Interstate Comm. Comm. v. Ill. Cent. RR

Background

A federal rail regulator (the Interstate Commerce Commission) complained that the Illinois Central Railroad’s rules for daily delivery of coal cars favored some mines by not counting certain cars when supply was short. Coal operators and other railroads had different systems for rating mines and sharing cars. The railroad sued to block the regulator’s order that all classes of cars, including the railroad’s own fuel cars, be counted when allocating cars during shortages and that a rule to that effect run for up to two years.

Reasoning

The central question was whether the federal regulator had power under the law to require railroads to count their company fuel cars when distributing cars in short supply. The Court said yes: coal cars and a railroad’s equipment are instruments of interstate commerce and fall under the regulator’s authority. The Supreme Court reversed the lower court’s injunction that had stopped enforcement of the part of the order dealing with company fuel cars. The opinion explains that the regulator’s power to correct preferences and unfair discrimination includes prescribing reasonable distribution practices.

Real world impact

Railroads must include company fuel cars in the allocation calculations during car shortages, unless a court suspends the regulator’s order. That makes it harder for railroads to use their own fuel purchases to tilt car distribution toward certain mines. The ruling also affirms the regulator’s ability to set temporary rules (up to two years) governing distribution unless a court intervenes.

Dissents or concurrances

Justice Brewer dissented, as noted in the opinion.