United States v. Erie R. Co., 236 U.S. 259 (1915)

U.S. Supreme Court

United States v. Erie R. Co., 236 U.S. 259 (1915) United States v. Erie Railroad Company

Nos. 493, 494

Argued January 11, 12, 1915

Decided February 23, 1915

236 U.S. 259

APPEALS FROM THE DISTRICT CORT OF THE UNITED STATES

FOR THE SOUTHERN DISTRICT OF NEW YORK

Syllabus

A ruling of the Interstate Commerce Commission which was never enforced, the custom of the carriers being uniformly the other way, cannot have the weight ordinarily accorded to the contemporaneous construction of a statute by the officers upon whom is imposed the duty of administering it.

While the Act to Regulate Commerce controls the relations of carriers subject to the act with each other, such carriers may have relations with other carriers who are not subject to the act, and permission to exchange passes with other carriers subject to the act can reasonably extend to other carriers who are not subject thereto, the same business reasons existing in both cases.

A comparison of possibilities under different constructions of a statute, which is but a comparison of excesses that are possible but not likely to be practiced, is not a fair argument.

The practice of carriers exchanging passes with other carriers has its justification in a strictly business policy, and, instead of being a burden upon their resources, is an aid.

The permission in the proviso of § 1 of the Act to Regulate Commerce, as amended by the Act of June 29, 1906, for the interchange of passes by common carriers, includes the interchange of passes with carriers not subject to the provisions of the act as well as those who are subject thereto.

The facts, which involve the provisions of the Act to Regulate Commerce regulating the giving and exchange of passes by carriers, are stated in the opinion.

Page 236 U. S. 267

MR. JUSTICE McKENNA delivered the opinion of the Court.

These are direct appeals from decrees dismissing two bills filed by the United States to enjoin the railroad company from issuing passes to employees of common carriers not subject to the act to regulate commerce.

The action of the railroad company is alleged to be in violation of §§ 2 and 3 of that act, Feb. 4, 1887, 24 Stat. 379, c. 104, and of §§ 1 and 6 as amended June 29, 1906, 34 Stat. 584, 586, c. 3591, prohibiting rebates and preferences.

Page 236 U. S. 268

The bills were filed in pursuance of § 3 of the Act to Further Regulate Commerce, Feb. 19, 1902, 32 Stat. 847, 848, c. 708, which authorizes proceedings in equity to prevent common carriers from departing from their published rates or from committing any discrimination forbidden by law, and the basic contention of the United States is that the giving of passes for free transportation constituted a departure from the carrier's published rates and a discrimination against other passengers. To this the railroad replies that the passes issued by it, and which constitute the ground of suit, were authorized by the so-called anti-pass provision of § 1 of the Act to Regulate Commerce. The question therefore is very direct and is, what does the act authorize or prohibit?

The charge in No. 493 is that the railroad company, which is a common carrier subject to the act, in pursuance of a standing practice, issues passes to certain of the officers, agents, and employees of various trans-Atlantic steamship lines, such lines not being carriers subject to the act, while other passengers who are transported between the same points are required to pay the published fares, and that the railroad company will continue the practice.

The railroad company admits the charges and avers that it solicits transportation over its lines of freight brought to this country by the steamship lines; that the latter in turn solicit from shippers on the line of the railroad company the transportation of their freight abroad; that large amounts of traffic moving by the steamship lines are transported by the railroad company after arrival in or before departing from the United States, as the case may be, some of it under through bills of lading; that the interchange of passes between the officers and employees of the railroad and such steamship lines to the limited extent alleged is one which, as a matter of common knowledge, has existed and been openly followed by the railroad

Page 236 U. S. 269

company and other carriers generally for years; that its existence was commonly known long before the passage of the Interstate Commerce Act, by the terms of which its continuance is permitted; that it rests upon the same consideration, including considerations of business policy, which have always been recognized as justifying the interchange of passes, and is recognized and permitted by the proviso in § 1 of the act as amended and approved June 29, 1906. The provision is as follows:

"No common carrier subject to the provisions of this act shall after January 1, 1907, directly or indirectly issue or give any interstate free ticket, free pass or free transportation for passengers, . . . provided that this provision shall not be construed to prohibit the interchange of passes for the officers, agents and employees of common carriers and their families, nor to prohibit any common carrier from carrying passengers free with the object of providing relief in cases of general epidemic, pestilence or other calamitous visitation."

The material facts in No. 494 are the same as in No. 493, with the exception that the passes there in controversy were issued by the railroad company to an employee of the Great Eastern Railway of England, and a defense of the passes is made not only under the proviso of § 1, above quoted, but under § 22 of the act as originally enacted, which reads as follows:

"Nothing in this act shall be construed to prevent railroads from giving free carriage to their own officers and employees, or to prevent the principal officers of any railroad company or companies from exchanging passes or tickets with other railroad companies for their officers and employees."

In support of its contention, the United States adduces certain rulings of the Interstate Commerce Commission, and argues that Congress, having reenacted the statute, adopted the Commission's construction as the proper

Page 236 U. S. 270

one. Counsel invoke a line of cases which decide, it is contended, that a contemporaneous construction of a statute by the officers upon whom is imposed the duty of administering it is entitled to weight, and, unless clearly wrong, to determining weight. The cases are familiar, the doctrine they announce a useful one, and we are brought to the inquiry, does it apply in the case at bar?

The first of the rulings referred to was made upon petition of Frank Parmelee & Company. That company, which is a transfer company transferring passengers and packages from the railroads to the hotels in Chicago and the reverse, asked for a ruling as to whether, under the exception contained in the proviso of § 1, it had a right to interchange passes with the railroads. The Commission decided that the Parmelee Company was not a carrier subject to the act, and that therefore an interchange of passes between it and the railroads was not permissible. In subsequent Conference Rulings, the Commission decided that the right to issue passes coexisted with the obligation to file tariffs, and when the latter did not exist, the former could not be exercised. These rulings received emphasis from the fact that "ocean carriers to nonadjacent foreign countries" were said to be among the carriers not subject to the act, and, under the principle announced, not entitled to receive passes.

But these rulings were never enforced, and the custom of carriers was uniformly the other way. Against a mere verbal construction, therefore, permitted to languish in inactivity, we have the unopposed practice of the companies. The Commission's action therefore cannot have the absolute effect that the Attorney General ascribes to it; but, keeping it in mind, let us proceed to a consideration of the statute.

It is not denied that the words "carriers," "common carriers," "railroads," and "railroad companies" are used in the act with and without the qualification, "subject to the

Page 236 U. S. 271

provisions of the act," and the number of times they are so used is compared. It will do no good to set forth the instances. The act was passed to regulate the conduct and affairs of the carriers of the country, and necessarily they are brought under its provisions and subject to them. It controls their relations, but the carriers subject to the act may have relation with other carriers, and special provisions would naturally be made to govern that relation. And certainly the reasoning is not impressive which justifies an interchange of passes between carriers subject to the act and denies it to those not so subject, the same business reasons existing in both cases.

Counsel for the United States sounds an alarm at such extension, and lets imagination loose in portrayal of its consequences, and sees included

"tap lines and other industrial railroads, street car lines, local traction companies, omnibus transfer companies and herdic lines, hackmen, boatmen, ferrymen, truckmen, lumber flumes, bucket lines for ore, parcel deliveries, district messenger services, carriers of all descriptions, both in this country and abroad"

a formidable enumeration, it must be admitted. And there must be included, too, all their officers, all their employees and their families. There is, however, an opposing picture. It is conceded that carriers subject to the act may interchange passes, the officers and employees of each carrier receiving free transportation, and giving it to every other carrier subject to the act, making an army of the privileged with the same discrimination and the same burden on the passenger service of the railroads as in the illustration of the government. There is no argument, therefore, in a comparison of the possibilities under one construction, rather than the other. At best, it is but a comparison of the excesses which may be but are not likely to be practiced. Counsel seem to think that the railroads have an eager desire to distribute passes and burden their transportation service with a crowd of

Page 236 U. S. 272

free passengers. Congress certainly had no such view, and gave power to exchange passes considering that the best safeguard against its abuse was the interest of the carriers. The cases at bar are a typical instance of its exercise. It has its justification in a strictly business policy, an,d instead of being a burden upon the resources of the companies, it is an aid to them. With these examples before us, and in view of the other reasons which we have adduced, we see no reason to disregard the literal terms of the statute. And this view is strengthened, not weakened, by the proviso inserted on June 18, 1910, which is as follows:

"And provided further that this provision shall not be construed to prohibit the privilege of passes or franks, or the exchange thereof with each other, for . . . employees . . . of such telegraph, telephone, and cable lines, and the . . . employees . . . of other common carriers subject to the provisions of this act."

36 Stat. 546, c. 309.

In such case, the statute makes a special limitation, as will be observed; in other words, restricts the privilege of exchanging telegraph and telephone franks for employees, etc., of such lines and of other common carriers subject to the act -- that is, there are words of explicit limitation.

Decree affirmed.

MR. JUSTICE McREYNOLDS took no part in the consideration and decision of the case.