Pennsylvania Railroad v. Clark Bros. Coal Mining Co.

Background

A Pennsylvania coal company sued in state court in January 1912 claiming the railroad gave it an unfair and inadequate supply of rail cars for moving coal from several of its mines between October 1905 and April 1907. The company relied on a Pennsylvania law that forbids unreasonable discrimination by carriers and allows triple damages. The railroad pointed out that the company had already brought a federal complaint to the Interstate Commerce Commission (ICC), which later found the railroad’s car-distribution method unlawfully discriminatory and then determined damages for interstate shipments. A jury in state court found discrimination and trebled a damages award, and the state supreme court affirmed.

Reasoning

The central question was whether the dispute over car distribution for shipments that in fact moved out of state was controlled by federal commerce law and the ICC. The Court explained that the character of the actual movement — not just where title passed or billing terms — determines whether commerce is interstate. The ICC had authority to decide if the railroad’s rule was unjustly discriminatory and to examine damages. Under the federal statute, a claimant who invokes the ICC must follow the federal procedures; the statute requires choosing between complaining to the ICC or suing in federal court and does not allow using a state remedy for the same interstate claims after the Commission has been invoked and has ruled.

Real world impact

Because the coal company had pursued and obtained the ICC’s finding about interstate shipments, the Court held it could not recover under the state treble-damages law for those same interstate transactions. The Supreme Court reversed the state judgment and sent the case back for proceedings consistent with the federal statute and the Commission’s findings.