City of Chicago v. Atchison, Topeka & Santa Fe Railway Co.

Background

The dispute involves the City of Chicago, several railroads, Parmelee Transportation Company, and a new company called Railroad Transfer Service. Rail passengers in Chicago often must be moved between terminals. The railroads stopped using Parmelee and hired Transfer to carry through passengers. Chicago had a local rule, §28-31.1, requiring a city certificate before issuing new terminal vehicle licenses, but it exempted existing license renewals. Transfer began operating without applying for the certificate and the City threatened enforcement. Transfer and the railroads sued to have the ordinance declared inapplicable or invalid under federal law.

Reasoning

The Court addressed whether Chicago could force the railroads or their chosen agents to obtain a city certificate before transferring interstate passengers between terminals. Relying on provisions of the Interstate Commerce Act and §302(c), the Court held that transfer service is part of interstate railroad transportation and federal law controls. The Court concluded that the ordinance gave local officials a veto over interstate transfer service and so was inconsistent with the federal statutory scheme. The Court affirmed the Court of Appeals and held the city could not require the certificate for Transfer's operation. The opinion left room for the City to enforce ordinary safety rules and registration requirements.

Real world impact

The decision prevents cities from using local licensing to block railroads’ chosen transfer agents in moving interstate passengers between terminals. Railroads can select agents without local veto on economic grounds. Cities still may enforce traffic, safety, and registration rules.

Dissents or concurrances

Justice Harlan (joined by Frankfurter and Burton) dissented, arguing the Court acted prematurely and the City should first be allowed to apply the ordinance to Transfer before federal courts strike it down.