Great Northern Railway Co. v. Minnesota Ex Rel. State Railroad & Warehouse Commission
1915 U.S. LEXIS 1624 · 238 U.S. 340 · 35 S. Ct. 753 · 59 L. Ed. 1337
June 21, 1915 · Docket 225
Headnotes
Generated summaries- Headnote 1
The Court applied the Oregon Railroad & Co. v. Fairchild test, stating that a taking must be examined for arbitrariness, unreasonableness, and lack of public necessity.
- Headnote 2
Evidence showed the six‑ton scales were used only for dealers’ convenience and never in freight calculations, and the Court noted the railroad’s business is transportation, not providing unrelated conveniences.
- Headnote 3
The majority found that the stock scales, although voluntarily installed at many stations, were considered part of transportation facilities and the refusal to provide one at Bertha was discrimination.
- Headnote 4
The Court held that the commission’s failure to consider eliminating use of existing scales, which would have eliminated the alleged discrimination at little cost, rendered the order arbitrary and unreasonable.
- Headnote 5
The Court declared that the Commission’s order to erect a new scale, without a showing of necessity, was an arbitrary and unreasonable exercise of power, thus depriving the railroad of property without due process.
- Headnote 6
The judgment was reversed because the lower court upheld the commission’s order without demanding consideration of alternatives like discontinuing existing scales, which the Supreme Court deemed necessary for a proper review.
- Headnote 7
The Minnesota commission ordered Great Northern to install a six‑ton scale at Bertha. The Court examined whether the order amounted to a taking of the railway’s property without due process, applying the test articulated in Oregon Railroad & Co. v. Fairchild.
- Headnote 8
Scales at the stockyards were shown to be convenient for dealers but not used in freight charges or transportation transactions. The Court held that such equipment is not essential to the carrier’s transportation function.
- Headnote 9
The majority found the stock scales to “pertain to the transportation facilities” and thus the refusal to install one at Bertha was discriminatory. The Court cited New Mexico Wool Growers to limit the commission’s authority to transportation‑related facilities.
- Headnote 10
Great Northern argued the commission acted arbitrarily by requiring a new scale without first allowing the use of existing scales to be discontinued. The Court agreed, citing prior cases that require consideration of less burdensome means.
- Headnote 11
The Court noted that enforcing the commission’s order would constitute a taking of Great Northern’s property, and whether such taking complied with due process depended on whether the order was justified by public necessity and not arbitrary.
- Headnote 12
The Court looked to Oregon Railroad & Co. v. Fairchild and held that a regulatory taking is examined by asking whether, considering all facts, the order is arbitrary and unreasonable or is justified by the public necessities the carrier can be lawfully compelled to meet.
- Headnote 13
The evidence showed that six‑ton stock scales were installed adjacent to stockyards, were not connected to tracks, and were used only for the convenience of dealers; they did not affect freight charges or the railroad’s transport function, demonstrating the lack of a public‑necessity justification.
- Headnote 14
The majority concluded that because the scales were merely a convenience and did not relate to the transportation of freight, they did not ‘pertain to the transportation facilities’ that the commission may require, citing New Mexico Wool Growers’ case for the limitation on regulatory power.
- Headnote 15
The commission ordered construction of a new scale at Bertha without first examining whether it could achieve the same anti‑discrimination goal by discontinuing use of the existing scales at Eagle Bend and Hewitt, a step that would have imposed little cost; the Court held that omission made the order arbitrary and unreasonable.
- Headnote 16
Because the order compelled Great Northern to build a nonessential scale and was not justified by public necessity, the Court held that enforcing it would constitute a taking of property without due process, violating the Fourteenth Amendment.
- Headnote 17
The Commission required Great Northern to erect a six‑ton stock scale at Bertha though the scales were merely a convenience to stock dealers and were not used in the railroad’s freight transactions or rate calculations.
- Headnote 18
The six‑ton stock scales were located beside stockyards, not on the tracks, and were used only by dealers for weighing livestock before shipment, not for determining freight charges.
- Headnote 19
The Commission argued that the scales were necessary to secure transportation of stock, but the Court found the scales were a convenience and not part of the railway’s transportation duties.
- Headnote 20
The Commission mandated construction of a new six‑ton scale at Bertha without first considering that stopping use of the existing scales at Eagle Bend and Hewitt would eliminate the alleged discrimination.
- Headnote 21
The Supreme Court of Minnesota affirmed the order; the U.S. Supreme Court reversed, holding the lower court erred by not requiring the Commission to explore less costly means to eliminate discrimination.
- Headnote 22
The Court held that enforcing the Commission’s order would deprive Great Northern of property without due process because the order lacked a showing of public necessity.
- Headnote 23
The Court applied the test set forth in Oregon Railroad & Co. v. Fairchild, holding that an order directing Great Northern to install a six‑ton stock scale was subject to a public‑necessity and arbitrary‑and‑unreasonable inquiry. Because the scales were merely conveniences, the order failed the test.
- Headnote 24
Evidence showed the stock scales were used only for dealers’ convenience and never in determining freight charges, so they were not part of the railroad’s transportation function. Accordingly, the Commission’s order was not justified by public necessity.
- Headnote 25
While the majority initially said the scales pertained to transportation facilities, the Court later concluded they were unrelated to transportation and therefore beyond the Commission’s authority, citing New Mexico Wool Growers’ Association precedent.
- Headnote 26
The Court noted the Commission could have eliminated discrimination by simply ceasing use of the existing scales, a method that would have entailed little expense, but it instead required a new scale, rendering the order invalid.
- Headnote 27
The Court held that enforcing the scale order would deprive Great Northern of property, and because the order lacked a public‑necessity justification, it violated due process.
- Headnote 28
The Court reversed the Minnesota Supreme Court’s decision, emphasizing that the lower court should have mandated the Commission to explore alternatives before imposing the new scale.
Opinion
delivered the opinion of the court.
- An order of the Minnesota Railroad & Warehouse Commission (October 26, 1911) directing the Great Northern Railway Company to erect within forty-five days at least a six-ton scale in its stockyard at the village Bertha, Todd County, was sustained by the Supreme Court of the State (122 Minnesota, 55, 57-58); the cause is here by writ of error; and it is contended that enforcement of order, as promulgated, would deprive the Railway of its property without due process of law contrary to the inhibition of the Fourteenth Amendment. The Supreme Court said:
“At the trial the appellant offered no evidence but rested upon the evidence presented by the respondent and the facts are undisputed. They are in substance as follows: That in the year 1910 stock was shipped in carload lots from 259 of appellant’s stations in the State of Minnesota; that the number of carloads so shipped from the different stations varied from one at each of 32 stations to 414 at the station of Jasper; that appellant has installed stock scales, each of six ton capacity, at 54 of these stations; that these scales are located adjacent to the stockyards, but are not adjacent to nor connected with the railway track or buildings; that they are convenient for and are used by dealers and stock raisers, in buying and selling, but no obligation to ship over the railway is imposed by such use; that stock raisers who would otherwise market their stock at Bertha sometimes take it to Hewitt or Eagle Bénd, a longer distance, in order to have the use of the scales installed at'those places; that such scales tend to draw the stock business to and concentrate it at the places where they are located; that where these scales are available shippers are accustomed to weigh their stock, for their own convenience and information, immediately before loading for shipment, but these weights are not used as a basis for freight charges, nor in any transactions between the shipper and the railway company, nor in sales made at the terminal stockyards; that, after stock is loaded,. the carload is weighed at some suitable point upon track scales which are under the supervision of the State, and the freight charges and all the transactions between the shipper and the company are based exclusively upon this weight; and that these stock scales are not used in any manner in the business transacted between the railway company and its patrons.
“The witnesses testifying for respondent insisted that . stock scales were a convenience, if not a necessity, in dealing in- stock, and that a town having such scales possessed an advantage, as .a stock market, over a town that did not, but frankly admitted that these scales had no direct part in the business of transportation, nor in the business of selling at the terminal yards.,
“As scales are a convenience and, probably, a necessity in dealing in stock, and tend to cause stock to be collected for shipment at the places where they are available, to the disadvantage of those places where they are not available, and are undoubtedly furnished for the purpose and with the view of securing the transportation of stock from points at which' they are located, it is the opinion of a majority of the members of the court that the evidence submitted, together with the fact that the company considered such scales of sufficient importance to its business to furnish them voluntarily at 54 of its stockyards in this State, is sufficient to support the finding that such scales ' pertain to the transportation facilities which the commission may require of a railroad and that the refusal to supply such scales to the station in question was a. discrimination against it.”
Manifestly, if the order is enforced plaintiff in error’s property will be taken. Whether this would be without due process of law depends upon the special circumstances.
The applicable principles were announced in Oregon Railroad &c. Co. v. Fairchild, 224 U. S. 510, 524. A taking of railroad property under administrative regulation must “be tested by considering whether, in view of all the facts, the taking was arbitrary and unreasonable or was justified by the public necessities which the carrier could lawfully be compelled to ifieet.” The facts being established the question then presented is whether as matter of law they áre adequate to support a finding of requisite 'public necessity — the mere declaration of a commission is not conclusive. Interstate Commerce Commission v. Louis. & Nash. Railroad, & Nash. 227 U. S. 88, 91; Florida East Coast Line v. United States, 234 U. S. 167, 185.
, It appears from the Supreme Court’s findings that six-ton scales installed by the Railway at 54 of its 259 stock-shipping stations in Minnesota were not used in transactions between carrier and shippers. All witnesses declared these instruments had no direct part in transportation or selling at terminal yards but were convenient in stock dealings and a station possessing one had an advantage over the placé where none existed.
The business of a railroad is transportation and to supply the public with conveniences not connected therewith is no part of its ordinary duty. The obvious purpose of the challenged order was to enforce installation at Bertha of a scale like those at Eagle Bend and Hewitt and dedicated to same use. Under admitted facts, unless justified by alleged unlawful discrimination, we think this was an arbitrary and unreasonable exercise of power. It is no answer to sáy, as counsel do, that the Commission has “general authority to require railroad companies to supply the necessary demands of the public along transportation lines; that it has a right to require the company to build and maintain such facilities as are necessary for the public needs.” The demands upon a carrier which lawfully may be made are limited by its duty, and the present record conclusively shows the required structure had no direct relation thereto. See New Mexico Wool Growers’ Association v. Atchison, Topeka & Santa Fe Ry., 145 Pac. Rep. 1077Rep..
The Railway Company does not presently controvert the finding that scales at Eagle Bend and Hewitt brought about . discrimination, but maintains the . Commission acted arbitrarily and unreasonably in seeking to eliminate this by peremptorily requiring construction of another without giving opportunity to accomplish the same result through discontinuing the use of those already installed. This contention is sound and must be sustained. Conceding power to inhibit discrimination, the Commission could not exercise it unreasonably by needlessly taking property or, what comes to the same thing, obliging incurrence of’expense wholly unnecessary. It by no means follows, simply because a railroad voluntarily supplies a convenience at some stations which attracts tradé, that it can be commanded positively to do likewise at other places along the line. A railroad’s possessions ar.e subject to its public duty but beyond this and within charter limits, íike other owners of private property, it may control its own affairs. Discontinuing the use of existing scales would abate the alleged discrimination and probably entail little, if any, outlay. The Commission’s order pre eluded use of this method to bring about lawful conditions and therein, we think, was plainly arbitrary and unreasonable. Missouri Pacific Railway v. Nebraska, 164 U. S. 403, 417; Donovan v. Pennsylvania Company, 199 U. S. 279, 293; Missouri Pacific Railway v. Nebraska, 217 U. S. 196, 206.
The judgment of the court below is reversed and the cause remanded for further proceedings not inconsistent with this opinion.
Reversed.