Interstate Commerce Commission v. Goodrich Transit Co.

Background

Four corporations organized under state law that run passenger and freight boats on the Great Lakes sued to stop two Interstate Commerce Commission orders. The orders required a uniform system of accounts for operating expenses and revenues and a detailed report about corporate organization and finances. The companies said the orders covered intrastate port-to-port business outside the Commission’s power. Some said most revenue came from port-to-port business, not joint rail-and-water service: Goodrich Transit earned about eighty percent from port-to-port activities, and White Star Line earned less than one percent from joint rail-and-water traffic. White Star also operates two Michigan amusement parks and objected to including that business in the report.

Reasoning

The central question was whether the federal law governing commerce allowed the Commission to require uniform accounting and detailed reports from carriers engaged partly by rail and partly by water under joint arrangements. The Court examined the statute’s provisions authorizing annual reports and uniform accounts and reviewed the information the Commission requested (organization, assets, revenues, expenses, routes, equipment, and traffic statistics). The Court concluded the statute authorized those requirements, that practical separation of interstate and intrastate accounts would be impracticable, and that the rules were needed to detect unfair practices and enable regulation. The Supreme Court reversed the Commerce Court’s injunction.

Real world impact

Great Lakes carriers operating under joint rail-and-water rates must follow Commission-prescribed bookkeeping and submit detailed reports. Companies will need standardized accounts and disclosure of revenues and expenses, including other operations such as amusement parks. The ruling lets the agency gather financial and operational information to regulate rates and guard against unfair practices. The decision lifts the injunction and sends carriers back to comply with the Commission’s orders.

Dissents or concurrances

Two Justices (Lurton and Lamar) dissented from the Court’s decision; the opinion records their disagreement without detailing their separate arguments.