205 F. 800 | M.D. Ala. | 1913
This matter was submitted for decision upon a rule served upon respondents, who are the members of the Railroad Commission of Alabama, to show cause why they should not be punished for contempt in violating the terms of a permanent injunction that was heretofore issued in the cause, enjoining the respondents from taking any steps to enforce certain rate statutes enacted by the Legislature of Alabama, known as the “Maximum Freight Act,” the “Eight Group Acts” and the “Maximum Passenger Rate Act.” The alleged violation of the injunction consists in the making of an order by the Commission requiring the complainant to’put into effect a passenger rate of 2% cents a mile for adults and a rate of 1% cents for children, and the serving of the order on the complainant.
The facts and history of the case in which the injunction was made permanent are fully stated in the statement of facts and the opinion in the report of the original case. L. & N. R. Co. v. Railroad Commission (D. C.) 196 Fed. 800. The order of the Commission asserted to constitute the contempt was made on the 19th day of February, 1913, and its effect was to direct the complainant on and after March 6, 1913, to put in effect between all points on its railroad in Alabama a standard passenger rate of 2% cents per passenger mile for adults and a rate of 1% cents per passenger mile for children not over 12 nor under 5 years of age, and providing that complainant’s proportion of joint passenger rates between points in Alabama should not exceed the standard rates prescribed. The final decree by which the injunction was made permanent was rendered April 2, 1912, but postponed the restoration of the rates which were in effect before the statutory rates went into effect until April 15, 1912.
2. It is further contended by the Commission that the effect of the injunction was merely to restrain the Commission from enforcing the schedule of rates comprised in the group of statutes, consisting of the Maximum Freight Act, the Eight Group Acts, and the Maximum Passenger Rate Act in their entirety, and that it left the Commission at liberty to put in force singly any one of'the several acts com
An examination of the master’s report, of the opinion of the court, and of the language of the final decree is persuasive that there was no adjudication in the cause that the operation of the maximum passenger rate, independently of its associated rate acts, would be confiscatory. It may be true that the pleadings were broad enough to present this issue, and that there is evidence in the record from which the inference might arise that the passenger business of complainant when conducted under the statutory rate was unremunerative and confiscatory, even though considered apart from complainant’s freight business. The master’s report, the court’s opinion, and the final decree, in connection with the attitude of the parties during the cause, indicate that the court did not attempt to determine whether, the passenger rate act would he confiscatory in its operation, if it alone were enforced and the remaining rate statutes enjoined, and the complainant in that event at liberty to put in freight rates not limited by the statutory maxima. It is conceivable that the court might have reached a different conclusion as to the confiscatory effect of the statutory passenger rate, when put in force by itself or in connection with a group of statutory freight rates. In the former case the revenue from the freight business, when unregulated, might make the total revenue from freight and passenger traffic remunerative, though the passenger traffic unaided might not be so. In the latter case the freight: traffic conducted under statatory rates might not only lend aid to the passenger traffic under like regulation, but be a detriment to it, so that the entire business of the carrier would be conducted at a loss. The passenger traffic is conducted on the same rails and largely with the same plant as is the freight, and might be held remunerative in connection with a remunerative freight business, though, if it were conducted alone, the holding would be different.
The question as to whether the statutory passenger rate, if it alone was put in force, would prove confiscatory, seems not to. have been presented to or decided by the court. What the court did decide was that the entire schedule represented by the statutory passenger and freight rates as fixed by the group of acts, the enforcement of which was enjoined, was confiscatory in its operation. The court in its final decree was careful in each instance to limit its findings, as to each class of statutory rates, to their effect when taken in connection with every other class. The assault was made by complainant upon the effect of the rates as an entirety upon the intrastate business of the complainant, and the master and court determined that the schedule of rates, taken as a whole, was confiscatory with relation to complainant’s intrastate business, both freight and passenger, and not
“The court is of opinion that the present application by the appellants in each of the above cases should be granted. The general question argued before us on the original hearing was whether the rates established by the Nebraska statute, looking at them as an entirety, were so unreasonably low as to prevent the railroad companies from earning such compensation as would be just, having due regard to the rights both of the public and of the companies. In our examination of that question it was appropriate and necessary to inquire as to the earnings of the respective companies under the rates which they had established, looking at those rates, also, as an entirety. In this way we ascertained the probable effect of the statute in question. We did not intend by an affirmance of the several decrees to adjudge that the railroad companies should not at any time in the future, if they saw proper, reduce the rates, or any of them, under which they were conducting business at the time the final decrees were rendered, nor that the state board of transportation should not reduce rates on specific or particular articles below the rates which the companies were charging on such articles when the decrees were entered. It may well be that on some particular article the railroad companies may deem it wise to make a reduction of the rate, and it may be that the public interests will justify the state board of transportation in ordering such reduction. We have not laid down an5r east-iron rule covering each and every separate rate. We only adjudged that the enforcement of the schedules of rates established by the state statute, looking at such rates as a whole, would deprive the railroad companies of the compensation they were legally entitled to receive. We did not pass judgment upon the reasonableness or unreasonableness of the rates on any particular article prescribed by the statute or by the railroad companies. If the state should by statute, or through its board of transportation, prescribe a new schedule of rates, covering substantially all articles, and which would materially reduce those charged by the companies respectively, or should by a reduction of rates on a*805 limited number of articles make its schedule of rates, as a whole, produce the same result, the question will arise whether such rates, taking into consideration the rights of the public as well as the rights of carriers, are consistent with the principles announced by tills court in the opinion heretofore delivered.”
The complainant contends that such a ruling would destroy the efficiency of the injunction, since the Commission could separately and at different times restore the rates prescribed in each act, and so place the matter in the attitude it was before the final decree. The injunction being against the statutory rale system in its entirety, an attempt to restore the system, or so substantial a part of it as to reduce the intrastate business of complainant below the remunerative point, would violate the injunction. An attempt, however, to restore a single rate or a number of rates whose effect was less than this, would not violate the injunction. Each instance would depend upon the effect of the changed rates on the volume of the complainant’s intrastate business. If the reduced passenger rate, when put into effect alone, had the former effect, it would violate the injunction; otherwise, it would not. The efficacy of the decree to protect the complainant against confiscation from the schedule in its entirety is complete. It was not intended to do more.
Conceding, however, the right of the Commission tO' still litigate the reasonableness of the statutory passenger rate, the question arises whether, in view of the language of paragraph six of the final decree, it can proceed to do so without first securing a modification of the, injunction. The right of the Commission to proceed depends upon what it was enjoined by the final decree of the court from doing, rather than upon whaf was found by the court as expressed in the final decree. If the mandate of the court is broader than the findings require, the mandatory language controls, and the respondents are not at liberty to violate the mandate of the court because the relief may not conform to the findings upon which it is based. The sixth paragraph of the final decree contains the mandate of the court. It enjoins the respondents from taking any step to compel the complainant to observe or to enforce “any of the said several acts of the Legislature.” One of the acts enjoined was the act establishing a maximum passenger rate of 2% cents per passenger mile. The sole effect of this act was to establish this maximum passenger rate. The order of the Commission directs complainant to put in effect the identical rate prescribed by the statute as the maximum. If the order be construed as having been made under the power of the Commission to enforce the statute, it is plainly a violation of an injunction, the effect of which was to restrain the Commission from taking any step to enforce the statute.
The case is to be distinguished from that of Smyth v. Ames, 171 U. S. 361, 18 Sup. Ct. 888, 43 L. Ed. 197, in two respects: (1) In that case a complete schedule of freight rates prescribed by statute was enjoihed as being confiscatory in its entirety. The effect of the language of the original injunction in that case was construed to be such as to prevent the carrier or the board of transportation from changing any single rate of the entire schedule. The court upon ap
Nor is the order of the Commission, if made with the purpose to enforce the statute, justified upon the idea that changed conditions renewed its authority to act. The final decree expressly retained jurisdiction in the district court of the matter of changes in the rates due to changed conditions, and it was incumbent upon the Commission to obtain leave of the district court, as provided for in paragraph seven of the decree, before assuming jurisdiction to act upon this ground. Moreover, the Commission did not, in making the order, refy upon any changed conditions. Again, the statutory passenger rate was enjoined because it operated as a discrimination against complainant, as well as a deprivation of its property, an order of the Commission having fixed the rate for other carriers at 2%. cents. It is now stated that this order has been revoked by the Commission, but this showing should have been made to the court by the Commission upon an application to modify the injunction, before it attempted to enforce the passenger rate act.
The conclusion reached is that, if the order of the Commission is to be construed as having been made by it in an attempt to enforce the statute prescribing the maximum passenger rate, it was a violation of the injunction.
3. The question remains as to whether the action of the Commission was an attempted enforcement of the passenger rate act or whether it was an order made by it in pursuance of its independent rate-making power. If the latter, it was not a violation of an in
Under the existing legislation in June, 1912, when the citation in the proceedings which resulted in the order complained of was issued and served on the complainant, and during the progress of the hearings and at the time of the making of the order in February, 1913, the only authority of the Commission with relation to statutory rates was to apply to a court of competent jurisdiction in the event the carrier after 20 'days refused to put the rate into effect for a mandamus, injunction, or other appropriate remedy. There was no requirement for a hearing or order of the Commission to put in force a statutory rate. There was no authority vested in the Commission by any of the various acts of the Legislature pertaining to its authority to entertain jurisdiction of hearings with relation to statutory rates or to make orders putting such rates into effect. The statutory rate acts, both passenger and freight, when taken in connection with the penalty act approved December 3, 1907 (Acts Extra Session 1907, pages 87-88), were self-executing, without action of the Commission. at least other than the initiation by it of legal proceedings for their enforcement.
During the same period the Railroad Commission was vested with an independent power to make rates, both passenger and freight. It had authority by virtue of sections 5852 and 5678 of the Alabama Code of 1907 to prescribe reasonable rates for passengers and freight, and to act on its own initiative in so doing; by section 5657 to classify both articles and carriers; and, while section 5658 of the
The Commission, therefore, at the time it entertained jurisdiction of this proceeding and made -the order complained of, had ample authority to act in the matter of establishing rates and fares by making orders, after having granted hearings, as an independent rate-making body, but had no authority to grant hearings with relation to statutory rates or to make, any order enforcing such rates. If, in the granting of the hearings and the making of the order complained of, it acted in its capacity as an independent rate-making body, it acted within its jurisdiction and statutory authority. If, on the other hand, its action in granting the hearing and making the order was in an endeavor to enforce the statutory maximum passenger rate act and it was not acting as an independent rate-making body, it then acted without its statutory authority and beyond its jurisdiction, since it had only such as the statute conferred. Its action should be attributed to the exercise of its lawful authority rather than to an usurpation, if it can be done consistently. The fact that a hearing was unnecessary to the enforcement of the statutory rate, as the statute itself conclusively determined the reasonableness of the rate and was controlling on the Commission, and the fact that no order on the-part of the Commission was made essential by the terms of the passenger rate statute to its enforcement, strengthen the presumption that the Commission in entertaining jurisdiction and making the order complained of assumed to act, not in the enforcement of the passenger rate act, but by virtue of the general power conferred on it by the Legislature to make passenger rates. When the proceedings before the Commission were instituted, the statutory passenger rate had become ineffective as against complainant, because of the final decree of the district court of April 2, 1912, and this left the general power of the Commission, as to complainant, uncontrolled by any statutory rate, and furnished, for that reason also, an appropriate occasion for its exercise.
It is contended by complainant that the charactpr of the proceeding before the Commission,, the limited scope of the evidence adduced upon the hearing, and the language of the opinion and of the order made by it show that its action was in an attempt to enforce the statute, rather than in the exercise of its independent rate-making power. The most obvious answer is that no hearing and no order of any kind could be appropriate if the Commission was acting in the enforcement of the passenger rate act. It is said the evidence adduced upon the hearing before the Commission was identical with
It is claimed by the complainant that the unreasonableness of a 2% cent passenger rate, as applied to it, has been adjudicated in the equity cause, and for that reason the Commission cannot relit igate it. Assuming this to be true, though it may be that no more was adjudicated in the equity cause than that the system of rates established by the Maximum Rate Act, the Right Group Acts, and the Passenger Rate Acts were in their entirety and taken one in connection with all the others confiscatory, leaving the effect of the Passenger Rate Act, when put in force by itself and not in conjunction with the freight acts, undetermined, yet the error of the Commission, if it was error, in assuming to decide it in a proceeding instituted by it under its general, rate-making power, would not he a violation of an injunction, the legal effect of which was merely to restrain it from enforcing the passenger rate act. At most, such error, if it existed, would subject the order of the Commission, when made, to reversal on appeal or to be restrained upon a showing that the rate established by the Commission as a result of the supposed erroneous method was confiscatory. The failure of one court to follow the rulings of another, even when there exists a relation of subordination which makes the rulings of the latter conclusive, is not a contempt of court. In this case there is no relation of direct subordination between the two tribunals.
The complainant insists that the injunction would be valueless if the Commission has the right contended for by it. If the Commission in making and enforcing its order acted as the instrument of the Legislature in enforcing the enjoined statute, and in that capacity is permitted to take such action with impunity, the insistence is justified. The situation, however, seems to arise from the coexistence of two
If the legislative rate had been by the terms of the statute given a fixed tenure, the Commission’s independent authority might have been suspended during the period of the statutory rate; the legislative action being paramount and effective to displace action by the Commission. The suspension of such a statutory rate by an injunction might even in that case have the effect to re'store the Commission’s power. However that may be, express power was conferred on the Commission by the Legislature to change the statutory rates when conditions justified, and this jurisdiction could he exercised any time after the statutory rates went into effect, no definite duration being accorded them by the statute. The jurisdiction to determine whether the .conditions had changed so as to authorize the Commission to change, statutory rates was vested in the Commission itself. Under this condition of legislation, the argument cannot prevail that the action of the Legislature in fixing the rate in question suspended all action on the part of the Commission, except to put in force the statutory rate.
The final decree was rendered in the district court in April, 1912, and this proceeding was instituted by the Commission in June, 1912. The argument is made that conditions could not have materially changed in so short a period, and that the Commission’s order must he construed as an attempt to put in force the statutory rate for this reason. The fate acts were all enacted by the Legislature as early as the year 1907; the final decree was rendered in April, 1912; while the order of the Commission complained of was not made until February, 1913. The argument also fails to take into account the fact that the final decree itself created a change of conditions. The 2y> cent passenger rate, operating in connection with the Maximum Freight Rate Act and the Fight Group Act, as it had done up to the date of the final decree, may have made the conduct of complainant’s intrastate business uuremuucrative, as was held by the district court, and it may still be true that the same passenger rate, taken in connection with the freight rates which the complainant was authorized by the final decree to and did restore after the date of the final decree, may yield the complainant proper remuneration on its entire intrastate business. It was therefore open to the Commission by virtue of its independent rate-making power to pass upon the reasonableness of the 2y> cent passenger rate, in view of this changed situation of the entire rate status from that which was considered -by the
For these reasons, it seems to me that the complainant cannot contest the propriety of the Commission’s order in a proceeding against it for contempt, since, not being an attempt to enforce the statutory rate act, the making and enforcement of the order does not constitute a violation of the injunction, and complainant is therefore remitted to the statutory remedy of appeal from the order of the Commission to the state, courts or to an application for an injunction against the enforcement of the rate fixed by the order of the Commission, if the rate so fixed is confiscatory.
The rule to show cause is discharged, and the complainant is taxed with the costs.