United States of America v. Louisville Nashville Railroad Company

• Decision Date: 07 December 1914
• Docket Number: No. 39,39
• Citation: 59 L.Ed. 245,235 U.S. 314,35 S.Ct. 113
• Parties: UNITED STATES OF AMERICA, Interstate Commerce Commission, W. S. Duncan & Company et al., Appts., v. LOUISVILLE & NASHVILLE RAILROAD COMPANY, Nashville, Chattanooga, & St. Louis Railway, Nashville Grain Exchange, and Nashville Board of Trade
• Court: U.S. Supreme Court

235 U.S. 314

35 S.Ct. 113

59 L.Ed. 245

UNITED STATES OF AMERICA, Interstate Commerce Commission, W. S. Duncan & Company et al., Appts.,

v LOUISVILLE & NASHVILLE RAILROAD COMPANY, Nashville, Chattanooga, & St. Louis Railway, Nashville Grain Exchange, and Nashville Board of Trade.

No. 39.

Argued February 24 and 25, 1913.

Decided December 7, 1914

Solicitor General Bullitt for the United States.

[Argument of Counsel from page 315 intentionally omitted] Mr. Charles W. Needham for the Interstate Commerce Commission.

Mr. William A. Wimbish for W. S. Duncan & Company et al.

Messrs. Albert S. Brandeis and Henry L. Stone for the Louisville & Nashville Railroad Company.

[Argument of Counsel from pages 316-318 intentionally omitted] Messrs. K. T. McConnico, John A. Pitts, and Lee Douglas for the Nashville Grain Exchange and Nashville Board of Trade.

Messrs. Merrel P. Callaway and R. Walton Moore for the Nashville, Chattanooga, & St. Louis Railway.

Mr. Chief Justice White delivered the opinion of the court:

This case involves a controversy as to the legality of a reshipping privilege permitted at Nashville by the carriers who are parties to the record, described by the court below as follows:

'On grain, grain products, and hay shipped to Nashville by rail from or through Ohio or Mississippi river crossing points such as Louisville, Evansville, Hickman, Paducah, Cairo, etc., the L. & N. and N. C. & St. L. charge the full local freight rate from said crossing points to Nashville. These shipments may then be stopped at Nashville for a period not exceeding six months, during which time they may be rebilled or reshipped to destination in southeastern and Carolina territory; and on such reshipments so rebilled the freight charges into and out of Nashville are readjusted so that the total transportation charge on any one shipment from any given Ohio or Mississippi river crossing via Nashville, to any given destination in said territory, shall exactly correspond with the transportation charge legally assessable on that shipment had it been billed and moved through from its point of origin at the said Ohio or Mississippi river crossing points to its final destination without having been stopped in transit at Nashville.'

We adopt the history of the litigation in so far as it relates to the privilege in question contained in the brief on the part of the United States.

'1. In 1908 certain Georgia grain dealers complained to the Interstate Commerce Commission of various traffic practices at Nashville; after taking voluminous proof, the Commission, on June 24, 1909, held the reshipping privilege illegal and ordered it stopped (16 Inters. Com. Rep. 590, 595).

'2. The Commission, on its own motion, postponed the effective date of the order, so that it might institute a country-wide investigation of the practices involved; and on May 3, 1910, the Commission, after a hearing at which about 150 shippers and carriers were represented by counsel, reported that its former order abolishing the reshipping privilege in toto was too strict, and remitted the matter to the carriers and shippers to frame regulations that would prevent any rebating under the privilege (18 Inters. Com. Rep. 280), and, pursuant thereto, new and satisfactory regulations were adopted to safeguard the reshipping privilege (21 Inters. Com. Rep. 183, 188).'

The previous order of June 24, 1909, which had abolished the reshipping privilege at Nashville, was vacated and the Commission thereafter again considered the controversy between the grain dealers of Georgia and the Nashville dealers and carriers.

'3. . . . On June 9, 1911, the Commission delivered a supplemental report, holding that the action of the carriers in granting the reshipping privilege to Nashville, while refusing it to Atlanta, etc., was an undue and unreasonable preference to Nashville, in violation of § 3 of the interstate commerce act. (21 Inters. Com. Rep. 186.) The Commission entered an order in accordance therewith.

'4. The Nashville Board of Trade, the L. & N. R. R. Co., and the N. C. & St. L. R. R. Co. thereupon sued in the commerce court to enjoin the enforcement of the order; the two suits were consolidated.' The record evi- dence before the Commission was introduced and some additional testimony was taken.

The commerce court, finding that there was no conflicting or disputed evidence concerning the origin and character of the reshipping privilege, concluded that whether such privilege was an undue preference was not a matter of fact, but a question of law, upon which it was its duty to reach an independent conclusion. The court, therefore, among other considerations, because the privilege was of long standing and was justified by water competition at Nashville, declared it to be not unlawful and not preferential. A peremptory injunction was allowed, restraining the enforcement of the order of the Commission. And the correctness of this action is the question here for decision.

In view of the doctrine announced in Interstate Commerce Commission v. Illinois C. R. Co. 215 U. S. 452, 54 L. ed. 280, 30 Sup. Ct. Rep. 155; Interstate Commerce Commission v. Delaware, L. & W. R. Co. 220 U. S. 235, 55 L. ed. 448, 31 Sup. Ct. Rep. 392; Interstate Commerce Commission v. Louisville & N. R. Co. 227 U. S. 88, 57 L. ed. 431, 33 Sup. Ct. Rep. 185, it plainly results that the court below, in substituting its judgment as to the existence of preference for that of the Commission, on the ground that where there was no dispute as to the facts it had a right to do so, obviously exerted an authority not conferred upon it by the statute. It is not disputable that from the beginning the very purpose for which the Commission was created was to bring into existence a body which, from its peculiar character, would be most fitted to primarily decide whether from facts, disputed or undisputed, in a given case, preference or discrimination existed. East Tennessee, v. & G. R. Co. v. Interstate Commerce Commission, 181 U. S. 1, 23-29, 45 L. ed. 719, 727-729, 21 Sup. Ct. Rep. 516. And the amendments by which it came to pass that the findings of the Commission were made not merely prima facie but conclusively correct in case of judicial review, except to the extent pointed out in the Illinois Central and other cases, supra, show the progressive evolution of the legislative purpose and the inevitable conflict which exists between giving that purpose effect and upholding the view of the statute taken by the court below. It cannot be otherwise, since if the view of the statute upheld below be sustained, the Commission would become but a mere instrument for the purpose of taking testimony to be submitted to the courts for their ultimate action.

While these conclusions demonstrate the error in the action of the court below, that result does not authorize us to reverse and give effect to the order of the Commission without going further, since it must be determined whether the action of the Commission was repugnant to the Constitution, in excess of the powers which that body possessed, or, what is equivalent thereto, was wholly unsustained by proof,—questions which the court below failed to pass upon because of the erroneous conception in which it indulged concerning its own powers. But if it were essential for us to consider these questions, we should be confronted with a grave situation arising from the serious doubt which would exist whether it would be possible for us to do so in view of the manner in which the Commission had discharged its functions, and whether that method had not, in and of itself, amounted to a denial of a hearing, and thus resulted in want of due process of law. See Interstate Commerce Commission v. Louisville & N. R. Co. 227 U. S. 91, 57 L. ed. 433, 33 Sup. Ct. Rep. 185, and the paragraph from the answer of the commission, filed in the court below, which is in the margin.¹

We pass this subject by, however, because its consideration is not...