331 U.S. 218 (1947), 470, Rice v. Santa Fe Elevator Corp.
|Docket Nº:||No. 470|
|Citation:||331 U.S. 218, 67 S.Ct. 1146, 91 L.Ed. 1447|
|Party Name:||Rice v. Santa Fe Elevator Corp.|
|Case Date:||May 05, 1947|
|Court:||United States Supreme Court|
Argued February 13, 14, 1947
CERTIORARI TO THE CIRCUIT COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
1. By the 1931 amendments to §§ 6 and 29 of the United States Warehouse Act, Congress terminated the dual system of regulation provided by the original Act and substituted an exclusive system of federal regulation of warehouses licensed under the Federal Act with reference to the subjects covered thereby, except to the extent that express exceptions in the Federal Act subject certain phases of the business to state regulation. Pp. 229-236, p. 234, n. 12.
2. Warehouses licensed under the United States Warehouse Act need not obtain state licenses or comply with state laws regulating those phases of the business which are regulated under the Federal Act, except those phases of the business which the Federal Act expressly subjects to state law. Pp. 234-236, p. 234, n. 12.
3. As amended, the Federal Act is not merely paramount over state law in the event of conflict, but completely supersedes the state law, except to the extent that it fails to cover the field or makes express exceptions in favor of state law. Pp. 234-236, p. 234, n. 12.
4. The test of applicability of state laws is whether the matter on which the State asserts the right to act is in any way regulated by the Federal Act. If it is, the federal scheme prevails though it is a more modest, less pervasive regulatory plan than that of the State. P. 236.
5. By this test, each of the following matters is beyond the reach of state law, since Congress has declared its policy with reference to them in the United States Warehouse Act (p. 236):
(1) Just and reasonable rates. Pp. 224, 236.
(2) Discrimination. Pp. 225, 236.
(3) Dual position of warehousemen. Pp. 225, 236.
(4) Mixing high quality public grain with inferior grain owned by warehouseman, delay in loading grain. Pp. 226, 236.
(5) Sacrificing or rebating storage charges, retaining desirable transit tonnage, utilizing preferred storage space. Pp. 227, 236.
(6) Maintenance of unsafe and inadequate elevators; inadequate and inefficient warehouse service. Pp. 227, 236.
(7) Operating without a state license. Pp. 228, 236.
(8) Abandonment of warehousing service. Pp. 228, 236.
(9) Failure to file and publish rate schedules; rendering warehousing service without filing and publishing schedules. Pp. 229, 236.
6. In the absence of any actual conflict with the Federal Act, the states are free to continue to regulate matters which are not regulated by the Federal Act, e.g.:
(1) Failure to secure prior approval of state officials for management, construction, engineering, supply, financial and other contracts between the warehouseman and its affiliates. P. 236.
(2) Failure to secure prior approval of contracts and leases between the warehouseman and other public utilities. Pp. 236-237.
(3) Failure to secure approval of issuance of securities. Pp. 236-237.
156 F.2d 33, affirmed in part, reversed in part.
A district court dismissed suits brought by a warehouseman licensed under the United States Warehouse Act to enjoin further proceedings on a complaint filed by one of his customers with the Illinois Commerce Commission alleging violations of the Illinois Public Utilities Act, Ill.Rev. Stats.1945, ch. 111 2/3, the Illinois Grain Warehouse Act, Ill.Rev. Stats.1945, ch. 114, §§ 189 et seq., and Art. XIII of the Illinois Constitution, and to enjoin the Attorney General of Illinois from instituting proceedings against the warehouseman to enforce any order of the Commission in the matter. The Circuit Court of Appeals reversed, on the ground that the United States Warehouse Act superseded state regulation of warehousemen licensed thereunder as to the matters presented in the complaint. 156 F.2d 33. This Court granted certiorari. 329 U.S. 701. The writs were dismissed as to certain parties, including the Great Lakes Elevator Corporation. 330 U.S. 810. Affirmed in part, reversed in part, and remanded, p. 238.
DOUGLAS, J., lead opinion
Opinion of the Court by MR. JUSTICE DOUGLAS, announced by MR. JUSTICE BLACK.
Respondents in these two cases are warehousemen engaged in the business of operating public warehouses for the storage of grain in Illinois. Their warehouses are operated under licenses issued by the Secretary of Agriculture pursuant to the United States Warehouse Act, 39 Stat. 486, as amended, 7 U.S.C. § 241 et seq. The Rice partnership, one of the petitioners, is an owner, shipper, and dealer in grain, and is a customer of respondents. The Illinois Commerce Commission, another petitioner, has certain regulatory jurisdiction, to which we will later refer, over public grain warehouses and other public utility companies.
In 1944, Rice filed a complaint with the Commission, charging respondents1 with maintaining unjust, unreasonable,
and excessive rates and charges contrary to the Illinois Public Utilities Act, Ill.Rev. Stats. 1945, ch. 111 2/3. It charged them with discrimination in storage rates in favor of the Federal Government and its agencies and against other customers, contrary to the Public Utilities Act and the Illinois Grain Warehouse Act, Ill.Rev. Stats.1945, ch. 114, § 189 et seq. It alleged that respondents were both warehousemen and dealers in grain, and, by reason of those dual and conflicting positions, had received undue preferences and advantages to the detriment of and in discrimination against petitioners and other customers of respondents,2 all in violation of provisions of the Public Utilities Act, the Grain Warehouse Act, or the Illinois Constitution of 1870, Article XIII. It charged respondents with having failed to provide [67 S.Ct. 1148] reasonable, safe, and adequate public grain warehouse service and facilities, with issuing securities, with abandoning service, and with entering into various contracts with
their affiliates without prior approval of the Commission; with rendering storage and warehousing services without having filed and published their rates; with operating without a state license, and with mixing public grain with grains of different grades -- all in violation of provisions of the Public Utilities Act or the Grain Warehouse Act. Among the remedies sought were the fixing of just, reasonable, and nondiscriminatory rates, the prohibition of unlawful discriminatory practices, the establishment of reasonable, safe and adequate storage and warehousing service, and the assessment of penalties for violations of Illinois law, including the cancellation of grain warehouse licenses.
Respondents moved to dismiss on the ground that the United States Warehouse Act superseded the authority of the Commission to regulate in the manner sought by the complaint. The Commission denied the motion and set the cause for a hearing on the merits. Thereupon respondents brought these suits in the District Court to enjoin further proceedings before the Commission and to enjoin the Attorney General of Illinois from instituting any proceedings against respondents to enforce any order of the Commission in the matter. Motions of petitioners to dismiss were granted. On appeal, the Circuit Court of Appeals reversed, holding that the United States Warehouse Act superseded state regulation of respondents as to the matters presented in petitioners' complaint.3 156 F.2d 33. The cases are here on petitions for writs of certiorari which we granted because of the public importance of the questions presented.
The United States Warehouse Act, as originally enacted in 1916 (39 Stat. 486), made federal regulation in this field subservient to state regulation. It provided in § 29 that "nothing in this Act shall be construed to conflict
with, or to authorize any conflict with, or in any way to impair or limit the effect or operation of the laws of any State relating to warehouses, warehousemen . . ." And § 6 required an applicant for a federal warehouse license to provide a bond "to secure the faithful performance of his obligations as a warehouseman" under state, as well as under federal, law.
In 1931 Congress amended the Act. 46 Stat. 1463. Section 29 was amended4 to provide that, although the
Secretary of [67 S.Ct. 1149] Agriculture "is authorized to cooperate with State officials charged with the enforcement of State laws relating to warehouses, warehousemen," and their personnel,
the power, jurisdiction, and authority conferred upon the Secretary of Agriculture under this Act shall be exclusive with respect to all persons securing a license hereunder so long as said license remains in effect.
Section 6 was amended to omit the requirement that the bond be conditioned on compliance with requirements of state law.
First. The chief matters which are the basis of the complaint before the Commission are treated as follows by the Illinois law and by the Federal Act:
(1) Just and reasonable rates. The complaint charges that respondents' rates are unjust and unreasonable. Under the Illinois statute, public utility rates must be just and reasonable, and the Commission, after a hearing, may fix rates which meet that standard. §§ 32, 36, 41, Public Utilities Act. The Secretary of Agriculture is authorized by the Federal Act to license warehousemen5 on condition that they conform to the requirements of the Act and the rules and regulations prescribed thereunder.6 §§ 4, 9. Every receipt of a licensed warehouse must disclose "the rate of storage charges." § 18(e). Before a license is granted, the applicant must file his proposed rates with the Secretary. Reg. 5, § 3. He must also file
any proposed changes in rates before making them effective. Id. Rates which are "unreasonable or exorbitant" are prohibited. Id. And the Secretary may...
To continue readingFREE SIGN UP