Louisville & Nashville Railroad v. Mottley
The Court ruled that a railroad could no longer be forced to honor its 1871 promise of free lifetime passes to a couple injured in a train collision, because a 1906 federal law banned railroads from giving free interstate passes to anyone outside certain exempt groups.
The decision holds that Congress's power to regulate interstate commerce can override even a private contract that was perfectly legal when it was signed, because parties are understood to make deals knowing Congress might later change the rules.
“The passenger has no right to buy tickets with' services, advertising, releases or property, nor can the ..railroad company buy services, advertising, releases or- property with transportation.”
The Court's core rule that railroads may only be paid in cash at published rates.
How it got here: After an earlier federal suit on the same contract was dismissed for lack of jurisdiction, the Mottleys sued in Kentucky state court, won, the Kentucky Court of Appeals affirmed, and the railroad brought the case to the U.S. Supreme Court.
The Case in Depth
What happened
After a railroad collision seriously injured Mr. and Mrs. Mottley, they agreed in 1871 to release the Louisville and Nashville Railroad from liability in exchange for free lifetime passes on its lines. The railroad honored this deal for decades but stopped after Congress passed a 1906 law barring railroads from issuing free interstate passes except to specified groups the Mottleys did not belong to.
The question before the Court
After a railroad promised an injured couple free lifetime train passes in exchange for dropping their injury claim, could Congress's later ban on free interstate rail passes wipe out that promise?
The Court's answer
No — the Court ruled the railroad could not be forced to keep honoring the 1871 pass agreement once Congress banned free interstate rail passes. The 1906 law required carriers to charge only the money rates listed in their published tariffs, and it made no exception for people who had already struck deals like the Mottleys'. Because the passes were really payment for releasing an injury claim rather than cash paid at the published rate, continuing to issue them would violate the statute.
The Court also held that Congress's commerce power let it override even a contract that was perfectly legal when signed, because parties who make deals touching interstate commerce are understood to accept the risk that later federal regulation may change the rules. Losing the value of the old bargain was not an unconstitutional taking, just an unavoidable consequence of a valid law.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
The ruling meant the injured couple lost the free lifetime rail passes they had bargained for after their accident, even though the deal was lawful when made. More broadly, it told businesses and individuals that private contracts touching interstate commerce can be overridden by later federal regulation, so no agreement can permanently lock in an arrangement Congress later decides to prohibit.
What changes now
The Supreme Court reversed the Kentucky judgment ordering the railroad to keep issuing passes and sent the case back for further proceedings consistent with its opinion. The Court left open, without deciding, whether the Mottleys might pursue some other legal avenue against the railroad to recover or restore the rights they held before the collision. This is a final merits ruling, not a temporary order.
What this does not decide
The Court expressly did not decide whether the Mottleys could pursue some other kind of legal claim against the railroad to recover compensation for their original injuries or restore their pre-collision rights, leaving that question open for future proceedings.
How the Court got there
The legal reasoning, step by step
- The Court read the 1906 amendment's added phrase barring carriers from charging a 'greater or less or different compensation' than their published rates, reasoning that Congress deliberately added the word 'different' to close a loophole and that every word of a statute must be given effect.
- Applying that language, the Court concluded railroads could only be paid in money at their published rates, so passes given in exchange for anything else -- including a release of injury claims -- were unlawful compensation outside the published tariff.
- The Court then addressed whether a contract valid when signed could later be barred by a new statute, invoking the established principle that Congress's power to regulate interstate commerce is complete and unrestricted except by the Constitution itself.
- Drawing on precedent holding that private contracts are made subject to the possible future exercise of government regulatory power, the Court reasoned that parties who contract about matters touching interstate commerce assume the risk that later legislation may make performance illegal.
- The Court rejected the argument that this result unconstitutionally impaired contract rights or took property, noting that indirect harm to contract value from a valid exercise of the commerce power is not a forbidden taking, and that courts cannot carve out equitable exceptions Congress chose not to write into the statute.
- Because the passes at issue would now be illegal payment for a release of claims rather than money paid under a published tariff, the Court concluded the contract could no longer be judicially enforced against the railroad.
Doctrinal impact
Cases affected by this decision
Reaffirms Union Pac. Ry. Co. v. Goodridge (149 U. S. 690)
Reaffirmed the rule that a carrier cannot depart from its published interstate rate schedule.
Reaffirms Armour Packing Company v. United States (209 U. S. 56)
Reaffirmed that no special contracts can exempt shippers from the one published, fixed rate.
Reaffirms Adams Express Co. v. United States (212 U. S. 522)
Reaffirmed that Congress meant to bar any departure from published rates absent an express exception.