Chicago Rys. Co. v. Illinois Commerce Commission, 2496.

Decision Date09 January 1922
Docket Number2496.
Citation277 F. 970
PartiesCHICAGO RYS. CO. et al. v. ILLINOIS COMMERCE COMMISSION et al.
CourtU.S. District Court — Northern District of Illinois

[Copyrighted Material Omitted] [Copyrighted Material Omitted]

W. W Gurley, James M. Sheean, Harry P. Weber, and Charles S. Babcock, all of Chicago, Ill., for plaintiffs.

Edward J. Brundage, Atty. Gen., of the State of Illinois.

Illinois Commerce Commission, pro se, by Frank L. Smith, Chairman, and Harvey E. Wood, Supervisor of Orders.

Samuel A. Ettelson, Corp. Counsel, Chester E. Cleveland, Daniel A. Roberts, and James G. Skinner, all of Chicago, Ill., for city of Chicago.

Jacob Legion Tenny, of Chicago, for certain interveners.

Before EVANS and PAGE, Circuit Judges, and CARPENTER, District Judge.

CARPENTER District Judge (after stating the facts as above).

The jurisdiction of this court ought not to be seriously, and cannot be effectively, challenged. Roller v. Holly, 176 U.S. 398, 20 Sup.Ct. 410, 44 L.Ed. 520; Willcox et al. v. Consolidated Gas Co., 212 U.S. 19, 29 Sup.Ct. 192, 53 L.Ed. 383, 48 L.R.A. (n.S.) 1134, 15 Ann.Cas. 1034; L. & N.R. Co. v. Central Stock Yards Co., 212 U.S. 132, 29 Sup.Ct. 246, 53 L.Ed. 441; Coe v. Armour Fertilizer Works, 237 U.S. 413, 35 Sup.Ct. 625, 59 L.Ed. 1027.

Willcox v. Consolidated Gas Company, supra, concerned a bill to enjoin the enforcement of certain acts of the New York state Legislature, and an order of the Gas Commission of that state fixing rates to be charged by the complainant, which were alleged to be confiscatory, and therefore in violation of the Fourteenth Amendment of the Constitution. The jurisdiction of the chancellor in the court of first instance was attacked. The court said (212 U.S.at page 40, 29 Sup.Ct. 195, 53 L.Ed. 383, 48 L.R.A. (N.S.) 1134, 15 Ann.Cas. 1034):

'They assume to criticize that court for taking jurisdiction of this case as precipitate, as if it were a question of discretion or comity, whether or not that court should have heard the case. On the contrary, there was no discretion or comity about it. When a federal court is properly appealed to in a case over which it has by law jurisdiction, it is its duty to take such jurisdiction (Cohens v. Virginia, 6 Wheat. 264, 404), and in taking it that court cannot be truthfully spoken of as precipitate in its conduct. 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. In re Metropolitan Railway Receivership, 208 U.S. 90-110; Prentis v. Atlantic Coast Line et al., 211 U.S. 210. In the latter case it was said that a plaintiff could not be forbidden to try the facts upon which his right to relief is based before a court of his own choice, if otherwise competent.'

The defendants urge Prentis v. Atlantic Coast Line, 211 U.S. 210, 29 Sup.Ct. 67, 53 L.Ed. 150, as defeating the jurisdiction of this court, because the record does not disclose that the plaintiffs have applied for the rehearing provided for in section 67 of the Public Utilities Act.

The order of the Illinois Commerce Commission was a complete exercise of the legislative power of the state, and was in force immediately after its passage, notwithstanding a motion to reconsider might have been urged and entertained. If the state of Illinois, vesting the power to regulate rates in the Commerce Commission, had provided that the orders of the commission should not be put into effect until after a certain time, within which an application for a rehearing could be made, another question would be involved; but the statutes of Illinois did not so provide, and, the granting or denying of a petition for rehearing being wholly within the discretion of the commission, the legislative act was complete upon the entry of the order.

The question involved here is that of a United States court exercising power under the Constitution of the United States to protect a citizen against the alleged confiscation of its property by some agency of a state. The matter is of extreme importance, because the relief prayed for interferes with the Illinois Commerce Commission, and would stop ad interim the regulatory power of the state over public utilities. It is a serious and very grave matter, and all doubts are resolved against the plaintiffs. If, however, the record discloses that the order of the state Commerce Commission is in fact a confiscation of private property without adequate and just compensation, this court not only has the power to act, but is in duty bound to exercise that power.

It is quite apparent from a reading of Prentis v. Atlantic Coast Line, above referred to and relied upon by defendants, that there the court of first instance was the final legislative body, just as in this case the Illinois Commerce Commission was the final legislative body. The Prentis Case was carefully considered by Judge Hook in A., T. & Santa Fe Railway Co. v. Love et al. (C.C.) 174 F. 59, and by Judge Sanborn in the same case on appeal, 185 F. 321, 107 C.C.A. 403, and the logic of the opinions in those cases makes it quite impossible for a different conclusion to be reached here.

With reference to the plaintiffs in this case, it is clear that prosecution for violating the order of the commission would not be suspended by the application for a rehearing. The character, force, and effect of the commission's order while it remained in operation is in no respect modified or affected by the opportunity given by the statute to apply to the commission for a rehearing, and, however the order be styled, it is nevertheless, until changed or rescinded, the final legislative act of the state of Illinois. For an indeterminate time at least it is complete and binding so far as is concerned the public utility affected.

The sole point open to this court for decision on this motion is whether the 5-cent rate of fare ordered by the Illinois Commerce Commission will produce for the plaintiff companies sufficient revenue to pay operating expenses and a fair and just return for the value of their property devoted to the public use. The Illinois Commerce Commission is the principal defendant here, and we may look to its brief, if anywhere, for reasons to deny the motion for the preliminary injunction.

The Commerce Commission, as well as the city of Chicago, were invited to point out from the record facts which would justify this court in refusing to grant injunctive relief. The commission stated in its brief and argument:

'In coming to the conclusions expressed in our order, we took into consideration all the evidence introduced in the case before us, also the law creating the commission, the law governing public utilities generally as it has been set forth in court decisions, matters of which we have special and official knowledge as members of the commission, and matters of common knowledge to all moderately well informed men. However, all the figures herein discussed which concern the affairs of the companies, and the tabulations attached hereto as appendices, were taken or deduced directly from the evidence in the case before us.'

The Public Utilities Act of Illinois granted power to the commission to enter orders only when based upon substantial evidence. It must follow, therefore, that unless the defendants can show that the record contains such substantial evidence, the order of the commission is void. L. & N.R. Co. v. Finn et al., 235 U.S. 601, 35 Sup.Ct. 146, 59 L.Ed. 379.

The plaintiffs having shown prima facie by the sworn bill and affidavits that the order of the commission was confiscatory, and there being no way in which they could demonstrate that there was no substantial evidence introduced before the commission, without reading to the court the entire record made before that body, which comprises several volumes of testimony and exhibits, the court asked the defendants to point to the evidence upon which they relied to support the ruling. Defendants availed themselves of the opportunity thus afforded, and introduced all of the evidence heard by the commission. Time was given to them by this court to file a statement pointing out such evidence as the record might contain which they deemed would be sufficient in law to support the findings of the commission. The commission and the city of Chicago have filed statements, which will now be analyzed and discussed.

With the exception of one item, that of renewals, $4,853,487.00, they attempted to justify the order upon the ground that the companies could put into effect certain savings in operation. The attorneys for the commission and the city of Chicago in effect urge that the Illinois Commerce Commission has authority to regulate the service by fixing the rates of fare charged therefor of all public utilities in Illinois, and that the only limitation upon its control of rates is that the rates fixed shall be just and reasonable. That the authority to control rates carries with it control of operation.

The Illinois Commerce Commission has the right to regulate the methods of operation employed by any public utility within the state, and section 75 of the Illinois Commerce Act (Laws 1921, p. 702) shows how changes in operation can be enforced by the commission, namely, by making application to the circuit or superior court in case the utility fails to comply with orders duly made. Nowhere, however, is the power given to reduce rates for the purpose of enforcing new methods of doing business.

The order of the commission found that at no time since the entry of the...

To continue reading

Request your trial
20 cases
  • Schlosser v. Welsh
    • United States
    • U.S. District Court — District of South Dakota
    • 19 Febrero 1934
    ...that legislative powers are conferred upon the supreme court of the state of Vermont." To the same effect see Chicago Ry. Co. v. Illinois Commerce Commission (D. C.) 277 F. 970; Belt Line Ry. Corp. v. Newton (D. C.) 273 F. 272; City R. Co. v. Beard (D. C.) 283 F. 313, In the last-cited case......
  • Los Angeles Gas & Electric Corporation v. RAILROAD COM'N
    • United States
    • U.S. District Court — Panama Canal Zone
    • 8 Abril 1932
    ...Ga. Ry. & Pr. Co. v. R. R. Comm. (D. C.) 278 F. 242, 247, affirmed 262 U. S. 625, 43 S. Ct. 680, 67 L. Ed. 1144; Chicago Rys. Co. v. Ill. Commerce Comm. (D. C.) 277 F. 970, 980; Garden City v. Telephone Co., 236 F. 693, 696, 150 C. C. A. "Customers pay for service, not for the property used......
  • Hope Natural Gas Co. v. Federal Power Commission, 4979.
    • United States
    • U.S. Court of Appeals — Fourth Circuit
    • 17 Mayo 1943
    ...Power Co. v. Railroad Commission, D.C., 278 F. 242, 247, affirmed 262 U.S. 625, 43 S.Ct. 680, 67 L.Ed. 1144; Chicago Rys. Co. v. Illinois Commerce Commission, D.C., 277 F. 970, 980; Garden City v. Telephone Company 8 Cir., 236 F. 693, "Customers pay for service, not for the property used to......
  • City of Minneapolis v. Rand
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • 8 Enero 1923
    ... ... 266, 39 L.Ed. 341; Blair v ... Chicago, 201 U.S. 400, 450, 26 Sup.Ct. 427, 50 L.Ed ... 567; Interstate Com ... Commission v. Railway Co., 167 U.S. 479, 499, 17 Sup.Ct ... See, ... also, Chicago Rys. Co. v. Illinois Commerce Commission ... (D.C.) ... ...
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT