King v. United States (344 U.S. 254)/Dissent Douglas

by William O. Douglas

United States Supreme Court

344 U.S. 254

King  v.  United States (344 U.S. 254)

 Argued: Oct. 15, 1952. --- Decided: Dec 22, 1952

Mr. Justice DOUGLAS, with whom Mr. Chief Justice VINSON concurs, dissenting.

The Court has taken an unprecedented and, in my view, an unwarranted step in enlarging the authority of the Interstate Commerce Commission. It upholds the power of the Commission to raise intrastate freight rates, not because they favor intrastate over interstate commerce, not because they fail to yield their fair share of the carriers' revenue, but because the carriers' interstate passenger operations are losing money.

The power of Congress to regulate intrastate rates stems from its authority to promote and protect interstate commerce. See Shreveport Rate Case (Houston East & West Texas R. Co. v. U.S.), 234 U.S. 342, 34 S.Ct. 833, 58 L.Ed. 1341. ^[1] By § 13(4) of the Act the Commission is empowered to regulate intrastate rates which are found to be discriminatory. The key to this regulatory authority is discrimination against interstate commerce, which presupposes that somehow or other the particular intrastate rates interfere with or prejudice interstate commerce. This principle is explicit in § 13(4) ^[2] and in the decisions of the Court, both before and after the enactment of § 13(4). ^[3]

In this case there is no rational relation between intrastate fright rates and interstate passenger operations. The present level of freight rates in Florida neither hampers nor obstructs the free flow of interstate passenger transportation. They do not affect its quantity or flow. There is, therefore, no basis for a finding of discrimination against interstate commerce.

The Commission, of course, is authorized to regulate intrastate rates so that intrastate operations will provide a fair share of the carriers' revenue. ^[4] See Wisconsin R. Commission v. Chicago, B. & Q.R. Co., 257 U.S. 563, 42 S.Ct. 232, 66 L.Ed. 371. But that authority rests on the Commission's power to remove discrimination. If, for example, intrastate freight operations fail to produce an adequate return as determined by reference to the cost of the intrastate operations and the investment in the intrastate business, interstate commerce is discriminated against. But there is no such failure in this case. Intrastate freight operations in Florida are amply profitable and carry their fair share of the load. The Commission nevertheless has saddled the intrastate freight business with the deficits from the interstate passenger business. If there is any discrimination here, it is against the local Florida shipper.

The Commission surmises but does not find that the intrastate passenger rates contribute to the passenger deficits of the carriers. But there is no showing that either the intrastate passenger rates or the intrastate freight rates do in fact contribute to these deficits. Moreover, even if we assume that intrastate passenger rates do contribute to the passenger deficits, we do not know the amount. The absence of these material findings, see North Carolina v. United States, 325 U.S. 507, 65 S.Ct. 1260, 89 L.Ed. 1760, indicates to me the short cut which the Commission is taking to enlarge its jurisdiction to unprecedented limits.

Notes

1. As Mr. Justice Hughes speaking for the Court in the Shreveport case said, 234 U.S. at page 351, 34 S.Ct. at page 836: 'Congress is empowered to regulate,-that is, to provide the law for the government of interstate commerce; to enact 'all appropriate legislation' for its 'protection and advancement' (The Daniel Ball, 10 Wall. 557, 564, 19 L.Ed. 999, 1001); to adopt measures 'to promote its growth and insure its safety' (County of Mobile v. Kimball, 102 U.S. 691, 696, 697, 26 L.Ed. 238-240); 'to foster, protect, control, and restrain' (Second Employers' Liability Cases (Mondou v. New York, N.H. & H.R. Co.), 223 U.S. 1, 47, 53, 54, 32 S.Ct. 169, 56 L.Ed. 327, 345, 347, 348, 38 L.R.A.,N.S., 44). Its authority, extending to these interstate carriers as instruments of interstate commerce, necessarily embraces the right to control their operations in all matters having such a close and substantial relation to interstate traffic that the control is essential or appropriate to the security of that traffic, to the efficiency of the interstate service, and to the maintenance of conditions under which interstate commerce may be conducted upon fair terms and without molestation or hindrance.'
2. The relevant portions of § 13(4) read: 'Whenever in any such investigation the commission, after full hearing, finds that any such rate, fare, charge, classification, regulation, or practice causes any undue or unreasonable advantage, preference, or prejudice as between persons or localities in intrastate commerce on the one hand and interstate or foreign commerce on the other hand, or any undue, unreasonable, or unjust discrimination against interstate or foreign commerce, which is hereby forbidden and declared to be unlawful, it shall prescribe the rate, fare, or charge, or the maximum or minimum, or maximum and minimum, thereafter to be charged, and the classification, regulation, or practice thereafter to be observed, in such manner as, in its judgment, will remove such advantage, preference, prejudice, or discrimination. * * *'
3. See Shreveport Rate Case, supra; American Express Co. v. South Dakota, 244 U.S. 617, 37 S.Ct. 656, 61 L.Ed. 1352; Wisconsin R. Commission v. Chicago, B. & Q.R. Co., 257 U.S. 563, 42 S.Ct. 232, 66 L.Ed. 371; Florida v. United States, 282 U.S. 194, 51 S.Ct. 119, 75 L.Ed. 291; Georgia P.S.C.ommission v. United States, 283 U.S. 765, 51 S.Ct. 619, 75 L.Ed. 1397; Louisiana P.S.C.ommission v. Texas & N.O.R. Co., 284 U.S. 125, 52 S.Ct. 74, 76 L.Ed. 201; United States v. Louisiana, 290 U.S. 70, 54 S.Ct. 28, 78 L.Ed. 181; North Carolina v. United States, 325 U.S. 507, 65 S.Ct. 1260, 89 L.Ed. 1760.
4. Section 15a(2) of the Act reads in pertinent part: 'In the exercise of its power to prescribe just and reasonable rates the commission shall initiate, modify, establish or adjust such rates so that carriers as a whole * * * will, under honest, efficient and economical management and reasonable expenditures for maintenance of way, structures and equipment, earn an aggregate annual net railway operating income equal, as nearly as may be, to a fair return upon the aggregate value of the railway property of such carriers held for and used in the service of transportation * * *.'