City of Sault Ste. Marie v. International Transit Co.

Background

The case was brought by the International Transit Company, a Canadian corporation that operates ferries between Sault Ste. Marie, Ontario, and Sault Ste. Marie, Michigan. The company holds a Dominion (Canadian) license, owns two steam ferryboats under British registry, leases a private wharf in the American city, and sells tickets at an office on the U.S. shore. In 1911 the Michigan city adopted an ordinance requiring anyone running a ferry from the city to the opposite shore to obtain a municipal license, file a schedule of rates, and pay fifty dollars a year per boat.

Reasoning

The key question was whether a State or city can make its permission a necessary condition for a foreign company to carry on cross-border ferry commerce from the American shore. The District Court had blocked enforcement of the ordinance, and the Supreme Court affirmed. Relying on earlier decisions, the Court explained that transportation across state or national borders is part of national commerce and cannot be turned into a local privilege. Therefore the city could not compel the Canadian company to take out a local license or pay a license fee to do that business.

Real world impact

The ruling protects companies that carry people and goods across international or interstate waters from being stopped by local licensing or taxed by municipal fees for the mere right to operate at an American wharf. Ferry operators, passengers, and shippers who use cross-border routes will not face a municipal gatekeeping requirement in these circumstances. The Court also said it was unnecessary to decide whether an international treaty bears on the question in this case.