The Federal courts and the orders of the Interstate Commerce Commission THE FEDERAL COURTS AND THE ORDERS OF THE INTERSTATE COMMERCE COMMISSION. By H. T. NEWCOMB. "My own judgment is that the Interstate Commerce Commission, notwithstanding my great respect for that body-a respect which I share with many lawyers and nearly all the judges of this country-has failed in its part of the administrative work of putting into execution the interstate-commerce act. I think the Commission has looked at it from a wrong attitude of mind. I think it has put itself rather in the position of a court than that of an inquisitor. I think it has deserted the inquisition, which is the Commission's part of the work, and has been trying to climb upon the tribune, which is another part of the work. I think it has put on the robes, when perhaps it ought to have worn the overalls."-Judge GROSSCUP, March 11, 1905. The annual report of the Interstate Commerce Commission subinitted to Congress in December, 1904, shows that at that time there had been received by the Commission 789 formal and 3,223 informal complaints. On October 9, 1904, the Commission had rendered 297 formal decisions, but as two or more cases were often considered and decided together, the total number of cases decided amounted to 359. Of the cases decided, 194 were decided in favor of the complainants-that is, there were 194 cases in which, if the action recommended by the Commission had been taken by the defendants, some benefit would have accrued to those who prompted the complaints. A report submitted to the United States Senate by the Commission on December 21, 1896 (Senate Doc. No. 30, 54th Cong., 2d sess.), shows the action taken by the defendants in 107 instances in which the decision of the Commission was more or less favorable to the complainants. From this report it appears that in 58 of the 107 cases included there was complete, voluntary obedience to the Commission's order. In 11 inore there was voluntary, partial obedience, while in another case the Commission reports that "some changes 99 were made. It is to be observed, concerning these twelve cases, that the degree of obedience was at least sufficient to prevent further action on the part of the Commission or the complainants. It appears, therefore, that in 107 cases there were only 37 in which the defendants declined substantially to comply with the Commission's recommendations. The informal complaints considered by the Commission are settled without formal reports or orders. As the Commission has decided but 359 out of 789 formal complaints, and as it has never been charged that its docket is clogged by an excessive number of undecided cases, the inference is warranted that more than half of the cases formally submitted are settled while pending. It follows that 90 per cent of the matters submitted to the Commission are settled satisfactorily to both parties without formal orders. Of the 10 per cent not settled in that way it appears that up to the present time in almost one-half the defendants have been justified in their refusal to make the desired changes in rates or methods by the final conclusions of the Commission. As already noted, in only 194 out of more than 4,000 cases submitted has the Commission seen fit to order changes in rates or in methods or practices which affect or control rates. But when the Commission has issued formal orders requiring affirmative action on the part of the railways, they have usually been obeyed. The best available record, quoted above, shows that they have been obeyed in nearly 70 per cent of the cases. FEW CASES HAVE GONE TO THE COURTS. When obedience to an order of the Commission is refused, that body, or anyone interested, has the right to appeal to a circuit court of the United States sitting in equity for a decree requiring obedience. Up to the present date (April 10, 1905) 45 cases of this sort have gone to the courts. Eleven of these cases have either been withdrawn or have not been actively prosecuted or there has not yet been time for judicial action. Sixteen of them have been carried to the Supreme Court of the United States, and in no case has that body decided in favor of the enforcement of the Commission's order. one case only its decree required the enforcement of a portion of the order. Of the remaining 18 cases the Commission has lost 16. Appeals are now pending from 3 of these cases in which the decision was adverse to the Commission and from 1 in which it was adverse to the railway defendant. In Had the interstate-commerce law from the beginning been in the form which the Commission now desires shall be substituted for the present statute, the only cases out of the more than 4,000 which have been submitted to the Commission that would have been affected are the 45 which have gone to the courts, or less than 1 per cent of the total number. As has already been shown, only 34 of these cases have been adjudicated, but the decisions of the courts show that in a large portion of the adjudicated cases such a difference in the law would not have affected the result. In other words, it is not true, as is so frequently asserted by those who desire radical legislation, that the frequent disapproval of the conclusions of the Commission by the Federal courts has been wholly due to the fact that the Commission's interpretation of the law has not had the sanction of the courts. While it is perfectly true that in the natural desire to enlarge the scope of its authority the Commission has often reached conclusions of law which the courts have declared to be erroneous, it is equally true that its determinations of facts and the conclusions which it has drawn from them have frequently received judicial condemnation. A study of the decisions of the courts, with a view to determining whether, on the whole, the results of the litigation in the several cases have been such as tend toward the establishment and perpetuation of just relations between shippers and carriers, affords a complete refutation to the argument so often advanced that the Commission has been right, that the law is wrong, and that, therefore, the law ought to be modified. PASSENGER TRAFFIC CASES. Passenger rates have been the subject of controversy in but two of the cases in which the courts have been appealed to for the enforce ment of the Commission's orders. One of these cases was that of a negro named Heard, who obtained an order from the Commission directing the Georgia Railroad to discontinue practices, connected with the use of so-called "Jim Crow cars, which were regarded as unjustly discriminating against the complainant. This case was withdrawn before decision. The other passenger-rate case is known as the "Party Rate " Case (see p. 74). It arose through the desire of one railway company to be relieved from one phase of its competition with a rival carrier. The order of the Commission would have mitigated the competition in the desired degree had not the court declined to enforce it. Whether the outcome of this case resulted in substantial justice may be inferred from the statement of the court that in making these "party rates" the defendant was merely putting into practice a "reasonable and well-settled business practice; that its revenues would "be seriously impaired " if the practice were discontinued, and that this practice afforded "convenience and benefit" to a portion of the public. CARRIERS' METHODS. Three of the cases which have gone to the courts have related to transportation practices rather than to rates. One of these, the "Orange Routing" Case (see p. 131), appears to have been due to an effort on the part of the complainants to secure the continuance of illegal and secret deviations from the schedules, by parties other than the defendants, which amounted to rebates. The Commission decided in favor of the complainants, but there was a strong dissenting opinion from the chairman (see p. 132). The circuit court has decided this case in favor of the enforcement of the Commission's order, but an appeal is now pending. Another case of this character, the "Cartage" Case (see p. 81), was prompted by the desire of one railway to weaken a competitor. In this effort the carrier was able to secure the cooperation of the Commission, but again its decision did not survive judicial scrutiny. The circuit court called attention to the admission of the counsel for the complainant before the Commission that the complainant had no real grievance, but had been instigated in making complaint by a railway which was paying the expenses of the litigation, and the circuit court of appeals noted that the effect of enforcing the order would practically deprive the defendant of its ability to compete with the rival which was responsible for the complaint. Another of the cases was brought at the instance of a railway which desired to be relieved of a contract that it had entered into with other railways and to force the latter to provide, at their own expense, facilities for bringing about that result. The circuit court, which refused to enforce the Commission's order, declared this to be the fact, and asserted that the interstate-commerce law "was never intended to invade the domain of private contracts between common carriers which were valid when made and are not in conflict with the provisions of the law." LONG AND SHORT HAUL CASES. The remaining cases in which appeal has been made to the courts have been those in which the Commission has attempted to control adjustments among freight rates. Roughly speaking, these are of two classes those in which the whole question has been that of absolute or relative reasonableness under the first or third sections of the act, and those in which the fourth, or long and short haul section, has been involved. Of the long and short haul cases, which considerably exceed the others in number, it may be said that if in any of them there were unjust relations which might have been relieved through the lawful action of the Commission, that body adopted an erroneous interpretation of the law, which prevented the beneficial results that might have followed action clearly within its authority. The only case under the fourth section which can be regarded as an exception to this rule is the "San Bernadino" Case (see p. 76), decided by the Commission while it adhered to the rule, laid down by Judge Cooley, with the unanimous approval of his colleagues as members of the original Commission, that the carriers must judge for themselves in each instance whether there are dissimilar circumstances and conditions which permit exceptions to the general rule that there shall be no higher charge for intermediate hauls than for longer hauls over the same line in the same direction, when the latter include the former. In the "San Bernardino " Case, however, the court, while not criticising the conclusions of the Commission as to matters of law, declared that the facts were "widely different from those set out in the report of the Commission." From its organization in 1887 until November, 1892, the Commission adhered to the rule just referred to, which was formulated in the first important case that arose under the fourth section. In deciding the Georgia Commission Cases (see p. 96), however, the Commission abandoned this rule so far as it related to the competition of carriers subject to the act to regulate commerce and declared that where the dissimilarity of circumstances relied on to justify exceptions to the general rule were the consequence of such competition, dissimilarity could not be set up as a defense to a complaint of violation of the law, but must be made the basis of an application to the Commission for permission to make the greater charge for the intermediate haul. After adopting this interpretation of the law the Commission for a number of years declined to consider evidence tending to prove the existence of dissimilar conditions arising through the competition of interstate railway carriers or of different markets, thus preventing the introduction of testimony which the courts have declared to be of controlling importance. It is true that this erroneous interpretation of the law has prevented the enforcement of the orders in these cases, but it is equally true that the Commission never expected obedience to them, and that they are to be regarded as strategic moves in a combat which the Commission proposed to conduct along lines that it hoped would force the carriers to appeal to it for relief. There seems to be ample justification, not only in the case to which it was applied, but in most of these cases, for the observation of the Supreme Court, in deciding the Chattanooga Case (see p. 92), that in making its order "the Commission thought that literal enforcement would bring about an injustice * ." In fact, before making some of them, the Commission allowed an interval to elapse for the avowed purpose of permitting applications for relief, and it provided for the suspension of several of the orders after they were made in case such application should be made. |