Bitterman v. Louisville & Nashville Railroad

Background

A railroad company sued a group of dealers who bought and resold non-transferable reduced‑rate tickets issued for events like the United Confederate Veterans’ Reunion and the New Orleans Mardi Gras. The railroad said the sales violated the tickets’ non‑transferable terms, cost the company thousands of dollars on the New Orleans division, and threatened its future ability to issue such reduced fares. The Circuit Court granted preliminary and final injunctions; the Circuit Court of Appeals ordered the injunction enlarged to cover similar tickets issued in the future.

Reasoning

The Court addressed whether buying and selling those non‑transferable reduced‑rate tickets was a legal wrong and whether equity could bar the dealers’ conduct. Relying on prior decisions and the federal statute allowing excursion tickets, the Court held the tickets may be valid only if carriers use due diligence to prevent misuse. Dealing in the tickets for profit was held to be a wrongful interference with the carrier’s rights; wanton disregard of those rights amounted to legal malice. The Court found the complaint’s allegation about the amount in controversy supported and concluded that money damages and many separate lawsuits would be inadequate, so equitable relief was proper. The Court also said an injunction can lawfully forbid repeated future acts of the same wrongful character.

Real world impact

The ruling lets railroads seek and keep broad injunctions to stop dealers from trafficking in non‑transferable reduced‑rate tickets now and for similar future issues. Dealers who run resale businesses for such event or excursion tickets can be barred from continuing that activity. The decision rests on the record here and affirms the lower courts’ relief, including prospective protection for the carrier.