseph F. Grossman: All right. Yesterday, I attempted to describe the operations of terminal vehicles by Parmelee from railroad terminal to any destination in the central business district of Chicago pursuant through licenses under a city ordinance before and after amendment in July 1955. Passengers were accepted by Parmelee for such transportation indiscriminately upon surrender of a coupon issued by a railroad for transfer between terminals or upon payment of the cash fare without identification as railroad passengers. Since Transfer was substituted for Parmelee under the contracts with the railroads, exclusively for the transfer of railroad passengers between terminal stations on through route tickets or coupons. Transfer commenced operations under its contracts without application for a license. That was -- that's the situation as it is today. Now, the power of the City to exercise its local police powers in the regulation of Transfer's operations is conceded by all concerned. And in the opinion of the Court of Appeals on page 52 of the petition for certiorari is a quotation from the opinion of the Court of Appeals where the Court of Appeals said, “Highways, being public property, users of them, although engaged exclusively in interstate commerce, are subject to regulation by the State or municipality to ensure safety and convenience, and the conservation of the highways." Now, the Court relied upon the history of the legislation to show that what the intention of the City Council was, was to grant to Parmelee a perpetual and exclusive right to perform the service which Transfer is now performing without a license. And the facts are, however, the referent part was to proceedings before the committee of the City Council at the time the ordinance was introduced. On page 90 to 92 is a correct transcript of the proceedings by court reporters as to what happened at the time of the introduction of an ordinance which originally was a grant or a franchise -- a special franchise to Parmelee, exclusively for the transfer of passengers to and from terminal stations, that's on page 85, and exclusive permission and authority was granted for a period of 10 years. Now, I went before the Committee and my remarks were misinterpreted, I think, by the Court of Appeals and by the clerk who took the minutes of the meeting down. I said that the ordinance, that is the franchise ordinance, was presented to me for consideration and I examined it very carefully, and that I don't think that it is within the corporate power of the City of Chicago, but that the objective could be obtained in some other way. Now then later on on page 92, the questions were asked by some of the older men, one of them -- one question was, “Do I understand that terminal vehicles embrace those vehicles that operate between railroad stations?” The Chairman said, “Yes.” But I said, “No, it is not.” The operation from railroad stations to points within the central business district, which is defined as the area bounded on the north by Ohio Street, and on the south by Roosevelt Road, and the Lake on the east, and Canal Street on the west, is in the railroad terminal area but it isn't necessarily between railroad stations. It may go from railroad stations to hotels and from hotels to railroad stations. That is the operation and that operation can be continued by amendments to the present ordinance without conflicting with any of the statutory provisions. Now, the purpose of the amendment which I drafted as a substitute for the franchise ordinance was an annual license fee to permit them to operate as a local transportation facility only. And that operation was what was in -- what was -- what the ordinance that was drafted as a substitute for the franchise ordinance was intended. I don't know whether I said --
William J. Brennan, Jr.: When you say to permit “them” to operate, whom do you mean? Transfer?
Joseph F. Grossman: Parmelee. To permit them to operate only at a local transportation facility.
William J. Brennan, Jr.: That is not --
Joseph F. Grossman: Same as taxicabs.
William J. Brennan, Jr.: Not between terminals necessarily.
Joseph F. Grossman: Not necessarily between terminals and between terminals on a cash basis. In other words, the -- the passenger in the -- in the Parmelee vehicle would direct the Parmelee driver where he wants to go. He'd pay him a cash fare. If he wanted to go to another station, it was his choice. He could have selected a Parmelee vehicle. He could have selected -- he could have selected a taxicab or a street car or any other available vehicle to make either the transfer or to go to a hotel or any other place in which the passenger directed him to go.
Hugo L. Black: What happened to Parmelee's pay ride or his coupon? Could he use that in Parmelee?
Joseph F. Grossman: He used -- they -- if there was a coupon prior to the amendment of 1955, I think that the coupon was accepted by Parmelee either to transfer him to a station or transfer him to a hotel.
Hugo L. Black: And after the new ordinance, then what?
Joseph F. Grossman: After the new ordinance, he had no such things. They had no coupons.
Hugo L. Black: The coupon was -- would that be good with Transfer?
Joseph F. Grossman: The coupon -- the coupon would be good for Transfer? Yes.
Hugo L. Black: But not for Parmelee.
Joseph F. Grossman: Not for Parmelee.
Charles E. Whittaker: Mr. Grossman, may I ask you, please? Are we here concerned now with what Parmelee may do? Are we not now concerned with what Transfer may do? Isn't that what's involved in this case?
Joseph F. Grossman: Yes, that's what involved. That's what's involved.
Charles E. Whittaker: You -- you contend, as I understand now, maybe I do not correctly understand, that Chicago has the right to refuse a license to Transfer to conduct as a carrier between these terminals interstate commerce.
Joseph F. Grossman: No, I do not say that. I say that Chicago has no right to refuse a license if a license were applied or if they are subject to the ordinance, they -- the license should be issued. The question is, are they subject to the ordinance? It's a question of the construction of the ordinance and not -- there's no constitutional question involved.
Charles E. Whittaker: I see. Assume that they are subject to the ordinance, then, does not the ordinance say that before the license can be issued, Chicago must find public convenience and necessity?
Joseph F. Grossman: No. The -- that part of the ordinance of public convenience and necessity is strictly applicable to a local transportation facility. It cannot be applied to an operation which is exclusively in the interstate commerce on a through ticket.
Charles E. Whittaker: Isn't that all --
Joseph F. Grossman: And that was the intention of that -- of that provision.
Felix Frankfurter: Aren't you urging that we don't know what the ordinance requires?
Joseph F. Grossman: I'm --
Felix Frankfurter: How can you be so sure in telling us what it does require?
Joseph F. Grossman: Because it's the -- it's the same kind of a provision which is applicable to taxicabs in the City of Chicago. And when this Court said that in the case of U.S. versus Yellow Cab Company, when the Supreme Court said that the Parmelee operation was subject to the Sherman Act to the trust -- Antitrust Act because it was in the interstate commerce, but the Yellow Cab Companies were not, because the passengers had a choice. It was just -- it was just a local transportation. In the same case in that, U.S. against Yellow Cab Company, when the ordinance was passed to make Parmelee an operator the same as the Yellow Cab except with this limitation that they -- they could operate only within the central business district whereas, the Yellow Cab Company could operate throughout the City of Chicago. The -- it was -- it became necessary to limit the operations by this provision for determining whether public convenience and necessity required the additional service, the additional local service, I say, or whether the traffic conditions would permit additional service of the kind and character applied for. And I say that that 28-31, public convenience and necessity provision is applicable, it must be construed -- it must be construed as constitutional, if possible. And I say that for the state court to determine -- the state court should determine -- the state court should determine whether the provision limiting the number of vehicles to be operated in interstation service should -- is applicable in the light of any constitutional question which may be raised.
Felix Frankfurter: Didn't I understand you to urge that the federal -- the federal courts have no business to strike down, if unconstitutional, an ordinance or any other act of legislation of a state if there is any doubt about a construction being given to it or has not yet been given to it by state court.
Joseph F. Grossman: Certain --
Felix Frankfurter: And therefore suggesting that --
Joseph F. Grossman: I think --
Felix Frankfurter: -- we better stick to that and not know what a construction is.
Joseph F. Grossman: I -- I think, Your Honor, stated it more clearly than I probably could. That's -- that's the entire case. I've said -- I've -- I tried to say that and perhaps I was -- I haven't been --
Felix Frankfurter: You didn't --
Joseph F. Grossman: -- as clear as I should have been.
Felix Frankfurter: I'm not sure that does it follow because an enterprise is subject to the Sherman law as being within the requirement of interstate commerce under the Sherman law that therefore, the State is wholly supplanted in making any regulations and other relation?
Joseph F. Grossman: No, I don't --
Felix Frankfurter: Any equation between amenability to the Sherman law in exclusion of state action?
Joseph F. Grossman: I don't --
Felix Frankfurter: I haven't thought so.
Joseph F. Grossman: I don't -- I don't think (Voice Overlap) -- I don't think that it goes that far, yet. I think -- I think Your Honor is right that the facts that they are subject to criminal prosecution under the antitrust laws and the operation is partly in interstate commerce.It doesn't follow that the operation is not subject to license by the City.
Felix Frankfurter: Well I'm not saying it is. All I'm saying is it doesn't follow.
Joseph F. Grossman: It doesn't follow. Yes, that's right.
Felix Frankfurter: The Sherman law excludes the State from action. It certainly doesn't exclude this from taxation. How do I know whether it's excluded on that if that isn't a -- an absolute proposition of law?
Joseph F. Grossman: This is purely regulation.
Charles E. Whittaker: Well, Mr. Grossman, may I bother you once more, please?
Joseph F. Grossman: Certainly.
Charles E. Whittaker: Did the Court of Appeals hold that Chicago couldn't require a license from Transfer?
Joseph F. Grossman: Yes. It held the ordinance for it.
Charles E. Whittaker: Well, it held that void only in that it -- you could not require it to apply for a certificate of convenience and necessity, isn't that right?
Joseph F. Grossman: No. It --
Charles E. Whittaker: But did -- didn't Judge Schnackenberg say that Chicago still had the right under its police powers to require a license?
Joseph F. Grossman: Correct.
Charles E. Whittaker: But he's merely held, did he not, as I understood the opinion, that you have no right to require the Transfer Company to apply for -- and go through the proceedings to obtain a certificate of convenience and necessity which they probably couldn't get.
Joseph F. Grossman: Yes. Well we have -- he held that we have no right to require it of Transfer Company.
Charles E. Whittaker: Yes.
Joseph F. Grossman: But we certainly have a right to require it and there is no reason why that section should have been held void, we have a right to require it of operators like Parmelee --
Charles E. Whittaker: To do --
Joseph F. Grossman: -- of local --
Charles E. Whittaker: To do a local business.
Joseph F. Grossman: To do a local business.
Charles E. Whittaker: But what about requiring it or denying it to one who is engaged exclusively in commerce?
Joseph F. Grossman: I agree that the ordinance does not -- that that provision of the ordinance, that section of the ordinance which Judge Schnackenberg held invalid and therefore held invalid all of the amendments in 1955, does not apply to Transfer operations.
Charles E. Whittaker: Will isn't on this (Voice Overlap)?
Joseph F. Grossman: The Transfer operations are still -- may still be subject to license.
Charles E. Whittaker: Didn't he say that?
Joseph F. Grossman: He said that.
Charles E. Whittaker: In that --
Joseph F. Grossman: He said that, but he said that it's -- it's subject to license under the old ordinance and he nullified the 1955 ordinance because of the -- of the provision, because of the provision that --
Charles E. Whittaker: Chicago had no right to require them to obtain a certificate --
Joseph F. Grossman: That's right.
Charles E. Whittaker: -- of convenience and necessity which they couldn't get.
Joseph F. Grossman: Yes. That's right.
Charles E. Whittaker: Is that all he said?
Joseph F. Grossman: Oh, he said a whole lot more than that.
Charles E. Whittaker: That's what he decided, isn't it?
Joseph F. Grossman: Yes, that's what he cited. The question -- and I say that the -- that the constitutional question is not in -- was not involved. It shouldn't have been involved. The sole question here and the -- and this respondent submitted the question. First, that the ordinance does not apply -- that the 1955 ordinance does not apply to Transfer. They contended that.
Felix Frankfurter: And you agree with that?
Joseph F. Grossman: And they said --
Felix Frankfurter: And you agree with it?
Joseph F. Grossman: I agree with it.
Felix Frankfurter: All right. Now, go on from there.
Joseph F. Grossman: And from there -- from there I say that -- that the judgment of the appellate court, the Court of Appeals in striking down the ordinance of 1955, because the public convenience and necessity provision is invalid which it is not, as applied to Parmelee or applied to any operator.
Charles E. Whittaker: How about as applied to Transfer?
Joseph F. Grossman: I say that it is -- it wasn't -- it does not apply to Transfer and that therefore, the ordinance should not have been held invalid --
Charles E. Whittaker: Is Transfer here --
Joseph F. Grossman: -- and there should have been no constitutional question --
Charles E. Whittaker: Is --
Joseph F. Grossman: -- as to whether that -- as to whether that provision of public convenience and necessity applies to Transfer is a question, I think, which is out of the case.
Felix Frankfurter: Is Transfer before us? Is Transfer --
Joseph F. Grossman: Certainly it is. Transfer is a party. And they claimed that the ordinance doesn't apply to them.
Felix Frankfurter: And you agree to that?
Joseph F. Grossman: The District Court said --
Felix Frankfurter: And you agree to that.
Joseph F. Grossman: I personally agree with that.
Felix Frankfurter: I don't know -- I don't know what that means personally if the City of Chicago --
Joseph F. Grossman: The City of Chicago takes a position that 28 at the Section 31-1 of the public convenience and necessity section applies to all local operations between railroad stations and any destination in the central business district of the City.
Charles E. Whittaker: Including --
Joseph F. Grossman: Not including --
Charles E. Whittaker: -- Transfer.
Joseph F. Grossman: Inclu -- including those that are not under contract for interstation transfer including those who do not travel on railroads on a through ticket.
Felix Frankfurter: Mr. Grossman, can you -- can we be clear about this thing because I'm not clear? This involved the lower court struck down an ordinance of 1955.
Joseph F. Grossman: That's right.
Felix Frankfurter: Transfer says it isn't within the ordinance and you agree to that, do you?
Joseph F. Grossman: Transfer is --
Felix Frankfurter: I think you said it is.
Joseph F. Grossman: Transfer is not within that ordinance.
Felix Frankfurter: All right. Then I do not understand that there's a litigation before the Court but if Transfer claims a right which you recognize, what is the contest as between Chicago and Transfer?
Joseph F. Grossman: The question is to whether Transfer should be licensed. Should have applied for a license and the --
Felix Frankfurter: Then that has nothing to do with 1955, does it?
Joseph F. Grossman: That has nothing to do with the 1955 ordinance.
Felix Frankfurter: All right. In your view. And is that the ordinance before us or there's some other ordinance?
Joseph F. Grossman: That's the ordinance before you. It was struck down.
Felix Frankfurter: Well it's struck down but the other ordinance, is that before us too?
Joseph F. Grossman: The other ordinance, say -- this wasn't a mandatory ordinance, the other ordinance is -- the other ordinance is applicable if this ordinance is -- if this ordinance is invalid. That is the other ordinance still has provision for licensing public passenger vehicles. And so, does the 1955 ordinance have provision for -- the question -- the question maybe put this way. It's claimed on one side that a terminal vehicle is -- that the definition of a terminal vehicle doesn't apply to Transfer. On the other side, in the case -- Parmelee, who was an intervener, claims that terminal -- the definition of terminal vehicle is broad enough to include Transfer. The contest was between these two companies.
Felix Frankfurter: But that isn't the case you're arguing, is it?
Joseph F. Grossman: I am -- I am -- yes, I'm arguing -- I'm arguing this case. I say that so far as public convenience and necessity are concerned, it is not applicable. This provision of the 1955 ordinance is -- is inapplicable to Transfer. But I say that the question of whether they are entitled to a license, whether they -- whether the ordinance provides for the licensing of Transfer vehicles, is one for the state courts to determine.
Felix Frankfurter: Did -- did the Court of Appeals pass on that question?
Joseph F. Grossman: No, it did not.
Felix Frankfurter: So that --
Joseph F. Grossman: It assumed that they were not -- that they didn't have to have a license.
Felix Frankfurter: So as I understand it, Transfer -- the position of Transfer under the 1955 Act is not a matter of controversy between you and Transfer, is that right?
Joseph F. Grossman: It isn't that.
Felix Frankfurter: And whatever other rights they may have, the lower court didn't pass on it. Is that right?
Joseph F. Grossman: The lower court said they didn't have to apply for a license because the 1955 ordinance was void. Void because Section 28-31.1 was invalid as an interference with interstate commerce. Now, I say that 28-31.1 is not invalid because it's applicable to local transportation and that the rest of the ordinance of 1955 is valid as applied to Transfer and as applied to -- to Parmelee if it is the terminal vehicle.
Felix Frankfurter: Well, as I understand you and you please correct me because I can assure you my head is foggy on this subject. As I understand you, the Court invalidated an ordinance because it couldn't be made applicable to transportation companies engaged in interstate commerce and you agree with that, that the ordinance doesn't apply to that. Is that right?
Joseph F. Grossman: No, I didn't say I agree with that. I --
Felix Frankfurter: I thought you said --
Joseph F. Grossman: I --
Felix Frankfurter: -- the ordinance --
Joseph F. Grossman: I --
Felix Frankfurter: -- is a matter of construction. It doesn't apply to Transfer. Is that right?
Joseph F. Grossman: I -- I agree that the provision requiring a determination of public convenience and necessity does not apply to Transfer. That's all I agreed to.
Felix Frankfurter: Because it is engaged in commerce.
Joseph F. Grossman: Because it is engaged ‘exclusively' --
Felix Frankfurter: In commerce.
Joseph F. Grossman: -- in interstate commerce.
Felix Frankfurter: And that is the ground on which the Court of Appeals found it invalid that it couldn't apply --
Joseph F. Grossman: That is the ground that have --
Felix Frankfurter: Is that right?
Joseph F. Grossman: It didn't find it invalid merely as to Transfer --
Felix Frankfurter: Well, I'm talking about Transfer for the moment just stick to that.
Joseph F. Grossman: I'm -- it didn't -- it -- it found the whole 1955 ordinance --
Felix Frankfurter: Yes, I understand that.
Joseph F. Grossman: -- invalid.
Felix Frankfurter: Yes. But so as far as Transfer is concerned, insofar as the invalidation was rested on the engaging in interstate commerce, you say the ordinance doesn't apply to Transfer, is that right?
Joseph F. Grossman: I say that section of the ordinance doesn't apply.
Felix Frankfurter: Yes.
Joseph F. Grossman: But the -- I -- I say there is -- they may still be required to secure a license in that.
Felix Frankfurter: Under some other -- under the prior ordinance.
Joseph F. Grossman: No, under this ordinance because this ordinance provides, let me -- let me read it to you.
Felix Frankfurter: Where is it, Mr. Grossman, so we can follow this?
Joseph F. Grossman: It's on page --
Felix Frankfurter: The court below knocked out the whole ordinance, did it? The entire ordinance, Mr. Grossman?
Joseph F. Grossman: The entire ordinance.
Felix Frankfurter: And the -- you agree that the -- insofar as invalidation was rested on interstate commerce, that was a gratuitous thing because the ordinance doesn't apply to that.
Joseph F. Grossman: That's right.
Felix Frankfurter: Now which section is knocked out for grounds other than commerce?
Joseph F. Grossman: Well, I'll read it from my -- from my note because I have it here. Here is what the ordinance -- the amendatory ordinance was. “Be it ordained by the City Council, Section 1. Section 28, one of the Municipal Court of Chicago has amended by striking the definition of terminal vehicle contained therein and substituting therefore the following - Terminal vehicle means a public passenger vehicle which is operated exclusively for the transportation of passengers from railroad terminal stations, and steamship docks, the points within the area defined in Section 28-31. And terminal vehicle shall not be used for transportation of passengers for hire except from railroad terminal stations and steamship docks to destinations in the central business area of the City.” Now then comes the section with reference to public convenience and necessity and the section relating to local fares. I think that that's -- I had it a moment ago, but I lost the 40 -- I think it is 42, isn't it? Yes. It's Exhibit B on page 44 of the transcript. Now, the provisions of the ordinance which are not amended and which I say is a question for the administrative and judicial departments of the State of Illinois to determine, is that that section which remains at Section 28-2, “It is unlawful for any person other than a metropolitan transit authority or public utility to operate any vehicle or for any such person who is the owner of any vehicle to permit it to be operated on any public way for the transportation of passengers for hire from place to place within the corporate limits of the city except on a funeral trip, unless it is licensed by the city as a public passenger vehicle.” Now, that is on page -- that's in the record on page 173 which I read yesterday, page 173 of the record. So that the question whether they're engaged in -- even though that -- even though it's in the interstate commerce. They are engaged in transporting persons between stations, between two points within the City, within the corporate limits of the City. And the -- Judge Schnackenberg said in his -- in his opinion which I read before at the -- in the early part of the day. That the City has a right to license the operation even though it is an interstate commerce. And it's been so held even though it's an interstate commerce. The City has the right to require a license and to regulate it under its police power.
Felix Frankfurter: What's the “but”?
Joseph F. Grossman: But the City has no right to limit or to deny a license to Parmelee simply because of economic -- the economic grounds, that is limit the number of vehicles to those that are necessary for the service. That's the public convenience and necessity provision.
Felix Frankfurter: And you say that that was really not an issue before the federal court because the ordinance either doesn't -- or the existing legal authority of Chicago either doesn't or we don't know whether it does give monopoly power? Is that what you're saying?
Joseph F. Grossman: It doesn't give monopoly power.
Felix Frankfurter: That's what you're saying.
Joseph F. Grossman: It's been so held under the state court in the taxicab cases.
Felix Frankfurter: But haven't you just said that that's the reason why Judge Schnackenberg wrote the way he wrote?
Joseph F. Grossman: No. Judge Schnackenberg said that it was invalid because there was an interference with interstate commerce. But it's not --
Felix Frankfurter: I give up.
Joseph F. Grossman: -- the monopoly.
Felix Frankfurter: I give up but you've said that that isn't the contention that you are making. You're admitting that. And if it's interstate commerce --
Joseph F. Grossman: I'm admitting that.
Felix Frankfurter: -- it's not covered. But you say, nevertheless, the City, for reasons of policing the traffic conditions in the second, if it is the second largest City in the United States, I don't know but Los Angeles is creeping up on this, that for police reasons, it may regulate to make life possible in the City of Chicago.
Joseph F. Grossman: That's correct. I don't think there's anything more that I need to say upon this.
Earl Warren: Thank you. Mr. Mathews.
Amos M. Mathews: Mr. Chief Justice, may it please the Court. I want if I may to make a complete statement of the facts in this case. First of all, however, because the subject has been a matter of colloquy for the past 15 or 20 minutes, I want to correct one thing. Of course, I do not know the extent to which Mr. Grossman is now authorized to speak for the City Council of the City of Chicago. But in both courts below, the City of Chicago and Mr. Grossman by signed pleadings and representations of attorneys and counselors of the Court, took the firm position that the 1955 Public Convenience and Necessity Provision of the ordinance was applicable to the Transfer operation being carried on under the contract between Transfer and the railroads.
William J. Brennan, Jr.: Will you tell me, Mr. Mathews, in one sentence, what would be the practical effect of the application of the convenience and necessity provision?
Amos M. Mathews: The practical effect -- well, the -- you have to go a little bit farther than that.
William J. Brennan, Jr.: Well, I don't want it -- I don't -- let me interrupt this confusing --
Amos M. Mathews: Well, I just as well -- just as well take that up at this time. Under the amendment of 1955, Transfer cannot operate any vehicle in the City of Chicago unless, first, it applies to the Commissioner of public vehicles. And the Commissioner after a hearing determines that public convenience and necessity requires the vehicles and then -- and here's the thing that for one reason or another, our adversaries don't say anything about, after the commissioner has made a finding, the City Council of the City of Chicago must pass an ordinance authorizing Transfer to operate any vehicle. In other words, this is not a case merely of application to an administrate for an administrative finding of public convenience and necessity or whatever else you want to call it. The administrator in effect, if we may borrow a terminology from the regulatory commissions, the administrator is made an examiner, say to use the terminology of the Interstate Commerce Act. And he makes a recommendation, but the recommendation is worth nothing unless the City Council of the City of Chicago passes an ordinance. Now, the City Council of the City of Chicago, if a subject is within its ordaining powers has power to -- thank you -- has power to pass an ordinance or to refrain from passing an ordinance. So under the 1955 Amendment, which Mr. Grossman himself by signed pleadings in the courts below in the City of Chicago by its corporation council, by signed pleadings in the courts below, has insisted stoutly applies to the Transfer operation here involved, we could not operate unless the City Council of the City of Chicago authorizes to do so by ordinance. Now, for example, devoting a little more time to this point than I thought I would at the beginning, but I -- I -- it's -- I can see its importance, of course.
Felix Frankfurter: Would it interfere with both the answer you're making to Justice Brennan and your own argument if you would state briefly what the critical condition is with reference to these facilities of going from one station to another, what the existing situation was, what the ordinance did, what you object to in the ordinance?
Amos M. Mathews: Mr. Justice, I -- I think I will proceed to that right now.
Earl Warren: I think if you get to the facts of (Voice Overlap) --
Amos M. Mathews: Yes, I believe so.
Earl Warren: -- could you tell us what the (Voice Overlap) --
Amos M. Mathews: I -- I merely -- I merely adverted to these other things because they were so surprising to me. Very well, I -- I think that's -- I think I shall proceed along that line. The 21 railroads having passenger -- operating passenger trains into Chicago and a corporation known as Railroad Transfer Service, Incorporated started an action in the United States District Court in Chicago for a declaratory judgment that an ordinance of the City of Chicago is inapplicable to them or if applicable, is violative of the Commerce Clause. The -- in the District Court there, upon representations of the City of Chicago, Mr. Grossman prepared a conclusion of law for the District Court, that the conclusion of law been to the effect that the public convenience and necessity provision applies to the Transfer operation. The District Court held the ordinance applicable in all respects to Transfer and held it valid. The railroads and Transfer appealed to the Court of Appeals. Now, the Court of Appeals held that the railroads are operating the interstation transfer service under Section 202 (c) (2) of the Interstate Commerce Act which is setout in full on pages 30 to 31 of our brief. I will go back to that Act more in detail after I've stated the general background.But the District Court -- I mean the Court of Appeals held that the -- that one section of the Chicago ordinance obstructed the interstate commerce being conducted by the railroads between the terminal stations under the authority of Section 202 (c) (2) of the Interstate Commerce Act. The Court of Appeals held every other section of the ordinance valid and applicable to the Transfer operation, and the railroads and Transfer did not appeal from any part of the judgment of the Court of Appeals. Now, that is what happened in the District Court and that in very brief capsule -- I mean, in both courts below and that in very brief capsule is -- was the Court proceeding. Now, I go back to the factual background but I will return, if time permits and I'm sure it will, to a comparison of the ordinance -- the conflicting ordinance and the section of the Interstate Commerce Act to which I refer. For many years, the 21 railroads operating passenger trains in Chicago have provided by tariffs filed with both the Interstate Commerce Commission and the Illinois Commerce Commission for the transfer of passengers between Chicago stations; that is of passengers travelling on through tickets. There are eight passenger terminals in downtown Chicago served by the 21 railroads. Each terminals serves from one to six railroads. Some through passengers -- well, no railroad, as you no doubt know, passes through Chicago but several thousand passengers per day travel on through railroad tickets through Chicago, that is from a point of origin outside Chicago on beyond the point of origin. The passenger buys at his point of origin a railroad ticket consisting of a series of coupons, good for each railroad on which he operates to destination. If the passenger in Chicago must transfer from an incoming railroad -- from the station of an incoming railroad to another station of the outgoing railroad, that is if they're not in the same station, that through ticket has a coupon. The passenger arrives in Chicago and he hands that coupon to a representative of the Transfer agency of the railroads and he and his baggage are carried to the outgoing railroad, where the price of the whole ticket is more than a very small minimum, it varies -- no -- no need to state that, but substantially -- in the case of substantially all tickets, that extra coupon does not add -- there's no charge for it at all over the regular tariff fare for the passenger ticket.
Felix Frankfurter: It's part of the tariff ticket.
Amos M. Mathews: That's -- that's correct. I think that's fair to say, except this, and I want to make this point plain. Where the passenger does not have to change stations, where, for instance, he arrives in the union station and goes out of the union station, his ticket is the same price as the passenger who has Transfer.
Felix Frankfurter: It's absorbed.
Amos M. Mathews: That's right. Now, the transfer agent obtains his pay or his compensation for performing this service from the outgoing railroad. That is the Transfer agent collects these coupons and at the end of the month or whatever the time is agreed upon, he sends a statement for all of the transfer coupons he's collected to the outgoing railroad and he's paid by them. Now, I want to call your attention, something that is I think of greatest importance at this point. This Transfer operation through passengers -- oh, I should give you a few statistics, I think. Approximately 3900 passengers per day on the average transfer in Chicago by means of this transfer service. That is from an incoming station to an outgoing station. And more than 99% of this 3900 are travelling between destinations located in different states. And in the Yellow Cab case in 322 U.S., this Court specifically held that that particular operation is interstate commerce. That is the transfer over the Chicago streets of a traveler travelling in interstate commerce. Now, this interstation transfer of passengers under the contract between Transfer and the railroads and under the former arrangement between Parmelee and the railroads is squarely within the authorization of Section 202 (c) (2) of the Interstate Commerce Act. As I said, that Section is setout in full on pages 30 and 31 of our brief, by paragraph (1) of Section 202 (c), transportation by motor vehicle, by carriers, by railroad, or water, or freight forwarders, when performed within the terminal areas of those carriers for transfer, collection, or delivery service are exempt from Part 2 of the Interstate Commerce Act, regulating motor carriers, but are made railroad transportation subject to Part 1. That -- this Section 202 (c) was enacted in 1940, an amendment in 1942 has nothing material to this controversy. However, subparagraph (2) of Section 202 (c) provides this, and I'm reading a few lines from the quote at page 31 of my brief, “Transportation by motor vehicle by any person whether as agent or under a contractual arrangement for a common carrier by railroad subject to Part 1. In the performance within terminal areas, the transfer, collection, or delivery service shall be considered to be performed by such carrier,” now that means carrier by railroad, “as part of and shall be regulated in the same manner as the transportation by railroad to which such services are incidental. Now, I want to go back now to the impact of the ordinance of the City of Chicago upon -- or the conflict ordinance of the City of Chicago upon this section, but I want to return to this section later on to point out the construction by the Interstate Commerce Commission and the construction of similar statutes by the courts. But -- and as I've said at the very beginning, the Court of Appeals held that the one section of the 1955 ordinance abstracted the interstate operation, transfer operation being conducted by the railroads under 202 (c) (2).
Charles E. Whittaker: (Inaudible)
Amos M. Mathews: That is correct, Your Honor.
Charles E. Whittaker: (Inaudible)
Amos M. Mathews: Yes, sir.
Earl Warren: And is that the one having to do with the convenience and necessity?
Amos M. Mathews: That is the one, yes. That -- that is the one that the -- the -- the only provision of the entire ordinance that the Court of Appeals held invalid was the one that required the railroads to prove to the satisfaction of the City of Chicago and obtain an ordinance finding that public convenience and necessity requires this operation that is authorized by the Interstate Commerce Act.
Hugo L. Black: Did they hold it invalid as a violation of the Constitution or as a violation of the acts of Congress which you've just referred?
Amos M. Mathews: They're not specific on that but their language makes it clear that it is held a violation of the -- both the Commerce Clause and the Interstate Commerce Act. Now --
William O. Douglas: (Inaudible)
Amos M. Mathews: Oh, yes. Yes, it does.
William O. Douglas: (Inaudible) with license.
Amos M. Mathews: That is correct.
William O. Douglas: Where did you quote that out? Is it at the bottom of page 73?
Amos M. Mathews: Yes. That is in the first paragraph of 28-31.1. “No license for any terminal vehicle shall be issued except in the annual renewal of such license or upon transfer to permit replacement of a vehicle for that license.” Now, that is the grandfather clause of Section 28-31.1 because the record shows that at the time of the enactment of this ordinance, Parmelee was the only holder of terminal vehicle licenses. This phraseology, “no license for any terminal shall be issued except in the annual renewal of such license.” Now --
William O. Douglas: Is there a 10-year limitation on that?
Amos M. Mathews: No, sir. The 10-year ordinance was another one. It was laid aside. I mean, the 10-year proposal was one that was laid aside.
William O. Douglas: It never went through.
Amos M. Mathews: It never went through.
William O. Douglas: This went on a space that could have operated (Inaudible) --
Amos M. Mathews: It could, yes, by annual renewal. That -- that --
William O. Douglas: (Inaudible)
Amos M. Mathews: That is correct. Or -- and it also provides that not only by annual renewal but by transfer to permit replacement of a vehicle for that license because the license applies to a vehicle but not the operator. Oh, well, I misquote, it applies to both -- it applies to an individual vehicle and the operator, but when the vehicle has to be replaced, you have to relicense it.
Speaker: (Inaudible)
Charles E. Whittaker: The Court of Appeals held substantially -- well, they held that Section 28-31.1 could not be enforced against Transfer. Now, they didn't invalidate that provision as far as Parmelee was concerned. They merely held that 28-31.1 could not be enforced against Transfer. That's all they held.
Speaker: (Inaudible)
Amos M. Mathews: Oh, no, sir.
Speaker: (Inaudible)
Amos M. Mathews: That is under the Chapter 28 of the -- beginning on page 171 of the record.
William O. Douglas: I think they're summarized in page 5 of your brief.
Amos M. Mathews: Yes, that is correct. On page 5 of my -- our brief, we summarized this as far as it applies to terminal vehicles, the provisions of Chapter 28 that begins on page 171 of the transcript. I'm -- I'm going to get to that. In fact, I'm now about to embark upon a chronological recital of the developments in respect to the regulation of the transfer operation by the City of Chicago.
Felix Frankfurter: Mr. Mathews.
Amos M. Mathews: Yes, sir.
Felix Frankfurter: I hope not to interrupt the course of your -- the sequence of your argument by asking whether you understood that I understood Mr. Grossman on behalf of the City, state to this Court that 28-31.1, the public convenience and necessity provision, does not apply, is not in conflict. He didn't say specifically 202 (c) (2) but that is the effect of what he said, namely, that since that is covered, that that is an interstate commerce operation, it does not require as typically convenience, is it? If that was so, then the conflict with 202 (c) disappears, doesn't it?
Amos M. Mathews: That is correct. However, Your Honor, that argument first appears -- that statement, first appears in Mr. Grossman's oral argument in this Court. It is contrary to Mr. Grossman's personal position in the courts below. It is contrary to the official position of the City of Chicago in the courts below.
Felix Frankfurter: What about the position of the lower courts? Can they rule that 28-31.1 does apply? And if they have so ruled, is there a ruling to govern in view of the fact that we don't know what the ruling of the Illinois courts would be?
Amos M. Mathews: Yes, I think there -- I think the answer is that the -- the Court of the -- United States District Court and Court of Appeals of the Seventh Circuit, both held that the 28-31.1 is applicable to this Transfer operation and they did so at the particular behest of the City of Chicago who urged that this applies. Now, as far as the question of construction by the state courts, I want to pay attention to that a little bit later on.
Felix Frankfurter: Right. I'm probably contented. If he's right, then this argument disappears. If he's right as a matter of law, then this argument of conflict with 202 (c) (2) disappears.
Amos M. Mathews: Well --
Felix Frankfurter: Isn't that true?
Amos M. Mathews: I -- I don't like -- I don't like to engage in personalities but I'm going to add one more qualification to that if he's right as a matter of law.
Felix Frankfurter: Yes, that's it.
Amos M. Mathews: And if he can bind the City Council of the City of Chicago which I doubt that the argument disappears.
Felix Frankfurter: There's one more thing that he said. Whether he's right or wrong, if the Supreme Court of Illinois has not yet spoken and if the Supreme Court of Illinois might tomorrow so speak, then we've got the kind of a problem that we've -- to which we've adverted several times in over the years?
Amos M. Mathews: Well --
Felix Frankfurter: But you took your time indeed for that.
Amos M. Mathews: You -- you would have if certain things were true, but you don't have, Your Honor.
Felix Frankfurter: All right, I'll leave you --
Amos M. Mathews: I'll get to that.
Felix Frankfurter: All right.
Amos M. Mathews: All right. Now we -- we, for many years, the City of Chicago has regulated the interstation transfer service that is prior to October 1 of 1955. The interstation transfer service had been performed by Parmelee Transportation Company as agent of the railroads. And the City of Chicago, by Chapter 28 of the Chicago Municipal Code, had regulated the operation and those provisions are summarized on page five of our brief and they include licensing for purpose of regulation, a $25 license fee for defrayal of the cost of regulation, and various of the common safety regulations ordinarily embraced in the general term police power. Now, I believe the sequence of -- chronological sequence of events, the calendar sequence of events is extremely important here not only on the merits of the controversy but on the point that it has been talked about by Mr. Justice Frankfurter, namely, on the construction and the application of the ordinance. On June 13, 1955, the railroads publicly announced that as of October 1, 1955 they were discontinuing their arrangements with Parmelee and that they had made a contract with a new corporation, Railroad Transfer Service, Incorporated, the party here, and that beginning with October 1, 1955, Railroad Transfer Service, Incorporated would take over the transfer operation of passengers between stations in Chicago that had been conducted by Parmelee.
Felix Frankfurter: Was that -- was that like the Union station here I believe? Was that a corporation in which all the railroads had (Voice Overlap) --
Amos M. Mathews: No, sir. I'd like to clear that out. No railroad --
Felix Frankfurter: I know that it's relevant, it wouldn't be?
Amos M. Mathews: No, but I want to say it. No railroad owns or any railroad man owns a nickel's worth of interest in Railroad Transfer Service Incorporated. It's -- it's strictly outside. The -- but as I said, on June 13, the railroads made that announcement. Parmelee immediately communicated that information to the Chairman of the Public Transportation Committee of the Chicago City Council who was, of course, an older body. On June 16, three days later, the Chairman of the Committee introduced in the Chicago City Council an ordinance that would have given Parmelee a 10-year exclusive franchise to transport -- to transfer railway passengers of any sort between the railway stations in Chicago. That ordinance was laid aside. It never came before the City Council. The ordinance is commented upon by the Court of Appeals and it appears in the record. But it's -- the only -- its only importance here is just the face of the history. However, on July 26th, 1955, the City of Chicago passed the ordinance that appears on pages 44 and 45 of the record and which is also set out on pages 7 and 8 of our brief. Now, the council also amended two other -- another provision of the ordinance. Prior to this amendment, the ordinance provided that no one should have a license, a terminal vehicle license, that is to transport passengers between Chicago passenger stations unless he had a contract with one or more railroads. This ordinance of July 26th, 1955 repealed that provision and left it wide open. I mean, it no longer made a necessity of having a contract with the railroads as a -- to obtain a terminal vehicle license, but it did then go ahead in Section 28-31.1 and did two things. It, in effect, said that gave -- gave permanent, perpetual automatic grandfather rights to all license that's outstanding, and the record is clear that they were held by Parmelee. Then it provided that no one else, and that might just as well have said that Railroad Transfer Service Incorporated shall not obtain a terminal vehicle license until they have applied to the public vehicle license commissioner for terminal vehicle licenses, and the public vehicle license commissioner has found that public convenience and necessity require the issue of the licenses and the -- the various categories of considerations that the public vehicle license commissioner can take into consideration including paragraph (4), “Any other facts which the commissioner may deem relevant.” Now, I want to read just a few lines to refer to that ordinance power of the City Council. The ordinance goes further said, “If the Commissioner shall report --,” and I'm reading from page eight of my brief, “If the Commissioner shall report that public convenience and necessity require additional terminal vehicle service, the council by ordinance may fix the maximum number of terminal vehicle licenses to be issued not to exceed the number recommended by the Commissioner.” Now, the Court of Appeals, as I said earlier, held that that particular provision obstructed the interstate transfer of passengers by motor vehicle and was invalid. The Court of Appeals also said that all of the rest of the ordinance was valid and applicable and there's no dispute about that. Now, I just want to call this to your attention. That if the judgment of the Court of Appeals is affirmed, we certainly think it should be, the situation in respect to the transfer of passengers in Chicago and the regulation by the City of Chicago will be precisely the same as the -- will be precisely the same regulation to which Parmelee was subject for many years. There'd be no change in it at all. The only difference will be that Transfer instead of Parmelee will be the railroads' transfer agent. In other words, to paraphrase the famous phrase, we think that what was good enough for Parmelee over the years is good enough for Transfer. And that is the effect of the judgment of the Court of Appeals.
Speaker: What are the areas of regulation that would be -- you would be subject to?
Amos M. Mathews: A license for identification. A $25 license fee for, I presume it's not a tax. I presumed it's a police-power fee for defrayment of the cost of regulation, various requirements to have a clean and sanitary and safe vehicle, filing of insurance policies with the City, and I think you can say in general summary, just the various ordinary police power regulations of traffic in a large city. Now, I want to call -- in that connection, I'd like to call your attention to this. This 1955 amendment that the Court of Appeals held invalid was not like some motor vehicle regulatory ordinances that are -- or laws that this Court has held valid. This was not aimed at a type of traffic deemed undesirable or as to which particular regulation was required because of this fact that Parmelee was given perpetual grandfather rights to operate. In other words, the City Council of the City of Chicago was not striking at the industry or at a type of vehicle operation. For instance, like it wasn't saying that nobody can operate if his truck weighs over so much or that a particular type -- specialized-type of motor vehicle traffic can be taxed higher than other types. They were merely saying -- they were merely saying the City Council of the City of Chicago is going to arrogate to itself to determine who shall engage in interstate commerce. And the Supreme Court of the -- this Court has held beginning back with Gibbons against Ogden and in numerous cases since, that the States have no right to say, who on a selected basis between two types of candidates or operators, the States have no power to say who to select, who shall engage in interstate commerce. That as a matter of fact, I think may not be entirely relevant right at this point of the argument but I think that this case presents a very striking parallel to Gibbons against Ogden because the State of New York didn't object to steamboats at all on the rivers. All it said was that any steamboat that operates on the river must have a license from the State of New York and we won't let any other steamboats operate on the river. Gibbons had a federal posting license which certainly if you will examine the Old Posting License Act. It actually gave less powers and imposed less duties than Section 202 (c) (2) of the Interstate Commerce Act. But in Gibbons against Ogden, this Court held that the Federal Posting License Act superseded the power of the State of New York to grant an exclusive license to Fulton and Livingston for steamboat traffic. And if Your Honors please, the City of Chicago, some 130 or more years later is trying here to do precisely what this Court said the State of New York could not do in Gibbons against Ogden. As a matter of interest --
Hugo L. Black: Does Parmelee -- does Parmelee have a certificate on the Interstate Commerce Commission?
Amos M. Mathews: No, sir, and neither does Transfer.
Hugo L. Black: Well has Parmelee had one heretofore?
Amos M. Mathews: No, sir. Under -- we do not need in order to -- you see, under Section 202 (c) (2), it is the railroads who are performing the service. And under Section 202 (c) (2), the -- the railroads have the authority under the Interstate Commerce Act to operate and it is a railroad operation, so that the agent who is operating for them does not need any authority. The agent operates under the authority of the railroads. That -- that is very clear under the decisions. The -- illustrating that is the -- are the decisions of this Court holding that in -- in grandfather rights cases where an agent has been operating during the grandfather period for a motor carrier and performing all of the physical services, the motor carrier itself gets a grandfather rights and not the agent. In other words, the -- under Section 202 (c) (2), the transfer is in fact simply its identity is merged into the identity of the railroads for purpose of regulation. So neither it nor Parmelee, in performing this service for the railroads, needs a certificate. Now --
Hugo L. Black: Did the railroads (Voice Overlap) excuse me.
Felix Frankfurter: Go on.
Hugo L. Black: Did the railroads have a certificate?
Amos M. Mathews: Not to perform the motor carrier operation. Of course, the railroads have permanent grandfather rights under the Part 1 one of the Interstate Commerce Act to operate passenger trains and ships into Chicago. And by Section 202 (c) (2) of the Interstate Commerce Act, the railroads are given perpetual franchises to operate motor vehicles in transfer, collection, or delivery service within terminal areas. That's where the -- in other words, if it were not for Section 202 (c) (2), any person performing this service or the railroads if they were performing it themselves, would have to have a certificate under part two of the Interstate Commerce Act; the certificate of public convenience and necessity. But Section 202 (c) gives the railroads in effect, permanent certificates of public convenience and necessity. Grant a permanent grandfather rights I suppose they could be styled to conduct this terminal operation.
Felix Frankfurter: I wanted to ask whether prior to June 30, 1955, Parmelee was the exclusive terminal vehicle service as between the railroad terminal in Chicago.
Amos M. Mathews: Yes, sir.
Felix Frankfurter: And was that because of 202 (c) (2) or that is to allow the railroads to define by the tariff who shall do the shuttling? Is that right?
Amos M. Mathews: Well, it goes -- does more than that. It -- it relieves them of the necessity of applying to the commission for a certificate.
Felix Frankfurter: I understand that, but the exclusiveness doesn't derive from that. The exclusiveness --
Amos M. Mathews: It derives from the contract.
Felix Frankfurter: From the contract.
Amos M. Mathews: Yes. Oh, yes. Well, did this answer your question? The railroads, if they wanted to --
Felix Frankfurter: The exclusiveness -- the exclusiveness so far as the railroads are concerned, derives from the contract, but does that exclude anybody else within Chicago? And if it did, if that exclusiveness doesn't -- did the City of Chicago have anything to do with that? Did the City of Chicago say, “We won't authorize other people to do that carriage between the termini? Take for instance, who don't take -- who take interstate carriers who do not have a through ticket. I'm probably assuming an unreal situation, but take a person who comes in from out of Chicago, out of Illinois into Chicago and then transfers to another railroad, buys another ticket and get to New York. And of course, that's very unreal. Could he -- could he or she pick up some taxi without any contract relation?
Amos M. Mathews: Oh, yes. Yes. And --
Earl Warren: You can do it if you have it. If you have through tickets, you can do just the same, could you?
Amos M. Mathews: Oh, yes, but that is if you wanted to -- wanted to lose the value of (Voice Overlap) --
Earl Warren: Yes.
Felix Frankfurter: But -- but the service that the vehicles that are allowed to coast around the different termini maybe regulated by Chicago even though it involved interstate transfers. Is that right or not?
Amos M. Mathews: Oh, yes.
Felix Frankfurter: Now what I'm asking is --
Amos M. Mathews: If I understand your question, right -- I'm sorry, go ahead.
Felix Frankfurter: Well, I want to put the question clearly if I can.
Amos M. Mathews: Well, I believe I do. Yes.
Felix Frankfurter: Yes. Now by what -- how did it come that Parmelee was that exclusive service for that transfer from one terminus to another?
Amos M. Mathews: The railroads entered into an arrangement with Parmelee.
Felix Frankfurter: And Chicago acquiesced, though it need not have acquiesced, is that it?
Amos M. Mathews: Well, the Chicago did acquiesce in this -- to this extent that --
Felix Frankfurter: Did it have any say in the matter?
Amos M. Mathews: Well, yes. They did this because, as I said prior to July 26, 1955, the ordinance provided that no one could have a license to transfer passengers unless he had a contract with the railroad.
Felix Frankfurter: And was that within the power of Chicago?
Amos M. Mathews: I don't know.
Charles E. Whittaker: Well, do you think it was?
Amos M. Mathews: Well, I've never even thought of that and it's a (Voice Overlap)
Felix Frankfurter: Did they become relevant to this question, Mr. Mathews.
Amos M. Mathews: Well, maybe I can approach it from this angle. Under Section 202 (c) (2), I think the railroads have a right to select their agent.
Felix Frankfurter: Yes.
Amos M. Mathews: Now, I can see -- as long as the railroads have that right under the Interstate Commerce Act, I can see no reason why Chicago can't say, “Well, alright. We'll --,” or conversely, the City of Chicago can say, “We'll give a terminal vehicle license to anyone who has a contract with the railroads.”
Felix Frankfurter: Or -- or who hasn't? Or who hasn't?
Amos M. Mathews: Or -- yes, they could do that. Oh -- oh I'm -- the City of Chicago can let anybody operate. But the City of Chicago can't say to the railroads, “You've got to divide your business among John Doe and Richard Row and Parmelee and Transfer.” That's what I mean.
Felix Frankfurter: But can't it say for traffic consideration, if that is conceivable, that we want to give a choice to the mass or to the 3900 people who pour into Chicago everyday because the actual service of traffic -- of shuttling, which the railroads are providing by their own arrangements, don't seem to be adequate, block the traffic, etcetera, etcetera.
Amos M. Mathews: Oh, I don't think they can under the Interstate Commerce Act. No.
Earl Warren: Mr. Mathews, may I ask you this question. Is it conceded by both sides that under this opinion of the court below, Parmelee can continue to transfer passengers from one station to another, only, it does it on its own independently and not by contract with the -- with the railroads?
Amos M. Mathews: Well, I certainly concede that and if I understand Mr. Grossman correctly, I think he does.
Earl Warren: Yes. Well Mr. -- Mr. Grossman --
Amos M. Mathews: Yes.
Earl Warren: -- and I just had an agreement.
Amos M. Mathews: Yes.
Earl Warren: Yes.
Amos M. Mathews: Just as an independent operation.
Earl Warren: So this does not put Parmelee out of business --
Amos M. Mathews: Oh, no.
Earl Warren: If -- if they can still operate --
Amos M. Mathews: Well --
Earl Warren: -- they can still operate.
Amos M. Mathews: -- it's not in the record. It's not in the record and I don't know that I've seen them lately. But for a long time after Transfer started to operate, the Parmelee vehicles were parked right outside the stations. And I suppose they got passengers, although I never actually saw anybody get into their vehicles, I never once.
Felix Frankfurter: Do the taxis in Chicago at this terminal -- are they local -- Yellow or some other taxi company?
Amos M. Mathews: Oh, yes.
Felix Frankfurter: But they can't come in to this terminus?
Amos M. Mathews: Oh, yes, they do. They come right into the terminus. You can -- in any station in Chicago, you can get out of your train and ride under the train ship. There will be taxi cab service of yellow, brown, black, and white.
Felix Frankfurter: And what is it that you wanted to stop Parmelee from doing?
Amos M. Mathews: We don't want to stop Parmelee from doing anything. All we want is the right to operate our transfer vehicles as we're authorized to do under the Interstate Commerce Act, and the City of Chicago says you can't do that.
Felix Frankfurter: Without getting a license.
Amos M. Mathews: Without having the -- no without having the City of Chicago pass an ordinance saying that we can do it.
Felix Frankfurter: That is on the assumption. That is on the assumption that Mr. Grossman's position here for the necessity of finding out whether his position is right or wrong has to be determined by Illinois Courts subject to that to which you --
Amos M. Mathews: No. No, I'd like to -- I'd like to go to that point now.
Felix Frankfurter: All right.
Amos M. Mathews: I don't have much time remaining but I would like to go to that point.
Felix Frankfurter: I'm thinking of a case like expected that we had some years ago.
Amos M. Mathews: Yes, that's it exactly. Well --
Felix Frankfurter: All right.
Amos M. Mathews: -- if Your Honor please, I'm thinking of a case like Toomer against Witsell in which this Court held that where these -- the state law is clear -- where the state statute or an ordinance is perfectly clear on the States and it's perfectly clear and everybody has agreed what it does and what it's intended to do that it's just simply, either gestured or remitted to the state courts, that's what this Court decided in Toomer against Witsell.
Felix Frankfurter: Yes, but we are troubled if we have the law preserve the City of Chicago, a City with a great deal of assurance.
Amos M. Mathews: Oh, well now, let me go to that. Let me go to that point right now. This -- this argument that was made by Mr. Grossman in the last 15 or 20 minutes he made, is something new in the case and if I may give my own personal view of it, I think it's a kind of a wheel of the west to get us all back into the morass in which the railroads and Transfer found themselves in the fall of 1955, and I will now proceed to tell you why. The railroads and Transfer in their complaint in the District Court made this allegation and this is a form of allegation I'll admit but it happened to be true. The railroad said this --
Hugo L. Black: What page is that in your brief?
Amos M. Mathews: That's on pages 6 and 7 of the record, paragraph (4) of page 6 and 7 of the record. “The terminal lines and Transfer have specifically and repeatedly advised the defendant in the City of Chicago through the defendant's Daley, the mayor, Melaniphy and Flynn, its duly elected or appointed officials that the provisions of said ordinance did not apply to the operations of Transfer pursuant to the agency contract. And further, that a said ordinance did apply to such operations, said ordinance was void as an attempt to regulate interstate commerce and contravention of the Commerce Clause despite said advice.” Now, these are allegations of fact, particularly this one. Despite said advice, the defendant in the City of Chicago, acting through the defendant's Daley, Melaniphy, O'Connor, and Flynn, its duly authorized officials, has asserted and continues to assert that the ordinance is valid and enforceable against Transfer. And that the Defendant, the City of Chicago, acting through its officers, agents, servants, and employees, would attempt to enforce said ordinance against Transfer as a violator thereof by arresting Transfer's drivers operating its passenger motor vehicles and so forth.” Well, one more important line, “Used in the performance of Transfer's operations under the agency contract.” Now, those are allegations of fact and they were all admitted by the motion of the defendants for summary judgment. That's not only true, of course, as a matter of law but the defendant stated in their motion for summary judgment in pages 71, 72 of the record.
Hugo L. Black: May I ask you. That said violating the ordinance if the terminal vehicle licenses are the ones which you say requires you to get a certificate of convenience and necessity, or is it a different kind?
Amos M. Mathews: It is. It is the one that under the amendment of 1955 requires us to get a certificate of convenience and necessity under 28-31.1. But it is the -- before 28-31.1 was enacted in July of 1955, the terminal vehicle license did not require proof of public convenience and necessity, but the terminal vehicle license that he's talked about here is the one that requires proof of public convenience and necessity under 28-31.1.
Hugo L. Black: How do we know that if the law wasn't in effect at that time this complaint was made?
Amos M. Mathews: Oh, the law was in effect.
Hugo L. Black: The law was in effect.
Amos M. Mathews: This complaint was filed October 24, 1955.
Hugo L. Black: After the ordinance --
Amos M. Mathews: After the ordinance went into effect.
Hugo L. Black: And it's clear I presume from both argues then that this charges that they were threatening you if you did not get a certificate of convenience and necessity under 31?
Amos M. Mathews: Oh, yes, and in other -- other --
Hugo L. Black: He shakes his head off.
Amos M. Mathews: Well, --
Hugo L. Black: [Laughs]
Amos M. Mathews: -- all I can say is this. That in paragraph (4), it's plain English and in -- in the City's motion for summary judgment they said this --
Hugo L. Black: What page is that?
Amos M. Mathews: 71 and 72 of the record.
Hugo L. Black: (Inaudible)
Amos M. Mathews: That's -- that's correct. That's correct, but I merely wanted to point out that they gilded to lily or frosted the cake or something by saying, “In support of said motion, defendant state that there is no genuine issue as to any material fact contained in the complaint.” Now, in other words, they admitted that they would arrest their drivers under the agency contract. Now, they're talking about the operation under this contract. They're talking about that specifically. Well, let's go on a little way. The District Court filed a memorandum opinion in which the District Court held the ordinance valid and enforceable and applicable against this operation. That was the whole business including this public convenience and necessity requirement. And as is customary, the District Court asked counsel to supply proposed findings of fact and conclusions of law. And in paragraph (2) of the proposed conclusion of law submitted by the City, by Mr. Grossman in-person, and that is on page 122 of the record, this was the conclusion of law submitted. “Transfer operates its motor vehicles on public ways for the transportation of passengers for hire from place to place within the corporate limits of the City as provided in Section 28-2 of the ordinance. Now, Section 28-2 of the ordinance is the fishnet or the drag net that catches everybody. If you're within 28-2, you're within the ordinance, and that was Mr. Grossman's own contribution to the final judgment of the District Court. That -- that -- and that was the City's position. Well, and I should add to that that in the record 155, 159, Conclusion of Law Number 5, the District Court adopted that conclusion recommended by Mr. Grossman. Now -- and the District Court specifically held as a conclusion of law and dismissed our complaint. In other words, and held that the whole ordinance including this public convenience and necessity section was enforceable against us. We appealed to the Court of Appeals. Now, what did the City do there? The City came in and by its -- we have filed a certified copy of the City's brief and all of the briefs in the Court of Appeals for that matter with this Court. And so I -- and I have set out in -- I set out on page 14 of our brief the quotation from the Court, from the City's brief in the Court of Appeals. Now, keep in mind that this brief in the Court of Appeals and the City's official brief signed by the corporation council and the paragraph, I won't read all of the paragraph, but on -- I call your attention to that language on page 14 of our brief that the framers of the ordinance in question intended to regulate the business carried on by Transfer wholly within the City of Chicago as hardly subject to challenge. Now that's what the City was seeing back in the Court of Appeals and down at the -- and then the City goes ahead in its brief and quotes several sections of the ordinance including 28-1. And the City lines up its discussion by saying in the last sentence, “A more accurate description of the business engaged in by Transfer would be hard to find.” Now, if the Court please, after the City of Chicago has obtained in the District Court and in the Court of Appeals, at its own request and upon its own solemn assurances to those two Courts, that this ordinance is applicable to the transfer operation, can counsel for the City come before this Court and make a representation to say that the City does not so contend? If he can, why then, we might just as well abolish all the rules of procedure and litigation.As a matter of fact, he couldn't make that contention in the Illinois courts. I call your attention to the City of Chicago against the University of Chicago cited on page 15 of our brief. In that case, the City Council of the City of Chicago had taken the position in the trial court, in the Circuit Court that a certain ordinance was valid. And then as suit of their convenience or suit of their -- they want to suit their convenience as in this case, they took the position before the Supreme Court of Illinois that the ordinance was invalid. And here is what the Supreme Court of Illinois said and I think that is what the rule of this Court should follow in this case. “Having alleged the validity of the ordinance in its pleading and proceeded to a hearing on that theory, the City cannot now be heard to say that the Circuit Court erred in adopting its view.” And to paraphrase that, Your Honors, we say that having alleged in the District Court and in the Court of Appeals of the Seventh Circuit that the ordinance is applicable including the public convenience and necessity, is applicable to the transfer operation from having one on both issues, mind you that both courts -- the courts decided those two issues in favor of the City, the City cannot now be heard to say that the Court of Appeals of the Seventh Circuit erred in adopting its view.
Felix Frankfurter: But I wonder -- I'm always troubled by estoppel arguments that I gather from Judge LaBuy's memorandum that before him, you urged that you are not included within the condemnation because of the fact that this is interstate commerce. Is that correct? At least Judge LaBuy said so.
Amos M. Mathews: Well, I think it would perhaps be better to go to our complaint to resolve what he said there than what LaBuy said -- Judge LaBuy said in his opinion but --
Felix Frankfurter: The last point urged by plaintiff is that the ordinance did not intend to include the public on or exclusively devoted to interstate (Voice Overlap) issue.
Amos M. Mathews: True enough. We did urge that. But the point is that we lost. We lost on that issue.
Felix Frankfurter: What I'm suggesting is that if you made that contention, one might infer that it isn't a wholly frivolous contention.
Amos M. Mathews: Well, I think it is myself.
Hugo L. Black: Suppose instead of making a statement here to this effect or argue that he would file a stipulation -- he had filed a stipulation representing his client, stipulating that your side is not included in the --
Amos M. Mathews: Oh, well now --
Hugo L. Black: That there's no controversy.
Amos M. Mathews: Let's -- let's get right at that. Let's get right at that in the five minutes I have remaining. Actually, I don't believe and I haven't been able to find the case on this except some very early observations of commentators on the Constitution. And I can't identify them now, but I don't believe the City of Chicago can go to a Court and say, “We want you to hold that one of our ordinances does not apply to Transfer because you have before you here the legislative body.” The City of Chicago, if it wanted to get rid of this legislation on the theory they now suggest, could pass a two-line ordinance tomorrow saying that the public convenience and necessity provisions of this do not apply to the Transfer operation and what would happen why this whole litigation would be dismissed as moot clear back through the District Court and everything would be wiped out. Why doesn't the City of Chicago do that? They don't do it because they're just not serious. They just are not serious in this because every time when it has served their purpose, they have said this ordinance applied to this. Now, when they find a judgment holding the ordinance unconstitutional on, if I may be permitted to say so, entirely sound grounds, they take this wheel of the west gamblers to avoid their position they've taken in the courts below and get back into the Courts of Illinois. If they get back into the Courts of Illinois, I tell you gentlemen as a member of the bar of this Court, the City of Chicago will go to an Illinois court and they will say this ordinance applies. They have done that on every occasion in the past when it served their purpose and they'll do it again. Now, getting back then to this issue of remission to the Illinois courts.
Hugo L. Black: So do you think you'd have any remedy if they would stipulate here to that effect and then went back to a totally different (Voice Overlap) --
Amos M. Mathews: Oh, if they were stipulated but --
Hugo L. Black: As I gather he's saying that it doesn't apply.
Amos M. Mathews: Well --
Hugo L. Black: And he might say that --
Amos M. Mathews: I -- I have -- I have grave doubts about what would happen in the City Council of the City of Chicago. Of course, well, another thing too.
Felix Frankfurter: (Inaudible)
Charles E. Whittaker: (Inaudible)
Amos M. Mathews: Yes. The -- as a matter of fact, the argument on applicability, if you'll examine the complaint, was not on applicability but it was simply to the effect that since this is interstate commerce, it doesn't apply. Well now, it does apply in terms and is in conflict. Now, I want to call your attention to Toomer against Witsell and other cases cited on pages 16 and 17 of our brief, to the effect that where in this case a litigant has taken positions and -- and the statute is clear, there is no occasion for admission to state courts. Thank you.
Joseph F. Grossman: May I have a few minutes.
Amos M. Mathews: You have one minute -- one minute or so left, Mr. Grossman, and I wish you would address yourself first to the question of whether the City of Chicago would be willing in this -- in this proceeding to stipulate that this ordinance does not apply to your cause.
Joseph F. Grossman: I don't know because the City Council, of course, governed --
Amos M. Mathews: Isn't that --
Joseph F. Grossman: The City Council governed the City.
Amos M. Mathews: That's enough answer to -- that's enough answer to that.
Joseph F. Grossman: Now Your Honor, I'm surprised the counsel is saying that he is subject to license -- that his operation is subject to license when he never applied for a license and he alleged in the complaint that they are not subject to license, which he didn't read. It says that they threatened arrest because they were a violator of the ordinance without obtaining terminal vehicle licenses for each such passenger motor vehicle as required by Section 28-2 of said ordinance. Nowhere does it appear that I couldn't issue Section 28-31.1. All we did and when he talks about the -- the findings of fact in law, I was merely following a memorandum of Judge LaBuy, the District Court I was compelled to find the way he found, and that is that the ordinance was applicable to it. Nothing was said about 28-31.2 in any of my pleadings. I think that the -- to say the least, improper motives were attributed by the Court of Appeals and by counsel here to my remarks and to my position. I never took the position. As a matter of fact, this contest was between Parmelee and Transfer. Parmelee's counsel argued the case before the District Court. Parmelee's counsel argued the case before the United States Court of Appeals and the controversy between -- between the two. We were in -- the City was in the middle. I took the position from the beginning at 28-31.1 applied to terminal vehicles as defined and that is the new definition is that it's a local transportation facility. And I never -- I never deviated from that from the beginning.
Earl Warren: Well do you take the position in this Court that this is just a fight between Parmelee and Transfer?
Joseph F. Grossman: Certainly, it is. And -- and counsel here -- counsel here said that they are subject to license that they will proceed just as Parmelee did. Now, why didn't they do it? Why did they -- why did they file a suit to restrain the City from enforcing a licensing ordinance? That's what they did.
Charles E. Whittaker: (Inaudible)
Joseph F. Grossman: I saw it. I saw it, Your Honor. That was a civil rights case. It came up through the state courts by virtue of a conviction for violating an ordinance to that or a state statute and which -- which -- by which there were no standards fixed or the issuance of a license as I recall it. That is not the case here. I think that this ought to go to the state courts to determine whether they are subject to license although they've now admitted it. They've now admitted that they're subject to license. And that's the only question that was the issue in the case whether they should -- whether they should apply for a license and secure a license to operate. Now, if as it's contended, they couldn't get a license because of 28-31.1, then it would be their prerogative to come into the federal courts and say they were -- we were interfering with interstate commerce.