Otto Olsen v. Smith

Citation49 L.Ed. 224,25 S.Ct. 52,195 U.S. 332
Decision Date28 November 1904
Docket NumberNo. 42,42
PartiesOTTO OLSEN, Plff. in Err. , v. A. D. SMITH, L. Huth, L. Best, et al
CourtUnited States Supreme Court

Mr. Walter Gresham for plaintiff in error.

[Argument of Counsel from pages 333-335 intentionally omitted] Messrs. James B. Stubbs and Charles J. Stubbs for defendants in error.

[Argument of Counsel from pages 335-338 intentionally omitted] Mr. Justice White delivered the opinion of the court:

The defendants in error, who were plaintiffs in the court of original jurisdiction, as the duly licensed state pilots of the port of Galveston, Texas, sued in a Texas district court to recover the damages averred to have been caused them by the alleged illegal action of the defendant in offering, when he was not authorized by law to do so, his services 'to pilot sail vessels or registered steamers, bound to or from foreign ports, in or out of the port of Galveston.' An injunction was prayed restraining the defendant from acting 'in any manner as branch or deputy pilot, or pilot under the laws of the state of Texas, and of said port, or under the laws of the United States, with respect to the kind of vessels specified.' The defendant filed a general demurrer, and, reserving the demurrer, answered, raising special defenses based on averments that the pilotage laws of Texas were in conflict with the Constitution and laws of the United States. The court overruled the demurrer of the defendant, and, on the ground that no defense was stated, sustained a demurrer to the answer. A judgment was entered in favor of the plaintiffs, awarding an injunction as prayed. (Tex. Civ. App.) 68 S. W. 320. The case was taken to the court of civil appeals for the first supreme judicial district, was thence transferred to the court of civil appeals for the fourth supreme judicial district, where the decree below was affirmed, with a slight modification not necessary to be stated. The supreme court of the state having declined to review the action of the court of civil appeals, this writ of error was prosecuted to the latter court.

The defenses raised by the answer, which the court below held to be no defense to the action, and which are in effect reiterated in the assignments of error, require us to determine, first, whether the state of Texas had power to enact laws regulating pilotage in the ports of that state; and, second, if such power existed, whether the provisions of the state statutes on that subject are void because they conflict with acts of Congress on the subject of pilotage, and because the statutes of Texas as to pilotage contain provisions of such a character as to cause them to be repugnant to the 14th Amendment or to the laws of Congress forbidding combinations in restraint of trade or commerce. Briefly, the pilotage laws of the state of Texas provide as follows: The governor is authorized to appoint for each port whose population and circumstances shall warrant it, ' a board of five persons of respectable standing, to be known as commissioners of pilotage.' Upon this board power is conferred to fix, within the maximum limits provided by law, the charges to be made by branch and deputy pilots for their services, to regulate the manner in which such pilots shall perform their duty, to examine them as to their qualifications, to hear complaints made against them, and, if occasion requires, to suspend them until the governor shall act in the matter. Upon the governor is conferred the authority to appoint such number of branch pilots as may from time to time be necessary, each of whom shall hold office for two years, subject to removal by the governor at pleasure, and any one who is not a duly commissioned branch pilot or deputy thereof is prohibited from engaging in the business of pilotage so far as the statutes provide for pilotage services by the duly appointed pilots. Revised Statutes of the state of Texas for 1895, articles 3790, 3791, 3792, 3793, 3794, 3796, and 3803. The maximum rates of pilotage are provided for as follows:

'The rate of pilotage on any class of vessels shall not, in any port of this state, exceed $4 for each foot of water which the vessel, at the time of piloting, draws, and whenever a vessel, except of the classes below excepted, shall decline the services of a pilot, offered outside the bar, and shall enter the port without the aid of one, she shall be liable to the first pilot whose services she so declined, for the payment of half pilotage; and any vessel which, after being brought in by a pilot, shall go out without employing one, shall be liable to the payment of half pilotage to the pilot who brought her in, or, if she has come in without the aid of a pilot, though offered outside, she shall, on so going out, be liable for the payment of half pilotage to the pilot who had first offered his services before she came in; but if she has come in without the aid of a pilot, or the offer of one outside, she shall not, in case of going out without a pilot, be liable to half pilotage. . . .' Article 3800.

The vessels excepted from the operation of the foregoing provisions are thus stated in article 3801:

'The following classes of vessels shall be free from any charge for pilotage, unless for actual service, to wit: All vessels of twenty tons and under, all vessels of whatsoever burthen owned in the state of Texas, and registered and licensed in the district of Texas, when arriving from or departing to any port of the state of Texas; all vessels of seventy-five tons and under, owned and licensed for the coasting trade in any part of the United States, when arriving from or departing to any port in the state of Texas; all vessels of seventy-five tons or under owned in the state of Texas and licensed for the coasting trade in the district of Texas, when arriving from or departing to any port in the United States.'

The first contention in effect is that the state was without power to legislate concerning pilotage, because any enactment on that subject is necessarily a regulation of commerce within the provision of the Constitution of the United States. The unsoundness of this contention is demonstrated by the previous decisions of this court, since it has long since been settled that even although state laws concerning pilotage are regulations of commerce, 'they fall within that class of powers which may be exercised by the states until Congress has seen fit to act upon the subject.' Cooley v. Port Wardens, 12 How. 299, 13 L. ed. 996; Ex parte McNiel, 13 Wall. 237, 20 L. ed. 624; Wilson v. McNamee, 102 U. S. 572, 26 L. ed. 234.

The second proposition relied on is that, albeit the state had power to legislate concerning pilotage until Congress acted, the state laws are void because in conflict with the laws enacted by Congress. This is based upon two provisions of the Revised Statutes of the United States, the one providing that 'no regulations or provisions shall be adopted by any state which...

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    ...one would expect them to be in the case of most professional licensing or fee-setting schemes, for example, cf. Olsen v. Smith, 195 U.S. 332, 25 S.Ct. 52, 49 L.Ed. 224 (1904)), I would be reluctant to find the restraint unreasonable. A particularly strong justification exists for a state-sa......
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    ...with the state's decision. This "state action immunity" from antitrust liability, first recognized in Olsen v. Smith, 195 U.S. 332, 344-45, 25 S.Ct. 52, 55, 49 L.Ed. 224 (1904), was fully explained by the Supreme Court in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943). In ......
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