Plaintiff
The Chicago, Milwaukee, and St. Paul Railway Company
Defendant
State of Minnesota ex rel. the Railroad and Warehouse Commission of the Stateof Minnesota
Plaintiff's Claim
The state of Minnesota wrongly granted power to the Warehouse and Railroad Commission to limit charges on behalf of freight carriers in the state.
Chief Lawyers for Plaintiff
John W. Cary, W. C. Goudy, J. H. Howe, W. H. Norris
Chief Defense Lawyers
Moses E. Clapp, H. W. Childs
Justices for the Court
Samuel Blatchford (writing for the Court), David Josiah Brewer, Stephen Johnson Field, Melville Weston Fuller, John Marshall Harlan I, Samuel Freeman Miller
Justices Dissenting
Joseph P. Bradley, Horace Gray, Lucius Quintus C. Lamar
Place
Washington, D.C.
Date of Decision
24 March 1890
Decision
The U.S Supreme Court reversed the writ of mandamus issued by the Supreme Court of Minnesota, and remanded the case back to the lower court for further proceedings because the lower court denied the Chicago, Milwaukee, and St. Paul Railway Company due process of law.
Significance
The U.S. Supreme Court confirmed that the state of Minnesota, hence all states, have the legislative power to craft laws regulating rates of transport. However, the manner in which the state of Minnesota executed their authority via the Railroad and Warehouse Commission--not allowing the Chicago, Milwaukee,and St. Paul Railway Company representation before the commission rate hearings--breached the Fourteenth Amendment of the U.S. Constitution. Thus, whilestates could legally regulate service rates rate hearings and decisions had to be conducted in a manner which permitted participation and input by all affected parties.
In March of 1887, the state of Minnesota established a Railroad and WarehouseCommission. The duties of this commission were defined in a legislative actof Minnesota (General Laws of 1887, chapter 10). The first section of this act proclaimed that any common carrier "engaged in the transportation of passengers or property . . . from one place or station to another, both being within the State of Minnesota" would be liable to its provisions. Thus, the commission was authorized to force any common carrier to change its tariffs if it found such charges "unreasonable" and "unequal." The commission, however, wasobliged to notify carriers, in writing, and explain why such charges were unlawful. If a common carrier overlooked such notification and refused to followor adopt recommended charges it was subject to a writ of mandamus (awritten order to undertake a certain legal procedure; subject to the mandamus are individuals, public officials, companies, and courts). In essence, the Railroad and Warehouse Commission had total authority and autonomy in determining what constituted lawful rate charges.
The commission, joined by the Board of Trade Unions of Farmington, Northfield, Faribault and Owatonna, petitioned the Chicago, Milwaukee, and St. Paul Railway Company (C M & St. P Railway) complaining that their charge for transport of milk was unjust. The petition stated that the company charged four cents per gallon of milk for shipment from Owatonna to St. Paul and Minneapolis, but from Faribault, Dundas, Northfield and Farmington to St. Paul and Minneapolis, the price was three cents per gallon. The commission requested thatcharges should be replaced with ones determined fair by the commission. Officials from C M & St. P Railway refused to change rates arguing that theircharges were even lower than in some parts of the country. In response, the commission and the Board of Trade Unions met at the office of the commission in St. Paul. They concluded that transport charges of three cents per gallon of milk was high and that two-and-one-half cents was fair.
The commission reported their findings to C M & St. P Railway. The reportprotested that the company overcharged for its service and announced that the sum of two and one-half cents was just compensation. The Commission ruled that the new, set rate should be charged regardless of the transport distancein the state. When the Railway Company refused to comply, the state attorneygeneral applied for a writ of mandamus from the Minnesota Supreme Court. Consequently, the court issued an "alternative" writ of mandamus. (Although the court's deadline for the response to be filled and returned was14 December 1887, C M & St. P Railway responded on 23 of December, 1887.)
The heart of the company's response debated whether the state had a legal ground to establish a regulatory commission with such vast authority. The briefpointed out that C M & St. P Railway succeeded all franchises granted bythe Congress of the United States in 1857 to the Cedar Valley Railroad Company and that under the ninth section of the charter, the directors of the company were granted exclusive right to regulate the rates of transport. The onlyclause in the charter was that the company had to "assure a reasonable rate."
C M & St. P Railway applied twice for a peremptory writ of mandamus, but the Minnesota Supreme Court denied their application both times. The court affirmed the writ and issued an order that the railroad must obey the decision of the Railroad and Warehouse Commission. To counter this decision, the company submitted a writ of error (written order, usually, from a superiorcourt to a lower one to send a record of the case for review) to the U.S. Supreme Court.
States' Rights Versus Commercial Rights
John W. Cary argued the case for the plaintiff. He claimed the ruling of thestate court had no legal ground for the state to limit transport rates, and that such a move was incompatible with the charter the federal government hadgranted to public railroads, as in Stone v. Farmers L. & T. Co. (1886). The company had been deprived of its property and its use without the due process of law (Allnutt v. Inglis) and, in another unrelated case involving the railway, Chicago, Milwaukee and St. Paul Railway Co. v. Ackley (1876). Cary maintained the court was mistaken in its opinion that rates set by the commission were final, lawful, and that C M & St. P Railwayshould not have to abide by the commission's rulings. The state court was also mistaken in issuing a writ of mandamus.
W. C. Goudy argued for the plaintiff as well. In presenting his arguments, Goudy suggested that the decision of the Railroad and Warehouse Commission should be subjected to judicial investigation. He believed the sections of the statute of Minnesota which authorized regulatory action by the railroad commission final were repugnant to the Fifth and Fourteenth Amendments. As precedent, Goudy cited Munn v. Illinois (1877), and Gibbons v. Ogden (1824). Moreover, he claimed the state court disregarded its own previous rulingin Brown v. Maryland (1827).
Counsel for the state of Minnesota argued that the state's supreme court didnot exceed its jurisdiction and the writ of mandamus was a legitimateuse of available leverage to force a common carrier to comply with the commission's ruling. Moreover, according to a prior ruling made inChicago, Burlington and Quincy Railroad Company v. Chicago(1876), the judgment of the state court was obligatory before the U.S. Supreme Court. The attorney for thedefendant reasoned that if not protected by their charters, railroad companies and, subsequently, their transport rates are subject to state control. Heconcluded that the general statute regulating common carriers or their transport charges did not inevitably deprive railroads of their property without due process of law if a ruling was not in collision with a railroad's charter as stated in Richmond, F. & P. R. Co. v. Richmond (1877).
On a 6-3 vote, the U.S. Supreme Court reversed the decision of the lower court. In writing their decision, the Court was careful to state that the legislature of the state of Minnesota had a right to form such a commission and thatthe decision of the Railroad and Warehouse Commission was indeed obligatory.The Supreme Court was also careful to acknowledge that their authority did not extend to making a determination whether the state's set rate was just. The charter that gave competence to the directors of the company to regulate the transport charges did not mean that the state abandoned its right to intervene when there existed a compelling need for the state to set rates. Furthermore, a federal charter protected a company and excluded it from legal liability only if its (federal) grant clearly stated so, which was clearly not within the charter of the C M & St. P Railway. However, the Court also found that the company was denied due process in the Minnesota Railroad and Warehouse Commission hearings because it had no opportunity to appear and justify thebasis for their transport rates. The Supreme Court thus found the writ of mandamus issued by the Minnesota Court to be "repugnant to the U.S. Constitution" and remanded the case back to the lower court for further adjudication.
Justice Bradley, writing the dissenting opinion, felt the Court neglected precedence set in Munn v. Illinois; interestingly, his main objection tothe majority opinion was that the case presented a legislative rather than judicial issue. However, he agreed with the majority opinion that states retained the authority to craft laws (within the limits of the U.S. Constitution) and so the state of Minnesota did not surpass its power by founding the Railroad and Warehouse Commission. Bradley went on to posit that "due process of law does not always require the court. It merely requires such tribunals and proceedings as are proper to the subject in hand." Moreover, he also agreed that while the U.S Constitution tacitly granted state governments the ability tomake their own regulatory bodies and code, states were obliged to conduct fair hearings.
Impact
At the time Chicago, Milwaukee, and St. Paul Railway Company v. the Stateof Minnesota was adjudicated, cases dealing with regulation of private corporations and monopolies were increasingly presented to the Supreme Court. In fact, another case was argued concurrently before the Court, MinneapolisEastern Railway Co. v. the State of Minnesota. Interestingly, the railroads accepted the decision of the Minnesota Railroad and Warehouse Commission.No official record exists that positively identifies the reason for the company's decision to accept the state's rate, however, it is quite likely that in a legal atmosphere which was perceived as actively pursuing the extent of state and federal regulatory capabilities, the railroads capitulated in theirown best interest. In upholding states' rights to found commissions and regulatory bodies to monitor common carriers, the U.S. Supreme Court showed its firm support to limit the potential for monopoly by railroads. Yet, even thoughthe Court only indirectly mitigated unreasonable transport charges set by railroads, this and similar rulings ensured an economic climate which promotedfree and fair market competition in the United States.
Related Cases
"Our Overworked Supreme Court"
Cartoonist Joseph Keppler depicted "Our Overworked Supreme Court" in a cartoon with that caption published in the humor magazine Puck on 9 December1885. The scene showed the Supreme Court justices awash amidst a pile of paper. It symbolized the extraordinary caseload in which the court was regularlymired at the time.
In the Supreme Court of John Jay, the first chief justice (1789-95), the caseload was light, and Justices often spent time on administrative matters. By the time of the Civil War, the size of the docket had grown to some 300 cases.By the time of Keppler's cartoon, the Court was swamped with more than 1,300cases.
In 1891, Congress gave the Court some relief with the passage of the CircuitCourt of Appeals Act, which established the appellate court system as a buffer between the lower courts and the High Court.
Sources
"Federal Judiciary (Library of Congress Manuscripts: An Illustrated Guide)."
http://lcweb.loc.gov.
The Chicago, Milwaukee, and St. Paul Railway Company
Defendant
State of Minnesota ex rel. the Railroad and Warehouse Commission of the Stateof Minnesota
Plaintiff's Claim
The state of Minnesota wrongly granted power to the Warehouse and Railroad Commission to limit charges on behalf of freight carriers in the state.
Chief Lawyers for Plaintiff
John W. Cary, W. C. Goudy, J. H. Howe, W. H. Norris
Chief Defense Lawyers
Moses E. Clapp, H. W. Childs
Justices for the Court
Samuel Blatchford (writing for the Court), David Josiah Brewer, Stephen Johnson Field, Melville Weston Fuller, John Marshall Harlan I, Samuel Freeman Miller
Justices Dissenting
Joseph P. Bradley, Horace Gray, Lucius Quintus C. Lamar
Place
Washington, D.C.
Date of Decision
24 March 1890
Decision
The U.S Supreme Court reversed the writ of mandamus issued by the Supreme Court of Minnesota, and remanded the case back to the lower court for further proceedings because the lower court denied the Chicago, Milwaukee, and St. Paul Railway Company due process of law.
Significance
The U.S. Supreme Court confirmed that the state of Minnesota, hence all states, have the legislative power to craft laws regulating rates of transport. However, the manner in which the state of Minnesota executed their authority via the Railroad and Warehouse Commission--not allowing the Chicago, Milwaukee,and St. Paul Railway Company representation before the commission rate hearings--breached the Fourteenth Amendment of the U.S. Constitution. Thus, whilestates could legally regulate service rates rate hearings and decisions had to be conducted in a manner which permitted participation and input by all affected parties.
In March of 1887, the state of Minnesota established a Railroad and WarehouseCommission. The duties of this commission were defined in a legislative actof Minnesota (General Laws of 1887, chapter 10). The first section of this act proclaimed that any common carrier "engaged in the transportation of passengers or property . . . from one place or station to another, both being within the State of Minnesota" would be liable to its provisions. Thus, the commission was authorized to force any common carrier to change its tariffs if it found such charges "unreasonable" and "unequal." The commission, however, wasobliged to notify carriers, in writing, and explain why such charges were unlawful. If a common carrier overlooked such notification and refused to followor adopt recommended charges it was subject to a writ of mandamus (awritten order to undertake a certain legal procedure; subject to the mandamus are individuals, public officials, companies, and courts). In essence, the Railroad and Warehouse Commission had total authority and autonomy in determining what constituted lawful rate charges.
The commission, joined by the Board of Trade Unions of Farmington, Northfield, Faribault and Owatonna, petitioned the Chicago, Milwaukee, and St. Paul Railway Company (C M & St. P Railway) complaining that their charge for transport of milk was unjust. The petition stated that the company charged four cents per gallon of milk for shipment from Owatonna to St. Paul and Minneapolis, but from Faribault, Dundas, Northfield and Farmington to St. Paul and Minneapolis, the price was three cents per gallon. The commission requested thatcharges should be replaced with ones determined fair by the commission. Officials from C M & St. P Railway refused to change rates arguing that theircharges were even lower than in some parts of the country. In response, the commission and the Board of Trade Unions met at the office of the commission in St. Paul. They concluded that transport charges of three cents per gallon of milk was high and that two-and-one-half cents was fair.
The commission reported their findings to C M & St. P Railway. The reportprotested that the company overcharged for its service and announced that the sum of two and one-half cents was just compensation. The Commission ruled that the new, set rate should be charged regardless of the transport distancein the state. When the Railway Company refused to comply, the state attorneygeneral applied for a writ of mandamus from the Minnesota Supreme Court. Consequently, the court issued an "alternative" writ of mandamus. (Although the court's deadline for the response to be filled and returned was14 December 1887, C M & St. P Railway responded on 23 of December, 1887.)
The heart of the company's response debated whether the state had a legal ground to establish a regulatory commission with such vast authority. The briefpointed out that C M & St. P Railway succeeded all franchises granted bythe Congress of the United States in 1857 to the Cedar Valley Railroad Company and that under the ninth section of the charter, the directors of the company were granted exclusive right to regulate the rates of transport. The onlyclause in the charter was that the company had to "assure a reasonable rate."
C M & St. P Railway applied twice for a peremptory writ of mandamus, but the Minnesota Supreme Court denied their application both times. The court affirmed the writ and issued an order that the railroad must obey the decision of the Railroad and Warehouse Commission. To counter this decision, the company submitted a writ of error (written order, usually, from a superiorcourt to a lower one to send a record of the case for review) to the U.S. Supreme Court.
States' Rights Versus Commercial Rights
John W. Cary argued the case for the plaintiff. He claimed the ruling of thestate court had no legal ground for the state to limit transport rates, and that such a move was incompatible with the charter the federal government hadgranted to public railroads, as in Stone v. Farmers L. & T. Co. (1886). The company had been deprived of its property and its use without the due process of law (Allnutt v. Inglis) and, in another unrelated case involving the railway, Chicago, Milwaukee and St. Paul Railway Co. v. Ackley (1876). Cary maintained the court was mistaken in its opinion that rates set by the commission were final, lawful, and that C M & St. P Railwayshould not have to abide by the commission's rulings. The state court was also mistaken in issuing a writ of mandamus.
W. C. Goudy argued for the plaintiff as well. In presenting his arguments, Goudy suggested that the decision of the Railroad and Warehouse Commission should be subjected to judicial investigation. He believed the sections of the statute of Minnesota which authorized regulatory action by the railroad commission final were repugnant to the Fifth and Fourteenth Amendments. As precedent, Goudy cited Munn v. Illinois (1877), and Gibbons v. Ogden (1824). Moreover, he claimed the state court disregarded its own previous rulingin Brown v. Maryland (1827).
Counsel for the state of Minnesota argued that the state's supreme court didnot exceed its jurisdiction and the writ of mandamus was a legitimateuse of available leverage to force a common carrier to comply with the commission's ruling. Moreover, according to a prior ruling made inChicago, Burlington and Quincy Railroad Company v. Chicago(1876), the judgment of the state court was obligatory before the U.S. Supreme Court. The attorney for thedefendant reasoned that if not protected by their charters, railroad companies and, subsequently, their transport rates are subject to state control. Heconcluded that the general statute regulating common carriers or their transport charges did not inevitably deprive railroads of their property without due process of law if a ruling was not in collision with a railroad's charter as stated in Richmond, F. & P. R. Co. v. Richmond (1877).
On a 6-3 vote, the U.S. Supreme Court reversed the decision of the lower court. In writing their decision, the Court was careful to state that the legislature of the state of Minnesota had a right to form such a commission and thatthe decision of the Railroad and Warehouse Commission was indeed obligatory.The Supreme Court was also careful to acknowledge that their authority did not extend to making a determination whether the state's set rate was just. The charter that gave competence to the directors of the company to regulate the transport charges did not mean that the state abandoned its right to intervene when there existed a compelling need for the state to set rates. Furthermore, a federal charter protected a company and excluded it from legal liability only if its (federal) grant clearly stated so, which was clearly not within the charter of the C M & St. P Railway. However, the Court also found that the company was denied due process in the Minnesota Railroad and Warehouse Commission hearings because it had no opportunity to appear and justify thebasis for their transport rates. The Supreme Court thus found the writ of mandamus issued by the Minnesota Court to be "repugnant to the U.S. Constitution" and remanded the case back to the lower court for further adjudication.
Justice Bradley, writing the dissenting opinion, felt the Court neglected precedence set in Munn v. Illinois; interestingly, his main objection tothe majority opinion was that the case presented a legislative rather than judicial issue. However, he agreed with the majority opinion that states retained the authority to craft laws (within the limits of the U.S. Constitution) and so the state of Minnesota did not surpass its power by founding the Railroad and Warehouse Commission. Bradley went on to posit that "due process of law does not always require the court. It merely requires such tribunals and proceedings as are proper to the subject in hand." Moreover, he also agreed that while the U.S Constitution tacitly granted state governments the ability tomake their own regulatory bodies and code, states were obliged to conduct fair hearings.
Impact
At the time Chicago, Milwaukee, and St. Paul Railway Company v. the Stateof Minnesota was adjudicated, cases dealing with regulation of private corporations and monopolies were increasingly presented to the Supreme Court. In fact, another case was argued concurrently before the Court, MinneapolisEastern Railway Co. v. the State of Minnesota. Interestingly, the railroads accepted the decision of the Minnesota Railroad and Warehouse Commission.No official record exists that positively identifies the reason for the company's decision to accept the state's rate, however, it is quite likely that in a legal atmosphere which was perceived as actively pursuing the extent of state and federal regulatory capabilities, the railroads capitulated in theirown best interest. In upholding states' rights to found commissions and regulatory bodies to monitor common carriers, the U.S. Supreme Court showed its firm support to limit the potential for monopoly by railroads. Yet, even thoughthe Court only indirectly mitigated unreasonable transport charges set by railroads, this and similar rulings ensured an economic climate which promotedfree and fair market competition in the United States.
Related Cases
- Gibbons v. Ogden, 22 U.S. 9 (1824).
- Brown v. Maryland, 25 U.S. 419 (1827).
- Chicago, Burlington and Quincy Railroad Company v. Ackley, 94 U.S.155 (1876).
- Chicago, Milwaukee and St. Paul Railway Co. v. the State of Minnesota, 94 U.S. 179 (1876).
- Winona R. Co. v. Blake, 94 U.S. 180 (1876).
- Munn v. Illinois, 94 U.S. 113 (1877).
- Richmond, F. & P. R. Co. v. Richmond, 96 U.S. 521 (1877).
- Stone v. Farmers L. & T. Co., 116 U.S. 326 (1886).
"Our Overworked Supreme Court"
Cartoonist Joseph Keppler depicted "Our Overworked Supreme Court" in a cartoon with that caption published in the humor magazine Puck on 9 December1885. The scene showed the Supreme Court justices awash amidst a pile of paper. It symbolized the extraordinary caseload in which the court was regularlymired at the time.
In the Supreme Court of John Jay, the first chief justice (1789-95), the caseload was light, and Justices often spent time on administrative matters. By the time of the Civil War, the size of the docket had grown to some 300 cases.By the time of Keppler's cartoon, the Court was swamped with more than 1,300cases.
In 1891, Congress gave the Court some relief with the passage of the CircuitCourt of Appeals Act, which established the appellate court system as a buffer between the lower courts and the High Court.
Sources
"Federal Judiciary (Library of Congress Manuscripts: An Illustrated Guide)."
http://lcweb.loc.gov.
Further Readings
- Biskupic, Joan, and Elder Witt, eds. Congressional Quarterly's Guide to the U.S. Supreme Court, 3rd ed. Washington, DC: Congressional Quarterly, Inc., 1996.
- Hall, Kermit L., ed. The Oxford Companion to the Supreme Court of theUnited States. New York: Oxford University Press, 1992.
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