North Dakota Ex Rel. Lemke v. Chicago & Northwestern Railway Co.

Background

The dispute involved the State of North Dakota, several railroad companies, and an order from the Interstate Commerce Commission that raised intrastate freight rates in North Dakota after finding prior rates discriminated against interstate commerce. North Dakota sued in this Court in equity to stop the rate increase while the Court reviewed the Commission’s decision. The State said the rate order would harm local jobbers and argued the Commission had erred on procedural grounds and in interpreting the law.

Reasoning

The Court considered whether this extraordinary equity suit should proceed here. It noted that statutes require the United States to be joined in suits that seek to set aside orders like the Commission’s and that such suits belong in the federal district courts. Even if the State had a substantial right, equity and public policy counsel against letting this Court issue relief that could conflict with the Commission and the United States. The Court emphasized avoiding two inconsistent commands and accepted that Congress intended the public interest to be represented by joining the United States.

Real world impact

The Court dismissed the bill and sent the State to the remedy Congress provided: a suit in the district court with the United States as a party. That means the Commission’s order can go into effect unless a district-court action (and any appeals) says otherwise. The decision does not resolve the merits of the rate increase itself, and the State retains its right to proceed in the district court and to appeal from that forum.