United States v. Capital Transit Co

• Decision Date: 28 May 1945
• Docket Number: No. 663,663
• Parties: UNITED STATES et al. v. CAPITAL TRANSIT CO. et al
• Court: U.S. Supreme Court

325 U.S. 357

65 S.Ct. 1176

89 L.Ed. 1663

UNITED STATES et al.

v CAPITAL TRANSIT CO. et al.

No. 663.

Argued April 3, 1945.

Decided May 28, 1945.

Rehearing Denied June 18, 1945.

See 325 U.S. 896, 65 S.Ct. 1562.

Mr. Paul A. Freund, of Washington, D.C., for appellant the United states.

Mr. Daniel W. Knowlton, of Washington, D.C., for appellant Interstate Commerce Commission.

Mr. Robert E. Quirk, of Washington, D.C., for appellees Alexandria, Barcroft & Washington Transit Co. et al.

Mr. Henry E. Ketner, of Richmond, Va., for appellee State Corporation Commission of State of Virginia.

Mr. Justice BLACK delivered the opinion of the Court.

A federal district court of three judges, one judge dissenting, set aside and permanently enjoined enforcement of an order of the Interstate Commerce Commission, 258 I.C.C. 559, on the ground that the findings were inadequate and that the Commission acted beyond its jurisdiction. 56 F.Supp. 670.¹ The case is here on direct appeal. 28 U.S.C. § 345, 28 U.S.C.A. § 345.

At the request of the Secretaries of War and the Navy, the Interstate Commerce Commission instituted an investigation into the reasonableness of the fares of four carriers, transporting passengers by bus between points in the District of Columbia and nearby points in the State of Virginia, where are located certain military and naval offices and installments employing more than 40,000 government workers. More than half these workers live in the District so that the number of individual passenger trips to and from government work on the four motor lines is in excess of 31,000 per day. The fares of the different lines were not identical for performance of substantially the same interstate transportation, and dissatisfaction of Army and Navy employees and officials had arisen on the ground that the charges of all the companies were excessive. The Commission, after a hearing, found some existing fares to be reasonable and others unreasonable. Its order required some of the rates to be reduced but permitted others to be increased.

A complicating factor arose from the distinctive type of business carried on by Capital Transit, one of the four companies transporting passengers to and from the Virginia government agencies. In addition to its District-Virginia bus service, it operated an urban and suburban transportation system, carrying passengers both by bus and streetcar. Since District terminals of all the bus companies were located in or adjacent to the central business sections, most government employees, in going to and returning from their work, were compelled to begin or complete their trips by utilizing buses or streetcars of Capital Transit. It accorded to its own bus and streetcar pas engers, but denied to passengers on other Virginia buses, a privilege of transfers to and from some of its Virginia buses which lowered the total fares between District residences and their Virginia places of work. The Commission treated Transit Company's local bus and streetcar business as an integrated unit, and its findings, supported by evidence, show that its intra-company transfer practices were the equivalent of establishment by Transit of through interstate routes with joint rates to and from District residences to the Virginia points. Accordingly it ordered that analogous joint arrangements as to fares, including transfer privileges, be established between Transit and the other bus lines carrying passengers to and from Virginia government agencies. This, and other elements of the Commission order not passed on by the district court, were separately attacked here. In order that final disposition of the case may not be further delayed, we shall consider all questions argued before us.

First. It is argued that the Commission is without jurisdiction to regulate any of the District-Virginia transportation here involved. The argument emphasizes that the movement begins and ends in a single 'community', all within an area which the Commission has previously recognized as the 'commercial zone' of Washington. 3 M.C.C. 243. We are referred here to the holding of this Court in 1912 that a street-railway, carrying passengers between Omaha, Nebraska and Council Bluffs, Iowa, was 'local', serving the use of a 'single community', and was not the kind of 'railroad' which the Interstate Commerce Act empowered the Commission to regulate. Omaha & C.B. St. R. Co. v. Interstate Commerce Com'n, 230 U.S. 324, 33 S.Ct. 890, 57 L.Ed. 1501, 46 L.R.A.,N.S., 385. Cf. United States v. Village of Hubbard, Ohio, 266 U.S. 474, 479, 480, 45 S.Ct. 160, 162, 69 L.Ed. 389. The same principle, we are told, should exclude similar local bus operations. But this Court's decision in the Omaha & C.B. St. R. Co. case did not hold that Congress could not authorize the Commission to regulate movements that took place across state lines in a single local community. The power of Congress over such movements cannot be doubted. The Omaha & C.B. St. R. Co. case only decided that Congress had not granted such power to the Commission under the law as it then existed.

We must now test the Commission's power in this case by the provisions of a statute enacted subsequent to the Omaha & C.B. St. R. Co. case, supra, the Motor Carrier Act, 49 Stat. 543, 49 U.S.C.A. § 301 et seq. under which the order here was entered. Section 203(b) of that Act provides the controlling rule. It specifically defines the circumstances under which the Commission can regulate interstate activities which happen to take place in a single 'commercial zone.'

That Section, to a limited extent, excludes from the Commission's jurisdiction 'The transportation of passengers or property in interstate or foreign commerce wholly within a municipality or between contiguous municipalities or within a zone adjacent to and commercially a part of any such municipality or municipalities * * *.' Other parts of the same Section authorize the Commission to apply the Act to these zone activities, however, if it finds that (1) 'such application is necessary' to carry out the national transportation policy declared in the Act, or (2) if the carrier is not 'engaged in * * * intrastate transportation of passengers over the entire length of such interstate route.' The Commission held that the four bus companies came within both these exceptions and therefore were not excluded from its jurisdiction. We need not consider whether they came within the second exception, because of our conclusion that the Commission's findings justified its order under the first exception. Those findings were that it was necessary for the Commission to exercise its jurisdiction in order to carry out the Act's declared policy, 'to encourage the establishment and maintenance of reasonable charges for transportation services, without unjust discriminations, * * * to the end of developing, coordinating, and preserving a national transportation system * * * adequate to meet the needs of the commerce of the United States, of the Postal Service, and of the national defense.' 54 Stat. 899, 49 U.S.C.A. note preceding § 301.

On its second hearing the Commission heard evidence from employees of the Army and Navy as to dissatisfaction with the fares. The Secretaries of both War and Navy made complaints concerning the...