State of Florida v. United States

• Decision Date: 02 April 1934
• Docket Number: No. 342,342
• Citation: 54 S.Ct. 603,78 L.Ed. 1077,292 U.S. 1
• Parties: STATE OF FLORIDA et al. v. UNITED STATES of America et al
• Court: U.S. Supreme Court

292 U.S. 1

54 S.Ct. 603

78 L.Ed. 1077

STATE OF FLORIDA et al.

v UNITED STATES of America et al.

No. 342.

Argued and Submitted Feb. 13, 1934.

Decided April 2, 1934.

Appeal from the District Court of the United States for the Northern District of Georgia.

Mr. Henry P. Adair, of Jacksonville, Fla., for appellant Wilson cypress co.

Mr. Theodore T. Turnbull, of Tallahassee, Fla., for appellants State of Florida and Florida Railroad Commission.

Mr. J. V. Norman, of Washington, D.C., for appellant Wilson Lumber Co.

Messrs. F. C. Hillyer and Julian E. Fant, both of Jacksonville, Fla., for appellant F. S. Buffum Co., Inc.

Messrs. J. Stanley Payne, of Washington, D.C., Carl H. Davis and F. B. Grier, both of Wilmington, N.C., and W. E. Kay, of Jacksonville, Fla., for appellees the United States and the Interstate Commerce Commission.

Mr. Robert C. Alston, of Atlanta, Ga., for appellee Atlantic Coast Line R. Co.

Mr. Chief Justice HUGHES delivered the opinion of the Court.

This appeal presents the question of the validity of an order made by the Interstate Commerce Commission on July 5, 1932, requiring to Atlantic Coast Line Railroad Company to desist from an unjust discrimination found to exist in the relation of intrastate and interstate rates and to maintain certain rates for the intrastate transportation of logs, as described, within and throughout the State of Florida for distances of 170 miles or less. 186 I.C.C. 157; 190 I.C.C. 588. The order was sustained by the District Court, three judges sitting. 4 F.Supp. 477.

By an order of August 2, 1928, the Commission prescribed interstate rates on logs on the lines of the Atlantic Coast Line Railroad Company from points in northern Florida to destinations in Georiga for distances not exceeding 170 miles. Finding that the Florida intrastate rates on similar logs for similar hauls, generally described as the Cummer scale, resulted in unjust discrimination, the Commission also established rates for intrastate application within Florida which would correspond with the rates fixed for interstate transportation. 146 I.C.C. 717. The order in the latter respect was assailed and the decree of the District Court sustaining it was reversed by this Court. Florida v. United States, 282 U.S. 194, 51 S.Ct. 119, 75 L.Ed. 291. We decided that the order could not be upheld on the ground of undue prejudice against persons and localities in interstate commerce, and that it could not be sustained on the ground of unjust discrimination against interstate commerce from the standpoint of revenue losses due to intrastate rates as the order in that aspect was not supported by appropriate findings.

Meanwhile, in February, 1929, both the interstate rates and intrastate rates, as prescribed, had been put into effect. After the mandate of this Court, the Cummer scale of intrastate rates was restored and became effective on April 10, 1931. The Interstate Commerce Commission reopened the proceedings and, after hearing, found that the Cummer scale of intrastate rates caused unjust discrimination against interstate commerce from a revenue standpoint. The Commission made no finding with respect to undue prejudice against persons and localities in interstate commerce. The Commission accordingly entered the order of July 5, 1932, now under review. While bills were pending in the District Court to enjoin this order, the Commission granted a further hearing in view of the representation that a number of southern railroads had reduced their log rates, and on January 9, 1933, the Commission made an additional report which affirmed the findings previously made and restored the order of July 5, 1932, to be effective February 25, 1933. 190 I.C.C. 600. Supplemental bills were filed in the District Court, and on February 24, 1933, the decree was entered upholding the Commission's action.

The order of the Commission is attacked upon the grounds: (1) That under Emergency Railroad Transportation Act, 1933 (c. 91, 48 Stat. 211 (49 USCA §§ 250, 251 and note, 252 et seq.)), the Commission was without power to make the order; (2) that the findings of the Commission are inadequate to sustain the order; and (3) that if the findings can be deemed to be adequate, they are not supported by the evidence.

First. The power of the Commission. By Transportation Act, 1920 (41 Stat. 484 (49 USCA § 13)), the Congress granted specific authority to the Commission to remove discriminations against interstate commerce caused by intrastate rates. The Congress amended section 13 of the Act to Regulate Commerce so as to emplower the Commission to confer with state authorities 'with respect to the relationship between rate structures and practices of carriers subject to the jurisdiction of such State bodies and of the commission.' Section 13(3), 49 USCA § 13(3). And, whenever in the course of its authorized investigations, the Commission, after full hearing, finds that any rate, regulation, or practice 'made or imposed by authority of any State' (section 13(3) causes 'any undue or unreasonable advantage, preference, or prejudice as between persons or localities in intrastate commerce on the one hand and interstate or foreign commerce on the other hand, or any undue, unreasonable, or unjust discrim- ination against interstate or foreign commerce' (section 13(4), the Commission is required to prescribe the rate thereafter to be charged, or the regulation or practice thereafter to be observed, in such manner as in its judgment will remove the discrimination. The order of the Commission is to bind the carriers, parties to the proceeding, 'the law of any State or the decision or order of any State authority to the contrary notwithstanding.' Section 13(4), 49 USCA § 13(4).

In Railroad Commission of Wisconsin v. Chicago, Burlington & Quincy R.R. Co., 257 U.S. 563, 585—587, 42 S.Ct. 232, 236, 66 L.Ed. 371, 22 A.L.R. 1086, we reached the conclusion that the provision of section 13(4) for the removal of 'any undue, unreasonable, or unjust discrimination against interstate * * * commerce' was not to be regarded as referring only to discrimination as between persons and localities. We held that Transportation Act 1920 imposed an affirmative duty on the Commission 'to fix rates and to take other important steps to maintain an adequate railway service for the people of the United States.' Intrastate rates, we said, must play a most important part in maintaining such an adequate system. If there was interference with the achievement of that purpose because of a disparity of intrastate rates as compared with interstate rates, the Commission was authorized to end that disparity. It was to be ended because it constituted an 'unjust discrimination against interstate * * * commerce.' We concluded that these words in section 13(4) were not tautological, but had the necessary effect of conferring authority upon the Commission to raise intrastate rates so that the intrastate traffic may produce its fair share of the earnings required to meet maintenance and operating costs and to yield a fair return on the value of property devoted to the transportation service, both interstate and intrastate. United States v. Louisiana, 290 U.S. 70, 75, 54 S.Ct. 28, 78 L.Ed. 181.

Appellants insist that this result was reached because of what was described as the 'dovetail relation' between section 13(4) and section 15a, and that the amendment of the latter section by Emergency Railroad Transportation Act, 1933 (49 USCA § 15a), has effected a radical change. They contend that the Commission no longer has authority to remove an unjust discrimination against interstate commerce caused by a disparity of intrastate rates viewed from a revenue standpoint. We are unable to accept that view. Section 13(4) was not amended by Emergency Railroad Transportation Act, 1933. The authority conferred by section 13(4) to prescribe intrastate rates for the purpose of removing an unjust discrimination against interstate commerce was not withdrawn. The Congress had knowledge of the construction given to section 13(4) by this Court and of the important effect of that construction in relation to intrastate rates found to be inadequate. The conclusion is not lightly to be reached that the Congress would have undertaken to change a policy of such great importance without explicit language indicating that purpose.

The purpose of the changes in section 15a is not left in doubt. They were made with the manifest object of eliminating the provisions for the recapture of excess income of carriers and of revising the rule as to rate making.¹ The requirement imposed by Transportation Act 1920 for the adjustment of rates according to rate groups was abolished and in substitution the Commission was directed to give due consideration to the factors which are specified in the section as amended.² Thus the Commission is to consider among other factors, the effect of rates on the movement of traffic'; 'the need, in the public interest, of adequate and efficient railway transportation service at the lowest cost consistent with the furnishing of such service'; and 'the need of revenues sufficient to enable the carriers, under honest, economical, and efficient management, to provide such service.'³

Neither the elimination of the group method of rate making, nor the substituted rule, suggests an intention to impair the Commission's authority over intrastate rates for the appropriate protection of interstate commerce. On the contrary, the substituted rule of rate making by its express terms emphasizes the carriers' need of adequate revenues. The Congress had provided authority to meet that need where inadequate intrastate rates caused unjust discrimination against interstate commerce. The Commission had exercised that authority. The Commission had not proposed the diminution of that authority. The new Act discloses no intention to weaken national control for essential national purposes over the...