Missouri Rate Cases, 230 U.S. 474 (1913)

Missouri Rate Cases*

Nos. 9

, 12

Argued October 12, 13, 1910
Ordered for reargument April 10, 1911
Reargued April 1, 2, 3, 1912
Nos. 339

, 340

, 341

, 342

, 345

, 346

, 349

, 350

, 351

, 352

, 357

, 358

, 365

, 366

, 367

, 368

Argued April 1, 2, 3, 1912
Decided June 16, 1913
230 U.S. 474

APPEALS AND CROSS APPEALS FROM THE CIRCUIT COURT OF THE

UNITED STATES FOR THE WESTERN DISTRICT OF MISSOURI

Syllabus

These suits were brought to restrain the enforcement of the freight rate and passenger fare acts of the Missouri, passed in 1907. The question of interference with interstate commerce is the same as that presented in the Minnesota Rate Cases, ante, p. 352, and the decision is the same.

Where an act fixing rates and imposing penalties for violation is repealed by a subsequent act which saves the penalties and simply substitutes other rates, the essential features of a controversy involving the constitutionality of the statute are the same, and, under the circumstances of this case, a supplemental bill may be filed setting up the new and additional legislation and praying relief in regard thereto. Where the ends of justice are advanced and no substantial rights of the objectors are violated, this Court will not interfere with the reasonable discretion of the trial judge in a matter of practice.

Where the federal court already has jurisdiction of an action to determine the constitutionality of a state statute fixing rates, that jurisdiction is not ousted by a substitution of rates by the legislature, because the state files a bill to enforce the new rates; the federal court retains jurisdiction under a supplemental bill.

Minnesota Rate cases, ante, p. 352, followed to effect that the legislative acts of Missouri establishing maximum rates for transportation wholly intrastate are not unconstitutional as an unwarranted interference with interstate commerce.

Legislative acts of a state establishing maximum freight and passenger rates for wholly intrastate commerce will not be declared unconstitutional under the Fourteenth Amendment as confiscatory in the absence of clear and convincing proof as to the value of the property used by the carrier and on which returns are based. General evidence as to assessed valuations without showing the method of appraisement are insufficient either as to value of property or apportionment of expenses between interstate and intrastate business.

Minnesota Rate Cases, ante, p. 352, followed, disapproving the establishment of values of property used in interstate and intrastate business by apportionment based on the gross revenue received from each class of business.

Where a number of different carriers bring separate suits to enjoin the enforcement of railway rates established by a state statute on the ground that the rates are unconstitutional as confiscatory, the bills can be sustained as to those carriers which actually prove that the rates are confiscatory as not yielding a return on their property, although dismissed as to other carriers which fail to offer clear and convincing proof to that effect.

Where a statute is valid on its face, each person attacking it as depriving him of his property without due process of law must show it does so deprive him; he cannot rely on the fact that it deprives others of their property without due process of law.

168 F. 317 affirmed in certain cases and reversed in others.

Appeals and cross-appeals from decrees of the circuit court entered March 8, 1909, as amended April 17, 1909, adjudging the maximum freight rate acts passed by the Legislature of the State of Missouri in 1905 and 1907, and the maximum passenger fare act passed in 1907, to be confiscatory, and enjoining their enforcement. 168 F. 317.

Eighteen suits, brought by as many railroad companies, were begun in June, 1905, assailing the Act of April 15, 1905 (effective June 16, 1905), which prescribed maximum rates for intrastate transportation of certain commodities in carload lots. The members of the Board of Railroad Commissioners, the Attorney General of the state, and representative shippers, were made defendants.

Preliminary injunction was granted in each case, demurrers to the bills were overruled, answers were filed, and in March, 1906, the cases were referred to a master to take evidence and report. The master proceeded, by agreement, to take testimony in three of the cases.

While this reference was pending, the legislature, in 1907, passed the following acts:

(1) That of February 27, 1907, fixing a maximum passenger fare within the State of two cents a mile for railroads over forty-five miles in length.

(2) That of March 19, 1907, repealing the Act of April 15, 1905, and prescribing new maximum intrastate rates for specified commodities in carload lots, the rates being higher in certain instances than those of the former act. It also repealed an act passed April 14, 1905 (not mentioned in the original bills) relating to rates on stone, sand, and brick, and made new rates therefor. It was provided that the repeal should not relieve any railroad company from liabilities and penalties previously incurred.

(3) That of March 19, 1907, fixing maximum rates for fruit in carload lots.

(4) That of April 4, 1907, requiring carriers of livestock in carload lots to carry the shipper or his agent free of charge. (This statute was held unconstitutional by the state court, and needs no further notice. McCully v. Railroad Co., 212 Mo. 1.)

These acts took effect on June 14, 1907.

On June 11, 1907, the complainant in each of the eighteen cases moved for leave to file an amended and supplemental bill, then presented to the court, which set forth the legislation of 1907, above-mentioned, and asked relief against its enforcement upon the grounds that these acts constituted an unwarrantable interference with interstate commerce and that they were confiscatory. On June 13, 1907, the court made an order setting down the applications for argument, and meanwhile restraining the enforcement of the new rates. On June 17, 1907, upon hearing, leave to file was granted and a temporary injunction was allowed as to the freight rate laws of 1907, but not as to the passenger fare law. The latter was permitted to go into effect for three months without prejudice, and was thereafter continued in force until the final decrees.

Meanwhile, on June 14, 1907, bills were filed in the name of the state in the state court against the railway companies, seeking an injunction requiring them to put in force both the freight and passenger rates as prescribed.

The supplemental bills in the federal courts were amended so as to show these proceedings. On demurrer to these bills, as amended, it was insisted that they were without equity; that the matters alleged were not germane to or supplementary of the original bills, and that the state court had jurisdiction of the proceedings therein instituted. The demurrers were overruled, and the defendants answered.

It was ordered (June 13, 1908) that the eighteen cases should be set down for hearing before the court upon the testimony theretofore taken before the master, and upon such further oral and documentary evidence as should then be offered in open court. And the cases were so heard.

With respect to eight of the suits, it was stipulated that they should abide the result in other suits named.

The case of the St. Louis, Kansas City & Colorado Railroad Company was consolidated with that of the Chicago, Rock Island & Pacific Railway Company, the latter having acquired the property of the former, and the court ordered that the "findings, statements, and figures" of the two companies should be combined. In the suit brought by the Chicago, Burlington & Quincy Railway Company, then the lessee of the property, the Chicago, Burlington & Quincy Railroad Company was substituted as complainant on the cancellation of the lease.

In the nine cases thus remaining, the court held that the rate acts, both of 1905 and 1907, were invalid, as confiscatory. The contention as to the invalidity of the acts by reason of interference with interstate commerce was not sustained. The costs were equally divided.

And from the final decrees entered in these nine suits, the above entitled appeals and cross-appeals were taken.