Pennsylvania Public Utility Commission v. Pennsylvania Railroad

Background

A railroad company sued to block enforcement of an order from the state utility regulator, saying the state order conflicted with a federal law. The state regulator argued that the federal law itself was unconstitutional. A three-judge District Court ruled for the railroad and issued an injunction stopping enforcement of the state order.

Reasoning

The Court considered whether a special three-judge trial panel was required in this lawsuit. It relied on an earlier decision that an injunction based on a conflict between a state order and a federal statute is not the same as declaring the state measure unconstitutional in the way that triggers a three-judge panel. The Court also explained that a different rule for stopping enforcement of a federal law did not apply here because the regulator had only challenged the federal law as a defense, not sought to block the federal law itself. Because no three-judge court was required, the Supreme Court said it did not have authority under the rule allowing direct appeals to decide this case.

Real world impact

The Court vacated the District Court’s judgment and sent the case back so the District Court can enter a new decree from which a timely appeal may be taken to the federal Court of Appeals. That gives the regulator the opportunity to obtain appellate review through the ordinary appeals process rather than by direct appeal to the Supreme Court.