Lawrence v. St. Louis-San Francisco Railway Co.

Background

A railroad company moved its repair shops and division point from Sapulpa to West Tulsa while a federal temporary injunction was in effect. Local interests and the State Corporation Commission objected and sought to force the railroad to restore the prior situation. The federal District Court denied immediate restoration and later entered a permanent injunction; the case reached this Court on appeal from that final decree.

Reasoning

The core question was whether the railroad had acted in contempt of the state commission and whether the court should have required immediate restoration. The Court explained that the temporary federal injunction, until reversed, freed the railroad from the state commission’s restraining order. The railroad had posted a $50,000 bond and assumed the risk of damages if the injunction proved improper. Given the economic benefits of the new site, the high cost and likely harm of forced restoration, and the District Court’s discretion, the Court found no contempt and affirmed the permanent injunction.

Real world impact

The decision means a company that relocates under the protection of a valid federal temporary injunction may not be forced to undo the move immediately, even if a state regulator objects. The Court did not rule on the constitutionality of the state statute that required prior application to the commission, so that question remains open.