Court Opinion

ID: 8803373
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:40:22.912661+00
Date Added: 2024-06-11T17:03:59.842323
License: Public Domain

BATTS, Circuit Judge
(concurring). In a proceeding initiated in 1911 by the Railroad Commission of Eouisiana against the Houston East & West Texas Railroad Company, the Houston & Shreveport Railroad Company, and the Texas & Pacific Railway Company, the Interstate Commerce Commission held that the named carriers maintained higher rates from Shreveport to points in Texas than were in force from cities in Texas to such points under substantially similar conditions and circumstances, and that thereby unlawful and undue preference and advantage was given to the Texas cities, and undue and unlawful discrimination against Shreveport, La., was effected. To correct this discrimination, the carriers were directed to desist from charging higher rates for the transportation of any commodity from Shreveport to Dallas and Houston, respectively, and intermediate points, than were contemporaneously charged by the carriers for such commodities from Dallas and Houston toward Shreveport, for equal distances. This order was attacked in a suit instituted by the carriers in the Commerce Court. The order was sustained by that court, and an appeal was taken to the Supreme Court.
The Supreme Court held (234 U. S. p. 342, 34 Sup. Ct. 833, 58 L. Ed. 1341) that: (1) Congress has the power to regulate rates within the state for transportation carried on by instrumentalities of interstate commerce, or where intrastate business would affect interstate commerce. (2) Congress has not undertaken, directly or through the agency of the Interstate Commerce Commission, to make rates for the transportation of passengers or property wholly within one state, and not affecting interstate traffic. (3) Where the observance by the carrier of the state-made rate constitutes a violation of the provision of the Interstate Commerce Act prohibiting unreasonable and uniust *306discrimination, or undue preference or advantage, Congress has, with reference thereto, exercised its power. (4) Where unjust discrimination or undue and unreasonable preference or advantage is charged, it is a matter primarily for investigation and determination by the Interstate Commerce Commission. (5) Where the Interstate Commerce Commission has. held that interstate rates charged by carriers are reasonable, and that the observance by the carriers of state-made rates, affecting the same locality, is an illegal discrimination, the carrier may comply with .the order of the Interstate Commerce Commission by so adjusting the state rates as to remove the discrimination.
After the rendition in 1913 of the opinion by the Supreme Court of’ the United States, the order of the Interstate Commerce Commission was enlarged to affect the rates of all common carriers within Eastern Texas, and, subsequently, further enlarged to include the entire state. The order also fixed the interstate rates between Shreveport and Texas points, and required the use, with reference to Texas business, of the western classification, in lieu of the classification prescribed by .tire Railroad Commission of Texas.
Being required under the order to adjust-their intrastate rates to the Shreveport rates established by the commission, the railroads prepared rate sheets and tariffs, which they claimed to be in conformity with the order, and filed them with the commission.
Pending the determination of the proceedings before the Interstate Commerce Commission, hearings were held by the Railroad Commission of Texas upon an application of the railroad companies for an increase of intrastate rates, and orders were issued by the Railroad' Commission, making a number of increases, which were to have become effective September 1, 1916. Upon the filing with the Interstate Commerce Commission of the rate sheets by the Texas railroad companies, the Texas Railroad Commission, without notice, canceled the orders increasing the Texas rates. Thereupon plaintiffs instituted this suit in the Western district of Texas, setting up in detail the facts herein-before mentioned. The bill also averred that all the rates, orders, and classifications of the Railroad Commission of Texas were unreasonable and confiscatory. It was alleged that, unless protection was given by injunction, plaintiffs would be subjected-to many suits for penalties by the state of Texas and by shippers, for obeying the orders of the Interstate Commerce Commission.
The District Judge not being accessible, application was made to Hon. Don A. Pardee, Circuit Judge, for the temporary injunction now under consideration. A restraining order was made, and the application set down for a hearing. Delays resulted from the concurrent action of the parties, and the application is now submitted to Circuit Judge PARDEE, and Circuit Judge WALKER, and the writer, whom he has called to his assistance, under the terms of the law.
In the meantime, the action of the Railroad Commission of Texas, in undertaking to cancel its orders increasing rates, was abrogated by thqt body. Also in the meantime, upon applications made by the Attorney General and the Railroad Commission of Texas, the Interstate Commerce Commission had reopened the case referred to and has made provision for hearing additional testimony,. ref using, however, to suspend the rates established, pending final action.
*307The Attorney General and Railroad Commission of Texas have in this case answered, and have filed a cross-action, asking for the cancellation of the order of the Interstate Commerce Commission. To this cross-bill, the Interstate Commerce Commission and the United States have filed pleas to the jurisdiction.
In the submission of this application the parties have filed transcripts of the records in the several hearings before the Interstate Commerce Commission, of the hearing extending over many weeks before the Railroad Commission of Texas, and many affidavits. It would probably not be possible for all this testimony to be read in less than two or three months. The application may be disposed of without delay, which would be inconsistent with the purpose of the law to expedite cases of this character.
If the rates from Texas points to Shreveport are reasonable, and if the application of the rates made by the Railroad Commission of Texas to points within Texas constitutes unjust discrimination against Shreveport, the Texas-made rates are invalid. Under the terms of the Interstate Commerce Commission Act, the railroads of Texas may be prosecuted for charging the Texas rates. This results entirely without reference to any action which may be taken or which may-have been taken by the Interstate Commerce Commission. The Texas railroads are entitled to protection against contemplated state action, which would result from their failure to violate the law.
The Interstate Commerce Commission has established the Texas-Shreveport rates. These rates must be regarded as reasonable until set aside in the manner provided by law. The Interstate Commerce Commission has declared that the use of the Texas rates will constitute a discrimination against Shreveport. This commission is one of the agencies designated by the law for the purpose of primarily determining whether a discrimination exists.
The law evidently contemplates that, when the Interstate Commerce Commission shall have made an order, it is ordinarily to ba obeyed until that order is set aside in the manner indicated by the law.
Whether this rule is universal in its application it is not necessary in this proceeding to determine. The Supreme Court has held that the commission may determine what is a reasonable interstate rate, and what rate must be charged on intrastate business to prevent a discrimination, when both rates are in use. But the authority of the Interstate Commerce Commission with reference to intrastate rates is purely incidental and remedial. The qualities of such an order are radically different from those of an order resulting from the exercise of the legislative function involved in rate-making. To hold that it may, under any circumstances, regulate a state rate, is to carry the rules of interpretation to the extreme limit, in view of the proviso in the first section of the Interstate Commerce Commission Act (Act Feb. 4, 1887, c. 104, 24 Stat. 379 [Comp. St. 1916, § 8563]). It may be held that it has the power to make such orders affecting intrastate rates as are necessary to prevent discrimination; certainly, the authority will not go beyond the necessity. When the Interstate Commerce *308Commission acts with reference to such a matter, it makes, or should make, the same character of investigation and the same character of determination that would be made by a court if a carrier charging the intrastate and the interstate rates were prosecuted for a violation of the Interstate Commerce Commission Act. Its action would be more nearly judicial than legislative. Whenever such an order is under consideration by a court, the court would have to determine whether the jurisdiction of the Interstate Commerce Commission had been 'exceeded; and it would doubtless decline to apply the same rules with reference to the conclusiveness of the action of the Interstate Commerce Commission that obtain when that body is, in the exercise of its established legislative authority, making rates. It would not permit the Interstate Commerce Commission to conclusively determine its jurisdiction by determining the fact of the discrimination upon which its jurisdiction would depend.
The order under investigation in this case is exceedingly comprehensive. It breaks down the intrastate rates of the state of Texas. These rates have not been held unreasonable. They are the result of many years of labor by an authorized rate-making body. They have, until the Interstate Commerce Commission acted, been acquiesced in by the railroads. Some of the rates which have been set aside could not have had an appreciable effect on the commerce of Shreveport, or any interstate commerce. Affidavits on file in this court indicate that, in some instances, the results of the order are disastrous to industries within the státe. In other instances, the effects are grotesque. No reason has been made to appear why it is necessary to supersede the Texas classification in order to prevent discrimination.
But the order is. It may be that it has been improvidently made. It may be that parts of it are invalid. It may be that when this case is finally tried it will be set aside in whole or in part. But it is not possible for us to hold the order void. A part of it has already been passed, upon by the Supreme Court of the United States, and has by that tribunal been declared valid.
The opinion of the Supreme Court is vigorously attacked. In capable, well-considered opinions, the state courts of Texas and South Dakota have declined to follow the opinion until reannounced. It is the obligation of the state courts, as it is the duty of .the federal courts, to vigilantly maintain the rights of the states, and to carefully determine the authority of federal agencies exercising powers claimed to be in derogation of those rights. It is not surprising that state courts should be reluctant to follow an opinion which adds vastly to the power heretofore assumed to be in the Interstate Commerce Commission, and which destroys the power which has been assumed to be in the state rate-making bodies.
In the Minnesota Rate Case, 230 U. S. 352, 33 Sup. Ct. 729, 57 L. Ed. 1511, 48 L. R. A. (N. S.) 1151, Ann. Cas. 1916A, 18, there is unequivocal recognition of the right of the states to make intrastate rates. In the Shreveport Case, 234 U. S. p. 358, 34 Sup. Ct. 833, 58 L. Ed. 1341, the right of the Interstate Commerce Commission to enter an order affecting intrastate rates “where interstate commerce itself is in*309volved,” is as definitely expressed. In the oral submission of this case, the representative of the Interstate Commerce Commission suggested the intimate relationship between all intrastate and all interstate business, and made it easy to see how the commission could supersede the state rates in every state, as it. had in Texas, and nullify the congressional declaration that the provisions of the act which created the commission “shall not apply to1 the transportation of passengers or property wholly within one state.”
That Congress could make all railroad rates, or delegate the making to a commission, is not, under the authorities, seriously to be questioned. That it has not exercised this power is made clear by the Minnesota Rate Case; that it has given authority to the Interstate Commerce Commission, which indirectly and awkwardly accomplishes the same result, would seem to be the commission’s interpretation of the Shreveport Case. But even if the commission’s application of the opinion is too broad, the language of the Supreme Court justifies a part, at least, of the order, and warrants and requires the protection we give the railroad companies.
It has been made to reasonably appear that, but for the restraining order heretofore made, the railroads of Texas would have been subjected to numerous and destructive suits for penalties, for the collection of overcharges, and for infractions of the Texas Railroad Commission law. But for this judicial action, their obedience to the order of the Interstate Commerce Commission would have been destructive of their property rights. If they had not obeyed the Interstate Commerce Commission’s order, they would have been subjected to the danger of suits and prosecutions by the United States government. Those conditions continue, and would seem to peculiarly demand the interference of the judiciary. It may be the issuing of the injunction will not be without injury to individual shippers, and to localities and industries. It is much to be regretted that all of the unfortunate consequences of conflicting laws cannot be avoided. The issuance of the injunction which is to be entered herein will, it is hoped, be the action least productive of disastrous effects.
The granting of the injunction prayed for by the railroads necessarily carries with it the refusal to grant a temporary injunction to the defendants. A serious question exists as to whether or not their cross-bill can be entertained in this suit. It is an attack upon an order of the Interstate Commerce Commission, and the law provides that it shall be instituted in the District Court of the residence of the party at whose instance the order was made. It' may be that, under the facts of this case, jurisdiction would lie only in the Western District of Louisiana. In addition to fixing the venue of suits of this kind, the law contemplates that the order setting aside the action of the Interstate Commerce Commission should be determined by a court of three judges.
It is certainly not contemplated that, in passing upon an application for a temporary injunction, the merits of a case which would require weeks for a proper trial, and the merits of a cross-bill which wordd require as long a time for disposition, should be considered and *310determined. The purpose of a temporary injunction Is to protect rights, as far as possible, during the period necessary for the proper disposition of the case. Sometimes such an injunction necessarily involves the merits of a case. We have not considered it necessary or desirable that present adjudication of the matters involved in this case should be undertaken. In addition to reasons suggested heretofore, the whole rate situation in Texas is yet before the Interstate Commerce Commission, and a satisfactory solution of the difficulties which have appeared may be reached. The order entered herein is not intended to adjudicate any of the issues made by the pleadings, but merely to maintain a status which will result in a minimum of harm.