Int. Comm. Comm. v. DEL., L. & WRR

Background

In 1907 a forwarding company combined goods from many small owners into three carload shipments and shipped them from Chicago to New York. Railroads charged higher less-than-carload rates on arrival because their tariff rules barred combining different owners’ goods for a carload discount. The forwarding company complained to the federal regulator, which ruled the tariff restrictions unlawful and ordered carriers to stop enforcing them; the railroads sued to block that order.

Reasoning

The central question was whether a railroad may refuse a carload rate or charge more simply because the shipper is not the legal owner of all the goods or because a forwarding agent organized the shipment. The Court held that carriers may not make ownership or the identity of the shipper the test for applying published rates. The opinion relied on the equality provision of the transportation law and English precedents to explain that rate differences must turn on the service or goods themselves, not on who owns them.

Real world impact

The decision protects practices that let many small businesses save money by combining small loads into carloads through forwarding agents. Railroads cannot lawfully deny those established carload discounts by enforcing ownership-based restrictions. Because the opinion enforces the regulator’s order, the relief is final here and carriers must comply unless the law itself changes.

Dissents or concurrances

Two members of the Commission had argued the opposite, saying carriers could limit rates to prevent unfair place-based preferences and protect revenue; the Court rejected that view as foreclosed by the statute.