Central of Georgia Ry. Co. v. Railroad Commission of Alabama

• Decision Date: 21 March 1908
• Citation: 161 F. 925
• Parties: CENTRAL OF GEORGIA RY. CO. et al. v. RAILROAD COMMISSION OF ALABAMA et al.
• Court: U.S. District Court — Middle District of Alabama

161 F. 925

CENTRAL OF GEORGIA RY. CO. et al. v. RAILROAD COMMISSION OF ALABAMA et al.

United States Circuit Court, M.D. Alabama.

March 21, 1908

Constitutional Law 38 [Copyrighted Material Omitted] no question of state rights or of the right to local self-government.

These are supplemental bills by the several complainants to arrest the execution of certain statutes passed at the called session of the Legislature of Alabama in November, 1907 particular mention of which is made hereafter. It will conduce to a better understanding of the cases to recite briefly the history of the original bills and the events happening after they were at issue which are made the basis of the supplemental bills.

On the 25th of March, 1907, the Atlantic Coast Line Railroad Company, the Kansas City, Memphis & Birmingham Railroad Company, the Southern Railway Company, the Central of Georgia Railway Company, the Nashville, Chattanooga & St. Louis Railway Company, and the Louisville & Nashville, Railroad Company, all foreign corporations and the Western Railway of Alabama, the Alabama Great Southern Railroad Company, the Mobile & Ohio Railroad Company, the Seaboard Air Line Railway Company, and the South & North Alabama Railroad Company domestic corporations, all operating railroads in this state, filed their bills for injunction in the Circuit Court of the United States for the Middle District of Alabama against the Railroad Commission and the Attorney General of Alabama. These bills alleged that the four acts of the Legislature of Alabama hereafter mentioned are unconstitutional, in that they deny to the complainants the equal protection of the law and deprive them of property without due process of law, in violation of the fourteenth amendment to the Constitution of the United States and like provisions in the Constitution of the state. These statutes, ipso facto, forfeited the right of any foreign corporation to do intrastate business if it filed a bill in the federal court to test the reasonableness of rates; fixed the maximum intrastate passenger rates at 2 1/2 cents a mile; made the rates in force on the 1st of January, 1907, the maximum intrastate freight rates, except as curtailed by the statute, which classified and fixed the maximum rates for intrastate transportation on 110 commodities or articles of freight. The statutes, at the time the original bills were filed, charged the Railroad Commission and the Attorney General with the duty of enforcing the rates, and provided that any railroad company might test the reasonableness of any rate or rates, by making the Commission and the Attorney General defendants in a suit in equity, in which event, if the court saw proper, it might, upon exacting bonds for the indemnity of passengers and shippers, suspend the rate laws pending final hearing.

Upon the filing of the bills five days' notice was given to the Attorney General and the Railroad Commission that a motion would be made for a restraining order on March 30, 1907. A restraining order was made that day, and the hearing for a preliminary injunction went over at the request of the respondents until the 19th day of May, 1907. On that day the matter came on again for hearing upon the allegations of the sworn bills. Respondents offered no opposing evidence of any kind, and made no objection to the granting of a preliminary injunction, stating in open court they did not intend to appeal therefrom. Thereupon the court, exacting bonds to refund any excess to passengers and shippers, if complainants were cast in the suits, issued a preliminary injunction against the enforcement of the rate statutes and the statute forfeiting the foreign railroad company's license to do intrastate business because of the filing of the bills to test the rates, and also made an order, as the state statute authorized, suspending the rate statutes. The court, in the progress of the litigation, declared unconstitutional the act which ipso facto forfeited the right of any foreign railroad corporation to do intrastate business, if it resorted to the federal court to test the reasonableness of the rates. Seaboard Air Line Railway Co., et al. v. Railroad Commission of Alabama et al. (C.C.) 155 F. 792. Among the statutes mentioned in the original bills, but as to which no relief was asked or granted, was one which forfeited the right of a foreign railroad corporation to do intrastate business if it removed any cause from a state court to the federal court. The Southern Railway Company, in August, 1907, removed a case from the state court at Talladega to the federal court, and thereupon the state authorities proclaimed that it had forfeited its right to do intrastate business, and avowed a purpose to arrest its operatives and indict that company for every act of intrastate transportation which it did thereafter, until its right was restored in the manner prescribed by the statute.

The state officials, although they had acquiesced in the preliminary injunctions on the original bills, then began to threaten to arrest the officials and servants of all other railroad companies for nonobservance of the rate statutes, notwithstanding they had been suspended, and the court had declared unconstitutional the act which forfeited the right of a foreign carrier to do intrastate business if it resorted to a federal court to test the reasonableness of the rates. At the instance of the Louisville & Nashville Railroad Company the court on September 4, 1907, enjoined the several solicitors and sheriffs of the state in the counties its road traversed from taking any steps whatever to enforce against that company or its servants the statutes complained of in its original bill. Louisville & Nashville Railroad Co. et al. v. Railroad Commission of Alabama et al. (C.C.) 157 F. 944.

In consequence of the attitude of the state authorities towards the Southern Railway Company, that company agreed to abandon its litigation and to put in force a schedule of rates which the Governor demanded, if the state authorities revoked the forfeiture of its license to do intrastate business. Shortly thereafter the Mobile & Ohio Railroad Company, the Atlantic Coast Line Railroad Company, the Kansas City, Memphis & Birmingham Railroad Company, the Alabama Great Southern Railroad Company, and the Atlanta & Birmingham Air Line Railway Company followed the example of the Southern Railway Company, and agreed with the state authorities upon a tariff of rates and to abandon their contest. The Louisville & Nashville Railroad Company, the Central of Georgia Railway Company, the South & North Alabama Railroad Company, the Nashville, Chattanooga & St. Louis Railway Company, and the Western Railway of Alabama, however, refused to agree with the state authorities, and continued to prosecute their original bills and to insist upon the protection of the injunctions issued therein. Thereupon a special session of the Legislature was called by the Governor to deal with the recalcitrant railroad companies. At the called session, many of the laws regarding tariffs for freight and passenger rates and reasonableness of rates were repealed, and other statutory rates prescribed, as well as another mode of testing the reasonableness of the rates. The nature and extent of these changes is hereinafter fully stated. The five railroad companies last named, after the passage of the legislation complained of, filed their supplemental bills, to arrest the execution of these laws, against the Railroad Commission, the Attorney General, the circuit solicitors, and clerks and sheriffs of the several counties in which the railroads were operated, and against certain classes of shippers and passengers, who had threatened to invoke the penalties the laws prescribed if the freight and passenger rates were not put into effect.

In all essential particulars the statements of fact in each of the bills is the same, except as to the value of the different properties and the income therefrom and the legal validity of the provision authorizing the commission to change statutory rates. The bills set out the respective gross earnings and net earnings of the several companies, how much was derived from interstate commerce and from intrastate business, and the cost of conducting the same. They also set forth in detail the facts and figures upon which they claimed that the reduced rates were confiscatory and denied to the complainants adequate compensation upon the value of the property devoted to intrastate commerce. As the supplemental bills are substantially alike as to the questions arising on the preliminary hearing, only one of the cases, that of the Central of Georgia Railway Company, is reported. That bill, after stating prior events in the litigation and the orders made in the beginning thereof, alleges:

'VII. Not a complaint was made, from any responsible source, at least, that the court has exceeded its jurisdiction or interfered with the rights of the state of Alabama and the rightful authority of any of its officials for a period of at least four months, when an agitation was started by his excellency, Braxton B. Comer, Governor of the state of Alabama, and other officials of the state of Alabama, to break down the jurisdiction of this honorable court in this case and in the equity cases which were then being prosecuted in this honorable court by the 11 other railway companies hereinbefore mentioned, and to thwart the injunction of this court issued in said cases which are hereinbefore described. Gov. Glenn, of North Carolina, had a short time previously as is now a matter of public history, through the employment of the criminal processes of the state of North Carolina, and by arresting, intimidating, and coercing the officers, agents, and

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