Missouri Pacific Railroad v. Stroud

Background

A lumber dealer had 20,000 feet of hardwood at Oxly, Missouri, and asked the railroad for two freight cars on June 12, 1920 to ship the lumber to St. Louis. The railroad did not furnish cars until August 19, while other shippers at Oxly received cars sooner. The shipper sued under Missouri statutes that ban undue preference and allow treble damages, claiming $1,000 in losses. His complaint did not say whether he wanted the freight routed only inside Missouri or over a route crossing into Illinois.

Reasoning

The key question was whether the state law could be applied when the shipment would have moved over a route that crossed state lines. The railroad’s routing instructions showed the lumber would have traveled partly outside Missouri through Illinois, making the move interstate commerce. The Court explained that Congress alone regulates interstate commerce and that federal law contains a similar prohibition on undue preference. Because the shipment was interstate, the state statute could not be applied to impose liability on the railroad, and the state-court judgment against the railroad could not stand.

Real world impact

The decision prevents a shipper from using this Missouri statute to get treble damages when the freight would have traveled interstate. Railroads are not liable under the state rule for car allocation affecting interstate shipments. The ruling enforces federal control over interstate freight rules and reverses the state judgment in this case.