Railroad Commission of California v. Southern Pacific Co.

Background

Civic associations and others complained to the California Railroad Commission that three railroads should remove grade crossings and build a single union passenger station in Los Angeles. The Commission in 1921 ordered removal of crossings, abandonment of existing depots, and construction of a new joint Union Station, imposing large track relocations and huge costs on the Southern Pacific, Santa Fe, and Salt Lake railways. The railways sought review, and the California Supreme Court held the state commission had exceeded its power because the matter was committed to the federal Interstate Commerce Commission by the Transportation Act of 1920.

Reasoning

The Court asked whether the Transportation Act gives the federal agency exclusive authority to approve major interstate terminal changes. It reviewed the Act’s broad definition of railroad facilities and provisions that allow the Interstate Commerce Commission to require joint use of terminals, to certify extensions of main lines, and to approve carriers’ issuance of securities. The Court concluded that ordering new main-track extensions, abandonment of existing terminals, and a large new union station with $25–$45 million in costs were the kind of interstate terminal changes Congress placed under federal supervision. The state commission could still regulate local safety matters like grade crossings, but it could not force the railways to undertake major interstate terminal construction before the federal agency acted.

Real world impact

The decision leaves large terminal projects and major track relocations to the Interstate Commerce Commission, not state railroad commissions. The three railways cannot be compelled by the state to build the new interstate Union Station until the federal agency grants the required approvals, and the California court’s judgment denying the state order was affirmed.