324 U.S. 439 (1945), 11, Georgia v. Pennsylvania Railroad Co.

Docket Nº:No. 11, original
Citation:324 U.S. 439, 65 S.Ct. 716, 89 L.Ed. 1051
Party Name:Georgia v. Pennsylvania Railroad Co.
Case Date:March 26, 1945
Court:United States Supreme Court

Page 439

324 U.S. 439 (1945)

65 S.Ct. 716, 89 L.Ed. 1051



Pennsylvania Railroad Co.

No. 11, original

United States Supreme Court

March 26, 1945

Argued January 2, 1945



1. Leave is granted the Georgia to file in this Court against twenty railroads a bill of complaint in which the State, suing as parens patriae and in its proprietary capacity, and seeking injunctive relief, charges that the defendants have conspired to fix freight rates which discriminate against the State, and that the northern roads use coercion on the southern roads in the fixing of joint through rates. Const., Art. III, § 2; 28 U.S.C. § 341; Clayton Act, § 16. Pp. 443, 452.

2. The bill states a justiciable controversy. Massachusetts v. Mellon, 262 U.S. 447, and Florida v. Mellon, 273 U.S. 12, distinguished. P.445.

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3. That the United States may bring criminal prosecutions or suits for injunctions under the antitrust laws does not preclude the State from maintaining the suit. P. 447.

4. In determining whether a State may invoke the original jurisdiction of this Court in a dispute which is justiciable, the interests of the State are not confined to those which are proprietary, but embrace also the so-called quasi-sovereign interests. P. 447.

5. The State may maintain the suit as parens patriae acting on behalf of its citizens, and the injury to the State in its proprietary capacity may be treated as makeweight. P. 450.

6. A State is a "person" entitled to sue for injunctive relief under § 16 of the Clayton Act. P. 452.

7. The State is not entitled to recover damages, even if the conspiracy be proved. Keogh v. Chicago & N.W. R. Co., 260 U.S. 156. P. 453.

8. The injunctive relief sought by the State against the alleged rate-fixing combination and conspiracy among the defendant carriers is not a matter over which the Interstate Commerce Commission has jurisdiction, and the relief sought is therefore not such as is available under § 16 of the Clayton Act only in a suit brought by the United States. P. 454.

9. Rate-fixing combinations are not immune from the operation of the antitrust laws. P. 456.

10. There is no warrant in the Interstate Commerce Act and the Sherman Act for saying that the authority to fix joint through rates clothes with legality a conspiracy to discriminate against a State or a region, to use coercion in the fixing of rates, or to put in the hands of a combination of carriers a veto power over rates proposed by a single carrier. P. 458.

11. The provision of § 16 of the Clayton Act, authorizing relief by injunction

when and under the same conditions and principles as injunctive relief against threatened conduct that will cause loss or damage is granted by courts of equity

is here sufficiently satisfied to justify filing of the bill of complaint. P. 460.

12. That the rates which have been fixed by the alleged combination may or may not be held unlawful by the Interstate Commerce Commission is immaterial to the issue here presented. P. 460.

13. A combination to fix reasonable and nondiscriminatory rates may nevertheless be illegal. P. 460.

14. Damage must be presumed to flow from a conspiracy to manipulate rates within that zone of reasonableness (between maxima and

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minima) within which a carrier is ordinarily free to adjust its charges for itself. P. 461.

15. Construed as charging a conspiracy among the defendants to use coercion in the fixing of rates and to discriminate against Georgia in the rates which are fixed, the bill states a cause of action under the antitrust laws. P. 462.

16. The bill is here construed with that liberality accorded the complaint of a sovereign State as presenting a substantial question with sufficient clarity and specificity as to require a joinder of issues. P. 463.

7. A State may not invoke the original jurisdiction of this Court in a suit against one of its citizens. P. 463.

18. Since the two defendant corporations which claim to be citizens of Georgia are not indispensable parties to the suit, it is unnecessary at this stage of the proceedings to determine whether they are citizens of Georgia within the meaning of Art. III, § 2 of the Constitution. The citizenship of the two defendants in question may be challenged by a motion to strike, and, if they are stricken, this Court would not lose original jurisdiction over the controversy between Georgia and the other defendants. P. 463.

19. It does not necessarily follow from the grant of leave to file the bill of complaint that this Court must exercise its original jurisdiction. P. 464.

20. Clause 2 of § 2 of Article III of the Constitution, which confers on this Court jurisdiction of those cases, inter alia, "in which a State shall be Party" does not grant exclusive jurisdiction to this Court in the classes of cases enumerated, and the exercise of the jurisdiction is not mandatory in every case. P. 464.

21. This Court cannot take judicial notice of the district or districts wherein all of the defendant railroads are "found" or "transact business," within the meaning of the venue provision of § 12 of the Clayton Act. P. 466.

22. No showing having been made here that all of the defendants can be "found" in some convenient forum, it cannot be said that Georgia has a proper and adequate remedy apart from the original jurisdiction of this Court. Once a State makes out a case within the original jurisdiction of this Court, its right to come here is established; the Constitution does not require that the State go further and show that no other forum is available to it. P. 466.

23. Apart from specific exceptions created by Congress, the jurisdiction of the federal district courts is territorial. P. 467.

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24. The provision of § 5 of the Sherman Act empowering the court before whom proceedings under § 4 are pending to bring in parties who reside outside the district is limited, as is § 4, to suits brought by the United States. P. 467.

25. In the exercise of its discretion, this Court does not remit Georgia to the federal district courts for relief, but grants leave to file the amended bill of complaint. P. 468.

Motion granted.

On motion by the Georgia for leave to file an amended bill of complaint against twenty railroads.

Page 443

DOUGLAS, J., lead opinion

MR. JUSTICE DOUGLAS delivered the opinion of the Court.

The State of Georgia, by this motion for leave to file a bill of complaint,1 seeks to invoke the original jurisdiction of this Court under Art. III, Sec. 2 of the Constitution. See Judicial Code § 233, 28 U.S.C. § 341. The defendants are some twenty railroad companies. On November 6, 1944, we issued a rule to show cause why Georgia should not be permitted to filed its bill of complaint. Returns to the rule have been made, and oral argument had.

Georgia sues in four capacities, only two of which we need mention: (1) in her capacity as a quasi-sovereign or as agent and protector of her people against a continuing wrong done to them, and (2) in her capacity as a proprietor to redress wrongs suffered by the State as the owner of a railroad and as the owner and operator of various institutions of the State.

The essence of the complaint is a charge of a conspiracy among the defendants in restraint of trade and commerce among the States. It alleges that they have fixed arbitrary and noncompetitive rates and charges for transportation of freight by railroad to and from Georgia so as to prefer the ports of other States over the ports of Georgia. It charges that some sixty rate bureaus, committees, conferences, associations, and other private rate-fixing agencies have been utilized by defendants to fix these rates; that no road can change joint through rates without the approval of these private agencies; that this private rate-fixing machinery which is not sanctioned by the Interstate Commerce Act and which is prohibited by the antitrust Acts has put the effective control of rates to

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and from Georgia in the hands of the defendants. The complaint [65 S.Ct. 720] alleges that these practices, in purpose and effect, give manufacturers, sellers, and other shippers in the North an advantage over manufacturers, shippers, and others in Georgia. It alleges that the rates so fixed are approximately 39 percent higher than the rates and charges for transportation of like commodities for like distances between points in the North. It alleges that the defendants who have lines wholly or principally in the South are generally dominated and coerced by the defendants who have northern roads, and therefore that, even when the southern defendants desire, they cannot publish joint through rates between Georgia and the North when the northern carriers refuse to join in such rates.

It is alleged that the rates, as a result of the conspiracy, are so fixed as

(a) to deny to many of Georgia's products equal access with those of other States to the national market;

(b) to limit in a general way the Georgia economy to staple agricultural products, to restrict and curtail opportunity in manufacturing, shipping, and commerce, and to prevent the full and complete utilization of the natural wealth of the State;

(c) to frustrate and counteract the measures taken by the State to promote a well rounded agricultural program, encourage manufacture and shipping, provide full employment, and promote the general progress and welfare of its people; and

(d) to hold the Georgia economy in a state of arrested development.

The complaint alleges that the defendants are not citizens of Georgia; that Georgia is without remedy in her own courts, as the defendants are outside her jurisdiction; that she has no administrative remedy, the Interstate Commerce Commission having no power to afford

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relief against such a conspiracy; that the issues presented constitute a justiciable question.


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