California v. Thompson

Background

California passed a law requiring anyone who sells or negotiates transportation over the state's public highways to get a license, pay a $1 fee, and file a $1,000 bond; acting without a license is a misdemeanor. The respondent arranged a single motor-vehicle passenger trip from Los Angeles to Dallas and was convicted under this law. A California appellate court reversed that conviction, relying on an earlier decision (Di Santo) that had struck down a similar licensing requirement.

Reasoning

The Court examined whether the state rule, when applied to someone who arranges interstate passenger trips, unlawfully interferes with interstate commerce. It noted Congress had not regulated casual or occasional interstate passenger transport and that the Motor Carrier Act expressly excludes such casual trips. The Court found the law is not a revenue measure, does not discriminate against interstate commerce, and aims to protect the public from fraud by local brokers. Relying on longstanding decisions allowing local safety and consumer protections where Congress has not acted, the Court held the state may require licensing and bonding of transportation agents so long as the regulation does not substantially obstruct interstate commerce.

Real world impact

The ruling permits states to require licenses, bonds, and fitness checks for local transportation brokers who arrange interstate trips, to protect passengers from fraud and overreaching. It distinguishes brokers from carriers and leaves room for Congress to act later; if Congress legislates, federal law could change this balance.