Railroad Commission v. Chicago, Burlington & Quincy Railroad
Headline: Federal regulators blocked from imposing a blanket increase on Wisconsin intrastate passenger fares; Court affirms injunction, limits agency power while recognizing it can fix serious rate disparities between state and interstate traffic.
Holding: The Court affirmed the injunction blocking the Commission’s blanket order to raise all intrastate passenger fares in Wisconsin as too sweeping, while holding the Commission may correct substantial interstate–intrastate rate disparities under the Transportation Act.
- Blocks a blanket federal increase of all Wisconsin intrastate fares.
- Confirms agency power to correct major interstate–intrastate rate disparities.
- Leaves states able to adjust local fares and seek exceptions.
Summary
Background
A federal rail regulator ordered a minimum intrastate passenger fare in Wisconsin of 3.6 cents per mile to remove what it found to be unfair treatment of interstate travelers. The District Court issued an injunction preventing enforcement of that order, and the case reached the Court to decide whether the regulator could broadly raise all intrastate fares to cure discrimination against interstate commerce under the Transportation Act of 1920.
Reasoning
The Court framed two questions: whether intrastate fares unduly prejudice interstate travelers so as to justify a blanket horizontal increase, and whether a general disparity between intrastate and interstate rates counts as an unlawful discrimination the regulator may remove. The Court found the Commission’s report showed some discriminatory effects and that Congress, by the Transportation Act and §15a, intended the regulator to protect the national railroad system’s ability to earn a fair return. But the Court held the particular order was too sweeping because it reached many interior fares that did not show discrimination; a broad saving clause could not save such an uncertain order. The Court concluded the Commission can correct substantial interstate–intrastate disparities, but must act with precision and a high standard of certainty.
Real world impact
The decision blocks this blanket federal fare increase in Wisconsin while confirming the regulator’s narrower authority to fix major disparities that harm interstate service and income. Rail companies, passengers, and state rate authorities remain affected: states keep a role in adjusting local fares, but the federal regulator may step in when disparities materially obstruct interstate commerce. The District Court’s injunction is affirmed.
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