Southern Railway Co. v. Reid

Background

A Virginia railroad company that ran freight service from Charlotte refused to accept household goods a woman offered to ship from Charlotte, North Carolina, to Davis, West Virginia. North Carolina law required carriers to receive freight when tendered and imposed a $50 daily penalty for refusal. The local agent said no through or joint rate had been established or filed with the Interstate Commerce Commission, so the company initially refused; after the carriers agreed on a rate the railroad accepted the shipment and issued a bill of lading. The state courts awarded the shipper penalties and damages under the North Carolina statute.

Reasoning

The central question was whether the state law conflicted with the federal Interstate Commerce Act and the Commission’s powers to regulate rates and related services. The Court explained that Congress, by the Interstate Commerce Act and the Hepburn amendments, occupied the field of rate making and required carriers to file and publish rates; it also defined “transportation” to include receipt and related services. Because federal law controls rates and the conditions on interstate shipments, a state law that compels carriers to accept interstate freight despite federal filing and rate requirements conflicts with federal law. The Court therefore concluded federal law preempts the state statute and reversed the state judgment.

Real world impact

The decision means states cannot force carriers to accept interstate shipments in ways that conflict with federal rate and publication rules. Railroads and shippers must follow federal rate-filing and Commission procedures before imposing state penalties for refusal. The case was remanded for further proceedings consistent with this opinion.