Illinois Central R. Co. v. State Pub. Util. Comm’n, 245 U.S. 493 (1918)

Illinois Central Railroad Company v.

State Public Utilities Commission
Nos. 416

, 448

Argued October 8, 9, 1917
Decided January 14, 1918
245 U.S. 493

APPEALS FROM THE DISTRICT COURT OF THE UNITED STATES

FOR THE NORTHERN DISTRICT OF ILLINOIS

Syllabus

Suits brought by carriers to restrain state officials from interfering with the establishment and maintenance of intrastate rates which the carriers have adopted in pursuance of an order of the Interstate Commerce Commission requiring the removal of discrimination against interstate commerce are not suits to "enforce" the order in the sense of the jurisdictional provision of the Act of October 22, 1913, c. 32, 38 Stat. 219, and need not be brought in the district "wherein is the residence of the party or any of the parties upon whose petition the order was made." They come within the provision in § 1 of the Act of June 18, 1910, c. 309, 36 Stat. 539, repeated in Jud.Code, § 207, by which the general jurisdiction over cases not therein enumerated is preserved.

In such a suit, neither the United States nor the Commission is a necessary party, either by statute or under the rules governing suits in equity.

As, by the jurisdictional provision of the Act of October 22, 1913, supra, a suit to set aside an order of the Commission, relating to transportation and made upon petition, may be brought only in the district of the petitioner’s residence, and as the United States has not consented to be thus impleaded in any other district, and its immunity from suit recognizes no distinction between cross and original bills, or ancillary and original suits, it follows that the district court of another district, in a suit by a carrier against state officials in aid of such an order, cannot entertain a cross-bill seeking to have the order declared void and to enjoin the United States and the Commission from enforcing it and the carrier from complying with it.

Nor may such cross-bill be entertained as against the Commission and the carrier only; under Jud.Code, §§ 208, 211, the United States is a necessary party, as the representative of the public.

When, in the exercise of the power constitutionally reposed in it by the Act to Regulate Commerce, the Commission finds that a disparity in interstate and intrastate rates is resulting in unjust discrimination against interstate commerce, and also determines what are reasonable rates for the interstate traffic and directs the removal of the discrimination, the carrier is not only entitled to put in force the interstate rates found reasonable, but is free to remove the forbidden discrimination by bringing the intrastate rates (though fixed by state authority) to the same level. The Shreveport Case, 234 U.S. 342; Adams Express Co. v. Caldwell, 244 U.S. 617.

In such case, the Commission may make the order as broad as the wrongful discrimination, but the extent of the discrimination found and of the remedy applied must be gathered from the reports and order of the Commission; and, to be effective in respect of intrastate rates established and maintained under state authority, the order must have a definite field of operation, and not leave uncertain the territory or points to which it applies. Such an order should not be given precedence over a state rate statute, otherwise valid, unless, and except insofar as, it conforms to a high standard of certainty.

Affirmed.

These cross-appeals present a controversy over the validity, scope, and effect of an order of the Interstate Commerce Commission dealing with discrimination found to result from a disparity in interstate and intrastate passenger rates. The facts and proceedings to be considered are these: the Mississippi River forms the boundary between the States of Missouri and Iowa on the west and the State of Illinois on the east. East St. Louis, in southwestern Illinois, is directly across the river from St. Louis, Missouri, and Hamilton, in western Illinois, is directly across the river from Keokuk, Iowa. At both places, the river is spanned by railroad bridges whereby the lines of railroad on one side are connected with those on the other. For some years prior to December 1, 1914, interstate passenger rates between St. Louis and Keokuk, on the one hand, and points in Illinois, on the other, were on a substantial parity with intrastate rates between East St. Louis and Hamilton, respectively, and points in Illinois. All were on a basis of 2 cents per mile, save that the rates to and from St. Louis and Keokuk included a bridge toll over the river. All other rates between points in Illinois were also on the same basis, any intrastate rate in excess of 2 cents per mile being prohibited by a statute of that state. On December 1, 1914, the rates between St. Louis and Keokuk, respectively, and points in Illinois were increased by the carriers to 2 1/2 cents per mile, plus bridge tolls, the parity theretofore existing being thereby broken. Following this increase, the Business Men’s League of St. Louis, a corporate body of that city engaged in fostering its interests, filed with the Interstate Commerce Commission a petition against the carriers charging that the rates between St. Louis and points in Illinois were unreasonable in themselves, and, in connection with the lower intrastate rates, worked an unreasonable discrimination against St. Louis and in favor of Illinois cities, particularly East St. Louis and Chicago, and a like discrimination against interstate passenger traffic to and from St. Louis and in favor of intrastate passenger traffic to and from East St. Louis and Chicago. An association representing interests in Keokuk, Iowa, intervened and urged that any relief granted with respect to St. Louis be extended to Keokuk, so the former would not have an undue advantage over the latter. The State of Illinois, the Public Utilities Commission of that state, an association representing interests in Chicago and another association representing interests in East St. Louis also intervened, and opposed any action contemplating or requiring an increase in intrastate rates. After a hearing in which all the parties and intervenors participated, the Interstate Commerce Commission filed a report (41 I.C.C. 13) finding that the existing bridge tolls at St. Louis and Keokuk were unobjectionable, that rates between either of those cities and points in Illinois were reasonable when not in excess of 2.4 cents per mile, plus bridge tolls, and that the service, equipment, and accommodations provided for intrastate passengers to and from East St. Louis, Hamilton, and Chicago, were the same as those provided for interstate passengers to and from St. Louis and Keokuk. In that report, the Commission also found that the contemporaneous maintenance between East St. Louis{1} and Hamilton,{2} respectively, and other points in Illinois, of rates on a lower basis than those maintained via the same routes between St. Louis and Keokuk, respectively, and the same points in Illinois, bridge tolls excepted, gave an undue preference to East St. Louis and Hamilton and to intrastate passenger traffic to and from the latter points and subjected St. Louis and Keokuk and interstate passenger traffic to and from those cities to an unreasonable disadvantage; that the existing disparity in interstate and intrastate rates worked an unjust discrimination against St. Louis and in favor of Chicago insofar as the rates between St. Louis and points in Illinois approximately equidistant from those cities exceeded, by more than the bridge toll, the rates between Chicago and the same points; that the disparity worked a like discrimination against Keokuk and in favor of Chicago, and that the existence on the reasonably direct lines of the carriers in the territory between Chicago, on the one hand, and St. Louis and Keokuk, on the other, of intrastate rates on a lower basis per mile than the rates between that territory and St. Louis and Keokuk, bridge tolls excepted, operated to subject interstate traffic to an unreasonable disadvantage.

The Commission then made an order intended to result in the installation of rates not exceeding 2.4 cents per mile between St. Louis and Keokuk, respectively, and points in Illinois, and to remove the discrimination shown in the report; but, shortly thereafter, the Commission recalled that order and filed a supplemental report (41 I.C.C. 503) indicating that lawful interstate rates between St. Louis and Keokuk, on the one hand, and Illinois points, on the other could be defeated by the use of two tickets, one purchased at the interstate rate for a part of the journey and the other at the lower intrastate rate for the remainder, and therefore that the order should be so framed as to cover the rates between the intermediate points. In this connection, it was said that the discrimination against interstate traffic resulting from the lower intrastate rates "would not be removed merely by an increase in the intrastate fares to and from the east bank points," and that

any contemporaneous adjustments of fares between St. Louis or Keokuk and points in Illinois, and generally within Illinois, which would permit the defeat of the St. Louis, Keokuk, East St. Louis, or any other east side city fares by methods such as described above, and which would thereby permit the continuance of the undue prejudice which we have found is suffered by St. Louis and Keokuk, and continue to burden interstate commerce,

would not comply with the order about to be copied in the margin.{3}

In obedience to that order, the carriers, of whom there were 29, took the requisite steps to establish and put in force interstate rates on a basis of 2.4 cents per mile between St. Louis and Keokuk, respectively, and points in Illinois, and those rates became effective. Then, believing the order required all intrastate rates in Illinois to be on a level with those interstate rates, bridge tolls excepted, the carriers proceeded to establish and put in force new rates between all points in that state on a basis of 2.4 cents per mile. This met with opposition on the part of the state authorities and the carriers severally brought suits against them, in the District Court for the Northern District of Illinois, to enjoin them from interfering, by civil or criminal proceedings, or otherwise, with the establishment and maintenance of such intrastate rates under the Commission’s order. The suits were consolidated, and the present appeals are from decrees dismissing the bills for want of equity and dismissing cross-bills of the state authorities for want of jurisdiction.