Louisville & Nashville Railroad v. Mottley

Background

A Kentucky couple was injured in a railroad collision and in 1871 released the railroad from claims in exchange for lifetime free passes. Decades later the railroad refused to keep issuing those passes, citing a federal law passed in 1906 that banned interstate carriers from giving or accepting free or non‑monetary transportation. The couple sued in state court and won, and the state appeals court affirmed before the issue reached this Court.

Reasoning

The central question was whether Congress’s commerce law could make an older, otherwise valid contract unenforceable when it required interstate carriers to publish and charge only listed money fares. The Court read the statute to bar any “different” compensation than the published rates and agreed with administrative rulings that only money could lawfully be accepted for interstate transportation. Relying on long‑standing principles that Congress may regulate interstate commerce and that later laws can remove the enforceability of private contracts inconsistent with federal regulation, the Court held the railroad could lawfully refuse to perform the pass agreement and reversed the state court judgment.

Real world impact

The ruling means carriers engaged in interstate travel must follow published, money‑based rates and cannot honor prior bargains that pay with services, releases, or other non‑monetary consideration. People claiming long‑standing free passes or similar non‑monetary deals for interstate trips may find those agreements unenforceable, though other remedies not addressed by this opinion could remain available.