There are three degrees to which the state exercises power over
commerce. First exclusively; second, in the absence of legislation
by Congress, until Congress does act; third, where, Congress having
legislated, the power of the state cannot operate at all.
Although when Congress is silent, the state may legislate in aid
of, or
Page 222 U. S. 425
without burdening, interstate commerce, there may at any time be
federal exertion of authority which takes that power from the
state.
Although where Congress and the state have concurrent powers,
that of the state is superseded when the power of Congress is
exercised, the action of Congress must be specific in order to be
paramount.
Missouri Pacific Ry. Co. v. Larabee Mills,
211 U. S. 612.
By the specific provision of the Act to Regulate Commerce, as
amended, Congress has taken control of ratemaking and charging for
interstate shipments, and in that respect such provisions supersede
state statutes on the same subject, and so
held that a
statute of North Carolina requiring common carriers to transport
freight as soon as received to interstate points under penalties
for failure, conflicts with the requirement of § 2 of the
Hepburn Act of July 29, 1906, c. 3591, 34 Stat. 584, forbidding
transportation until rates had been fixed and published, and is
therefore unenforceable.
As between the federal government and the states, one authority
must be paramount, and when it speaks, the other must be
silent.
No essential power is taken from the states in preserving the
balances of the Constitution and giving to Congress the power which
belongs to it.
Any middle ground on which state authority might still be
preserved after Congress has spoken in regard to interstate
commerce is passed when the state regulation burdens such commerce,
and the imposition of penalties for failure to receive and
transport freight does impose a burden.
Quaere whether conceding that a state may impose a
penalty does not concede the state to be competent to determine the
amount.
153 N.C. 490 reversed.
The facts, which involve the validity of a statute of North
Carolina affecting common carriers, are stated in the opinion.
Page 222 U. S. 431
MR. JUSTICE McKENNA delivered the opinion of the Court.
The question in the case is the validity of an act of the State
of North Carolina which requires the agents and officers of
railroads and other transportation companies to receive freight for
transportation whenever tendered at a regular station, and every
loaded car tendered at a side track or any warehouse connected with
the railroad by a siding, and forward the same by a route selected
by the person tendering the same, under penalty of forfeiting $50 a
day to the aggrieved party for each day of refusal to receive such
freight and all damages actually sustained.
*
Page 222 U. S. 432
Defendants in error brought suit against plaintiff in error,
herein called the railway company, in one of the courts of North
Carolina to recover penalties and damages for the failure of the
railway company, in violation of the statute, on dates from
September 17 to September 23, 1907, to receive goods tendered to it
by Etta C. Reid, defendant in error at Charlotte, North Carolina,
for transportation to a point in the State of West Virginia.
The material facts, as stipulated, are as follows: the railway
company is a Virginia corporation, and is a common carrier, and
operates a line of railroad from the city of Charlotte to the City
of Alexandria, Virginia, and another line to the City of Richmond.
Davis is a town in West Virginia, and a terminus of a branch road
of the Western Maryland Railroad Company, six miles long, running
from a point on the railroad, known as Thomas, to Davis.
The railway company operates no line of railroad or other means
of conveyance to Davis, nor does it connect with the Western
Maryland Railroad's line.
On the seventeenth of September, 1907, Etta C. Reid tendered to
the railway company at its depot in Charlotte, where it usually
accepts freight, a lot of household goods
Page 222 U. S. 433
and kitchen furniture, and offered to pay the freight charges
thereon. She demanded that the company issue to her a bill of
lading "reading from Charlotte, in the State of North Carolina, to
Davis, in the State of West Virginia, consignee to be Samuel
Hammock." The railway company declined to name a rate to be charged
for transportation of the goods, declined to permit her to prepay
the freight charges from Charlotte to Davis, declined to receive
the goods for shipment, and declined to issue a bill of lading
therefor.
She renewed her request on four successive days, and with each
demand the company refused to comply. On September 23, 1907, the
company named the sum of $34.08 as the amount necessary to prepay
the freight charges on the shipment from Charlotte to Davis, and
thereupon she paid the said sum and the company issued a bill of
lading to her.
On September 17, 1907, no through and joint rate of freight had
been established by the railway company and the Western Maryland
Railroad Company and other roads which the shipment would have to
pass over going from Charlotte to Davis,
"and no such rates had been filed with the Interstate Commerce
Commission, and no rate of freight had been established of filed
with the Interstate Commerce Commission, or published, covering
shipments between said points."
On that day, when Etta C. Reid made her demand of the railway
company, the company's agent advised her that there was no
established rate for the shipment, that no rate had been filed or
published, that he did not know the rate, that he had no authority
to receive the goods or the freight charges thereon to destination,
and no authority to issue a bill of lading reading "final
destination, Davis, in the State of West Virginia."
The agent wired the officer having charge of such matters to
obtain authority to name a through and joint rate,
Page 222 U. S. 434
to receive the shipment and issue a bill of lading. Immediately
thereafter the officers of the company took up with the officers of
the companies over whose lines the shipment of freight would have
to move the establishment of a rate, with the result that a rate
was established. On Monday, September 23, 1907, the local agent was
informed of such rate and given authority to receive the shipment
and to issue a bill of lading. Thereupon the company received the
shipment, accepted the amount of freight in accordance with the
joint and through rate, and issued the bill of lading.
There is, and was at the date of the tender of the goods, a
telegraph office at Davis. Mrs. Reid remained at Charlotte for the
time mentioned, awaiting the establishment of the rate.
It is stipulated that she was damaged in the sum of $25, for the
recovery of which and the penalties prescribed by the statute she
asked the court to adjudge.
The railway company resisted the demand and contended that to
hold that the act was applicable to it would violate the commerce
clause of the Constitution of the United States.
Judgment was awarded to defendants in error as prayed, and it
was affirmed by the supreme court of the state, two members of the
court dissenting. 153 N.C. 490.
This statement indicates the questions which are presented for
solution and the principles upon which the solution of them
depends. It hardly needs to be stated that transportation of
property between the states is interstate commerce, and may be of
federal, rather than of state, jurisdiction. We say may be of
federal jurisdiction, for interstate commerce in its practical
conduct has many incidents having varying degrees of connection
with it and effect upon it over which the state may have some
power. As to the extent of the power and the occasions for its
exercise, controversies have arisen, and in deciding which
Page 222 U. S. 435
the power of the state over the general subject of commerce has
been divided into three classes: first, those in which the power of
the state is exclusive; second, those in which the states may act
in the absence of legislation by Congress; third, those in which
the action of Congress is exclusive and the state cannot act at
all.
Covington &c. Bridge Co. v. Kentucky,
154 U. S. 209;
Western Union Telegraph Co. v. James, 162 U.
S. 650,
162 U. S.
655.
These divisions, however, express but the extreme boundaries of
the subject. Something more definite is necessary for the decision
of the opposing contentions in the case at bar. The supreme court
of the state was of the view that the statute simply regulated a
duty which preceded the entry of the goods in interstate commerce,
and concluded therefore that the statute was "neither an
interference with nor a burden upon interstate commerce." And it
decided that the execution of this duty was not precluded by the
provision of the Interstate Commerce Act requiring a schedule of
tariffs to be established and charged. It was said by the court
that it was the duty of the railway company to file such schedule,
and that the company could not justify the violation of it common
law duty by the neglect of its statutory duty.
The case, however, is not quite in such narrow compass. There is
something more to be considered than the accumulation of defaults,
if there be defaults. It is undoubtedly the duty of a railway
company to receive freight when tendered for transportation. It
may, besides, have other obligations, but it does not follow that
it is within the power of the state to enforce them. There may be a
federal exertion of authority which takes from a state the power to
regulate the duties of interstate carriers or to provide remedies
for their violation. This is realized by defendants in error, and
they assert that the state statute is in aid of commerce, and not
an interference with or burden upon it, and therefore must be
sustained as a valid exercise
Page 222 U. S. 436
of the state's power, citing
Atlantic Coast Line R. Co. v.
Mazursky, 216 U. S. 122;
Western Union Tel. Co. v. James, 162 U.
S. 650.
In those cases, and in the later case of
Western Union Tel.
Co. v. Commercial Milling Co., 218 U.
S. 406, the principle is expressed that
"there are many occasions where the police power of the state
can be properly exercised to insure a faithful and prompt
performance of duty within the limits of the state upon the part of
those engaged in interstate commerce."
Such exercise of power, it was further said, was in aid of
interstate commerce, and, although incidentally affecting it, did
not burden it. But the facts of those cases distinguish them from
the case at bar, and make their principle inapplicable. In the
Telegraph Company cases, there was a failure to transmit or deliver
telegrams, in violation of the duty so to do imposed by the
particular state statutes. In the Railroad case, a statute of the
State of South Carolina which required carriers to settle within a
specified time claims for loss of or damage to freight while in
their possession within the state was sustained against the
objection that it was an interference with interstate commerce. In
none of the cases, however, was there any federal legislation upon
the subject involved, and in all of them such circumstance was
stated as an element of decision. The circumstance is important,
and we are brought to the inquiry whether it exists in the present
case.
It is well settled that, if the state and Congress have a
concurrent power, that of the state is superseded when the power of
Congress is exercised. The question occurs to what extent and how
directly must it be exercised to have such effect? It was decided
in
Missouri Pacific Railway Co. v. Larabee Flour Mills
Co., 211 U. S. 612,
that the mere creation of the Interstate Commerce Commission and
the grant to it of a large measure of control over interstate
commerce does not, in the absence of action by it, change the
rule
Page 222 U. S. 437
that Congress, by nonaction, leaves power in the states over
merely incidental matters. "In other words," and we quote from the
opinion,
"the mere grant by Congress to the Commission of certain
national powers in respect to interstate commerce does not of
itself, and in the absence of action by the Commission, interfere
with the authority of the state to make those regulations conducive
to the welfare and convenience of its citizens. . . . Until
specific action by Congress or the Commission, the control of the
state over those incidental matters remains undisturbed."
The duty which was enforced in the state court was the duty of a
railroad company engaged in interstate commerce to afford equal
local switching service to its shippers notwithstanding the cars
concerning which the service was claimed were eventually to be
engaged in interstate commerce. This duty was declared to be a
common law duty which the state might, "at least, in the absence of
congressional action, compel a carrier to discharge."
The principle of that case therefore requires us to find
specific action either by Congress in the Interstate Commerce Act,
or by the Commission, covering the matters which the statute of
North Carolina attempts to regulate. There is no contention that
the Commission has acted, so we must look to the act. Does it, as
contended by plaintiff in error, take control of the subject matter
and impose affirmative duties upon the carriers which the state
cannot even supplement? In other words, has Congress taken
possession of the field?
It is not possible to epitomize the act by giving a more
particular designation than that it was designed to regulate
interstate commerce. Something more was certainly intended by it
than the mere ordaining or the supervision of the movement of
goods. In a certain general way, traffic would be regulated by
railroad and shipper, but their powers were not equal. The
railroads had the
Page 222 U. S. 438
greater power, and might and did exercise it in unreasonable
charges and in discriminations. The potent instrument for this was
the difference in the rate charged for transportation, or by secret
rebates if the charge was not discriminating in the first instance.
Hence, we said, in
Texas & Pacific Ry. v. Abilene Oil
Co., 204 U. S. 426,
204 U. S. 437:
"The act made it the duty of carriers subject to its provisions to
charge only just and reasonable rates." To that end, it was further
said, schedules of rates were required to be established and
published, and departure from the rates established, except in the
manner authorized by the act, was forbidden under criminal
penalties, and any injury to persons was provided to be redressed
through application to the Commission or to the courts. And it is
provided that,
"if no joint rate over a through route has been established the
several carriers in such through route shall file, print, and keep
open to public inspection as aforesaid, the separately established
rates, fares, and charges applies to the through
transportation."
The Commission is given the power to determine and prescribe the
manner in which the schedules required by the act are to be kept.
And it is enacted that, unless otherwise provided, no carrier
"shall engage or participate in the transportation of passengers
or property, as defined in this act, unless the rates, fares, and
charges upon which the same are transported by said carrier have
been filed and published in accordance with the provisions of this
act."
It is evident, therefore, that Congress has taken control of the
subject of ratemaking and charging. All of the particular details
we cannot set forth without extensive quotation from the act, which
it is quite inconvenient to make. The provisions of the act are
directed at the abuses most to be feared -- unreasonableness in the
rates, and discriminations, including in the latter discriminations
in service, in the acceptance and delivery of freight, and in
facilities furnished.
Page 222 U. S. 439
The power which has been given to the Commission to secure those
results we have set forth in
Texas &c. Ry. Co. v. Abilene
Oil Co. supra, and in
Baltimore & Ohio R. Co. v.
United States, 215 U. S. 481. In
the first case, it was said:
"It is apparent that the means by which these great purposes
were to be accomplished was the placing upon all carriers the
positive duty to establish schedules of reasonable rates which
should have a uniform application to all, and which should not be
departed from so long as the established schedule remained
unaltered in the manner provided by law."
After citing cases, it was further said:
"When the general scope of the act is enlightened by the
considerations just stated, it becomes manifest that there is not
only a relation, but an indissoluble unity between the provision
for the establishment and maintenance of rates until corrected in
accordance with the statute and prohibitions against preferences
and discrimination."
In that case, it was decided that a shipper could not maintain
an action at common law in a state court on the ground that a rate
established in accordance with the Interstate Commerce Act was
unreasonable. In the second case was considered the power of the
Commission under the amendments of 1906, and it was decided that,
on the principles announced in the
Abilene case, and from
a consideration of the amendments and their purpose to supply the
defects of the act and enlarge the powers of the Commission, the
distribution of coal cars by the railroad company among shippers
was a matter involving preference and discrimination, and within
the competency of the Interstate Commerce Commission to consider,
and that the courts could not interfere with such distribution
until after action by the Commission. This was resolved
notwithstanding § 23 of the act gave jurisdiction to the
circuit and district courts of the United States to command at the
suit of one aggrieved, a common carrier "to move and transport
Page 222 U. S. 440
the traffic, or to furnish cars or other facilities for
transportation." And transportation means not only the physical
instrumentalities, but all services in connection with receipt,
delivery, and handling of property transported, and such
transportation the carrier must "provide and furnish upon
reasonable request therefor." (Section 1, paragraph 2, of the act,
as amended June 29, 1906, by the Hepburn Act.) Section 7 of the
latter act requires the carrier to issue a bill of lading for an
interstate shipment, and makes the carrier liable for the loss of
or damage to property while on its own line, and also while on the
lines over which the property may pass.
There is scarcely a detail of regulation which is omitted to
secure the purpose to which the Interstate Commerce Act is aimed.
It is true that words directly inhibitive of the exercise of state
authority are not employed, but the subject is taken possession of.
We are therefore brought to consider what the statute of North
Carolina provides. Leaving out qualifications with which we are not
concerned, the act requires railroad companies to receive freight
for transportation whenever tendered at a regular station, and
forward the same over the route selected by the person offering the
shipment. Fifty dollars a day is the penalty prescribed for
refusal, and all the damages incurred.
The particular act which was held to violate the statute was
refusing the tender of goods for shipment from Charlotte, North
Carolina, to Davis, West Virginia -- that is, a tender for
interstate shipment, and a demand coincidentally for a bill of
lading covering the shipment, explicitly stating the origin of the
shipment at Charlotte and its destination at Davis. The supreme
court of the state decided, as we have seen, that the statute deals
with a common law duty simply, one which attaches before freight
enters into interstate commerce, and hence concluded as
Page 222 U. S. 441
follows:
"The statutory enforcement under penalty of the common law duty
to accept freight 'whenever tendered' is not within the scope or
terms of any act of Congress. It is neither an interference with
nor a burden upon interstate commerce."
We are unable to agree with the conclusion. It would destroy
absolutely federal control until the freight was in the possession
of the carrier, and is directly contradictory of the provision of
the Interstate Commerce Act which we have quoted.
See, in
this connection,
Houston & Texas Cent. R. Co. v.
Mayes, 201 U. S. 321. In
the term "transportation," we have seen, Congress has included "all
services in connection with the receipt . . . of property
transported." And this certainly imposes the obligation to receive
the property as well as to carry it -- one of the obligations the
carrier must perform "upon reasonable request therefor." Other
provisions of the same import and direction might be quoted.
Conditions put on the receipt of articles at the railroad station
may be conditions upon the traffic, and necessarily are within the
regulating power of Congress. Their inducement and aim may be to
secure a prompter performance of duty by the carrier, and so far
beneficent. But that is not the question. The question is where is
the control, in the state or Congress, and has Congress acted? That
the control is in Congress we have seen; that it has acted is
demonstrated by the provisions of the Interstate Commerce Act to
which we have referred. As we have seen, schedules of rates,
whether the road be single or forms with another a "through route,"
must be established, filed, and published, designating the places.
They cannot be changed without permission of the Interstate
Commerce Commission, and no carrier is permitted to engage or
participate in the transportation of passengers or property unless
the rates for the same have been so filed and published. Criminal
punishments are imposed for violations of these requirements, and
civil redress of injuries
Page 222 U. S. 442
received by shippers is given through the Interstate Commerce
Commission.
See Robinson v. Baltimore & O. R. Co.,
post, p.
222 U. S. 506. By
these provisions, Congress has taken possession of the field of
regulation with the purpose, which we have already pointed out, to
keep under the eye and control of the Commission the rates charged
and the action of the railroad in regard to them, to secure their
reasonableness, and to secure their impartial application. The
statute of North Carolina conflicts with these requirements. What
they forbid the carrier to do the statute requires him to do, and
punishes disobedience by successive daily penalties.
We cannot assume that it was without consideration of its
necessity that Congress enacted § 2 of the Hepburn Act. It was
no doubt the adaptation of experience to the exigencies of a
practical problem, Congress coming to believe that the most
effective way to prevent preferences in charges by carriers was to
forbid them to "engage or participate in the transportation of
passengers or property" until they had fixed and proclaimed the
rate to be charged therefor -- a rate that would be not only for
one shipper or shipment, but for all shippers and shipments; not
for one time only, but for all times. The power of Congress to so
provide cannot be doubted. If the regulation be not exclusive, this
situation is presented: if the carrier obey the state law, he
incurs the penalties of the federal law; if he obey the federal
law, he incurs the penalties of the state law. Manifestly one
authority must be paramount, and when it speaks, the other must be
silent. We can see no middle ground. In so deciding, we take no
essential power from the states. The balances of the Constitution
are only preserved, and there is given to the states the power
which is the states' and to Congress the power which belongs to
Congress.
But if there be a middle ground, it certainly can be argued that
the cases establish that it is passed when the
Page 222 U. S. 443
state regulation burdens interstate commerce, and whether a
regulation has such effect may be determined by its sanctions. If a
penalty of $50 for refusing to receive freight "when tendered" be
no burden on interstate commerce beyond the power of a state to
impose, would a penalty of $100 or $1,000 likewise be no burden?
May not the power which is competent to impose a penalty select its
amount? The penalty of the North Carolina statute, it is to be
remembered, is independent of the damage received, and what excuses
or defenses may be offered the decisions of the court leave in
doubt. The statute seems to permit none. The case at bar
illustrates somewhat its peremptory character, and the case which
was argued with this (
Southern Railway Company v. Reid,
post, p.
222 U. S. 444)
still more so. The plaintiffs in that action sued for $750 for
refusal to receive and forward a carload of shingles, and recovered
$350, although one of them testified that they "never lost a cent."
The circumstance was declared by the court, citing a prior case, to
be immaterial, as the penalties were
"not given solely on the idea of making pecuniary compensation
to the person injured, but usually for the more important purpose
of enforcing the performance of a duty required by public policy or
positive statutory enactment."
The policy of the statute, then, is to require the acceptance of
freight "when tendered," with daily accumulating penalties upon
refusal to do so. If such power be conceded, what is the limit of
its exercise, either as to conditions or penalties?
One other contention remains to be noticed. It is said that
there is not presented in the case the dilemma of alternative
penalties, for the Hepburn Act, it is pointed out, requires a
schedule of rates to be filed only "when the through route and
joint rate have been established," and that none was established in
the case at bar, and that therefore the railway company was not put
to a choice of obligations, and subjected to punishment however it
might
Page 222 U. S. 444
choose. But it is also provided that,
"if no joint rate over the through route has been established,
the several carriers in such through route shall file, print, and
keep open to public inspection as aforesaid, the separately
established rates, fares, and charges applied to the through
transportation."
There is nothing in the record to show that there were such
established separate rates, and that separately established rates
were published and kept open for inspection. Indeed, the record
shows that a through rate had to be fixed by the several carriers
in the through route.
It was only because of the obligation imposed by the Hepburn Act
that the railway company refused to receive the goods tendered to
it, and the agent of the company informed defendant in error that
he was without power to comply with her demand. He promptly acted
in the matter when the lines over which the freight had to pass
established a joint rate. He then received the goods, issued a bill
of lading therefor, "and the shipment went forward to its
destination."
The judgment is reversed, and the case remanded for further
proceedings not inconsistent with this opinion.
*
"Agents or other officers of railroads and other transportation
companies whose duty it is to receive freights shall receive all
articles of the nature and kind received by such company for
transportation whenever tendered at a regular depot, station,
wharf, or boat landing, and every loaded car tendered at a side
track, or any warehouse connected with the railroad by a siding,
and shall forward the same by the route selected by the person
tendering the freight under existing laws, and the transportation
company represented by any person refusing to receive such freight
shall forfeit and pay to the party aggrieved the sum of fifty
dollars for each day said company refuses to receive said shipment
of freight, and all damages actually sustained by reason of the
refusal to receive freight. If such loaded car be tendered at any
siding or workhouse warehouse at which there is no agent, notice
shall be given to an agent at the nearest regular station at which
there is an agent that such car is loaded and ready for
shipment."
Code of North Carolina, 1905, § 2631.