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Chicago, Milwaukee & St. Paul Railway Co. v. Minnesota

Supreme Court of the United States · 1890 · Constitutional Law

Constitutional LawDue ProcessRailroad Rate Regulationdue process of lawrate regulationrailroad commissionjudicial investigationreasonable rates

Facts

Minnesota created a railroad commission empowered to declare railroad charges unequal or unreasonable and to require carriers to adopt rates the commission declared equal and reasonable. The Minnesota Supreme Court construed the statute to mean that the commission's published rates were final and conclusive, and that in mandamus proceedings no judicial inquiry into the actual reasonableness of those rates was permitted. The Chicago, Milwaukee and St. Paul Railway Company refused to comply with a commission-fixed rate for transporting milk and, in its return, alleged that the rate was not equal or reasonable. The state court nevertheless treated the only triable issue as noncompliance with the commission's order and awarded mandamus.

Issue

May a state, consistently with the Constitution of the United States, make a railroad commission's determination of what rates are reasonable final and conclusive, while denying the railroad any judicial inquiry into whether the prescribed rates are in fact reasonable? Also, did the railway company's charter prevent Minnesota from regulating its rates at all?

Rule

A railroad charter's general grant of power to fix tolls does not amount to an irrepealable contract exempting the company from future state regulation unless such exemption is stated expressly or by equally clear implication. Although a state may regulate railroad charges, due process is violated when the reasonableness of rates is made finally conclusive by a commission and the carrier is denied a judicial investigation, under judicial forms and machinery, into whether the rates are equal and reasonable.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Ohio creates a Freight Rate Board to review intrastate rail charges. The statute says that once the Board publishes a rate schedule, the rates are "final and conclusive" in any enforcement action, and a court may determine only whether the railroad refused to comply. Lake Erie Rail Lines challenges an order lowering its grain-haul rate between Toledo and Columbus as unreasonably low.

Under the majority's doctrine, is the Ohio scheme constitutional as applied to Lake Erie Rail Lines?

Explanation. The majority accepted that a state may regulate railroad charges and may use a commission. But it held unconstitutional a statutory scheme that makes the commission's determination of reasonableness final and conclusive while denying the carrier a judicial investigation into whether the rates are in fact equal and reasonable. A court limited to deciding only noncompliance does not supply due process.