State Of Alabama v. United States Davis/Opinion of the Court

The States of Alabama, Tennessee, and Kentucky filed a bill in a federal district court seeking to set aside and enjoin enforcement of an order of the Interstate Commerce Commission. The Federal Economic Stabilization Director, acting through the Price Administrator, was granted the right to intervene. The Commission's order directed that intrastate railroad rates in Alabama, Kentucky, Tennessee and North Carolina, be raised to the level of interstate rates fixed by the Commission. The district court declined to enjoin enforcement of the order, 56 Fed.Supp. 478, and the case is here on direct appeal under Section 210 of the Judicial Code.

The issues here are substantially the same as in Nos. 560 and 561, 325 U.S. 507, 65 S.Ct. 1260, which involved the same order of the Commission as it applied to rates in the State of North Carolina. The Commission relied basically on the 1936 rate order, to which we referred in our opinion in the North Carolina case. Here also the Commissions of the three states had held hearings and determined that the intrastate rates were adequate in every respect to give the particular railroads involved a sufficient income to compensate them fully for their services and to enable the railroads adequately and efficiently to operate in the State. There was evidence before each of the state Commissions, as there was before the Interstate Commerce Commission, that the railroads were enjoying an unprecedented prosperity and reaping a tremendous harvest of profits from their railroad operations in the state. There was evidence from which the Interstate Commerce Commission could have found that the intrastate passenger rates involved were sufficient to pay each railroad a substantial profit for each mile it carried an intrastate passenger. The findings here possess the same infirmities as those in the North Carolina case. It follows that our judgment must be the same.

Because the order of the Commission was not based on adequate findings supported by evidence, the District Court should have declined to enforce the Commission's order. The judgment of the district court is therefore reversed.

Reversed.

The CHIEF JUSTICE, Mr. Justice ROBERTS, Mr. Justice REED, and Mr. Justice FRANKFURTER dissent for the reasons stated in the dissent to 65 S.Ct. 1260.