City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – Oral Argument, Part 2: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104)

Media for City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

Audio Transcription for Oral Argument, Part 1: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 05, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Earl Warren:

Mr. Kurland, you may proceed.

Philip B. Kurland:

May it please the Court.

Perhaps I’d better clarify our position that Parmelee stands in, particularly with relation to Section 28-31.1 of the Municipal Code.

Mr. Grossman apparently contended that the statute — the ordinance was valid but not applicable.

The appellants here appear to have contended that it was applicable but invalid.

And it’s our position that it’s both valid and applicable.

Hugo L. Black:

The position it did what was?

Philip B. Kurland:

That this ordinance — Section 28-31.1 is both applicable and valid and applicable to transfer as we have no question in this case as to whether it’s applicable for Parmelee.

The Parmelee —

William O. Douglas:

No question.

It’s — it is plain (Inaudible).

Philip B. Kurland:

We have never raised any question as — so far as Parmelee is concerned.

We do not do so here and this would not be the proper litigation to do so.

Our position is that we have aligned ourselves with the City in defending the application and validity of these arguments.

William O. Douglas:

But we can assume that Parmelee is the beneficiary on the renewal of the provision.

Philip B. Kurland:

It’s true that — that Parmelee does have vehicle licenses at the moment.

The renewal provision is not peculiar to this portion of the statute.

It’s applicable both to the delivery and the taxicab provisions but it’s merely a form for administering a — a statute to this point.

It would be unfortunate and impractical to require carriers who have applied for and secured a license to come back year after year to renew their applications.

And if terminal should apply for license and secure it, it will no longer have to apply for a license thereafter so long as it continues to comply with the terms of the statute.

Earl Warren:

But under this ordinance to — do the taxicab companies transport passengers from one station to another, are they obliged to take out this particular license?

Philip B. Kurland:

No, because they are taking out another license under the same ordinance.

Earl Warren:

Yes — yes.

So they’re not — it isn’t applicable to them.

Philip B. Kurland:

No, this — this ordinance will be applicable only to terminal vehicles which are —

Earl Warren:

Yes.

Philip B. Kurland:

— on the terms of the statute vehicles which pick up passengers at stations and deliver them —

Earl Warren:

Yes.

Philip B. Kurland:

— within the central area.

Felix Frankfurter:

And is it true that there was only one license outstanding?

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Philip B. Kurland:

That Parmelee had all the licenses outstanding at the time of the passengers are —

Felix Frankfurter:

The only license — the only license outstanding, was that a problem?

Philip B. Kurland:

Yes, sir.

And —

Felix Frankfurter:

If it’s true and I suppose you would say that makes no difference.

Philip B. Kurland:

Well, the statute — the ordinance at the time specified that a terminal vehicle was a vehicle operated by a person who had a contract with the railroad.

It’s the railroad that gives the exclusive contract and not the City.

The railroad had granted an exclusive contract to Parmelee.

After the end of the Parmelee contract, when the railroads decided to hire another carrier, the crew in — in response to a question Mr. Justice Harlan said earlier today, the City — the City was asked to broaden the definition of terminal vehicles so that Parmelee could continue to operate.

Under the 28-31.1, Parmelee is now required to have a license and can continue to have a license.

A terminal can also apply for a license and we submit and can secure one if they meet the conditions which the City imposes.

There is no monopoly situation involved here with the Court.

Felix Frankfurter:

Under — under the tariffs filed by the railroad, today, tomorrow include other terminal vehicle enterprises?

Philip B. Kurland:

I’m sorry, sir.

Felix Frankfurter:

Under the tariffs which the railroads have filed with the Interstate Commerce Commission —

Philip B. Kurland:

They certainly —

Felix Frankfurter:

— today or tomorrow or could they — the day after this complaint was filed have given their patronage to other —

Philip B. Kurland:

They certainly could subject to cost to the lawsuit they might in fact be terminal.

Felix Frankfurter:

Well, I’m not talking about that.

Philip B. Kurland:

Yes, sir.

Their power under the statute certainly exists for them to retain another service.

Let me point it out that the service which terminal is supplying is not an agency service as it’s been suggested.

Under the terms of the contract between terminals and the railroads, terminal is acting as an independent contractor.

They’re required to act as an independent contractor.

On page 40, the bottom of the page in Section 11 after the contract, it is specifically provided that the transfer shall be and remain an independent contractor.

And if you will look at the top of that page, you will find another provision of the contract which indicated quite clearly that it was a contemplation of the parties that this transfer service would submit itself to the rules and regulations of government agencies having jurisdiction over it.

At the top of the page in (l) of paragraph 10 of the contract between the railroads and terminals — I’m sorry, in Transfer, if the agreement provides that Transfer shall comply at all times with all laws, rules and regulations of governmental agencies having jurisdiction over it.

Felix Frankfurter:

Are the tariffs by — are the tariffs of these railroads in the record?

Or can you tell us whether in the tariffs filed including this absorbed shuttling service formally and previously and now Transfer was specifically mentioned.

Philip B. Kurland:

They are not, sir.

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Felix Frankfurter:

They’re not.

Philip B. Kurland:

They are in the record with the — at page 195 of the record.

You will find the tariff.

It starts on page 193.

Felix Frankfurter:

So that all the railroads does is to include this as the — the true rate —

Philip B. Kurland:

Exactly, sir.

Felix Frankfurter:

— transaction.

Philip B. Kurland:

This is a choice of the railroads.

The position that we maintain here is that unless and until Transfer shall have applied for a license and have had it refused on improper grounds, they lack the standing to complain about the action of the City of Chicago.

It has been their choice to avoid making use of the administrator of remedies that are available to them.

We concede —

William O. Douglas:

(Inaudible)

Philip B. Kurland:

So the question is whether there’s an unconstitutional requirement on this phase, Your Honor.

And they take the position of this because the statute contains — the ordinance contains the words “convenience and necessity” or “certificate of convenience and necessity.”

It’s quite clear from both decisions of this Court and decisions of the Illinois court that that phrase is not a phrase at all.

It is not restricted to the application of economic considerations.

We concede that if it were, the City could not exercise its power over the — the transport company.

Now, the fact of the matter is that in the cases which have been before this Court, the Court has recognized and permitted states to regulate the carriers, motor carriers over the highways of the state under a requirement that they obtain a “certificate of convenience and necessity”.

If I may, I’d like to make reference to the case of Columbia Terminals Company against Lambert which is exactly an off-course with this particular case.

In both cases, we had interstate commerce involved.

In both cases, the interstate commerce involved was a transfer between railroad terminals.

In both cases, the state required that the carrier apply for a license in order to engage in the service.

In both cases, the state — the carrier refused to apply for that license.

In both cases, the counsel for the state asserted that the state was without power to apply these economic tests, those tests which were rejected in Buck against Kuykendall.

The state was without power to apply those tests to an interstate motor carrier.

Now, the Court in that case held that the carrier was not eligible to complain about the constitutionality of the statute until such time as they had first applied for a license and had it refused on improper grounds.

Perhaps, I should also make reference to the case of Bradley against Public Utilities Commission of Ohio.

I do so because the Buck and Kuykendall case as you may recall is written by Mr. Justice Brandeis so to as the Bradley against Public Utilities case.

The Public Utilities case came after the Buck and Kuykendall case.

In that case, in the Bradley case, the Court was asked to decide whether a state could impose a requirement for securing a certificate of public convenience and necessity to an interstate motor carrier.

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Philip B. Kurland:

The Court held that it could do so, so long as the grounds which — on which it was applying that statute were grounds relevant to the police power and the power to control the highways.

We submit that that’s exactly what we have in this situation.

The Supreme Court of Illinois as I have said in the Yellow Cab Company against City of Chicago —

Earl Warren:

Mr. Kurland, you make no distinction between the — the public necessity and convenient provision of the ordinance and the other ones that counsel referred to as — as police regulations.

Philip B. Kurland:

Well —

Earl Warren:

Do you think they’re subject to any distinction of any kind?

Philip B. Kurland:

Do I think they’re —

Earl Warren:

Yes.

Philip B. Kurland:

I think they are not, sir.

I think that they are both the — the first set or more specific that this has given some discretion in the exercise of the granting of the license in terms of the police power.

And if I may revert to the Bradley case and I must use a hypothetical because in the absence of the application for a license, I don’t know, nobody knows what the position the license commissioner would take on this.

But suppose that the application for the license were denied or were granted on condition as it — as it could be granted under this provision on condition that the terminal vehicles not use certain streets during the rush hour in the Chicago loop that they reroute their vehicles during that period.

Nowhere else in the ordinance would that probably be available to the — to the City.

I submit that it is available under 28-31.1.

In short, my suggestion is the fact that the City has attempted to impose police power regulations on what is admittedly interstate commerce does not invalidate the statute.

And until such time as the application has been made to the City, we do not know that the license will be denied.

We do not know that if it’s denied, it will be denied on the improper grounds.

And so we pull in a long line of cases not the — perhaps the most recent statement of this Court on the subject based on the Public Utilities Commission of California against United States handed down on Monday in which the Court said “If an administrative proceeding might leave no room until the constitutional question, the administrator for Parmelee plainly should be pursued.”

And that’s all that we suggest should be done here until such time as it is preserved.

This fraud is faced with a hypothetical question.

Earl Warren:

But it did — it didn’t follow — it didn’t act that way in that case, did it?

Philip B. Kurland:

No, sir.

Earl Warren:

It turned out the other way.

Philip B. Kurland:

That’s right.

The — the proposition there goes back to the — the Court took the position that the statute was invalid on its face just as it did in the Georgia case to which Justice Whittaker referred earlier today.

The only basis for saying that this statute is invalid on its face is by construing convenience and necessity to allow the City to impose invalid economic requirements, requirements which would be invalid under the Buck and Kuykendall test.

Earl Warren:

May I ask this?

Is there any distinction between this case in the — in the Bradley case in that — in this case not only as a finding of public convenience and necessity required but also after that there must be a political decision as to whether it will be granted to that party by the City Council?

Philip B. Kurland:

Your Honor, you — you say it’s a political decision and it has been suggested that it would be with the City Council as a body which has administrative functions as well as legislative functions in the City of Chicago.

Now, I don’t know if this Court has ever suggested that the administrative procedure, the form of the administrative procedure should take within a jurisdiction shall be governed by the — the determination of this Court.

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Philip B. Kurland:

Again, we cannot tell how formal or informal the requirement of going before the City Council is going to be until such time as the application has been made.

Earl Warren:

What I was saying — there’s one — it might be one thing for the — the City to say that anybody seeking such a license was established if there’s a public necessity for it and that there must be a finding to that effect.

But I think there’s an added element, isn’t there when they say even after that has been found that it then rest with a body in its discretion as to whether it will be granted.

Now, I — I don’t know that that — was there such an element in the Bradley case?

Philip B. Kurland:

No, there was not, sir.

They had a Public Utility Commission.

But I think that the position was quite specifically.

The analogy was well drawn this morning when the suggestion was made that the Commissioner is acting as an examiner, a finder of fact to make the determination and recommend action by the City Council.

Now clearly, if we had — if the City Council were to put on a different set of hats and designate itself to Public Utility Commission for the City of Chicago, we would have a similar situation to the Bradley case.

It’s the fact that they happen to have in addition to their legislative capacities.

They have undertaken an administrative function.

I do not see how that sanction of function by the City Council makes for a basis for distinguishing the Bradley case.

Hugo L. Black:

As I understood Mr. Mathews, he contended that under 302 (c) (2), the Congress has authorized the railroads themselves to choose an agent either by — by contract such as to do the specific work, kind of work.

If that interpretation is accepted, would you still say that they could be revised —

Philip B. Kurland:

No, this — this would go to a separate issue.

The point that I’ve been talking to is the power of the City to — to regulate interstate commerce in the exercise of its police power.

Hugo L. Black:

Which you already had presented.

Philip B. Kurland:

Well, yes.

Now, we are now — in the suggestion that you raised goes to the question of conflict with the federal statute if there is any and it’s our position that there is no conflict with the federal statute.

The federal statute was interpreted by the Interstate Commerce Commission itself with regard to the very tight — with the very activity that’s under question in this case.

In — in the case of status of Parmelee, subsequent to the passage of the statute which has been referred to.

Hugo L. Black:

What page is that?

Philip B. Kurland:

And on status of — it’s on page 39 of our brief.

It starts on 38.

The quotation is found at 38 and 39.

The Interstate Commerce Commission initiated a proceeding to determine whether or not the certain action should — whether any action should be taken for purposes of issuing orders with reference to Parmelee.

Parmelee was then engaged in the service of transferring passengers from one terminal to another under contract with the railroads exactly as — as Transfer is doing now.

The Court held or the Interstate Commerce Commission held, first, that they were not motor carriers for purposes of Part 2 of the Act and we’re not subject to regulation there.

They held that under Part 1 of the Act, they were subject to regulation although they were not carriers under Part 1 of the Act.

The Court — the Commission specifically makes the statement.

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Philip B. Kurland:

They are not a carrier but they are subject to regulation under the Act.

The fact of the matter is that the Interstate Commerce Commission has never issued any regulation or attempted to assert any power over this type of activity.

It’s an activity which again as I’ve stated in the status of Parmelee, the railroads can adopt or reject at their will.

But as in — in many cities, they do have this transfer service.

In many cities, they do not have this transfer service.

Hugo L. Black:

If they do, however, make a contract, how can anyone else require them to be anything more than to survive by this Act here —

Philip B. Kurland:

Well —

Hugo L. Black:

— based on their qualifications?

If — if they have made the railroad eligible, Congress has made the railroads eligible —

Philip B. Kurland:

The statute does not say that.It says that they — that they have the power to engage in this activity.

Hugo L. Black:

That’s right, the railroads too.

Philip B. Kurland:

That’s right.

And they can engage in this activity.

But the Congress has not suggests that the agents which they choose need not to comply with the police regulations of the states.

Hugo L. Black:

But will they have to on the —

Philip B. Kurland:

Well, let me — let me, if I may, sir, point out that the — the very — the railroads themselves in this case are taking the position that the other provisions of this ordinance are applicable to Transfer that they do have to apply for a license, that they do have to meet the safety requirements which is specifically set forth in those parts of the ordinance prior to Section 28-31.1 and that they’re to subject suspension if they do not comply with those regulations.

Now, the — the Interstate Commerce Commission has indicated that it is true not with regards to the specific activity but with reference to activities of motor carriers within a municipal area.

The — the Interstate Commerce Commission itself has rules as to require the submission of these local carriers operating within this area to local police regulations.

They make certain exceptions which are not pertinent here except the carriers of explosives for the reason which I do not think of is relevant.

But the fact of the matter is that there is no indication either in the statute and there is certainly has no indication by the way the Commission has acted that the federal government either has undertaken, is prepared to undertake the things it was to undertake this type of municipal activity within a single municipal area.

Hugo L. Black:

But if Congress has said they can function that way, whatever right the City might have to punish them for some violation of law, can it say they cannot function if Congress had said they can?

Philip B. Kurland:

The Congress has not said that they must function or can’t function by choosing a — a transfer service which would be operating in violation of the law.

Now, it’s been suggested that what we’re talking about is a recent decision of this Court in Castle against Hayes Freight Company.

We are conceded in our brief and we concede constantly throughout this litigation that the federal or government if it had issued a license or if the federal regulations came into conflict with the regulations of this ordinance then it would be quite clear and nobody challenges the supremacy of the federal government in this area.

Hugo L. Black:

And you are saying that this statute, whatever it does, does not of itself automatically allow railroads to operate this kind of business in Chicago.

Philip B. Kurland:

It does not allow them to —

Hugo L. Black:

It does not automatically guarantee that they should be allowed.

Philip B. Kurland:

That’s right.

It does not give the equivalent of a certificate of convenience and necessity which did exist in the Hayes case.

What we would have would be if we were to analogize this to the Hayes case, Hayes to retain an independent contractor to carry on some of its business and then tell the State of Illinois that it has no power over this independent contractor for the reason that Hayes — not the independent contractor but Hayes has a certificate of convenience and necessity (Voice Overlap) —

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Hugo L. Black:

But if the Congress has said that Hayes could do it —

Philip B. Kurland:

I have no —

Hugo L. Black:

— independent contractors.

Philip B. Kurland:

Your Honor, we would — have no question about that.

There’s no language — nothing in the statute indicated what Congress did.

And certainly, the action of the Interstate Commerce Commission would indicate that the federal government just kept a hands-off policy over this type of operation.

Felix Frankfurter:

I haven’t read the series of Parmelee into 288 I.C.C.

So I’m just going to ask you what that decide or doesn’t decide.

Did I understand you to say that the Commission could exercise but has not chosen to exercise power over Parmelee in that litigation?

Philip B. Kurland:

Yes, sir.

Felix Frankfurter:

What kind of — what kind of exercise of power would they have?

Philip B. Kurland:

I think they could exercise — issue regulations governing the — the operation of this part of Interstate Commerce the same as they have with regard and as the respondent’s brief show, with regard to some of the trucking operations that are combined with (Voice Overlap) operation.

Felix Frankfurter:

Well, I mean, deal with physical aspects.

They actually —

Philip B. Kurland:

They could —

Felix Frankfurter:

— vehicle, the type of vehicle and all that?

Philip B. Kurland:

They could deal with safety with the employee — with the hiring of employees, with the — they — they could cover all of the area but they have — they had not said so and if — if you’re asking what they said in the Parmelee case this is what my interpretation of the Parmelee case.

Felix Frankfurter:

What was sought to be done by that proceeding?

Philip B. Kurland:

It was sought to bring the Parmelee’s operations under the active regulation of the — of the Interstate Commerce Commission.

Now, when you say sought to be done, I — I can’t answer that.

They initiated this proceeding themselves.

Felix Frankfurter:

And then they dismissed it and ordered to continue on the proceeding will be entered.

Philip B. Kurland:

That’s right.

Felix Frankfurter:

Now, what was the proceeding for?

Philip B. Kurland:

To determine whether a certain regulation should be issued by the —

Felix Frankfurter:

Of a physical character or — or the inter-contract relation between the railroad and the Parmelee?

Philip B. Kurland:

Well, Your Honor, you’re asking me for motives which I —

Felix Frankfurter:

No, no, I’m not asking for motives.

I’m continuing the question put —

Philip B. Kurland:

Well —

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Felix Frankfurter:

— by Justice Black as to the extent, as to the extent of taking over by the Commission of aspects of this service.

Philip B. Kurland:

I would suggest that power is playing around the situation.

Felix Frankfurter:

But you say that —

Philip B. Kurland:

They have chosen not to exercise it.

They have chosen not to exercise any of the power which they have over this type of operation.

They found that it removed from this Part 2 of the Act.

They established their power.

They assert their power over this operation as a railroad operation but they deny that this is a carrier which I take it means that the Commerce Commission has the same power over this operation as they would have over railroad operations, any other form of railroad operation.

Felix Frankfurter:

I’ll put —

Philip B. Kurland:

If they chose to exercise it.

Felix Frankfurter:

I’ll put to you another question whether anything in the filed tariff until it changed by the carriers from having free such terminal service and the answer — your answer was yes —

Philip B. Kurland:

That there is nothing in the tariff which would prevent them from engaging free such —

Felix Frankfurter:

From having Transfer and also Parmelee now.

Philip B. Kurland:

That’s right.

Let me suggest —

Felix Frankfurter:

I gathered from what you’ve said that if the Commission could choose to restrict that inter-terminal — inter-terminal service to one such service carrier.

Is that right?

Philip B. Kurland:

I should think that it could, yes, Your Honor.

Felix Frankfurter:

And what you are saying is that this is one of those cases — what was that case (Inaudible) he wrote, that the power is dormant and not being exercised, the police power can — can move in that area until the Commission displaces it.

Philip B. Kurland:

Exactly.

Felix Frankfurter:

That’s your position.

Philip B. Kurland:

Yes, it is.

And so in — in brief, our position is that we do not have an attempt to exercise economic control over the interstate commerce involved in this case nor do we have any conflict between the City’s ordinance.

I’m talking both cases on the face of the ordinance.

We do not have any conflict between the ordinance and any federal regulation.

That being so, this Court cannot be ask to make a decision as to what the City’s powers are until they’ve been invoked.

They have not been invoked and therefore, it seems to me that the railroads and the transport service are in no position at this time to ask this Court to pass on what is a hypothetical question.

Thank you, Your Honor.

Earl Warren:

Mr. Matthews.

Amos M. Matthews:

I’ll try to be very brief.

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Amos M. Matthews:

I won’t take too long if I may.

And perhaps I can save time by simply surrogate and following on the points the counsel has made.

In the first place, counsel attempts to say that by reason of the fact that Transfer is what he calls an independent contractor that Section 202 (c) doesn’t govern here.

Well, now Section 202 (c) (2) says that it governs transportation by motor vehicle by any person whether as agent or under a contractual arrangement.

Now, whatever else you can say about the contract between Transfer and the railroads which appears beginning at page 25 of the record.

It’s a long contract.

It is a contractual arrangement but no question about that, so it is squarely within the terms of Section 202 (c) and you can’t escape that by saying, “Well, obviously if you have a written contract whereby you make somebody an independent contractor that nevertheless would mean it’s a contractual arrangement.”

Now, the counsel has mentioned that the recent decision of this Court last Monday in the Public Utilities Commission of California against United States and perhaps I do not need to advert to that but it seems to me this one sentence that I would like to read fits this case perfectly on all of this talk about exhausting administrative remedies.

And that is this, but where the only the question is whether it is constitutional to fasten the administrative procedure onto a litigant — onto the litigant, the administrative agency may be defied and judicial relief sought as the only effective way of protecting the asserted constitutional right.

That is precisely this case.

And the Chief Justice says perfectly characterized this because after you get all through with your so-called administrative procedure, nevertheless, the Chicago City Council says you’ve got to come in and lobby us before you can operate.

Felix Frankfurter:

Mr. Matthews, may I ask you whether you think it will make a difference if instead of the Chicago City Council or the Commerce Commission of Illinois?

Amos M. Matthews:

Yes, sir.

Felix Frankfurter:

Do you think it’s a matter of conflict that makes a difference who the agency is that the state has chosen (Voice Overlap) —

Amos M. Matthews:

Oh well —

Felix Frankfurter:

— by the police power determination.

Amos M. Matthews:

Well, I’m going to withdraw my answer and say no, sir, in this that the Commerce Commission of the State of Illinois would have no authority to say who shall engage in interstate commerce in Illinois.

Felix Frankfurter:

Well, nobody would.But my question is rather the suggestion which for practical purposes I’m ready to accept that considerations that may move the City Council, is that what it is?

Amos M. Matthews:

Yes.

Felix Frankfurter:

The City Council of Chicago.

I don’t want to be discriminating or New York (Inaudible) whatnot.

I want to know whether the Constitution would make a difference whether the State’s choice of the agent in exercising as it claims its police power varied it because pursuit the agency that it has chosen is much more likely to be governed by political considerations than a supposedly judicial-minded administrative agency.

Do you think this Court can say, “Well, we know the City Council of Chicago will be guided by considerations,” they’re rather political where the Commerce Commission of Illinois would be guided by more or less objective considerations.

Do you think we can take that — take that line?

Amos M. Matthews:

I don’t know.

And frankly, I’ve never thought of that but —

Felix Frankfurter:

Well, that’s essential in this business.

Amos M. Matthews:

But it is — I — I think — I think you can be for this reason that public service commissions and regulatory commissions are traditionally governed by certain processes of — of weighing the evidence and making findings of fact and so forth.

And well, yes, I’ll get warm up to this.

I can see a lot of difference.

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Felix Frankfurter:

I can see a lot of —

Amos M. Matthews:

If the — if the public utilities — if the Public Utilities Commission of Illinois denies a certificate on constitutional grounds, the courts of Illinois can review that but the courts of Illinois cannot review the discretion of the Chicago City Council.

Felix Frankfurter:

Not if it’s a discretion within the allowable area by which a body exercise discretion.

That’s equally true of the Board of Alderman or a City Council or administrative agency or whatever you call it.

Amos M. Matthews:

Well —

Felix Frankfurter:

And who is this Court to tell Illinois or any other states who is likely to give objective judgment on a question within the state power?

Amos M. Matthews:

If Your Honor please, I think the question — I — I think we don’t need even to go into that for this reason.

Felix Frankfurter:

Well, that — that answer.

Amos M. Matthews:

That the — this Court has never held and in the long line of cases it has held to the contrary.

This Court has always held that where a discretion to engage in interstate commerce as to who shall conduct the Commerce is vested in a state or in municipality every such regulation has been struck down by this Court.

Felix Frankfurter:

I understand that proper issue but I do not understand that we can say, so that I can say, merely because I can take practical notice of the fact that a City Council is likely to be all political and I’m not that sure about that either.

Then the administrative agency of the state that therefore the power vested in the City Council would be bad or it might be good if vested into the so-called “administrative agency”.

Amos M. Matthews:

Well, I don’t think we need to go that far.

Felix Frankfurter:

All right, I understand that answer.

Amos M. Matthews:

Now —

Earl Warren:

In Illinois, is there — is there any review at all of the discretion of the City Council in adopting or rejecting ordinances?

Amos M. Matthews:

Not at the discretion.

There is, of course, to review in the courts, their ordinary review of the validity whether the action is within the power of the City or whether it’s constitutional.

But —

Earl Warren:

But — but even assuming that — that they have the right — assuming they have the right to do it and the City Council denies — denies the right by a refusal to pass an ordinance.

Can there be any — any review in the State of Illinois —

Amos M. Matthews:

No, sir.

Earl Warren:

— of such refusal?

Amos M. Matthews:

No.

You mean if the City Council just did nothing?

Earl Warren:

Well, if they just — if they just said in spite of — of a favorable ruling by the Commissioner on the necessity and public necessity and convenience, it said no by a vote of so many, so maybe — so maybe won’t — we won’t —

Amos M. Matthews:

Absolutely no reviews.

Earl Warren:

— pass the ordinance.

Amos M. Matthews:

You couldn’t — you couldn’t mandamus the City Council to —

Earl Warren:

Could there be any review.

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Amos M. Matthews:

No.

Earl Warren:

Now, it would take the — the ordinary Board of Commerce, Public Utilities or whatever it is.

They’re usually subject to some kind of judicial review as to whether they have abused their discretion and so forth, are they not?

Amos M. Matthews:

They always are.

Felix Frankfurter:

But in Illinois, do you know whether the City Council hasn’t licensing authority of all sorts of things?

Amos M. Matthews:

Oh, yes.

Felix Frankfurter:

Cities of — cities of United States have full of licensing powers in — in City Council or the like.

Amos M. Matthews:

Unquestionable.

Felix Frankfurter:

The judicial review — is there any difference between reviewing or withholding of a license for a wrong ground that in — was deemed to be installed or I mean, vesting power, where the City Council or some other agencies that has licensing power, if there is review for arbitrary conduct.

The City Council is amenable to such review as any other body.

Isn’t that true?

It can’t review.

You can’t review of course political authority.

Amos M. Matthews:

Well (Voice Overlap) —

Felix Frankfurter:

You couldn’t pass an ordinance but if this Illinois legislature vests either directly or by a whole rule charter, I don’t know anything about Chicago.

If a state vests licensing power in the City Council and it exercises that licensing power for a wholly arbitrary reason, I should think judicial review would apply to that just the same as those to commission of licenses (Voice Overlap) —

Amos M. Matthews:

Only — only if it were unconstitutional.

Felix Frankfurter:

Well — or if it’s — it’s unconstitutional if it’s arbitrary —

Amos M. Matthews:

Well —

Felix Frankfurter:

They say we won’t give this to a Jew or a Catholic or a Negro.

You could go into the federal court and say that’s an unconstitutional exercise of power.

Amos M. Matthews:

Well, certainly, certainly.

Felix Frankfurter:

All right.

Amos M. Matthews:

However, it’s doubtful whether if they — if they said “We’re not going to let any Negroes have barber licenses.”

You wouldn’t need to apply for a license.

You could go into federal court and get — get an injunction tomorrow I assume.

Felix Frankfurter:

All these — all of my questions are directed to the suggestion that if there is power in the state and the City has power because it’s given by the state, then I don’t think it can make a difference whether it’s vested in an agency that is much more amenable, that is more amenable to political influence than some other agencies.

Amos M. Matthews:

Well, I want to — maybe I can answer that as I cast on to something else.

Felix Frankfurter:

Well, don’t bother about it.

You’ve dealt with it adequately.

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Amos M. Matthews:

Now, I want to go now to a question that has been raised as to the status of Parmelee case.

Now in the — that has been adverted to by counsel for the Interstate Commerce Commission.

The sole question in that case was whether the employees of Parmelee were by virtue of the arrangement between Parmelee and the Railroads if that make those employees, railroad employees, so that they were entitled to the benefits of the Railroad Labor Act.

And the Interstate Commerce Commission, resting its decision squarely and entirely within the framework of the federal statutes said that — that Parmelee was not a carrier in and of itself subject to the Interstate Commerce Act.

Therefore, its employees were not employees of a carrier subject to the Interstate Commerce Act.

But that case is precisely what I was saying this morning, namely, that the activities of — of Transfer are simply assimilated to the operations of the railroads specifically by 202 (c) (2), they are made railroad operation.

Now, however, I want to call your attention to other decisions of the Interstate Commerce Commission in respect to 202 (c) (2) of the Interstate Commerce Act.

In pick up of livestock in Illinois Island and Wisconsin and I’m — I’m referring now briefly to some cases on pages 31 — 21 to 23 of our brief.

In pick up of livestock in Illinois Island and Wisconsin, the railroads filed tariffs providing for pick up of livestock within 10 miles of their stations that is they’d — they’d go out and bring them in and load them in cars.

This was before the enactment of 202 (c).The — that matter was brought before the Commission by a complaint of some motor carriers and the Commission said this that that was a motor carrier operation.

The railroad had no authority under Part 2.

It was not a railroad operation under Part 1.

Therefore, the railroads were ordered to cancel their tariffs and cease and desist from the operation.

After that, 202 (c) was enacted and the Commission reopened it.

And then the Commission said the railroads now do not need any certificate under Part 2, 202 (c) has made it a railroad operation under part 1.

We will now approve the tariffs of the railroads providing for pick up of livestock by motor truck within 10 miles of their stations.

In other words, that shows by the construction of the Commission exactly the rights given by 202 (c) to the — to the railroads that they are given in effect permanent certificates of public convenience and necessity to perform motor carrier operations, pick up and delivery and transfer in their terminal areas.

Now, in cartridge rail, the steamship lines at New York.

The railroads attempted to cancel tariffs.

The railroads had filed tariffs providing for pickup and delivery in inter-station service of freight in New York.

The railroads attempted to cancel those tariffs and the Commission held in that case that it had jurisdiction to require performance of the service.

Now, any service that is performed under tariff and which the Commission has authority to require is a service that is, I submit, safe from any obstruction by state action, going again to another case of the Commission construing 202 (c), movement of highway trailers by rail.

I’m sure you all take — you’ve — you’ve all read about it and take judicial notice of the fact that there is a tremendous railroad traffic growing up in what is so-called piggyback service.

That is a trailer within a railroad terminal area that picks up freight.

The trailer is hauled to the railroad yard and loaded on a flat car, carried by the flat car to destination.

The trailer unloads it and it’s delivered to destination.

In a — an extensive hearing before the Interstate Commerce Commission, the Commission held that that entire operation is railroad service subject to Part 1 of the Act and that in order to perform that service, the railroads do not need any authority under Part 2 on account of Section 202 (c).

Now, if cities all along the line can impose obstructions and require a showing of public convenience and necessity for the transfer of property and the persons in terminal areas, 202 (c) and the intention of Congress in respect to it is completely set at naught.

Now, I want to refer now to Castle against Hayes Freight Lines.

No, I — I will first refer to Columbia Terminal’s case and the Bradley against the Public Utilities Commission.

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Amos M. Matthews:

Now, both of those cases are immediately differentiated in this respect that the Columbia Terminal’s case was decided before the enactment of Section 202 (c) of the Interstate Commerce Act.

True enough, Columbia Terminals was performing inter-station pickup and delivery, but 202 (c) had not yet been enacted by the — and that — that is precisely the — that the — the District Court rested its decision on two grounds that there was no supersedure by the federal government.

The federal government hadn’t — hadn’t entered the field, the pick up and delivery service.

In Bradley against Public Utilities Commission, it again rested on the ground that the federal government had not entered the field.

Now, I want to go to Castle against Hayes Freight Lines because I think that case is directly in point here.

Castle against Hayes Freight Lines involved an Illinois statute in which the State of Illinois in an attempt to avoid and abuse of its highways as the Court pointed out by overloading — chronic overloading of motor trucks.

The State passed an Act that a chronic overloader could be suspended from the use of the Illinois highways for 10 days for — for three months and on the second offense prolonged.And this Court held that since Castle had a certificate from the Interstate Commerce Commission under which it was required to perform service and in as much as the Interstate Commerce Commission had the power to suspend that certificate that a power — a — an assertive power of suspension of Castle’s rights in the state was violative of the Commerce Clause and the Interstate Commerce Act.

You have precisely the same situation here because the railroads are vested with this right to perform the inter-station transfer service by Section 202 (c) (2) of the Interstate Commerce Act and there is this however this difference that did not appear in the Castle case.

To the Hayes Freight Lines could file a cancellation of its schedules and could cease all operations in 30 days and the Interstate Commerce Commission or nobody else could do anything about it.

If the railroads filed a cancellation of their tariffs providing for the inter-station transfer of railroad passengers, the Commission under its own holdings, no Court has passed on this but the Commission has so held in the case I cite.

The Interstate Commerce Commission could compel the continuance of that inter-station transfer service.

So in the Castle case, you held that a carrier who was not required, who was authorized, it’s true to render service under the Interstate Commerce Act but was not required to do so could not be interfered with by the state on purely safety grounds, nothing but sheer police power grounds.

But here, you have a case where the service — the Commission as held can be compelled.

We can’t quit if the Interstate Commerce Commission says we can’t quit.

Yet, the City of Chicago purports to say that it is going to say who shall — who the railroad shall make a contract with.

Felix Frankfurter:

What — what is it that Chicago is trying to do that bars the railroads from carrying out the mandated of the Commission, its mandated to be that it should give in the Court inter-station transport?

What is it that Chicago has done or seeks to do that precludes the railroad from doing what the Commissioner says they’re required to do namely to carry people from one station to another?

Amos M. Matthews:

The City of Chicago is doing exactly what the State of New York did in Gibbons against Ogden.

It said — it is saying “Nobody shall render this inter-station transfer service for the railroads unless we approve them.”

Felix Frankfurter:

But if I — if I come into Chicago and I want to go from one station to another to get to New York or to Boston, is there anything that Chicago has — is trying to do that precludes my getting that service from the railroad?

Is there anything that Chicago is doing that precludes my getting a service which the Interstate Commerce Commission says I’m entitled to get, to have myself taken from one station to another?

Amos M. Matthews:

Oh, yes, if the —

Felix Frankfurter:

What is it?

Amos M. Matthews:

If the — if the Chicago ordinance should be held valid then we’ve got — then — then we either have to go back to doing business with Transfer or we can’t transfer the passengers.

Felix Frankfurter:

Well, but Chicago doesn’t say you can’t have some rent for service carrying me.

It merely — it merely defines the choice you have as to who should be doing that service.

Amos M. Matthews:

Well, that is correct and that is unconstitutional under every decision of this Court.

Felix Frankfurter:

But that wasn’t — that isn’t what the — what’s the name of that in Chicago, in the Illinois case?

The Hayes case was.

With the Hayes case, with the latter certificate, he could do business and Illinois said, “No, you can’t do business anymore.”

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Amos M. Matthews:

Well, my associate called me to one point that I should have mentioned before.

Sorry, I didn’t.

In the interchange — and — and that is in our complaint, and alleged in great detail and admitted of course by the motion for summary judgment.

The railroads coming into Chicago have certain schedules to meet.

That is taking a passenger from one station to another station.

The railroads want to control that service to give good service to the passengers.

The — besides all of the considerations in the express language of 202 (c) (2), the railroads have a right as the Court of Appeals pointed out to select their own agent where the railroads are, at least a number of railroad presidents have said so, are fighting a very battle for their very lives and the passenger service is one of their most vulnerable points.

And certainly, the railroads in their relations with the public and in maintaining their passenger service have a right to say who shall carry their passengers from one Chicago station to another.

And in the maintenance of — and have a carrier who will take a passenger from the Northwestern station to the Illinois Central Station some two miles away and getting there in time to catch the train for Springfield in New Orleans.

That I think is the — is the consideration and the — the — may I call your attention again to the — the Hill against Florida covers, Your Honors, exact point as I understand it.

In Hill against Florida, the State of Florida, a licensed representative of labor unions and said, “Nobody can be a bargaining agent for a labor union in the State of Florida unless he’s licensed by the State of Florida.”

On this case, this Court said the State of Florida can’t do that, that employees have a right to be represented before the National Labor Relations Board and in the bargaining under the National Labor Relations Act have a right to be represented by their own representatives and that — that the State of Florida simply cannot interfere with that right by demanding a license and that’s exactly —

Felix Frankfurter:

I’ll put it to you, Mr. Matthews.

In the Hill case, this Court held that Congress had laid down certain conditions, certain qualifications for officers of the union and further tried to add that too.

And this Court said, when Congress says conditions one, two, three of the conditions, it’s presumably thought those were all the conditions that were necessary and part of that Act, four or five.

Now, what I want to know is what conditions does the Interstate Commerce actually have done here other than to say that in a situation like Chicago, you may engage in inter-station transfer.

It is authorizing to give that service but what have it said about choosing the means of carrying out that service.

Amos M. Matthews:

It hadn’t said anything in specific terms.

I grant you that.

But it has said that the — the person you can — you can make a contract with a person and then he becomes your service.

And certainly, the Commerce Clause and the Interstate Commerce Act gives the railroads, I think just on the bear statement of it, gives the railroads the right to say who that agent shall be.

That is my position on that.

Now —

Hugo L. Black:

That’s — that’s your total argument on the statute, isn’t that true?

Amos M. Matthews:

Yes.

Well —

Hugo L. Black:

It depends on the interpretation then of the statute.

Amos M. Matthews:

Of — of the federal statute.

Hugo L. Black:

Your argument?

Amos M. Matthews:

Yes.

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Hugo L. Black:

Yes, that’s what I mean.

Amos M. Matthews:

Yes.

Hugo L. Black:

You insist that that is the equivalent of saying the railroads shall have the right to make a contract with such a person or agent that you see fit to carry these passengers.

Amos M. Matthews:

That is correct.

Hugo L. Black:

And if you’re wrong in that interpretation, you have to go back to your constitutional ground.

Amos M. Matthews:

Yes.

And I think it would — I think we can — I was about to touch on that — the —

Felix Frankfurter:

Before you get to that, I want to ask you whether you do not also agree unless I misapprehended your argument in 103 that complies to use of this ordinance lies in the fact that Parmelee, by a practical operation, is given the grandfather license.

And therefore, I ask whether that provision was out so that Parmelee would stand on the same footing or Transfer would stand on the same footing as everybody else, namely, for police reasons as I call it or traffic conditions, etcetera.

Everybody has to get a license and nobody gets an advantage, you’d have a different situation, wouldn’t you?

Amos M. Matthews:

I’m not — not under the constitution, no, I don’t believe you would.

However, we — we are making no objection that grandfather clause to Parmelee.

That, I don’t think that is — is an issue in the case.

The merely is descriptive of what the City Council did.

They gave — but — but on connection, Mr. Justice Frankfurter, with — with what you’ve recently said.

I want to go back to case of a venerable history namely the Pensacola Telegraph case.

There, the State of Florida simply said “no telegraph company can come in to the state unless it has a license from the state.”

And Congress, for the express purpose of avoiding that, provided for federal licenses for telegraph companies and this Court held that the Florida law couldn’t keep the Western Union Telegraph out.

Now as I say, the — the question of who shall conduct Interstate Commerce is the important question in all of these cases from Gibbons against Ogden on down.

I want to refer now to some couple of other federal statutes.

In 1866, Congress passed an Act that has been variously called the — the “Railroad Communication Interchange Act of 1866.”

I set it out on page 26 in my brief.

Now, the legislative history of that Act shows that the State of New Jersey had provided by a New Jersey law had — had granted an exclusive franchise to a certain railroad and said that no other railroad could operate between Philadelphia and New York, which of course are both outside of the State of New Jersey, unless the legislature of New Jersey agreed.

Congress passed the — a law which says this and I think it’s entirely applicable to this situation today, “Every railroad company in the United States is hereby authorized to carry upon and over its road and so forth, passengers on their way from any state to another state and to receive compensation therefore and to connect with roads of other states so as to form continuous lines for the transportation of the same to the place of destination.”

And this Court has construed that Act in a number of cases, in the Bowman against the Chicago and Northwestern Railroad.

The Court said, these Acts referring to that another Act were passed under the power vested in Congress were designed to remove trammels upon transportation between different states which had previously existed and to prevent a creation of such trammels in the future and to facilitate railway transportation.

In Union Pacific against Rock Island Railroad cited on page 30, the Court said, “It is impossible for us to ignore the great public policy in favor of continuous lines thus declared by Congress and that such it is in effectuation of that policy that such business arrangements as it will make such connections effective are made.”

Coming now to the last —

Hugo L. Black:

What do you say to Mr. Kurland’s argument for this event?

It’s been frequently held that at least in some cases and I thought (Inaudible) that the mere fact that Congress has the power to regulate in the absence of regulation, the powers don’t with the state (Inaudible).

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Hugo L. Black:

And Mr. Kurland’s argument, as I understood it, in reference to the statute was this, one argument.

That the statute does give the Commission power to regulate it under one, Part 1 of the Act as a carrier, although it’s not a carrier but it gives that regulatory.

But they haven’t made any effort to do it and therefore the power lines don’t — you can’t claim that — the city without a power by the state, without power to demand a certificate of convenience and necessity.

What do you say to that argument?

Amos M. Matthews:

Well, that argument is unsound on two bases.

In the first place, the Congress has exercised the power here.

In other words, if it were not for Section 202 (c) (2), the railroads could not conduct this inter-station transfer operation without a certificate of public convenience and necessity from the Commission under Part 2.

But the Congress has given the railroads permanent motor carrier authority rights under Section 202 (c) (2).

They — they’ve given them just as effective rights as Hayes Freight Lines had so Congress has entered the field.

The second answer to that is that assuming for purpose of argument that Congress has not entered the field, there is a very long line of cases.

I cite them on Page 37 to the effect that no state or municipality can exercise its discretion as to whether it is going to permit the performance of Interstate Commerce.

And under the cases, this Court in 140 years, the question of who is going to perform Interstate Commerce as between two rival candidates is a function that is forbidden to the states by the Commerce Clause so this Court has held.

Hugo L. Black:

I understood maybe I was wrong about this argument but maybe I didn’t make it briefly and clearly.

I understood it not to deny that Congress had entered the field and authorized the Commission to regulate where he said it hadn’t done so.

Amos M. Matthews:

Well, he’s in error about that because the — the Commission has already exercised this authority.

Of course the Commission exercised its authority in given situations but if it exercised its authority in New York in a precisely similar situation to the Chicago situation then the Commission certainly has entered the field of regulation.

Hugo L. Black:

Has it established any rules supervising the selection of agents by the railroad?

Amos M. Matthews:

No, sir.

Hugo L. Black:

I understood him to say it hadn’t done that.

Amos M. Matthews:

No, sir, it has not.

Hugo L. Black:

Maybe I’m — maybe I’m wrong about the (Voice Overlap) —

Amos M. Matthews:

No, no, it has not.

Hugo L. Black:

I gather that the argument was and since it hadn’t done so, you couldn’t claim that the statute is the equivalent of a certificate that the power is there lying dormant.

Amos M. Matthews:

No, it has not done so but it has said that it can compel the railroads to perform the service and it has compelled them to perform it.

And if the railroads are compelled to perform it, the railroads certainly have the power to select under the — the contracting party to perform it for them.

They can’t be deprived of that.

Perhaps Congress could deprive them of that power but certainly the states and local governments can’t deprive them of that power.

Felix Frankfurter:

Mr. Matthews, tell me why I’m wrong in thinking as you talk that 202 (c) (2) in effect says “You don’t need to get a license with the federal government.”

Amos M. Matthews:

Because —

Felix Frankfurter:

Isn’t that true?

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Amos M. Matthews:

No, sir.

Felix Frankfurter:

Because it says — it says 202, although you’re a trucker, you don’t have to get a trucker’s license what other truckers have to get.

Amos M. Matthews:

No, sir.

I — I disagree with your construction.

Felix Frankfurter:

Now, tell me why that’s wrong.

Amos M. Matthews:

It — its wrong for this reason that it says that despite in effect, it says despite the — the provisions of Part 1, you are hereby authorized to go ahead and operate and to make contracts with another to operate for you, pick up and delivery service in inter-station areas.

Felix Frankfurter:

You may make that selection and you don’t have to come to the Interstate Commerce Commission the way other people who do that service do have to come and get a license on under two.

Amos M. Matthews:

I — I’m — under two I — I —

Felix Frankfurter:

Under Part 2 of the 1940 Act.

Section 202 (c) (2) released these inter-station carriers from getting — from being required to get the license that are under Part 2 of the Transportation Act as required by other people who do that kind of thing.

Amos M. Matthews:

Well, Section 202 (c) (2) doesn’t give any rights to the inter-station carrier itself but it does give rights to the railroads.

Felix Frankfurter:

Yes.

But the question is what’s the nature of their ideas —

Amos M. Matthews:

Their nature —

Felix Frankfurter:

— and the scope of it and I say that although we’ve got a provision of the Transportation Act which said that a person who does — who does the interstate carriage of the kind that inter-station service people do in Chicago, they do not need a license.

Amos M. Matthews:

Well, I think the answer to that is this.

That the railroads are performing transportation under Part 1 of the Interstate Commerce Act and they are part of the service.

They are required to perform and were required to perform before 202 (c) was enacted is the transfer of freight and passengers between their stations.

They have been doing that for many years in a case that’s involving the transfer in St.Louis.

I cited the case before 202 (c) was enacted.

This Court held that a contract of this character between a railroad — between the St.Louis Railroads and an inter-station carrier could not be enjoined under the antitrust laws because it was within that exemption from injunction under the Antitrust laws any — of any right arising under the Interstate Commerce Act.

And this Court —

Hugo L. Black:

What is — what is your answer to Justice Frankfurter?

It’s not quite clear what you said here that they do not have to get a license on the federal government to this — this particular motor carrier —

Amos M. Matthews:

Transfer.

Hugo L. Black:

— doesn’t have to get it.

Amos M. Matthews:

No.

Hugo L. Black:

Does that — does that end your case so far as the Act is concerned?

If the Congress has constitutionally given you the power to make the selection, what is the difference?

Amos M. Matthews:

I’m afraid I don’t understand your question, sir.

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Hugo L. Black:

What if Congress had given you the power to make the selection of somebody to do the carrying?

Why?

What difference does that make to your contention?

Would you not still claim that the City can’t take away that power?

Amos M. Matthews:

Well, that’s what we do claim.

Hugo L. Black:

I thought so.

Amos M. Matthews:

I — well, I may — I may have misspoken.

The Congress has given us.

Congress didn’t exempt us from anything in 202 (c).

The Congress gave the railroads who were engaging in commerce the right to continue that commerce, a permanent — a permanent certificate by statute.

Hugo L. Black:

By a contract.

Amos M. Matthews:

That’s right.

Hugo L. Black:

Select somebody by a contract.

Amos M. Matthews:

Or they can do it themselves without — or they can — or they can select somebody by contract, yes.

Hugo L. Black:

And maybe that’s not the equivalent of a certificate that they had authorized.

But isn’t that your point now or is it that that’s the equivalent of an authority granted by the Interstate Commerce Commission on certificate of convenience and necessity is that they had the power to give it, that it has authorized you to get somebody to do that.

Amos M. Matthews:

That’s right.

That is my point.

Felix Frankfurter:

You don’t need a statute.

The answer — the suggested answer is that 202 (c) (2) is immaterial because the Commerce Clause gives you that untrammeled choice, isn’t that right?

Amos M. Matthews:

No, well under Part 2, we need 202 (c) because Part 2 is on the statute.

If it wasn’t for 202 (c), we’d have to apply for a certificate under Part 2 of the Interstate Commerce Act.

Felix Frankfurter:

Forget about applied in 1940.

If you claim this as an exercise of the — as a right to carry on interstate commerce into which the state can’t cut it, isn’t that right?

Amos M. Matthews:

That’s right.

Well, I — I — we claim under both that — that —

Felix Frankfurter:

I understand that but — but if —

Philip B. Kurland:

But in —

Felix Frankfurter:

— if it’s under the Commerce Clause that no statute can save it.

Amos M. Matthews:

I didn’t understand that, sir.

Audio Transcription for Oral Argument, Part 2: City of Chicago v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (103) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company
Audio Transcription for Oral Argument, Part 1: Parmelee Transportation Company v. Atchison, Topeka & Santa Fe Railway Company – March 06, 1958 (104) in City of Chicago v. Atchison, Topeka & Santa Fe Railway Company

del

Felix Frankfurter:

If you have a right under the Commerce Clause then no statute can take it away, no state statute can take it away.

Amos M. Matthews:

That is correct.

Felix Frankfurter:

And that is your position.

Amos M. Matthews:

It’s our position that’s —

Felix Frankfurter:

That’s what (Voice Overlap) of your position.

Amos M. Matthews:

We’re — that that’s right.

We rely first on the stronger position that Congress has superseded the power of the state but — that even if Congress hadn’t superseded the power of the state, we would still have the power.

Yes, that is our position under these various federal statutes.

Earl Warren:

Mr. Kurland.

Philip B. Kurland:

If the Court has a question —

Earl Warren:

All right.

Philip B. Kurland:

— give you back the rest of the time.

Thank you very much.

Earl Warren:

Thank you, Mr. Kurland.