Di Santo v. Commonwealth of Pennsylvania/Dissent Brandeis

Mr. Justice BRANDEIS, with whom Mr. Justice HOLMES concurs, dissenting.

The statute is an exertion of the police power of the state. Its evident purpose is to prevent a particular species of fraud and imposition found to have been practiced in Pennsylvania upon persons of small means, unfamiliar with our language and institutions. Much of the immigration into the United States is effected by arrangements made here for remittance of the means of travel. The individual immigrant is often an advance. After gaining a foothold here, he has his wife and children, aged parents, brothers, sisters or other relatives follow. To this end he remits steamship tickets or orders for transportation. The purchase of the tickets involves trust in the dealer. This is so not only because of the nature of the transaction, but also because a purchaser when unable to pay the whole price at one time makes successive deposits on account, the ticket or order not being delivered until full payment is made. The facilities for remitting both cash and steamship tickets are commonly furnished by private bankers of the same nationality as the immigrant. It was natural that the supervision of persons engaged in the business of supplying steamship tickets should be committed by the statute to the commissioner of banking.

Although the purchase made is of an ocean steamship ticket, the transaction regulated is wholly intrasate-as much so as if the purchase were of local real estate or of local theater tickets. There is no purpose on the part of the state to regulate foreign commerce. The statute is not an obstruction to foreign commerce. It does not discriminate against foreign commerce. It places no direct burden upon such commerce. It does not affect the commerce except indirectly. Congress could, of course, deal with the subject, because it is connected with foreign commrce. But it has not done so. Nor has it legislated on any allied subject. Thus, there can be no contention that Congress has occupied the field. And obviously, also, this is not a case in which the silence of Congress can be interpreted as a prohibition of state action-as a declaration that in the sale of ocean steamship tickets fraud may be practiced without let or hindrance. If Pennsylvania must submit to seeing its citizens defrauded, it is not because Congress has so willed, but because the Constitution so commands. I cannot believe that it does.

Unlike the ordinance considered in Texas Transport Co. v. New Orleans, 264 U.S. 150, 44 S.C.t. 242, 68 L. Ed. 611, 34 A. L. R. 907, this statute is not a revenue measure. The license fee is small. The whole of the proceeds is required to defray the expense of supervising the business. Unlike the measure considered in Real Silk Mills v. Portland, 268 U.S. 325, 336, 45 S.C.t. 525, 69 L. Ed. 982, this statute is not an instrument of discrimination against interstate or foreign commerce. Unlike that considered in Shafer v. Farmers' Grain Co., 268 U.S. 189, 199, 45 S.C.t. 481, 69 L. Ed. 909, it does not affect the price of articles moving in interstate commerce. The licensing and supervision of dealers in steamship tickets is in essence an inspection law. Compare Turner v. Mary land. 107 U.S. 38, 2 S.C.t. 44, 27 L. Ed. 370.

The fact that the sale of the ticket is made as a part of a transaction in foreign or interstate commerce does not preclude application of state inspection laws, where, as here, Congress has not entered the flend, and the state regulation neither obstructs, discriminates against, nor directly burden the commerce. Patapsco Guano Co. v. United States, 171 U.S. 345, 18 S.C.t. 862, 43 L. Ed. 191; Diamond Glue Co. v. United States, 187 U.S. 611, 23 S.C.t. 206, 47 L. Ed. 328; McLean v. Denver & Rio Grande R. R. Co., 203 U.S. 38, 54, 27 S.C.t. 1, 51 L. Ed. 78; Red 'C' Oil Mfg. Co. v. Board of Agriculture, 222 U.S. 380, 32 S.C.t. 152, 56 L. Ed. 240; Savage v. Jones, 225 U.S. 501, 32 S.C.t. 715, 56 L. Ed. 1182; Sligb v. Kirkwood, 237 U.S. 52, 62, 35 S.C.t. 501, 59 L. Ed. 835; Merchants' Exchange v. Missouri, 248 U.S. 365, 39 S.C.t. 114, 63 L. Ed. 300; Pure Oil Co. v. Minnesota, 248 U.S. 158, 39 S.C.t. 35, 63 L. Ed. 180; Hebe Co. v. Shaw, 248 U.S. 297, 39 S.C.t. 125, 63 L. Ed. 255; Weigle v. Curtice Brothers Co., 248 U.S. 285, 39 S.C.t. 124, 63 L. Ed. 242, Armour & Co. v. North Dakota, 240 U.S. 510, 36 S.C.t. 440, 60 L. Ed. 771, Ann. Cas. 1916D, 548; Corn Products Refining Co. v. Eddy, 249 U.S. 427, 39 S.C.t. 325, 63 L. Ed. 689; Crescent Oil Co. v. Mississippi, 257 U.S. 129, 42 S.C.t. 42, 66 L. Ed. 166. To require that the dealer in tickets be licensed in order to guard against fraud in the local sale of tickets certainly affects interstate or foreign commerce less directly than to provide a test of the locomotive engineer's skill, Smith v. Alabama, 124 U.S. 465, 8 S.C.t. 564, 31 L. Ed. 508; or eyesight, Nashville, Chattanooga & St. Louis Ry. v. Alabama, 128 U.S. 96, 9 S.C.t. 28, 32 L. Ed. 352; or requiring that passenger cars be heated and guard posts placed on bridges, N. Y., N. H. & H. R. R. Co. v. New York, 165 U.S. 628, 17 S.C.t. 418, 41 L. Ed. 853; or requiring every railway to cause three of its regular passenger trains to stop each way daily at every village containing over three thousand inhabitants, Lake Shore & Michigan Southern R. R. Co. v. Ohio, 173 U.S. 285, 19 S.C.t. 465, 43 L. Ed. 702; or to require trains to limit within a city their speed to six miles an hour, Erb v. Morasch, 177 U.S. 584, 20 S.C.t. 819, 44 L. Ed. 897; or to establish a standard for the locomotive headlight, Atlantic Coast Line R. R. v. Georgia, 234 U.S. 280, 34 S.C.t. 829, 58 L. Ed. 1312; or to prescribe 'full crews,' Chicago, Rock Island & Pacific Ry. v. Arkansas, 219 U.S. 453, 31 S.C.t. 275, 55 L. Ed. 290; St. Louis, Iron Mountain & Southern Ry. Co. v. Arkansas, 240 U.S. 518, 36 S.C.t. 443, 60 L. Ed. 776; or to compel the providing of separate coaches for whites and colored persons, South Covington, etc., Ry. v. Kentucky, 252 U.S. 399, 40 S.C.t. 378, 64 L. Ed. 631; or to compel a railroad to eliminate grade crossings, although the expense involved may imperil its solvency, Erie R. R. Co. v. Public Utility Commissioners, 254 U.S. 394, 409-412, 41 S.C.t. 169, 65 L. Ed. 322-state requirements sustained by this court. See, also Engel v. O'Malley, 219 U.S. 128, 138, 31 S.C.t. 190, 55 L. Ed. 128.

It is said that McCall v. California, 136 U.S. 104, 10 S.C.t. 881, 34 L. Ed. 391, requires that the Pennsylvania statute be held void. McCall was an employee of the railroad, not an independent solicitor or dealer. Di Santo, as the state court found the facts, was not an employee of a steamship company, nor an agent authorized to act for one, and it ruled, as a matter of statutory construction, that, if he had been such, he would not have been required by the statute to be licensed. It found him to be an independent dealer or contractor, 'a free lance' authorized by the several steamship companies 'to sell tickets or orders entitling the persons therein named to passage upon steamers,' but 'with no obligation to any particular company,' except the remit the net amount payable by him to the company for a ticket or order sold. Moreover, the fee imposed by the San Francisco ordinance was an occupation tax, not an inspection fee. Here the Pennsylvania court found that the statute did not produce any revenue.

On the facts, the McCall Case is distinguishable from that at bar. If, because of its reasoning, it is thought not to be distinguishable, it should be disregarded. The doctrine of state decisis presents no obstacle. Disregard of the McCall Case would not involve unsettlement of any constitutional principle or of any rule of law, properly so called. It would involve merely refusal to repeat an error once made in applying a rule of law-an error which has already proved misleading as a precedent. While the question whether a particular statute has the effect of burdening interstate or foreign commerce directly presents always a question of law, the determination upon which the validity or invalidity of the statute depends is largely or wholly one of fact. The rule of law which governs the McCall Case and the one at bar is the same. It is that a State may not obstruct, discriminate against or directly burden interstate or foreign commerce. The question at bar is whether as applied to existing facts this particular statute is a direct burden. The decision as to state regulations of this character, depends often, as was said in Southern Railway v. King, 217 U.S. 524, 533, 30 S.C.t. 594, 596 (54 L. Ed. 868), 'upon their effect upon interstate commerce.' In that case, the Georgia blow post law was held constitutional, as not being a direct burden. In Seaboard Air Line Ry. v. Blackwell, 244 U.S. 310, 37 S.C.t. 640, 61 L. Ed. 1160, L. R. A. 1917F, 1184, the same statute was held, on other facts, to be void, because shown to be a direct burden. Each case required the decision of the question of law. Each involved merely an appreciation of the facts. Neither involved the declaration of a rule of law.

It is usually more important that a rule of law be settled, than that it be settled right. Even where the error in declaring the rule is a matter of serious concern, it is ordinarily better to seek correction by legislation. Often this is true although the question is a constitutional one. The human experience embodied in the doctrine of stare decisis teaches us, also, that often it is better to follow a precedent, although it does not involve the declaration of a rule. This is usually true so far as concerns a particular statute whether the error was made in construing it or in passing upon its validity. But the doctrine of stare decisis does not command that we err again when we have occasion to pass upon a different statute. In the search for truth through the slow process of inclusion and exclusion, involving trial and error, it behooves us to reject, as guides, the decisions upon such questions which prove to have been mistaken. This course seems to me imperative when, as here, the decision to be made involves the delicate adjustment of conflicting claims of the federal government and the states to regulate commerce. The many cases on the commerce clause in which this court has overruled or explained away its earlier decisions show that the wisdom of this course has been heretofore recognized. In the case at bar, also, the logic of words should yield to the logic of realities.

Mr. Justice STONE, dissenting.

I agree with all that Mr. Justice BRANDEIS has said, but I would add a word with respect to one phase of the matter which seems to me of some importance. We are not here concerned with a question of taxation to which other considerations may apply, but with state regulation of what may be conceded to be an instrumentality of foreign commerce. As this court has many times decided, the purpose of the commerce clause was not to preclude all state regulation of commerce crossing state lines but to prevent discrimination and the erection of barriers or obstacles to the free flow of commerce, interstate or foreign.

The recognition of the power of the states to regulate commerce within certain limits is a recognition that there are matters of local concern which may properly be subject to state regulation and which, because of their local character, as well as their number and diversity, can never be adequately dealt with by Congress. Such regulation, so long as it does not impede the free flow of commerce, may properly be and for the most part has been left to the state by the decisions of this court.

In this case the traditional test of the limit of state action by inquiring whether the interference with commerce is direct or indirect seems to me too mechanical, too uncertain in its application, and too remote from actualities, to be of value. In thus making use of the expressions, 'direct' and 'indirect interference' with commerce, we are doing little more than using labels to describe a result rather than any trustworthy formula by which it is reached.

It is difficult to say that such permitted interferences as those enumerated in Mr. Justcie BRANDEIS' opinion are less direct than the interference prohibited here. But it seems clear that those interferences not deemed forbidden are to be sustained, not because the effect on commerce is nominally indirect, but because a consideration of all the facts and circumstances, such as the nature of the regulation, its function, the character of the business involved and the actual effect on the flow of commerce, lead to the conclusion that the regulation concerns interests peculiarly local and does not infringe the national interest in maintaining the freedom of commerce across state lines.

I am not persuaded that the regulation here is more than local in character or that it interposes any barrier to commerce. Until Congress undertakes the protection of local communities from the dishonesty of the sellers of steamship tickets, it would seem that there is no adequate ground for holding that the regulation here involved is a prohibited interference with commerce.

Mr. Justice HOLMES and Mr. Justice BRANDEIS concur in this opinion.