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Rice v. Santa Fe Elevator Corp.

Supreme Court of the United States · 1947 · Constitutional Law

Constitutional LawFederal PreemptionSupremacy ClausepreemptionSupremacy Clausefield preemptionUnited States Warehouse Actexclusive federal authority

Facts

Respondents operated public grain warehouses in Illinois under licenses issued by the Secretary of Agriculture pursuant to the United States Warehouse Act. Rice, a grain owner and customer, filed a complaint before the Illinois Commerce Commission alleging numerous violations of Illinois law, including unreasonable and discriminatory rates, improper grain mixing, inadequate facilities and services, operation without a state license, abandonment of service, and failure to file and publish rates. Respondents argued that the federal Act superseded Illinois regulation as to those matters and sought to enjoin the state proceedings. The opinion also identified three additional state-regulatory matters concerning approval of affiliate contracts, utility contracts and leases, and issuance of long-term securities.

Issue

Whether the 1931 amendments to the United States Warehouse Act preempt Illinois regulation of federally licensed grain warehouses on matters addressed in Rice's complaint. More specifically, whether Illinois may regulate matters that are also regulated in some fashion by the federal Act, and whether Illinois may regulate matters the federal Act does not address.

Rule

When Congress has made the Secretary of Agriculture's power, jurisdiction, and authority under the United States Warehouse Act exclusive as to federally licensed warehouses, the test is whether the matter on which the State seeks to act is in any way regulated by the federal Act. If it is, the federal scheme prevails even if federal regulation is less comprehensive than the state's and even if no actual conflict has yet arisen; if Congress has not moved into that field or adopted a federal policy on that matter, state regulation is not preempted.

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

Prairie Harbor Storage, a grain warehouse in Omaha, holds a federal warehouse license issued under a federal statute that makes the Secretary of Agriculture's authority exclusive as to licensed warehouses. Nebraska's utility board orders Prairie Harbor to obtain a separate state warehouse license before it may continue storing grain moving in interstate commerce.

Is the state licensing requirement preempted?

Explanation. The majority's rule is that where Congress made federal authority exclusive for federally licensed warehouses, the test is whether the matter on which the state acts is in any way regulated by the federal act. Licensing is one of the subjects regulated by the federal scheme, so the state cannot impose an additional license requirement on the warehouse's covered activities, even absent an actual conflict. (Derived from Rice v. Santa Fe Elevator Corp. (n.d.).)