Munn v. Illinois
94 U.S. 113 (1876) (1876)
Rule of Law:
A state legislature may, in the exercise of its police powers, regulate the prices of a private business if that business is found to be 'affected with a public interest' and is devoted to a public use.
Facts:
- Munn & Scott owned and operated a grain warehouse, known as a grain elevator, in Chicago, Illinois.
- Their business involved storing grain in bulk, where grain from different owners was commingled.
- Chicago was a critical transit point for grain moving from western states to the eastern seaboard, making its grain storage facilities essential to this national trade.
- The grain elevators in Chicago, while privately owned by about nine firms, constituted a 'virtual monopoly' over the grain storage and handling at this key commercial gateway.
- The owners of these elevators, including Munn & Scott, regularly agreed upon and published a set schedule of storage rates.
- In 1870, Illinois adopted a new constitution declaring all such elevators to be 'public warehouses.'
- Subsequently, the Illinois General Assembly passed a law fixing the maximum rates that could be charged for storing grain in these warehouses in cities with more than 100,000 people.
Procedural Posture:
- Munn & Scott were prosecuted and convicted in the Criminal Court of Cook County, Illinois (a state trial court) for violating the state statute regulating warehouse rates and operations.
- The defendants were found guilty and fined.
- Munn & Scott appealed the conviction to the Supreme Court of Illinois, the state's highest court.
- The Supreme Court of Illinois affirmed the trial court's judgment, upholding the constitutionality of the state law.
- Munn & Scott then brought the case to the Supreme Court of the United States on a writ of error, arguing the Illinois law violated the U.S. Constitution.
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Issue:
Does an Illinois state law that fixes the maximum rates for storing grain in privately-owned warehouses violate the Due Process or Equal Protection Clauses of the Fourteenth Amendment?
Opinions:
Majority - Chief Justice Waite
No, the Illinois law does not violate the Fourteenth Amendment. When private property is devoted to a use in which the public has an interest, it becomes 'clothed with a public interest' and ceases to be solely a matter of private right, thereby subjecting it to public regulation for the common good. Citing common law principles from Lord Hale regarding ferries and wharves, the Court found that the grain elevators stood in the 'gateway of commerce' and operated as a virtual monopoly, making their business a matter of public consequence. The power to regulate such a business includes the power to set maximum charges. The Court concluded that protection against potential legislative abuse of this regulatory power lies with the voters at the polls, not with the courts.
Dissenting - Justice Field
Yes, the Illinois law violates the Due Process Clause of the Fourteenth Amendment. The 'affected with a public interest' doctrine is misapplied here and should only extend to property dedicated to public use by the owner or where the business enjoys a special grant or privilege from the government, such as a franchise. A business being merely useful or important to the public does not convert it from a private to a public enterprise subject to price controls. The right to property protected by the Due Process Clause includes the right to its use and the income derived from it; legislative price-fixing is a deprivation of property because it takes away the fruits of its use. This decision gives the legislature unrestrained power to interfere with private business and property rights.
Dissenting - Justice Strong
Yes, the Illinois law violates the Fourteenth Amendment. This opinion fully concurs with the reasoning expressed in Justice Field's dissent.
Analysis:
Munn v. Illinois is a landmark case that established the 'affected with a public interest' doctrine, dramatically expanding the scope of state police power to regulate the economy. This decision provided the constitutional foundation for states to regulate industries, particularly public utilities and transportation, by controlling the rates they could charge. While the Supreme Court would later narrow this doctrine, especially during the Lochner era, Munn created a crucial precedent for government intervention in the economy that would be revived and relied upon during the New Deal and beyond.
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