Houston, East and West Texas Railway v. United States
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| Houston, East & West Texas Railway v. United States | |
| Reference: 234 U.S. 342 | |
| Term: 1914 | |
| Important Dates | |
| Argued: Oct 28, 1913 Decided: Jun 8, 1914 | |
| Majority | |
| William R. Day • Willis Van Devanter • Oliver Holmes • Charles E. Hughes • Joseph Rucker Lamar • Joseph McKenna • Edward D. White | |
| Dissenting | |
| Horace Harmon Lurton • Mahlon Pitney | |
Houston, East & West Texas Railway v. United States, also known as the Shreveport rate case, was a case decided 7-2 on June 8, 1914, by the United States Supreme Court that determined that the U.S. Interstate Commerce Commission (ICC) has the constitutional authority to regulate interstate railroad rates.[1]
Why it matters: The U.S. Supreme Court ruled that the U.S. Constitution gave the U.S. Congress the power to regulate interstate commerce through the ICC. Justice Charles Evans Hughes wrote the majority opinion and argued that matters that have a "substantial relationship to interstate traffic" are subject to regulation under the commerce clause. He argued that "it is immaterial…that the discrimination arises from intrastate rates as compared with interstate rates."[1]
Background
The Houston, East & West Texas Railway Company managed an interstate railroad that ran through Dallas, Texas, and Shreveport, Louisiana. It set disproportionate shipping rates for the railcars traveling into Texas and into Louisiana. The distance from Marshall, Texas, to Dallas, Texas, was 148 miles and cost 36.8 cents. The shipping rate from Marshall, Texas, to Shreveport, Louisiana, was 42 miles and cost 56 cents.[2]
The Railroad Commission of Louisiana issued a complaint to the ICC arguing that the Houston, East & West Texas Railway Company disproportionately charged those who shipped goods into the state of Louisiana. The ICC found that the rate structure gave the state of Texas "an unlawful and undue preference and advantage" and ordered the Houston, East & West Texas Railway Company to change the rate structure.[2]
The Houston, East & West Texas Railway Company argued that the ICC could not order them to change their rate structure because the Tenth Amendment reserves the power to regulate railroads to the states and because the U.S. Constitution does not expressly delegate regulatory power to the ICC.[2]
The ICC argued that the U.S. Constitution gives the U.S. Congress the power to regulate interstate commerce. The commission argued that the issue at hand was whether "Congress is impotent to control the intrastate charges of an interstate carrier." The Houston, East & West Texas Railway Company argued that by attempting to equalize the rates from Marshall to Shreveport and the rates from Marshall to Dallas, the ICC attempted to regulate interstate and intrastate commerce.[2]
Oral argument
Oral argument was held on October 28, 1913. The case was decided on June 8, 1914.[2]
Decision
The United States Supreme Court ruled 7-2 that the ICC has the constitutional authority to regulate interstate railroad rates.[1]
Justice Charles E. Hughes wrote the majority opinion for the United States Supreme Court and was joined by Justices William R. Day, Willis Van Devanter, Oliver Holmes, Joseph Rucker Lamar, Joseph McKenna, and Edward D. White.
Justices Horace Harmon Lurton and Mahlon Pitney dissented but did not issue a written opinion.[2]
Opinions
Majority opinion
Justice Charles E. Hughes wrote for the 7-2 majority of the U.S. Supreme Court and ruled that the U.S. Congress has the constitutional authority to establish the ICC. He argued that regulating the Houston, East & West Texas Railway was a means to regulating interstate commerce and, therefore, was constitutional.[2]
The majority ruled that because the Houston, East & West Texas Railway set rates that gave preference to Texas cities, the rate structure had a substantial relation to interstate commerce. Justice Hughes argued that if Congress could not regulate intrastate commerce that had a substantial effect on interstate commerce, then it could not effectively regulate commerce between the states:[2]
| “ | [The regulation of interstate commerce]] necessarily embraces the right to control. . . . operations in all matters having a close and substantial relation to interstate traffic, to the efficiency of interstate service, and to the maintenance of conditions under which interstate commerce may be conducted upon fair terms. | ” |
Dissenting opinions
Justices Lurton and Pitney dissented from the majority's argument but did not issue a written opinion.[2]
Aftermath
After the U.S. Supreme Court's decision in Houston, East & West Texas Railway v. United States, the U.S. Congress passed the Transportation Act of 1920. The Transportation Act directed the ICC to create a plan to consolidate railway properties in the United States into a limited number of systems regulated by the ICC. The ICC plan was issued in 1929 and proposed 21 regional railroads under the regulation of the ICC.[4]
The U.S. Congress passed deregulation measures for U.S. railways beginning in 1976 with the Railroad Revitalization and Regulatory Reform Act of 1976, which established a limited regulatory framework for the railway industry. After the Railroad Revitalization Act, the U.S. Congress passed the Motor Carrier Act of 1980, which deregulated the trucking industry, and the Staggers Rail Act of 1980, which deregulated U.S. railways. The U.S. Congress, in December 1995, passed the ICC Termination Act of 1995 and abolished the ICC.[4]
See also
- Commerce clause
- Separation of powers
- The Taft Court
- Supreme Court of the United States
- History of the Supreme Court
External links
- Full text of case syllabus and opinions (Justia)
- Supreme Court of the United States
- Search Google News for this topic
Footnotes
- ↑ 1.0 1.1 1.2 Oyez, Shreveport Rate Cases, accessed October 31, 2022
- ↑ 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 JUSTIA, Houston East and West Texas Railway Co. v. United States, accessed October 31, 2022
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ 4.0 4.1 Investopedia, Interstate Commerce Commission, accessed May 9, 2023
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