In re Arkansas Railroad Rates

• Citation: 168 F. 720
• Parties: In re ARKANSAS RAILROAD RATES.
• Decision Date: 19 April 1909
• Court: U.S. District Court — Eastern District of Arkansas

168 F. 720

In re ARKANSAS RAILROAD RATES.

United States Circuit Court, E.D. Arkansas, Western Division.

April 19, 1909

John M Moore, Buzbee & Hicks, Reid & McDonough, and B. R. Davidson for complainants.

Hal L Norwood, Atty. Gen., Joseph M. Hill, James H. Harrod, and Wm F. Kirby, for defendants.

TRIEBER District Judge.

Upon application for a temporary injunction made by the railroads of this state, and heard by Judge Van Devanter, one of the Circuit Judges of this circuit, preliminary injunctions were granted restraining the enforcement of the intrastate rates then prescribed by the Railroad Commission of the state of Arkansas for the transportation of freight and the two cents a mile passenger act of the General Assembly of the state of Arkansas, approved February 9, 1907 (Acts 1907, p. 10), the contention on the part of complainants being that they were unreasonable, noncompensatory, and confiscatory. At that hearing the learned judge found from the evidence submitted that the additional cost of intrastate traffic exceeds that of the interstate of the complaining roads 100 per cent. on freight, and 15 per cent. on passenger traffic, and, applying this rule to the earnings of the roads and their values, decided that 'the rates in question are noncompensatory and unreasonable, and that their enforcement, although not so intended, is nothing other than a taking of the property of the railroad companies without due compensation, which is confiscation. ' The opinion on that hearing will be found in 163 F. 141.

The State Railroad Commission now applies for a modification of these temporary injunctions, alleging that 'since the granting of the preliminary injunctions the railroad companies have established freight and passenger rates on all intrastate business which are unreasonable and exorbitant and are destroying many of the industries of the state. ' It is charged that the passenger rate has been raised to three cents a mile, and the freight tariffs put into effect increased those prescribed by the commission, and in force at the time the temporary injunctions were granted, as follows:

Fifty per cent. on grain; on cotton, 140 per cent.; on packing-house products, 100 per cent.; on coal, 35 per cent.; on brick, stone, and sand, 75 per cent.; on lumber, 107 per cent.; and other various lines of merchandise about 75 per cent.-- that the average increase on the principal commodities of the state on a revenue producing-basis is over 77 per cent., which rates it is claimed are unreasonable, extortionate, and oppressive to the shippers and consumers of the state. It is therefore asked that the preliminary injunction now in force be modified so as to prevent this injustice.

That a preliminary injunction may be modified at any time whenever the ends of justice require it is beyond question. Not only may it be done b the trial court, but upon appeal by the appellate tribunal. Denver & Rio Grande R. Co. v. United States, 124 F. 156, 59 C.C.A. 579. Judge Sanborn, who in that case, said that:

'A preliminary injunction may be modified when by such modification the injury or inconvenience of one or more of the litigants may be decreased without increasing the danger of loss to their opponents.'

And, accordingly, he modified the temporary injunction which had been granted by the lower court. There can be no doubt that a temporary injunction cannot be claimed as an absolute right, but is within the sound discretion of the court; that discretion, of course, to be controlled by the established principles of equity jurisprudence. Shubert v. Woodward (C.C.A.) 167 F. 47. In the headnote of that case, prepared by the court, it is said:

'The specific performance of contracts and the issuance of injunctions are not matters of right; they rest not in the arbitrary or whimsical will, but in the judicial discretion of the court, informed and guided by the established principles, rules, and practice in equity, which are advisory rather than mandatory.'

See, also, New York City v. Pine, 185 U.S. 93, 22 Sup.Ct. 592, 46 L.Ed. 820; Kansas v. Colorado, 206 U.S. 46, 27 Sup.Ct. 655, 51 L.Ed. 956.

In granting or refusing a preliminary injunction, proper regard must be had for the comparative injury which will be sustained by the defendant if the injunction were granted, and by complainant if it were refused, and, in order to prevent great injury to the defendant when the complainant is prima facie entitled to a temporary injunction, the court, in the exercise of its discretion, frequently resorts to the expediency of imposing terms and conditions upon the parties at whose instance it proposes to act. Russell v. Farley, 105 U.S. 433, 438, 442, 26 L.Ed. 1060; Meyers v. Block, 120 U.S. 206, 214, 7 Sup.Ct. 529, 30 L.Ed. 644; Ewing v. Filley, 43 Pa. 384, 387; Denver & Rio Grande R. Co. v. United States, 124 F. 156, 161, 59 C.C.A. 579; Mountain Copper Co. v. United States, 142 F. 625, 73 C.C.A. 621; Vogel v. Warsing, 146 F. 449, 77 C.C.A. 199; McElroy v. Kansas City (C.C.) 21 F. 257, 264, 263; McCaul v. Braham (C.C.) 16 F. 37, 42; Spring Valley Water Co. v. San Francisco (C.C.) 165 F. 667; Macon R.R. Co. v. Gibson, 85 Ga. 1, 11 S.E. 442, 21 Am.St.Rep. 135; Carleton v. Rugg, 149 Mass. 550, 22 N.E. 55, 5 L.R.A. 193, 14 Am.St.Rep. 446; Kerr on Injunction (2d Am. Ed.) 30; Spelling on Injunction, 1031, 1033.

The authorities cited by counsel for complainants all refer to permanent, and not preliminary, injunctions, and for this reason are not applicable to this proceeding.

In Denver & Rio Grande R. Co. v. United States, supra, it was said that:

'The purpose of a preliminary injunction is to protect and preserve the rights of all the litigants with the least injury to each until the controversies between them can be tried and finally decided.'

In Spring Valley Water Co. v. San Francisco, supra, the question before the court was the terms upon which a preliminary injunction should be granted against the enforcement of an ordinance fixing water rates to be charged by complainant. Judge Farrington, in a very exhaustive and learned opinion, held that:

'This court cannot control the discretion of the supervisors; it cannot substitute its judgment for theirs. The power and duty of fixing water rates is cast by the Constitution on that board, and not on this court. The law nowhere provides an appeal to this court from an ordinance adopted by the board of supervisors, nor does it clothe this tribunal with any authority to review, revise, correct, or send back to that body for reconsideration an ordinance establishing the compensation to be collected for water. * * * It would seem, therefore, that the court is limited to the determination of a single question, namely, is the ordinance confiscatory?'

And coming to the question of a preliminary injunction, the learned judge says:

'It is an abuse of judicial discretion to issue an injunction which will permit one party to obtain any advantage by acting, while the hands of the adverse party are tied by the writ.'

From these authorities it may be stated that a court, when called upon to grant a preliminary injunction, may impose such terms, on granting it, as will protect the rights of the defendant as well as those of the complaining party, and if, after the temporary injunction has been granted, and before a final hearing, while it is in force, it is shown to the court that great injustice is being done by reason thereof, that the acts of the plaintiff are unjust, oppressive, and unmindful of the rights of the defendants, the court may modify it by imposing terms which will prevent such injustice.

This leaves for determination another very important matter. Can the court, for the purpose of requiring the complainant, who obtained the preliminary injunction, to do equity and preventing the imposition of extortionate rates for the carriage of freight and passengers, fix maximum rates beyond which complainants must not go during the pendency of the litigation, and make a compliance with these rates a condition upon which the temporary injunction will be continued? That the making of carriers' rates is a legislative act and not judicial is frankly conceded by counsel for the defendants, and for this reason courts are powerless to make them. Upon final hearing the court must, if it is shown that the commission rates are compensatory within the meaning of the law, dissolve the preliminary injunction or make it perpetual if they are found to be noncompensatory, and therefore confiscatory.

The authorities are not only numerous, but harmonious, on this subject. A few of the leading and late cases is all that it is necessary to cite on the subject. Reagan v. Farmers' Loan & Trust Co., 154 U.S. 362, 400, 14 Sup.Ct. 1047, 1054, 38 L.Ed. 1014; Interstate Commerce Commission v. Ry. Co., 167 U.S. 479, 499, 505, 17 Sup.Ct. 896, 42 L.Ed. 243; Prentiss v. Atlantic Coast Line, 211 U.S. 210, 226, 29 Sup.Ct. 67, 53 L.Ed. . . . . But when the application is for a temporary injunction, the rule is different. As was said in Spring Valley Water Co. v. San Francisco, supra:

'While it appears that the ordinance in question is probably confiscatory, and therefore invalid, the fact that complainant will suffer irreparable injury unless an injunction issues is not decisive. The court owes equal consideration to both parties; it must not issue an injunction which will do more harm to one party than good to the other; it should so preserve the matters in dispute as to protect each party as far as possible from harm. We have no means of knowing the plans of the company, whether it will raise the rates for the remainder of the fiscal year to the full amount of what is alleged to be reasonable-- that is, so as to

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