Southern Pac. Co. v. Board of Railroad Com'rs

The Southern Pacific Company, operating railroads under leases as the 'Pacific System,' sought to enjoin the California Board of Railroad Commissioners from enforcing resolutions reducing grain rates by 8% and proposing 25% reduction on other freight. The company alleged the rates were already insufficient to cover expenses and would cause irreparable injury. The court held that while the commission has authority to regulate rates, courts can review and enjoin unreasonable rates under the Fourteenth Amendment. The court continued the injunction against the grain rate reduction based on the company's showing of financial deficits, but dissolved restraints on the 25% resolution as commissioners declared it required further investigation. The court rejected the commission's attempts to challenge the validity of the company's leases and found the constitutional provision making commission rates conclusively reasonable violated due process but was severable.

A railroad company sought to enjoin a state board from enforcing resolutions reducing grain rates by 8% and other freight rates by 25%, claiming the rates were unprofitable and caused irreparable harm. The court upheld the board's regulatory authority but allowed judicial review of unreasonable rates under the Fourteenth Amendment, continuing the injunction on the grain rate reduction due to evidence of financial deficits while dissolving it for the other resolution pending further investigation. The court rejected challenges to the company's leases and found a constitutional provision deeming commission rates conclusively reasonable to violate due process but severable, with the case proceeding to trial on rate reasonableness.

• Courts have power to review and enjoin unreasonable railroad rates
• Commission's rate-setting is quasi-legislative but subject to judicial review
• 25% resolution not final action requiring injunction
• Commission cannot collaterally attack validity of company's leases
• Constitutional provision making rates conclusive violates due process but is severable
• Company's financial showing justifies continuing injunction on grain rates

• Matter in dispute exceeds $5,000 exclusive of interest and costs
• Cause arises under the Constitution and laws of the United States

• Constitutionality of California railroad commission provisions
• Reasonableness of proposed rate reductions
• Authority of commission to enforce rates