Louisville Nashville Railroad Company v. Laurence Finn

• Decision Date: 05 January 1915
• Docket Number: No. 546,546
• Citation: 35 S.Ct. 146,235 U.S. 601,59 L.Ed. 379
• Parties: LOUISVILLE & NASHVILLE RAILROAD COMPANY, Appt., v. LAURENCE B. FINN, Green Garrett, and William Klair, Individually and as Constituting the Railroad Commission of Kentucky, et al
• Court: U.S. Supreme Court

235 U.S. 601

35 S.Ct. 146

59 L.Ed. 379

LOUISVILLE & NASHVILLE RAILROAD COMPANY, Appt.,

v LAURENCE B. FINN, Green Garrett, and William Klair, Individually and as Constituting the Railroad Commission of Kentucky, et al.

No. 546.

Argued December 11 and 14, 1914.

Decided January 5, 1915.

Messrs. Edward S. Jouett, William A. Colston, and Henry L. Stone for appellant.

Messrs. Edward W. Hines, J. V. Norman, Charles C. McChord, and Mr. James Garnett, Attorney General of Kentucky, for appellees.

Mr. Justice Pitney delivered the opinion of the court:

This case was here on a former occasion (Louisville & N. R. Co. v. Garrett, 231 U. S. 298, 58 L. ed. 229, 34 Sup. Ct. Rep. 48), when an order denying a motion for an interlocutory injunction was affirmed. The suit was brought by the railroad company to enjoin the enforcement of two orders made August 10, 1910, by the Railroad Commission of Kentucky, one of which prescribed maximum rates of freight upon certain intrastate traffic, and the other awarded specified amounts in reparation for payments previously exacted by the carrier for freight transportation in excess of the rates thus established by the Commission as reasonable. One of the grounds of attack upon the rate order was that the Commission had acted arbitrarily, in that there was no evidence before it tending to establish that the rates which the company had maintained were unreasonable. Upon the former appeal we held that since it appeared that there had been a hearing before the Commission, with evidence adduced on each side, and since this was not produced before the court, the general allegations of the bill respecting the effect of the evidence, and the statements contained in the affidavits submitted upon the application for injunction, were insufficient to justify the court in enjoining the rates upon the ground that the Commission either had denied the hearing which the statute contemplated, or by its arbitrary action had been guilty of an abuse of power. With respect to the reparation order, we sustained the action of the court below in declining to determine its validity, upon the ground that the persons in whose favor the award was made had not been brought in as parties.

After our decision, appellant filed an amended and supplemental bill bringing in as defendants the parties in whose favor reparation was awarded, stating with more particularity the grounds upon which that order was attacked, and, with respect to the rate order, setting out as an exhibit a transcript of the evidence introduced before the Commission. Upon this amended and supplemental bill appellant again moved for an interlocutory injunction. The motion was heard before three judges, under § 266, Judicial Code (36 Stat. at L. 1162, chap. 231, Comp. Stat. 1913, § 1243), the application for injunction was denied (214 Fed. 465), and the case comes here by direct appeal taken pursuant to the provisions of the same section.

The jurisdiction of the Federal court was invoked because of questions raised under the Constitution of the United States, and not because of diversity of citizenship; but it extends, of course, to the determination of all questions presented, irrespective of the disposition that may be made of the Federal questions, or whether it is necessary to decide them at all. Ohio Tax Cases, 232 U. S. 576, 587, 58 L. ed. 738, 743, 34 Sup. Ct. Rep. 372, and cases cited.

The action of the Commission was based upon Kentucky Statutes: § 816, defining what shall be deemed extortion by a railroad corporation in charging toll or compensation for intrastate transportation; § 820a (the 'McChord act'), authorizing the Commission, upon complaint made against a railroad company for charging extortionate freight or passenger rates, to hear the matter, and, if it determines that the company has been guilty of extortion, then to establish a just and reasonable rate for services thereafter to be rendered; and § 829, authorizing the Commission to hear and determine complaints under § 816, and to render such award as may be proper.

It appears that for many years prior to March 25, 1910, the railroad company had voluntarily maintained special rates for the transportation of corn, rye, barley, and malt, and empty barrels, boxes, etc., from three points of origin upon the Ohio river Louisville, Covington, and Newport—to points of destination in the interior of the state; these rates being allowed only to owners of distilleries, when the commodities in question were used as raw materials or supplies. On the date mentioned, the carrier withdrew these special rates and substituted what are described as the 'standard rates,' being the same that had been theretofore charged to others than distillers. Thereupon numerous distillery companies complained to the Commission, insisting that the new rates were exorbitant, and that the former rates were just and reasonable. After a hearing the Commission sustained the contention of the petitioners and established the maximum rates now in question, these being the same as the special rates, which, prior to March 25, 1910, the carrier had given to the distillery companies; but by the Commission's order they were made to apply to the commodities mentioned, without regard to the use that was to be made of them.

The McChord act, under which the rate order was made, is set forth in Siler v. Louisville & N. R. Co. 213 U. S. 178, 53 L. ed. 754, 29 Sup. Ct. Rep. 451. It provides for notice to the carrier, stating the nature of the complaint or matter to be investigated, and the time and place of hearing it, and requires the Commission to hear such statements, argument, or evidence offered by the parties as the Commission may deem relevant. Section 829 likewise requires notice of the hearing to be given to the company; the evidence is to be reduced to writing, together with the award, and they are to be filed in the office of the clerk of a designated court, and a summons is to be issued requiring the company to appear and show cause why the award should not be satisfied. If the parties fail to appear, judgment is rendered by default; but if trial is demanded, the case is to be tried as ordinary cases are, except that no evidence shall be introduced by either party other than that heard by the Commission, or such as the court shall be satisfied could not have been produced before the Commission by the exercise of reasonable diligence. The judgment and proceedings thereon are to be the same as in ordinary cases. Since the case was here before, the court of appeals of Kentucky, in Illinois C. R. Co. v. Paducah Brewery Co. 157 Ky. 357, 163 S. W. 239, has passed upon § 829, upholding its validity under the state and Federal Constitutions, and construing it as authorizing the Commission to award reparation in money.

The contentions now made by appellants are reducible to two; first, that the rate order is invalid because not...