American Express Co. v. United States

Background

The disputes involve express companies that long issued “franks” allowing officers, employees, and their families to ship personal packages without paying the published rates. The franks were exchanged for railroad passes and said they were not for business consignments or extra-heavy items. The Government sued under the Elkins Act, and a lower federal court issued an injunction stopping the express companies from using those franks for free carriage of property.

Reasoning

The Court looked to the Elkins Act and the Interstate Commerce Act, which require carriers to publish tariffs and forbid any secret discounts, rebates, or departures from published rates. The Court concluded that franks that produce free carriage or refunds let some people obtain transportation at a different, lower rate than the published tariff, so that practice falls within the Elkins Act’s ban on discrimination. The Court also considered a proviso in a related law that permits free passenger passes between carriers and said that proviso applies to passengers, not to the free shipment of goods, so it does not protect these franks.

Real world impact

The ruling affirms the injunction and requires express companies to stop shipping personal packages under franks that avoid published interstate rates. Employees and family members who used the franks will no longer receive free freight under those arrangements. The Court noted that any change to allow free carriage of goods would have to come from Congress rather than the courts.