Phoenix Railway Co. v. Geary

Background

In 1913 the Arizona Corporation Commission ordered a street railway company to double-track ten blocks of its West Washington Street line in Phoenix, with a completion deadline later extended to December 1. The company asked the Commission for a rehearing and was denied, then sued in federal court saying the order was unreasonable, would cost about $14,000 the company could not afford, and would prevent any adequate return on its property; the company also raised constitutional complaints tied to state penalty laws. A temporary restraining order was granted while the company sought an injunction from a three-judge federal court.

Reasoning

The central question was whether the company had shown the Commission’s order to be so unreasonable or confiscatory that a federal court should block it while the case proceeds. The Supreme Court noted disputed facts about traffic, community needs, and company finances, and recognized a presumption that the Commission’s action was reasonable after a full hearing. The Court concluded the company did not overcome that presumption and therefore denied the request for an interlocutory injunction. The Court also said the penalty provisions in state law were separable and did not need to be decided at this stage.

Real world impact

The result leaves the Commission’s order enforceable unless and until a later court decision says otherwise, and the company must respond to the requirement to double-track or face enforcement. The ruling is an interim decision on injunctive relief, not a final determination of all constitutional claims, and the district court retains authority to consider penalties later.