Rainier Brewing Co. v. Great Northern Pacific Steamship Co.

Background

In 1917 a steamship company sent two carloads of beer from San Francisco to Seattle, consigned to a local transfer company, containing 2,565 separate packages addressed to individual people in Seattle. The shipment moved by water and rail and was billed and paid for at a through carload rate. At Portland the railroad refused to accept the cars, saying federal and Washington law prevented it from carrying intoxicating liquor in carload lots into the State. The beer was then re-billed by individual package and the railroad delivered each package to the named recipients. The shipper sued to recover the difference between the carload and the smaller-package shipping rates, and the lower courts ruled for the shipper.

Reasoning

The Court addressed whether the railroad could lawfully transport and deliver the beer in bulk to the transfer company. It examined a federal labeling law, the Webb‑Kenyon Act limiting interstate shipment of liquor used to violate state law, and Washington statutes that tightly regulated beer imports. Washington law limited quantities for any one person, required a special red permit attached to each package showing the shipper and consignee, required conspicuous markings, and made the permittee the ultimate consignee. The facts showed the packages met the labeling and permit rules, but the Court held the state law made each package’s permittee the real consignee and placed on the carrier the duty to deliver to those named recipients and to cancel permits.

Real world impact

The Court concluded the railroad properly required re‑billing by package and could refuse bulk carload delivery to the transfer company because carriers must ensure each package and permit comply and must make delivery to the named consignees. The judgment of the lower court was affirmed.