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LOUISVILLE & NASHVILLE RAILROAD COMPANY v. FINN AND OTHERS AS RAILROAD COMMISSION KENTUCKY

January 5, 1915

LOUISVILLE & NASHVILLE RAILROAD COMPANY
v.
FINN AND OTHERS AS RAILROAD COMMISSION OF KENTUCKY



APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF KENTUCKY

White, McKenna, Holmes, Day, Hughes, Van Devanter, Lamar, Pitney, McReynolds

Author: Pitney

[ 235 U.S. Page 602]

 MR. JUSTICE PITNEY delivered the opinion of the court.

This case was here on a former occasion (Louisville & Nashville R. R. v. Garrett, 231 U.S. 298), when an order

[ 235 U.S. Page 603]

     denying a motion for an interlocutory injunction was affirmed. The suit was brought by the Railroad Company to enjoin the enforcement of two orders made August 10, 1910, by the Railroad Commission of Kentucky, one of which prescribed maximum rates of freight upon certain intrastate traffic, and the other awarded specified amounts in reparation for payments previously exacted by the carrier for freight transportation in excess of the rates thus established by the Commission as reasonable. One of the grounds of attack upon the rate order was that the Commission had acted arbitrarily, in that there was no evidence before it tending to establish that the rates which the company had maintained were unreasonable. Upon the former appeal we held that since it appeared that there had been a hearing before the Commission with evidence adduced on each side, and since this was not produced before the court, the general allegations of the bill respecting the effect of the evidence, and the statements contained in the affidavits submitted upon the application for injunction, were insufficient to justify the court in enjoining the rates upon the ground that the Commission either had denied the hearing which the statute contemplated, or by its arbitrary action had been guilty of an abuse of power. With respect to the reparation order we sustained the action of the court below in declining to determine its validity, upon the ground that the persons in whose favor the award was made had not been brought in as parties.

After our decision, appellant filed an amended and supplemental bill bringing in as defendants the parties in whose favor reparation was awarded, stating with more particularity the grounds upon which that order was attacked, and, with respect to the rate order, setting out as an exhibit a transcript of the evidence introduced before the Commission. Upon this amended and supplemental bill appellant again moved for an interlocutory injunction.

[ 235 U.S. Page 604]

     The motion was heard before three judges, under § 266, Judicial Code (36 Stat. 1162, c. 231), the application for injunction was denied (214 Fed. Rep. 465), and the case comes here by direct appeal taken pursuant to the provisions of the same section.

The jurisdiction of the Federal court was invoked because of questions raised under the Constitution of the United States, and not because of diversity of citizenship; but it extends, of course, to the determination of all questions presented, irrespective of the disposition that may be made of the Federal questions, or whether it is necessary to decide them at all. Ohio Tax Cases, 232 U.S. 576, 587, and cases cited.

The action of the Commission was based upon Kentucky Statutes (Carroll): § 816, defining what shall be deemed extortion by a railroad corporation in charging toll or compensation for intra-state transportation; § 820a (the "McChord Act"), authorizing the Commission, upon complaint made against a railroad company for charging extortionate freight or passenger rates, to hear the matter and, if it determines that the company has been guilty of extortion, then to establish a just and reasonable rate for services thereafter to be rendered; and § 829, authorizing the Commission to hear and determine complaints under § 816 and to render such award as may be proper.

It appears that for many years prior to March 25, 1910, the railroad company had voluntarily maintained special rates for the transportation of corn, rye, barley, and malt, and empty barrels, boxes, etc., form three points of origin upon the Ohio River -- Louisville, Covington, and Newport -- to points of destination in the interior of the State; these rates being allowed only to owners of distilleries, when the commodities in question were used as ...


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