Louisville Nashville Railroad Company v. Eubank/Dissent Brewer

Mr. Justice Brewer, with whom concurred Mr. Justice Gray, dissenting:

I am unable to concur in the opinion and judgment in this case. We have just held that § 218 of the Constitution of Kentucky and § 820 of the Kentucky Statutes, based thereon, are not in conflict with the Constitution of the United States when applied to a case in which both the long and the short are wholly within the state. Louisville & N. R. Co. v. Kentucky, 183 U.S. 503, antc, 95, 22 Sup. Ct. Rep. 95. The constitutional section, briefly stated, forbids a carrier from charging more for a short than for a long haul within which the short haul is included. The prohibition is upon the short-haul charge. There is no prohibition in respect to the long-haul charge, no restriction of the power of the carrier over it, no regulation concerning it, no prescribing by whom or how or when it shall be made,-all this is absolutely untouched by the section.

The proposition now advanced is that while the state may constitutionally prohibit a short-haul charge in excess of a longhaul charge, it can do so only when both hauls are within the limits of the state. Nothing in the section makes such limitation. Nothing in the Federal Constitution, in terms, at least, restricts the power of the state in this respect over its internal commerce. This question may arise under either of two conditions, one in which Congress has prescribed the interstate rate, and the other in which it has left the matter to be fixed by the carrier.

Considering the first of these conditions, suppose Congress in the exercise of its power over interstate commerce should enact that all interstate passengers be charged exactly 4 cents a mile, and the railroad company, while obeying that statute in its charges for carrying passengers from Nashville to Louisville, should from Franklin to Louisville charge 5 cents a mile, could it be pretended that the prohibition of the state Constitution against charging more for a short haul than for a long haul was not operative because an interference with interstate commerce? Has the state no power to compel its corporations to give to parties traveling within its limits the same rates and privileges that Congress prescribes for interstate passengers? And can it not do so by simply prohibiting a greater charge for a long than a short haul clause? In other words, is it interfering with interstate commerce when the state, not prescribing the charges for interstate travel, simply requires that the passenger shall be charged no higher rates for local travel?

The form in which the state legislation is cast cannot be vital in determining the question of power. If an act which in terms prescribes a rate per mile for local travel the same as has been prescribed by Congress for interstate travel is within the power of the state (and that it is cannot be doubted), surely one accomplishing the same thing by simply forbidding the carrier to charge more for a short than for a long haul is likewise within its power. The state is merely using the standard fixed by Congress, and enforcing that standard in respect to local rates. In Miller v. Swann, 150 U.S. 132, ''sub nom. Miller v. Anderson'', 37 L. ed. 1028, 14 Sup. Ct. Rep. 52, it was held that the construction of that part of the state statute which authorized the disposal of the state's lands in accordance with the provisions of the public land laws of the United States involved no Federal question. The reference to the land laws of the United States was simply by way of selecting a standard.

But if a state may select as a standard the interstate rates prescribed by Congress, and make its local rates the same, without interfering with interstate commerce, it would certainly seem that it could in like manner take the interstate rates which the carrier himself prescribes, and compel conformity of local rates thereto, and still not be subject to the charge of interfering with interstate commerce. It is strange to be told that the action of a carrier in fixing interstate rates is potent to render unconstitutional the legislation of the state respecting local rates, when the like action of Congress in prescribing interstate rates is not so potent. In other words, action by the carrier in pursuit of its own financial interests overturns the Constitution and statute of the state when like action by Congress in the exercise of its constitutional power does not.

It must be borne in mind that there is here no question of reasonableness of rates. It is true the carrier avers that the rate of 25 cents per 100 pounds from Franklin to Louisville was just and reasonable, but it also avers that it made that charge only by reason of water competition, whereas 'but for that competition the defendant would and could have charged a much higher rate, which higher rate would have been just and reasonable.' According to these allegations, while 25 cents was a just and reasonable rate, a much higher rate would also be just and reasonable; and it is nowhere alleged that a rate of 12 cents that from Nashville to Louisville-would have been unreasonable as a rate between Franklin and Louisville. If invalid at all, it is not because it is no higher than the rate between Nashville and Louisville, but because it is in and of itself unreasonably low for the services rendered. As the amount of tobacco which the defendant shipped from Nashville to Louisville between February 23 and July 15 was only twelve hogsheads, weighing 20,910 pounds, and paying $25.09 freight, it is obvious that the loss of this entire amount of freight would not have worked a confiscation of the defendant's railroad property, if that be the test of reasonableness so far as the power of the legislature over rates is concerned, though as to the true test of reasonableness see Cotting v. Kansas City Stock Yards Co. 183 U.S. 79, ''sub nom. Cotting v. Godard, ante'', 30, 22 Sup. Ct. Rep. 30.

The question may be looked at in another light. The railroad company avers that it made its rate of 12 cents from Nashville to Louisville in conformity with the act of Congress; that the said rate was duly printed, posted, and kept open to public inspection, and that by virtue of the Interstate Commerce Act it was unlawful for it to charge either more or less than the rate of 12 cents from Nashville to Louisville. Suppose the legislature of Kentucky, accepting that statement as correct, should pass an act in terms prohibiting this company from charging more than 12 cents from Franklin to Louisville, who would undertake to say that such act was unconstitutional without evidence that in and of itself the rate of 12 cents was unreasonable within some recognized definition of reasonableness? Does the act become prima facie unconstitutional because, instead of naming 12 cents, the legislature forbids the carrier from charging more than 12 cents, which the carrier has fixed as its rate from Nashville to Louisville?

Again, Louisville is on the northern border of the state, and the route of defendant's railroad extends through the state, and thence southward to Nashville. Every place on the line of the road within the limits of Kentucky makes, therefore, a shorter haul to Louisville than the haul from Nashville, and is included in the latter. Under the reasoning of this opinion the state of Kentucky has no power to prescribe a rate from any point within the state of Kentucky to Louisville which shall be less than the rate which the company has fixed from Nashville to Louisville. Nor are we to suppose that competition between Nashville and Louisville is limited to the matter of the transportation of tobacco. It is a competition between water and railroad transportation, and naturally extends to all articles of freight, as well as to passengers. By the reasoning of the opinion the state of Kentucky would be powerless to compel the Louisville & Nashville Company to charge a less than the competitive Nashville rate, no matter how reasonable, from any point within its borders to Louisville. It does not seem to me that much is left of state control over local rates.

'The result of the construction of this provision by the court below is in effect to prohibit the carrier from making a less charge for the transportation from Nashville to Louisville than from Franklin to Louisville, or else to make a charge that will prevent its doing any business between the states in the carrying of tobacco. The necessary result of the provision under the circumstances set up in the answer directly affects interstate rates, or, in other words, directly affects interstate commerce, for it directly affects commerce between Nashville and Louisville. . . . We fully recognize the rule that the effect of a state constitutional provision, or of any state legislation, upon interstate commerce, must be direct, and not merely incidental and unimportant; but it seems to us that where the necessary result of enforcing the provision may be to limit or prohibit the transportation of articles from without the state to a point within it, or from a point within to a point without the state, interstate commerce is thereby affected, and may be thereby to a certain extent directly regulated; and in that event the effect of the provision is direct and important, and not a mere incident.'

The fallacy of this is that it makes transportation by the Louisville & Nashville Company essential to commerce between Nashville and Louisville. The burden of the complaint on the part of the company is that there is competition at Nashville for the transportation of tobacco to Louisville, and that it must make a low charge to get a share of that transportation; not that the tobacco will not be transported, not that commerce will be interfered wiht, but that this company will lose some portion of that transportation. In other words, the power of the state of Kentucky over this corporation, which it has created, in respect to local rates, is denied in order that the corporation may obtain some portion of interstate transportation. I think we may well recall what was said only three weeks since by this court in the opinion in the case referred to, of this same company against the commonwealth of Kentucky: 'It may be that the enforcement of the state regulation forbidding discrimination in rates in the case of articles of a like kind carried for different distances over the same line may somewhat affect commerce generally; but we have frequently held that such a result is too remote and indirect to be regarded as an interference with interstate commerce; that the interference with the commercial power of the general government to be unlawful must be direct, and not the merely incidental effect of enforcing the police powers of a state. New York, L. E. & W. R. Co. v. Pennsylvania, 158 U.S. 431, 439, 39 L. ed. 1043, 1046, 15 Sup. Ct. Rep. 896; Henderson Bridge Co. v. Kentucky, 166 U.S. 150, 41 L. ed. 953, 17 Sup. Ct. Rep. 532.'

Another matter is worthy of consideration. Suppose that Congress enacts that an interstate rate shall be the sum of the local rates prescribed by the several states for the parts of the through line within their borders. Will it be contended that this is an interference with the power of the state over local rates? Does the mere fact that Congress accepts the local rates and makes them the basis of an interstate rate make it an interference by Congress with local commerce? And if that be not so, how, on the other hand, can it be held that a mere recognition by the state of existing interstate rates as a basis for its legislation concerning local rate is an interference with interstate commerce?

I do not suppose it will be seriously contended that the defendant can invalidate all the local rates which the legislature of Kentucky may see fit to enforce by simply saying that outside of the state it somewhere touches a competitive point, and is forced to reduce its interstate rates by reason of the competition there existing. In other words, if in the present case there was in fact no water competition between Nashville and Louisville, or if there was no tobacco shipped from Nashville to Louisville, I take it no one would seriously contend that the railroad company, by affirming that there was, could upset the provisions of the Kentucky legislation. There would be a question of fact to be determined, even according to the theory that competition in interstate rates has anything to do with local rates, and that question of fact might be presented in actions like the present, actions for overcharges, actions in which the parties would have the right to trial by jury. Suppose that one jury, upon the testimony presented before it, should find that there was water competition between Nashville and Louisville, and that there was tobacco shipped between the two places, and another jury, upon the testimony introduced in a succeeding case, exactly the contrary, is the legislation of Kentucky to be declared unconstitutional in one case and constitutional in the other?

It seems to me, in conclusion, that a state legislature has full power over local rates, subject only to the restriction that it cannot require a carrier to carry without reasonable compensation, and that when it legislates for local rates alone it may fix those rates by figures, or upon the basis of any standard which it sees fit to adopt, and the mere fact that it bases them upon some standard is not legislation regulating that standard, the local rates are alone the matter regulated. For these reasons I cannot concur in the opinion and judgment.

I am authorized to state that Mr. Justice Gray agrees with this dissent.