Stephenson v. Binford

Background

A group of private truck operators who hauled freight under private contracts sued Texas officials after the State passed a law imposing permits, insurance and bonding, and rate controls for motor carriers. The carriers said the law would stop them from fulfilling contracts, force them to become public carriers, take their property without compensation, and deny equal treatment compared with other highway users. A three-judge federal court denied both temporary and permanent injunctions, and the case was appealed to this Court.

Reasoning

The main question was whether Texas could impose permit, rate, and insurance rules on private contract truckers as part of protecting public highways. The Court held the statute could be viewed as a valid regulation of the highways and a measure to conserve them. It found the law treats contract carriers separately from common carriers, so it does not by legislative fiat convert private carriers into common carriers, and the permit and minimum-rate provisions have a reasonable relation to reducing highway burdens and protecting public safety.

Real world impact

The decision allows Texas to enforce its permit system, require minimum rates when competing with rail or common carriers, and generally to regulate contract trucking in the interest of highway conservation. The Court declined to rule finally on how the insurance-and-bond requirement will be applied because that provision has not been enforced against these carriers yet, leaving some practical questions for state courts or future enforcement.

Dissents or concurrances

The opinion notes that Justice Butler dissented but gives no detailed dissenting reasoning in the published majority opinion.