Court Opinion

ID: 9420592
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:55:19.919832+00
Date Added: 2024-06-11T17:22:26.075719
License: Public Domain

Mr. Justice Frankfurter,
whom Mr. Justice Jackson joins, concurring in the result.
The Southern Railway asked leave of the Alabama Public Service Commission to take off two of its passenger trains. The Commission, deeming the service of these runs necessary for the communities served, denied leave. The Railway thereafter applied to the United States District Court for an injunction against the order of the Commission. The bill asking for this injunction was based on a claim under the Due Process Clause of the Fourteenth Amendment. The allegations of the bill and the proof under it failed to establish a substantial claim under the United States Constitution. Under familiar, well-established principles the District Court *352should have dismissed the bill. The Court likewise directs the District Court to dismiss the bill. But it chooses to do so by a line of argument in plain disregard of congressional legislation. Against that I am compelled to protest.
Alabama has the conventional feature of railroad regulatory legislation requiring leave of the State Public Service Commission for the discontinuance of trains. Ala. Code, 1940, tit. 48, § 106. The Southern Railway Company asked permission to discontinue the two trains on the ground that, as segregated items of its total business in Alabama, these trains were operating at a substantial loss. The Commission refused permission after a full hearing, and no question of procedural due process is before us.
Southern brought its suit to restrain enforcement of the Commission order in the United States District Court for the Middle District of Alabama. The case was heard by a three-judge court, as required by 28 U. S. C. § 2281, and a permanent injunction was granted. A direct appeal to this Court lies from such a decision. 28 U. S. C. § 1253.
In holding that the order of the State Commission violated the Due Process Clause of the Fourteenth Amendment, the District Court relied chiefly upon the fact that the operation of the two trains involved a substantial loss. It has long been settled, however, that a requirement that a particular service be rendered at a loss does not make such a service confiscatory and thereby an unconstitutional taking of property. St. Louis & S. F. R. Co. v. Gill, 156 U. S. 649, 665-666; Atlantic Coast Line R. Co. v. North Carolina Comm’n, 206 U. S. 1; Missouri Pacific R. Co. v. Kansas, 216 U. S. 262, 278; Chesapeake & O. R. Co. v. Public Serv. Comm’n, 242 U. S. 603; Puget Sound Traction Co. v. Reynolds, 244 U. S. 574; Fort Smith Light & Traction Co. v. Bourland, 267 *353U. S. 330; see Northern Pacific R. Co. v. North Dakota, 236 U. S. 585, 600.
Unlike a department store or a grocery, a railroad cannot of its own free will discontinue a particular service to the public because an item of its business has become unprofitable. “One of the duties of a railroad company doing business as a common carrier is that of providing reasonably adequate facilities for serving the public. This duty arises out of the acceptance and enjoyment of the powers and privileges granted by the State and endures so long as they are retained. It represents a part of what the company undertakes to do in return for them, and its performance cannot be avoided merely because it will be attended by some pecuniary loss.” Chesapeake & O. R. Co. v. Public Serv. Comm’n, supra, at 607.
It is true that we have, on rare occasion, found an order requiring service so arbitrary as to constitute confiscation. Thus, in Northern Pacific R. Co. v. North Dakota, supra, the State was attempting to force railroads to subsidize production of a particular commodity. In Mississippi Comm’n v. Mobile & O. R. Co., 244 U. S. 388, the Court concluded: “Looking to the extent and productiveness of the business of the company as a whole, the small traveling population to be served, the character and large expense of the service required by this order, and to the serious financial conditions confronting the carrier, with the public loss and inconvenience which its financial failure would entail, we fully agree with the District Court in concluding that the order of the commission at the time and under the circumstances when it was issued was arbitrary and unreasonable . . . .” Id. at 396.
In the case before us, the trains involved, Nos. 7 and 8, are local passenger trains operated between Sheffield-Tuscumbia, Alabama, and Chattanooga. Southern operates four other trains between these points. Nos. 45 and 46 do not stop at all stations and operate on a schedule *354inconvenient to the public here concerned. The State Commission found that the schedules of Nos. 35 and 36 “are not comparable to” those of Trains 7 and 8 and do not afford the same convenience.
It appears that the operation of Trains 7 and 8 resulted in a loss of $8,527.24 per month during the twelve-month period ending February 28, 1949. During the five-month period ending July 31, 1949, the loss amounted to $10,738.51 per month. But the railroad made no claim that it is operating at a loss, or failing to receive a fair return, either on its total investment or upon its investment within the State of Alabama. The record contains only the sketchiest findings concerning the operation of the railroad in its entirety. But it does appear that, although Southern has operated its passenger business at a loss aside from the war years, it has earned a substantial net operating income upon both its entire business and its service within the State of Alabama.1 This litigation seems to have been concerned almost exclusively with the operations of Trains 7 and 8. No showing whatever was made that by the loss incurred in running these trains Southern was deprived of that protection for its investment in Alabama which alone can be made the basis of a claim under the Due Process Clause of the Fourteenth *355Amendment. The lack of merit in the plaintiff’s case is so clear that it calls for dismissal of the complaint.
Instead, as we have stated, this Court rests its decision on a ground that requires it to overturn a long course of decisions and, in effect, to repeal an act of Congress defining the jurisdiction of the district courts. It is undisputed that the plaintiff is asserting a claim under the Federal Constitution. The Court admits that the District Court has jurisdiction of the suit. 28 U. S. C. §§ 1331,1332. It is said, however, that the District Court must decline to exercise this jurisdiction because judicial review of the order could have been had in the State courts.
In 1875, Congress for the first time (barring the abortive Act of 1801) opened the federal courts to claims based on a right under the Constitution or laws of the United States. Act of March 3, 1875, 18 Stat. 470.2 Theretofore such claims had to be pursued in the State courts and brought to this Court for review of the federal question under § 25 of the Judiciary Act of 1789, 1 Stat. 73, 85. In Reagan v. Farmers’ Loan & Trust Co., 154 U. S. 362, 391, we rejected the argument that suit could not be brought in the federal court to restrain the enforcement of a State agency order. The Court has consistently held to the view that it cannot overrule the determination of Congress as to whether federal courts should be allowed jurisdiction, concurrent with the State courts, even where the plaintiff seeks to restrain action of a State agency. Smyth v. Ames, 169 U. S. 466, 516; Willcox v. Consolidated Gas Co., 212 U. S. 19, 40; Bacon v. Rutland R. Co., 232 U. S. 134, 137; Detroit & Mackinac R. Co. v. Michigan Comm’n, 235 U. S. 402; Oklahoma Natural Gas Co. v. *356Russell, 261 U. S. 290, 293; Prendergast v. New York Telephone Co., 262 U. S. 43, 47; Pacific Telephone & Telegraph Co. v. Kuykendall, 265 U. S. 196, 201; Railroad & Warehouse Comm’n of Minnesota v. Duluth St. R. Co., 273 U. S. 625, 628; see Prentis v. Atlantic Coast Line R. Co., 211 U. S. 210, 228.
These cases can be overruled. They cannot be explained away. The theory of the cases now discarded was clearly stated in Willcox v. Consolidated Gas Co., supra, decided the same Term as the Prentis case: “That the case may be one of local interest only is entirely immaterial, so long as the parties are citizens of different States or a question is involved which by law brings the case within the jurisdiction of a Federal court. The right of a party plaintiff to choose a Federal court where there is a choice cannot be properly denied.” 212 U. S. at 40. What the Court today holds is that if a plaintiff can be sent to a State court to challenge an agency order there is no federal court available to him.3 Since the body of decisions *357which hold the contrary is thus to be discarded, they ought not to be left as derelicts on the waters of the law.
In Congress, a prolonged debate has ensued over the wisdom of the broad grants of power made to the federal courts of original jurisdiction — power which may be invoked against State regulation of economic enterprise. Bill after bill has been proposed to prevent the lower federal courts from interfering with such State action. Finally, in 1910, by a provision in the Mann-Elkins Act, Congress provided that an action for an interlocutory injunction to restrain the action of a State officer acting under a statute alleged to violate the Federal Constitution be heard by a court of three judges, with a right of direct appeal to the Supreme Court. Act of June 18, 1910, § 17, 36 Stat. 539, 557. In 1913, this procedure was extended to applications for an interlocutory injunction to restrain enforcement of the order of a State board or commission. Act of March 4, 1913, 37 Stat. 1013. By the same statute, a State was empowered to keep litigation concerning the validity of State agency regulation in its own courts if it was willing to stay the administrative order.4 In 1925, the provision for a three-judge court and *358direct appeal was extended to a permanent injunction. Act of Feb. 13, 1925, 43 Stat. 936, 938.
Congress, fully aware of the problem, was still not satisfied with the jurisdiction it had left to the federal district courts. Accordingly, in 1934, it passed the Johnson Act which withdrew their jurisdiction over suits to enjoin the enforcement of State rate orders, providing that a remedy was available in the State courts. Act of May 14, 1934, 48 Stat. 775. This restriction on a district court is not here applicable, for the order in controversy is not a rate order. In 1937, Congress further limited federal jurisdiction by providing that a district court could not enjoin enforcement of a State tax statute where a remedy was available in the State courts. Act of Aug. 21, 1937, 50 Stat. 738.
Plainly we are concerned with a jurisdictional issue which has been continuously before Congress and with which it has dealt by explicit and detailed legislation. Congress first made a broad grant of jurisdiction to the federal courts as to all constitutional and other federal claims. Experience gave rise to dissatisfaction with this grant and Congress began to hedge and limit the power. It required that the case be heard by three judges, that a speedy appeal be available, and that the State courts could have exclusive jurisdiction if they would stay the administrative order. It withdrew jurisdiction to enjoin enforcement of State statutes and orders in the two fields where the greatest dissatisfaction with federal jurisdiction existed — rate orders and taxation — so long as a State rem*359edy was available. But Congress did not take away the power of the district court to decide a case like the one before us. Instead, it recognized by the wording of § 17 of the Mann-Elkins Act and later legislation that it had given a right to resort to the federal courts and that such power was an obligatory jurisdiction, not to be denied because as a matter of policy it might be more desirable to raise such constitutional claims in a State court.
The Court rejects the guidance of these amendatory acts, all placing specific limitations upon the exercise of district court jurisdiction in cases affecting local regulation. Instead, the Court now limits the jurisdiction of the federal courts as though Congress had amended § 1331 of Title 28 to read:
“The district courts shall have original jurisdiction of all civil actions wherein the matter in controversy exceeds the sum or value of $3,000, exclusive of interest and costs, and arises under the Constitution, laws or treaties of the United States, provided that the district courts shall not exercise this jurisdiction where a suit involves a challenge to an order of a state regulatory commission.” (New matter in italics.)
It does not change the significance of the Court’s decision to coat it with the sugar of equity maxims. As we have seen, there is no warrant in the decisions of this Court for saying that the plaintiff has an “adequate remedy at law” merely because he may bring suit in the State courts. An “adequate remedy at law,” as a bar to equitable relief in the federal courts, refers to a remedy on the law side of federal courts. Petroleum Exploration, Inc. v. Commission, 304 U. S. 209, 217; Di Giovanni v. Camden Ins. Assn., 296 U. S. 64, 69; Henrietta Mills v. Rutherford County, 281 U. S. 121, 126; Risty v. Chicago, R. I. & Pac. R. Co., 270 U. S. 378, 388. An equity court *360may decline to give relief by injunction if the plaintiff would be adequately compensated by money damages, his “remedy at law.” Armour & Co. v. Dallas, 255 U. S. 280, Harrisonville v. Dickey Clay Co., 289 U. S. 334. But it is not suggested that this suit should have been transferred to the law side of the federal court.
An equity court may also decline to issue an injunction if the interest of the plaintiff is relatively unimportant when compared to some overwhelming public interest. See Mr. Justice Brandéis, dissenting, in Truax v. Corrigan, 257 U. S. 312, 354, 374. See also Virginian R. Co. v. System Federation, 300 U. S. 515, 552. An equity court, in the exercise of its broad powers, may also decline to give relief if there are special circumstances which make it desirable for the court to stay its hand or decline to interfere. Thus, traditionally, an equity court will be reluctant to interfere with the administration of criminal justice. Beal v. Missouri Pacific R. Corp., 312 U. S. 45. It should avoid decision of a constitutional question when construction of a State statute in the State courts may make such a decision unnecessary. Railroad Comm’n v. Pullman Co., 312 U. S. 496. It may decline to consider a case which involves a specialized aspect of a complicated system of local law outside the normal competence of a federal court. Burford v. Sun Oil Co., 319 U. S. 315, 332 et seq. In that case, the majority found that the technicalities of oil regulation and the importance of competent, uniform review made it proper for the District Court to decline to exercise its equity jurisdiction. Again, an equity court, like a court of law for that matter, ought not to hear a case before the plaintiff has exhausted all available nonjudicial legal remedies. Prentis v. Atlantic Coast Line R. Co., supra.
Here the plaintiff has exhausted its non judicial remedies. Avery Freight Lines, Inc. v. Persons, 250 Ala. 40, 32 S. 2d 886 (1947). Concededly there is no State statute *361to construe. There is no consideration which should make a court of equity, as a matter of discretion, decline to entertain a bill for an injunction. Nor does the situation in this suit involve a specialized field of State law in which out-of-State federal judges are not at home. On the contrary, the claim that is made here is within the easy grasp of federal judges, and certainly within the competence of three judges bred in Alabama law, with wide experience in its administration. The only reason for declining to entertain the suit is that it may well be more desirable as a matter of State-Federal relations for the order of a State agency to be reviewed originally in the State lower court and not to be challenged in the first instance in a federal court. It is not for me to quarrel with the wisdom of such a policy. But Congress, in the constitutional exercise of its power to define the jurisdiction of the inferior federal courts, has decided otherwise.
Equity by its very nature denies relief if, on balance of considerations of convenience relevant to equity, it would be inequitable to grant the extraordinary remedy of an injunction. Federal courts of equity have always acted on this equitable doctrine. But it was never a doctrine of equity that a federal court should exercise its judicial discretion to dismiss a suit merely because a State court could entertain it.
This is so because discretion based solely on the availability of a remedy in the State courts would for all practical purposes repeal the Act of 1875. This Act gave to the federal courts a jurisdiction not theretofore possessed so that a State could not tie up a litigant making such a claim by requiring that he bring suit for redress in its own courts. That jurisdiction was precisely the jurisdiction to hear constitutional challenge to local action on the basis of the vast limitations placed upon State action by the Civil War amendments. And precisely because of objections to the choice of courts given plain*362tiffs by the Act of 1875, Congress, by piecemeal restrictive legislation, did require that some federal claims against local regulatory action be litigated originally in State courts and from there brought here for review.
By one fell swoop the Court now finds that Congress indulged in needless legislation in the Acts of 1910, 1913, 1925, 1934 and 1937. By these measures, Congress, so the Court now decides, gave not only needless but inadequate relief, since it now appears that the federal courts have inherent power to sterilize the Act of 1875 against all proceedings challenging local regulation. For if this decision means anything beyond disposing of this particular litigation it means that hereafter no federal court should entertain a suit against any action of a State agency. For every State must afford judicial review in its courts of a claim under the Due Process Clause if such claim would give a federal court jurisdiction. In the absence of such judicial review in the State courts, State action under the doctrine of Ohio Valley Co. v. Ben Avon Borough, 253 U. S. 287, would be nugatory because unconstitutional.
I regret my inability to make clear to the majority of this Court that its opinion is in flagrant contradiction with the unbroken course of decisions in this Court for seventy-five years.

 The record contains no allegations or findings on the value of the railroad’s property and no particulars concerning its accounting system. Finding 23 indicates that the railroad has had the following yearly “net operating income” from its entire business:
1931-1941 (average). $16,232,045
1942-1945 (average). 35,561,045
1946-1948 (average). 23,278,299
Finding 24 indicates that the railroad has had the following yearly “net operating income” from its service within Alabama:
1936-1941 (average). $1,508,282
1942-1945 (average). 4,220,203
1946-1948 (average). 2,598,459

 Jurisdiction over cases where there is diversity of citizenship was conferred by § 11 of the Judiciary Act of 1789. 1 Stat. 73, 78. In Meredith v. Winter Haven, 320 U. S. 228, we held that in an equity case the District Court could not decline to exercise its jurisdiction merely because matters of State law were involved.

 We are told by the Court: “Compare such cases as Bacon v. Rutland R. Co., 232 U. S. 134 (1914), where State judicial review procedures plus review in this Court were thought to be inadequate.” There is not the shadow of a hint in the Bacon case to warrant such an explanation of it. No such thing was “thought” before today’s decision. The Bacon case is merely an instance of what until today was the settled doctrine that a railroad company had the choice of going either into the State court or into the federal court to press a federal constitutional claim.
It is suggested that the “inadequacy” of State judicial review, by which the Bacon case is now sought to be explained, “derived from the rationale that the federal right of a utility to be protected from confiscation of its property depended upon 'pure matters of fact’ to the extent that a de novo hearing of such facts in a federal court was essential to the protection of constitutional rights. Prentis v. Atlantic Coast Line R. Co., 211 U. S. 210, 228 (1908).”
I regret the necessity for saying again that there is no warrant whatever for this statement. It cannot be found at the place cited in the Prentis opinion. That merely repeats the doctrine of the *357numerous cases after the Act of 1875 that a plaintiff has a choice of State or federal court where a constitutional claim is made:
“All their constitutional rights, we repeat, depend upon what the facts are found to be. They are not to be forbidden to try those facts before a court of their own choosing if otherwise competent. ‘A State cannot tie up a citizen of another State, having property within its territory invaded by unauthorized acts of its own officers, to suits for redress in its own courts.’ Reagan v. Farmers’ Loan & Trust Co., 154 U. S. 362, 391; Smyth v. Ames, 169 U. S. 466, 517. See McNeill v. Southern Railway Co., 202 U. S. 543; Ex parte Young, 209 U. S. 123, 165.” 211 U. S. at 228.

 “It is further provided that if before the final hearing of such application a suit shall have been brought in a court of the State having jurisdiction thereof under the laws of such State, to enforce such statute or order, accompanied by a stay in such State court *358of proceedings under such statute or order pending the determination of such suit by such State court, all proceedings in any court of the United States to restrain the execution of such statute or order shall be stayed pending the final determination of such suit in the courts of the State.” ' 37 Stat. 1014. See 28 U. S. C. § 2284 (5).
Alabama did not avail itself of this means for taking the litigation from the federal court.