Southern Ry Co v. Commonwealth of Virginia Shirley 17 8212 18, 1933

• Citation: 78 L.Ed. 260,290 U.S. 190,54 S.Ct. 148
• Decision Date: 04 December 1933
• Docket Number: No. 26,26
• Parties: SOUTHERN RY. CO. v. COMMONWEALTH OF VIRGINIA ex rel. SHIRLEY, State Highway Commissioner. Argued Oct. 17—18, 1933
• Court: United States Supreme Court

290 U.S. 190

54 S.Ct. 148

78 L.Ed. 260

SOUTHERN RY. CO.

v COMMONWEALTH OF VIRGINIA ex rel. SHIRLEY, State Highway Commissioner.

No. 26.

Argued Oct. 17—18, 1933.

Decided Dec. 4, 1933.

Appeal from the Supreme Court of Appeals of the State of virginia.

Messrs. Sidney S. Alderman, of Washington, D.C., and Thomas B. Gay, of Richmond, Va., for appellant.

Messrs. J. F. Hall and Brockenbrough Lamb, both of Richmond, Va., for appellee.

[Argument of Counsel intentionally omitted] Mr. Justice McREYNOLDS delivered the opinion of the Court.

This appeal questions the validity of chapter 62, Acts General Assembly of Virginia, 1930, Michie's Code 1930, § 3974a. Pertinent portions are in the margin.¹ The claim is that enforcement of the act as construed by the state Supreme Court would deprive appellant of property without due process of law, and thus violate the Fourteenth Amendment.

Purporting to proceed under the challenged chapter, the Highway Commissioner, without prior notice, advised appellant that in his opinion public safety and convenience required elimination of the grade crossing near Antlers; also, he directed construction there of an overhead passage according to accompanying plans and specifications. Replying, the company questioned the Commissioner's conclusion upon the facts, denied the validity of the act, and refused to undertake the work. Thereupon, by petition he asked the State Corporation Commission for an order requiring it to proceed. A demurrer to this questioned the constitutionality of the statute. It especially pointed out that the Commissioner undertook to ordain without prior notice, and that there was no provision for any review except in respect of the proposed plans for the structure. The Commission overruled the demurrer and directed the railway to construct the overhead. The Supreme Court construed the statute and approved this action.

As authoritatively interpreted the challenged act permits the highway commissioner—an executive officer—without notice or hearing to command a railway company to abolish any designated grade crossing and construct an overhead when, in his opinion, necessary for public safety and convenience. His opinion is final upon the fundamental question whether public convenience and necessity require the elimination unless what the Supreme Court denominates 'arbitrary' exercise of the granted power can be shown. Upon petition, filed within sixty days, the Corporation Commission may consider the proposed plans and approve or modify them, but nothing more. The statute makes no provision for review by any court. But the Supreme Court has declared that a court of equity may give relief under an orginal bill where 'arbitrary' action can be established.

As construed and applied, we think the statute conflicts with the Fourteenth Amendment.

Certainly, to require abolition of an established grade crossing and the outlay of money necessary to construct an overhead would take the railway's property in a very real sense. This seems plain enough both upon reason and authority. Washington ex rel. Oregon R.R. & N. Co. v. Fairchild, 224 U.S. 510, 523, 524, 32 S.Ct. 535, 56 L.Ed. 863; Great Northern Ry. Co. v. Minnesota, 238 U.S. 340, 345, 35 S.Ct. 753, 59 L.Ed. 1337. See Chicago, Milwaukee & St. Paul Ry. Company v. Board of Commissioners, 76 Mont. 305, 247 P. 162.

If we assume that by proper legislation a state may impose upon railways the duty of eliminating grade crossings, when deemed necessary for public safety and convenience, the question here is whether the challenged statute meets the requirements of due process of law. Undoubtedly, it attempts to give an administrative officer power to make final determination in respect of facts—the character of a crossing and what is necessary for the public safety and convenience—without notice, without hearing, without evidence; and upon this ex parte finding, not subject to general review, to ordain that expenditures shall be made for erecting a new structure. The thing so authorized is no mere police regulation.

In Interstate Commerce Commission v. Louisville & Nashville R.R., 227 U.S. 88, 91, 33 S.Ct. 185, 186, 57 L.Ed. 431, replying to the claim that a Commission's order made without substantial supporting evidence was conclusive, this Court declared:

'A finding without evidence is arbitrary and baseless. And if the government's contention is correct, it would mean that the Commission had a power possessed by no other officer, administrative body, or tribunal under our government. It would mean that, where rights depended upon facts, the Commission could disregard all rules of evidence, and capriciously make findings by administrative fiat. Such authority, however beneficently exercised in one case, could be injuriously exerted in another, is inconsistent with rational justice, and comes under the Constitution's condemnation of all arbitrary exercise of power.

'In the comparatively few cases in which such questions have arisen it has been distinctly recognized that administrative orders, quasi judicial in character, are void if a hearing was denied; if that granted was inadequate or manifestly unfair; if the finding was contrary to the 'indisputable character of the evidence."

Chicago, Milwaukee & St. Paul Ry. Co. v. Minnesota, 134 U.S. 418, 457, 458, 462, 466, 10 S.Ct. 702, 33 L.Ed. 970, involved an act of the Minnesota Legislature, which permitted the Commission finally to fix railway rates without notice. It was challenged because of conflict with the due process clause. This Court said:

'It deprives the company of its right to a judicial investigation, by due process of law, under the forms and with the machinery provided by the wisdom of successive ages for the investigation judicially of the truth of a matter in constroversy, and substitutes therefor, as an absolute finality, the action of a railroad commission which, in view of the powers conceded to it by the state court, cannot be regarded as clothed with judicial functions, or possessing the machinery of a court of justice. * * * No hearing is provided for; no summons or notice to the company before the commission has found what it is to find, and declared what it is to declare; no opportunity provided for the company to introduce witnesses before the commission,—in in fact, nothing which has the semblance of due process of law. * * *

'The question of the reasonableness of a rate of charge for transportation by a railroad company, involving, as it does, the element of reasonableness both as regards the company and as regards the public, is eminently a question for judicial investigation, requiring due process of law for its determination. If the company is deprived of the power of charging reasonable rates for the use of its property, and such deprivation takes place in the absence of an investigation by judicial machinery, it is deprived of the lawful use of its property, and thus, in substance and effect, of the property itself, without due process of law, and in violation of the constitution of the United States. * * *'

The claim that the questioned statute was enacted under the police power of the state, and therefore is not subject to the standards applicable to legislation under other powers, conflicts with the firmly established rule that every state power is limited by the inhibitions of the Fourteenth Amendment. Chicago, Milwaukee, St. Paul & Pacific R.R. Co. v. Tompkins, 176 U.S. 167, 20 S.Ct. 336, 44 L.Ed. 417; Eubank v. Richmond, 226 U.S. 137, 143, 33 S.Ct. 76, 57 L.Ed. 156, 42 L.R.A.(N.S.) 1123, Ann. Cas. 1914B, 192; Adams v. Tanner, 224 U.S. 590, 594, 37 S.Ct. 662, 61 L.Ed. 1336, L.R.A. 1917F, 1163, Ann. Cas. 1917D, 973; Adkins v. Children's Hospital, 261 U.S. 525, 549, 550, 43 S.Ct. 394, 67...