Interstate Commerce Commission v. Cincinnati, New Orleans & Texas Pacific Railway Co.
1897 U.S. LEXIS 2111, 17 S. Ct. 896, 167 U.S. 479 (1897)
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Rule of Law:
The power to prescribe rates for common carriers is a legislative function, and an administrative agency like the Interstate Commerce Commission does not possess this power unless it is explicitly and unambiguously granted by Congress in the enabling statute.
Facts:
- Several railroad companies transported freight from Cincinnati and Chicago to various southern destinations.
- The Interstate Commerce Commission (ICC) investigated the freight rates charged by these railroad companies.
- Following its investigation, the ICC concluded that the existing rates charged by the companies were unreasonable and unjust.
- The ICC issued an order that not only condemned the existing rates but also prescribed a new schedule of maximum future rates for the carriers to follow.
- The railroad companies refused to comply with the ICC's order and did not adopt the new, lower rates.
Procedural Posture:
- The Interstate Commerce Commission (ICC) filed a suit in the U.S. Circuit Court for the Southern District of Ohio against the Cincinnati, New Orleans & Texas Pacific Railway Co. and other railroads.
- The ICC sought a court order to compel the railroad companies to comply with its decision prescribing maximum future freight rates.
- The Circuit Court, acting as the trial court, dismissed the ICC's case, siding with the railroads.
- The ICC, as appellant, appealed the dismissal to the U.S. Circuit Court of Appeals for the Sixth Circuit.
- The Circuit Court of Appeals then certified the legal question of the ICC's rate-making authority to the Supreme Court of the United States for a definitive ruling.
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Issue:
Does the Interstate Commerce Act of 1887 grant the Interstate Commerce Commission the power to prescribe maximum rates that railroad companies must charge in the future?
Opinions:
Majority - Justice Brewer
No. The Interstate Commerce Act does not grant the Commission the legislative power to prescribe future rates for carriers. The power to prescribe a tariff of rates is a legislative function, not an administrative or judicial one. A delegation of such a significant power from Congress to an administrative body cannot be presumed or implied from doubtful language; it must be conferred in clear and direct terms. The Act's language, which requires rates to be 'reasonable and just' and empowers the Commission to 'execute and enforce' its provisions, does not constitute such an explicit grant. Furthermore, Section 6 of the Act recognizes that carriers themselves 'establish' their rates and specifies the procedure for them to change those rates, which is inconsistent with the Commission having the ultimate authority to set them. The Commission's role is limited to investigating existing rates to determine their reasonableness and to prevent discrimination, not to legislate new rate schedules for the future.
Dissenting - Justice Harlan
Justice Harlan dissented from the majority opinion. (Note: The provided case text does not include the reasoning for the dissent.)
Analysis:
This decision significantly curtailed the power of the newly formed Interstate Commerce Commission by establishing a clear distinction between the legislative power of rate-making and the judicial/administrative power of reviewing existing rates. By holding that rate-making authority must be explicitly delegated by Congress, the Court set a high bar for regulatory agencies exercising legislative-like functions. The ruling rendered the ICC largely ineffective at controlling railroad rates, as it could only invalidate an existing rate but not mandate a new, reasonable one. This decision directly led to further congressional action, culminating in the Hepburn Act of 1906, which expressly granted the ICC the rate-setting power the Court found lacking here.
