City of Des Moines v. Des Moines City Railway Co.

Background

An Iowa electric street railway company sued the City of Des Moines after the City Council passed a resolution ordering the company to remove tracks, poles, and wires from city streets and to repair pavements. The railway company said it had a perpetual right under a city ordinance to operate and maintain its lines and argued the resolution would impair that contract right and take its property without due process under the Fourteenth Amendment. A federal Circuit Court granted an injunction stopping the city from enforcing the resolution, and the city appealed to this Court.

Reasoning

The Court addressed whether the city resolution itself was a law that impaired contracts or unlawfully took property. The Court read the resolution as a denial of the railway’s claim and as a direction to the City Solicitor to sue if the companies did not accept the city’s position. The opinion reasoned that the solicitor’s only reasonable action would be to bring court proceedings, not to seize property or physically remove tracks. Because the resolution merely put the companies in potential disobedience as a basis for litigation, it was not a present law impairing contract rights or a taking without due process. The Court therefore concluded federal jurisdiction could not be maintained.

Real world impact

The Court reversed the injunction and ordered the federal case dismissed. This means a city council’s statement directing its lawyer to seek enforcement in court does not by itself create a federal constitutional claim of contract impairment or property taking. Disputes about the right to operate tracks must be resolved through proper legal proceedings rather than by treating a council resolution as an immediate violation.