163 F. 141 | U.S. Circuit Court for the District of Eastern Arkansas | 1908
The matter now under consideration is an application in each of four suits against the Railroad Commissioners of the state of Arkansas and others for a temporary injunction restraining the enforcement of the prescribed rates for the transportation of freight and passengers in intrastate commerce in that state; it being contended on the part of the complainants that these rates are unreasonable, noncompensatory, and therefore confiscatory. The matter was first brought on for hearing on July 28th last, when, at the request of the defendants, the hearing .was post
The first question for consideration is: How shall this cost be apportioned between the intrastate and interstate traffic? The proofs make it quite plain that the production of a given amount of revenue is attended with greater cost in intrastate business than in interstate business; and that this is a generally recognized fact is attested by the decisions in other cases where the reasons which make it so are fully stated. Chicago, etc., Co. v. Tompkins, 176 U. S. 167, 178, 20 Sup. Ct. 336, 44 L. Ed. 417; Minneapolis, etc., Co. v. Minnesota, 186 U. S. 257,262, 22 Sup. Ct. 900, 46 L. Ed. 1161; Northern Pacific Ry. Co. v. Keyes (C. C.) 91 Fed. 51, 53. Here the additional cost is. shown to be at least 100 per cent, in freight traffic and at least 15 per cent, in passenger traffic, and this is not more than what has been shown in other cases. Undoubtedly these differences furnish a standard by which to apportion the total cost between the traffic which is intrastate and that which is interstate. Other standards are suggested, but the proofs indicate that none of them is as satisfactory or accurate as is the difference in cost in its relation to the revenue. That standard must, therefore, be applied, and this may be done in this way, taking the freight and passenger traffic separately: Increase the intrastate earnings by the ascertained percentage representing the difference in cost, thereby ascertaining what would have been earned by the same actual expenditure in conducting the intrastate traffic, had it been attended with the same relative cost as the interstate traffic. Then add the intrastate earnings, as so increased, to the interstate earnings, thereby ascertaining what would have been earned by the actual expenditure in conducting both the intrastate and the interstate traffic, had the former been attended with the same relative cost as the latter. Then ascertain what proportion of this total represents the intrastate earnings, as so increased, and what proportion represents the interstate earnings, and then ascertain the corresponding proportions of the total cost of the intrastate and the interstate traffic. When this mode of apportionment is applied in these cases,'the result shows
“(1) A railroad corporation is a person witliin the meaning of the fourteenth amendment, declaring that no state shall deprive any person of property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws.
“(2) A state enactment, or regulations made under the authority of a state enactment, establishing rates for the transportation of persons or property by railroad that will not admit of the carrier earning such compensation as under all the circumstances is just to it and 1;o the public, would deprive such carrier of its property without due process of law and deny to it the equal protection of the laws, and would therefore be repugnant to the fourteenth amendment of the Constitution of the United States.
“(3) While rates for the transportation of persons and property witliin the limits of a state are primarily for its determination, the question whether they are so unreasonably low as to deprive the carrier of its property without such compensation as the Constitution secures; and therefore without due process of law, cannot be so conclusively determined by the Legislature of the state or by regulations adopted under its authority that the matter may not become the subject of judicial inquiry.”
It is pertinent in this connection to observe that in that case it was also said (page 54-1 of 169 U. S., page 432 of 18 Sup. Ct. [42 L. Ed. 819]):
“So far as rates of transportation are concerned, domestic business should not be made to bear the losses on interstate business, nor the latter the losses on domestic business. It is only rates for the transportation of persons and property between points within the state that the state can prescribe; and, when it undertakes to prescribe rates not to be exceeded by the carrier, it must do so with reference exclusively to what is just and reasonable, as between the carrier and the public, in respect of domestic business. The argument that a railroad line is an entirety, that its income goes into, and its expenses are provided for, out of a common fund, and that its capitalization is on its entire line, within and without the state, can have no application where the state is without authority over rates on the entire line, and can only deal with local rates and make such regulations as are necessary to give just compensation on local business.”
But it is urged that a temporary injunction ought not to be granted because these railroads have heretofore applied and given effect to the rates in question; the contention being that a temporary injunction may be employed to preserve the status quo pending the suit, but not to change it. It may be conceded that such an injunction is generally
.A temporary injunction will.be granted as prayed for, but it will be required, for the protection of shippers and passengers, that a proper bond be executed in the sum of $200,000 conditioned that during the continuance of the injunction the railroad company shall keep a correct account showing, as respects every carriage of freight or passengers, the difference between the tariff actually charged and what would have been charged had the restrained rates been applied, and showing the particular carriage in question, the stations between which it occurred, and the name of the person affected, such record to be kept and-held subject to the further order of the court; and also conditioned that the excess charged, with lawful interest and damages, shall be returned in each instance to the party entitled thereto within a reasonable date to be fixed by the court, if it shall be eventually determined that the temporary injunction ought not to have been granted.