City of Hammond v. Schappi Bus Line

• Decision Date: 21 November 1927
• Docket Number: No. 67,67
• Citation: 275 U.S. 164,48 S.Ct. 66,72 L.Ed. 218
• Parties: CITY OF HAMMOND v. SCHAPPI BUS LINE, Inc
• Court: U.S. Supreme Court

275 U.S. 164

48 S.Ct. 66

72 L.Ed. 218

CITY OF HAMMOND

v SCHAPPI BUS LINE, Inc.

No. 67.

Argued Oct. 25 and 26, 1927.

Decided Nov. 21, 1927.

Messrs. C. B. Tinkham, of Hammond, Ind., and L. T. Michener, of Washington, D. C., for petitioner.

Mr. Wm. J. Whinery, of Hammond, Ind., for respondent.

Mr. Justice BRANDEIS delivered the opinion of the Court.

This suit which was commenced in the federal court for Indiana in July, 1925, is here on certiorari to the Circuit Court of Appeals. 273 U. S. 675, 47 S. Ct. 92, 71 L. Ed. 834. Schappi Bus Line, Incorporated, an Illinois corporation, seeks to enjoin the city of Hammond, Ind., from enforcing its Ordinance No. 1945 concerning the operation of motor busses, adopted May 23, 1925.¹ Section 1 prohibits the operation of any busses (with an exception to be noted) on certain streets which lead into and through the business district. Section 2 prohibits any busses (with the same exception) from stopping anywhere on any street in the city, either to load or to discharge passengers, but reserves to the board of public works authority to grant, from time to time, permission, for periods not exceeding six months, to stop on portions of a few designated streets.

For some time prior to the adoption of the ordinance, Schappi, Incorporated, had owned and operated a line of motor busses between Chicago and Hammond; another between Calumet City, Ill., and Hammond; and one from Calumet City through Hammond to East Chicago, Ind. The business is chiefly interstate; and on at least one of the lines is wholly interstate. The bill charges that for reasons there set forth the ordinance is void; and alleges that, if enforced, it will compel abandonment of all existing bus lines operated by the plaintiff. The case was heard upon an application for an interlocutory injunction. The District Court denied it without making any finding of fact and without an opinion or other statement of the reasons for its action. The decree was reversed by the Circuit Court of Appeals, which remanded the case 'with directions to enter a decree granting the injunction,' without specifying its scope. 11 F.(2d) 940. That court, also, made no finding on any controverted fact, save that it stated in its opinion 'that the record does not show any valid reason for the passage of such an ordinance because of congestion in the streets. The record shows that there was a parking privilege on both sides of the streets in question of not less than an hour's limit, very generally availed of.'

The city of Hammond has an area of about 35 square miles; much of it sparsely settled. It has 250 miles of streets. Its population is 60,000. The terminal of the three Schappi lines is on private property in the heart of the business district. Schappi claims that the ordinance not only denies access to its existing terminal, but practically prevents its busses from coming within miles of the business section. The city concedes that the ordi- nance prohibits the continued operation of Schappi busses over their existing routes. It urges that, despite the prohibition of section 1 of the ordinance, Schappi busses might use other streets which would bring them within a short distance of the business district, and that it might, under section 2, secure permits to stop for loading and unloading which would adequately serve its purposes.

The city asserts that the purpose of the ordinance is to prevent congestion of traffic and to promote safety. Schappi insists that there is no congestion, even in the business district, except such as results, at times, from the passing of railroad trains at grade and from the allowance of unreasonable parking privileges; that the prohibition by section 2 of stopping to load or unload passengers is obviously arbitrary; and that the real purpose of the ordinance is disclosed by section 3 which provides that it shall not 'be construed to impair the obligation of any contract to which the city is a party under which motor vehicles are now operated for hire within the city.' It appears that, under a contract made by the city in 1924, the Calumet Motor Coach Company is authorized, for a period of 25 years, to run its coaches on any street of the city and to stop on any street in order to load or discharge passengers. Schappi asserts that the only purpose of the city in adopting the ordinance was to protect the Calumet Company from the competition of other bus lines. That company has, among other lines, one between Chicago and the business district of Hammond.

The issues of law are as serious and as numerous as those of fact. Schappi contends that the city lacked power to adopt any ordinance dealing with the subject, because by Act of March 4, 1925, Indiana General Assembly, pp. 138-142, and Act of March 14, 1925, Indiana General Assembly, pp. 570-607, the power to authorize use of the highways by motor busses was vested in the Public Service Commission and Schappi had obtained from it certificates of public convenience and necessity specifically authorizing the use of the existing routes. Schappi contends further that, even if the city possessed the power to deal with the general subject, this ordinance is void, under other state statutes and under the Constitution of the state, because it is unreasonable, arbitrary, and grossly discriminatory. And Schappi claims that, regardless of any power which state statutes may have purported to confer upon the city, the ordinance is void under the commerce clause, because all of its busses are operated in interstate commerce and the business is chiefly interstate, although some of the busses carry some intrastate passengers. Rights under the Fourteenth Amendment also were asserted.

The opinion of the Circuit Court of Appeals states that the ordinance must be sustained, if at all, as a police regulation; that, as such, it was clearly discriminatory; and that it must be held void on that ground. Whether the invalidity results from the provisions of a state statute, or from the Constitution of the state, or from the Fourteenth Amendment is not stated. The court did not discuss the statutory powers of the city, declined to consider the effect of the recent state legislation particularly relied upon by the plaintiff, and did not even mention claims urged under the commerce clause. If, as Schappi contends, the ordinance is void under the state law, there is no occasion to consider whether it violates the federal Constitution and there could be no propriety in doing so. Whether it is void under the law of Indiana involves questions upon which this court should not be called upon to pass without the aid which discussion by members of the lower courts familiar with the local law would afford.

On the other hand, if it should become necessary to consider Schappi's rights under the commerce clause, it is not fitting that these should be passed upon by this court upon the present record and at this stage of the proceedings. The general principles governing the rights of motor vehicles to use the highways in interstate commerce, Michigan Public Utilities Commission v. Duke, 266 U. S. 570, 45 S. Ct. 191, 69 L. Ed. 445, 36 A. L. R. 1105; Buck v. Kuykendall, 267 U. S. 307, 45 S. Ct. 324, 69 L. Ed. 623, 38 A. L. R. 286; George W. Bush & Sons Co. v. Maloy, 267 U. S. 317, 45 S. Ct. 326, 327, 69 L. Ed. 627; the power of the state to regulate their use, Kane v. New Jersey, 242 U. S. 160, 37 S. Ct. 30, 61 L. Ed. 222; Interstate Busses Corporation v. Holyoke Street Ry. Co., 273 U. S. 45, 47 S. Ct. 298, 71 L. Ed. 530; Morris v. Duby, 274 U. S. 135, 143, 47 S. Ct. 548, 71 L. Ed. 966; and its power to require users to contribute to the cost and upkeep, Hendrick v. Maryland, 235 U. S. 610, 35 S. Ct. 140, 59 L. Ed. 385; Clark v. Poor, 274 U. S. 554, 47 S. Ct. 702, 71 L. Ed. 1199, have been settled by these recent decisions.² But the...