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CRS Annotated Constitution

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Federal Regulation of Intrastate Rates (The Shreveport Doctrine).—Although its statutory jurisdiction did not apply to intrastate rate systems, the Commission early asserted the right to pass on rates, which, though in effect on intrastate lines, gave these lines competitive advantages over interstate lines the rates of which the Commission had set. This power the Supreme Court upheld in a case involving a line operating wholly intrastate in Texas but which paralleled within Texas an interstate line operating between Louisiana and Texas; the Texas rate body had fixed the rates of the intrastate line substantially lower than the rate fixed by the ICC on the interstate line. “Wherever the interstate and intrastate transactions of carriers are so related that the government of the one involves the control of the other, it is Congress, and not the State, that is entitled to prescribe the final and dominant rule, for otherwise Congress would be denied the exercise of its constitutional authority and the States and not the Nation, would be supreme in the national field.”679

The same holding was applied in a subsequent case in which the Court upheld the Commission’s action in annulling intrastate passenger rates it found to be unduly low in comparison with the rates the Commission had established for interstate travel, thus tending to thwart, in deference to a local interest, the general purpose of the act to maintain an efficient transportation service for the benefit of the country at large.680

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Federal Protection of Labor in Interstate Rail Transportation.— Federal entry into the field of protective labor legislation and the protection of organization efforts of workers began in connection with the railroads. The Safety Appliance Act of 1893,681 applying only to cars and locomotives engaged in moving interstate traffic, was amended in 1903 so as to embrace much of the intrastate rail systems on which there was any connection with interstate commerce.682 The Court sustained this extension in language much like that it would use in the Shreveport case three years later.683 These laws were followed by the Hours of Service Act of 1907,684 which prescribed maximum hours of employment for rail workers in interstate or foreign commerce. The Court sustained the regulation as a reasonable means of protecting workers and the public from the hazards which could develop from long, tiring hours of labor.685

Most far–reaching of these regulatory measures were the Federal Employers Liability Acts of 1906686 and 1908.687 These laws were intended to modify the common–law rules with regard to the liability of employers for injuries suffered by their employees in the course of their employment and under which employers were generally not liable. Rejecting the argument that regulation of such relationships between employers and employees was a reserved state power, the Court adopted the argument of the United States that Congress was empowered to do anything it might deem appropriate to save interstate commerce from interruption or burdening and that inasmuch as the labor of employees was necessary for the function of commerce Congress could certainly act to ameliorate conditions that made labor less efficient, less economical, and less reliable. Assurance of compensation for injuries growing out of negligence in the course of employment was such a permissible regulation.688

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Legislation and litigation dealing with the organizational rights of rail employees are dealt with elsewhere.689

Regulation of Other Agents of Carriage and Communications.—In 1914, the Court affirmed the power of Congress to regulate the transportation of oil and gas in pipe lines from one State to another and held that this power applied to the transportation even though the oil or gas was the property of the lines.690 Subsequently, the Court struck down state regulation of rates of electric current generated within that State and sold to a distributor in another State as a burden on interstate commerce.691 Proceeding on the assumption that the ruling meant the Federal Government had the power, Congress in the Federal Power Act of 1935 conferred on the Federal Power Commission authority to regulate the wholesale distribution of electricity in interstate commerce692 and three years later vested the FPC with like authority over natural gas moving in interstate commerce.693 Thereafter, the Court sustained the power of the Commission to set the prices at which gas originating in one State and transported into another should be sold to distributors wholesale in the latter State.694 “The sale of natural gas originating in the State and its transportation and delivery to distributors in any other State constitutes interstate commerce, which is subject to regulation by Congress. . . . The authority of Congress to regulate the prices of commodities in interstate commerce is at least as great under the Fifth Amendment as is that of the States under the Fourteenth to regulate the prices of commodities in intrastate commerce.”695

Other acts regulating commerce and communication originating in this period have evoked no basic constitutional challenge.[p.181]These include the Federal Communications Act of 1934, providing for the regulation of interstate and foreign communication by wire and radio,696 and the Civil Aeronautics Act of 1938, providing for the regulation of all phases of airborne commerce, foreign and interstate.697


Footnotes

679 Houston & Texas Railway v. United States, 234 U.S. 342, 351–352 (1914). See also, American Express Co. v. Caldwell, 244 U.S. 617 (1917); Pacific Tel. & Tel. Co. v. Tax Comm., 297 U.S. 403 (1936); Weiss v. United States, 308 U.S. 321 (1939); Bethlehem Steel Co. v. State Board, 330 U.S. 767 (1947); United States v. Walsh, 331 U.S. 432 (1947).
680 Wisconsin Railroad Comm. v. Chicago, B. & Q. R. Co., 257 U.S. 563 (1922). Cf. Colorado v. United States, 271 U.S. 153 (1926), upholding an ICC order directing abandonment of an intrastate branch of an interstate railroad. But see North Carolina v. United States, 325 U.S. 507 (1945), setting aside an ICC disallowance of intrastate rates set by a state commission as unsupported by the evidence and findings.
681 27 Stat. 531 , 45 U.S.C. §§ 1 –7.
682 32 Stat. 943 , 45 U.S.C. §§ 8 –10.
683 Southern Railway Co. v. United States, 222 U.S. 20 (1911). See also Texas & Pacific Ry. Co. v. Rigsby, 241 U.S. 33 (1916); United States v. California, 297 U.S. 175 (1936); United States v. Seaboard Air Line R., 361 U.S. 78 (1959).
684 34 Stat. 1415 , 45 U.S.C. §§ 61 –64.
685 Baltimore & Ohio Railroad v. ICC, 221 U.S. 612 (1911).
686 34 Stat. 232 , held unconstitutional in part in the Employers’ Liability Cases, 207 U.S. 463 (1908).
687 35 Stat. 65 , 45 U.S.C. §§ 51 –60.
688 The Second Employers Liability Cases, 223 U.S. 1 (1912). For a longer period, a Court majority reviewed a surprising large number of FELA cases, almost uniformly expanding the scope of recovery under the statute. Cf. Rogers v. Missouri Pacific R., 352 U.S. 500 (1957). This practice was criticized both within and without the Court, cf. Ferguson v. Moore–McCormack Lines, 352 U.S. 521, 524 (1957) (Justice Frankfurter dissenting); Hart, “Foreword: The Time Chart of the Justices,” 73 Harv. L. Rev. 84, 96–98 (1959), and has been discontinued.
689 Infra, pp. 189–190, 191 n. 739.
690 The Pipe Line Cases, 234 U.S. 548 (1914). See also State Comm. v. Wichita Gas Co., 290 U.S. 561 (1934); Eureka Pipe Line Co. v. Hallanan, 257 U.S. 265 (1921); United Fuel Gas Co. v. Hallanan, 257 U.S. 277 (1921); Pennsylvania v. West Virginia, 262 U.S. 553 (1923); Missouri ex rel. Barrett v. Kansas Gas Co., 265 U.S. 298 (1924).
691 Public Utilities Comm. v. Attleboro Co., 273 U.S. 83 (1927). See also Utah Power & Light Co. v. Pfost, 286 U.S. 165 (1932); Pennsylvania Power Co. v. FPC, 343 U.S. 414 (1952).
692 49 Stat. 863 , 16 U.S.C. §§ 791a –825u.
693 52 Stat. 821 , 15 U.S.C. §§ 717 –717w.
694 FPC v. Natural Gas Pipeline Co., 315 U.S. 575 (1942).
695 Id., 582. Sales to distributors by a wholesaler of natural gas delivered to it from out–of–state sources are subject to FPC jurisdiction. Colorado–Wyoming Co. v. FPC, 324 U.S. 626 (1945). See also Illinois Gas Co. v. Public Service Co., 314 U.S. 498 (1942); FPC v. East Ohio Gas Co., 338 U.S. 464 (1950). In Phillips Petroleum Co. v. Wisconsin, 347 U.S. 672 (1954), the Court ruled that an independent company engaged in one State in production, gathering, and processing of natural gas, which it thereafter sells in the same State to pipelines that transport and sell the gas in other States is subject to FPC jurisdiction. See also California v. Lo–Vaca Gathering Co., 379 U.S. 366 (1965).
696 48 Stat. 1064 , 47 U.S.C. Sec. 151 et seq. Cf. United States v. Southwestern Cable Co., 392 U.S. 157 (1968), on the regulation of community antenna television systems (CATV).
697 52 Stat. 973 , as amended. The CAB has now been abolished and its functions are exercised by the Federal Aviation Commission, 49 U.S.C. Sec. 106 , as part of the Department of Transportation.
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