Railroad Transfer Service Inc. v. City of Chicago

PETITIONER: Railroad Transfer Service Inc.
RESPONDENT: City of Chicago
LOCATION: Leon County Jailhouse

DECIDED BY: Warren Court (1965-1967)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 386 US 351 (1967)
ARGUED: Feb 13, 1967
DECIDED: Mar 27, 1967

Facts of the case


Media for Railroad Transfer Service Inc. v. City of Chicago

Audio Transcription for Oral Argument - February 13, 1967 in Railroad Transfer Service Inc. v. City of Chicago

Earl Warren:

Number 209, Railroad Transfer Service, Incorporated, Petitioner, versus the City of Chicago.

Mr. Mathews.

Amos M. Mathews:

Mr. Chief Justice, may it please the Court.

Petitioner brought this action in United States District Court for a declaratory judgment that a Chicago ordinance is invalid on its face, a reason of conflict with the Interstate Commerce Act and the Commerce Clause of the constitution.

The city and the other respondents who are officials of the city filed a motion to dismiss for failure to state a cause of action.

The District Court dismissed in response to that motion and the Court of Appeals affirmed.

This Court granted certiorari.

Some of the issues in this case were presented to this Court are issues similar to those in this case, were presented to this Court in 1958 in Chicago against Atchison, Topeka, and Santa Fe Railway Company, 357 U.S.77.

In order to understand the issues in this instant case, it is necessary to refer very briefly to some of the facts in that earlier litigation.

Petitioner is engaged under a contract with the Chicago Railroads in transferring passengers between railroad stations in Chicago.

It frequently happens that a passenger engaged on a through journey through Chicago must transfer from his incoming to his outgoing railroad station.

The petitioner furnishes that service in specially designed buses.

The petitioner receives ultimate remuneration from the railroads that passenger pays nothing to petitioner.

Prior to 1955, this interstation transfer service had been performed for many years by the Parmelee Transportation Company.

During the time that Parmelee performed the service, the service was regulated by the City of Chicago along with taxicab service and other similar services by what is known as Chapter 28 of the Municipal Code of Chicago.

On June -- in June of 1955, the railroads notified Parmelee that as of October 1 of that year, they would discontinue using Parmelee service and would use petitioner instead.

About a month later in July of 1955, the City Council of Chicago passed an amendment to Chapter 28 that I've already mentioned, that imposed two very serious obstacles or barricades to petitioner and the railroads in their expectation of launching the new service.

In the first place the amendment gave what amounted due a perpetual franchise to Parmelee to perform the service.

Secondly, it provided that a newcomer to the field, such as petitioner, must prove to the satisfaction of the public vehicle license commissioner of the City of Chicago that public convenience and necessity required the new service.

This Court in the Atchison case that I've mentioned held the amendment to Chapter 28 invalid because in conflict with the Interstate Commerce Act.

I'd like to mention briefly here that the evidence shows in that earlier case and it is set out both in the opinion of this Court and in the opinion of the Court of Appeals which this Court affirmed, that this action of the Chicago City Council in amending Chapter 28 as I've said, was a well-planned, well-conceived scheme to keep -- to perpetuate Parmelee in the service and to keep -- and to put petitioner out of business.

After the decision of this case in the Atchison -- after the decision in the Atchison case by this Court in 1958, that restored the status quo regulatory wise that had prevailed as to this interstation transfer service before the 1955 Amendment.

In other words, in order to leave regulation or have regulation of the same type that had covered Parmelee for many years, all the City of Council had to do was simply do nothing.

But shortly after -- a few months after the mandate came down in the former Atchison case, the Chicago City Council started on a course of amendment of Chapter 28 again to the great detriment of petitioner and the Chicago Railroad.

The Council amended Chapter -- Section 28-6 of Chapter 28 by requiring that annually a person desiring a license to operate as a public passenger vehicle must file an application with the -- well, they already had to file an application but it amended those application proceedings to provide that a person filing an application must prove to the satisfaction of the Public Vehicle License Commissioner that the applicant was qualified to pursue the occupation of a cabman or a coachman.

Now that phrase qualified to pursue the application of a cabman or a coachman included petitioner within its scope because petitioner was defined as a coachman in the ordinance.

It also included taxicabs for the most part but taxicabs operators already had to prove that they -- the public convenience and necessity before conducting any operation since they were an intrastate operation, presumably that was valid, at least it's never been challenged as to the taxicabs.

In other words, this Amendment in 1959 to Section 28-6 the -- almost the entire force of it fell up on the petitioner.

This phrase qualified to pursue the occupation of a coachman was not in any sense, could not -- cannot in any sense, we submit, be considered a regulation within the legitimate police power.

It gave a discretion to the Public Vehicle License Commissioner to -- in his discretion, deny the application for a certificate to perform this service.