St. Louis-San Francisco Railway Co. v. Alabama Public Service Commission

Background

A railroad company stopped running two interstate trains that had long also carried local intrastate service between towns in Alabama. Alabama law required a railroad to get permission from the state Public Service Commission before abandoning any part of its service and imposed severe penalties on officers and employees for willful abandonment. The railroad sued in federal court to stop state enforcement and to challenge the law, saying the trains lost money, other service was adequate, and the Commission ordered restoration without first hearing the carrier. A three-judge court denied an interlocutory injunction but left a temporary restraining order in place while the case proceeded.

Reasoning

The Court avoided ruling on the constitutional claims. Instead, relying on the facts admitted, it said the railroad should have applied to the Commission before ending the intrastate service because there was no emergency and only a brief delay would have resulted. At the same time the Court made clear that the carrier, and its officers and employees, should not be exposed to harsh criminal or other severe penalties without a chance to be heard. The Commission must be allowed to hear the carrier’s reasons, consider whether continuing the service would impose an unreasonable burden, or accept an alternative, and resolve the matter fairly.

Real world impact

The Court vacated the lower-court decree and continued the temporary restraining order while directing that the Commission hold a prompt hearing if the railroad applies. That prevents immediate punishment for the past discontinuance and gives the state regulator the first opportunity to decide whether restoration is required. If the Commission still insists on restoration after a hearing, the parties may pursue appropriate further proceedings in federal court.