The Constitution of the United States of America: Analysis and Interpretation Part 176

"Liberty" in General

Definition.--"While * * * [the] Court has not attempted to define with exactness the liberty thus guaranteed, the term has received much consideration and some of the included things have been definitely stated. Without doubt, it denotes not merely freedom from bodily restraint but also right of the individual to contract, to engage in any of the common occupations of life, to acquire useful knowledge, to marry, establish a home and bring up children, to worship G.o.d according to the dictates of his own conscience, and generally to enjoy those privileges long recognized at common law as essential to the orderly pursuit of happiness by free men."[113]

Personal Liberty: Compulsory Vaccination: s.e.xual Sterilization.--Personal liberty is not infringed by a compulsory vaccination law[114] enacted by a State or its local subdivisions pursuant to the police power for the purpose of protecting inhabitants against the spread of smallpox. "The principle that sustains compulsory vaccination is [also] broad enough to cover" a statute providing for s.e.xual sterilization of inmates of State supported inst.i.tutions who are found to be afflicted with an hereditary form of insanity or imbecility.[115] Equally const.i.tutional is a statute which provides for the commitment, after probate proceedings, of a psychopathic personality, defined by the State court as including those persons who, by habitual course of misconduct in s.e.xual matters, have evidenced utter lack of power to control their s.e.xual impulses and are likely to commit injury.[116] However, a person cannot be deprived of his liberty under a vague statute which subjected to fine or imprisonment, as a "gangster,"

any one not engaged in any lawful occupation, known to be a member of a gang consisting of two or more persons, and who had been convicted of a crime in any State in the Union.[117]

Liberties Pertaining to Education (of Teachers, Parents, Pupils).--A State law forbidding the teaching in any private denominational, parochial, or public school, of any modern language, other than English, to any child who has not successfully pa.s.sed the eighth grade was declared, in Meyer _v._ Nebraska[118] to be an unconst.i.tutional interference with the right of a foreign language teacher to teach and "of parents to engage him so to instruct their children." Although the Court did incorporate into its opinion in this case the general definition of "liberty" set forth above, its holding was substantially a reaffirmation of the liberty, in this instance of the teacher, to pursue a lawful calling free and clear of arbitrary restraints imposed by the State. In Pierce _v._ Society of the Sisters,[119] the Court elaborated further upon the liberty of parents when it declared that a State law requiring compulsory public school education of children, aged eight to sixteen, "unreasonably interferes with the liberty of parents and guardians to direct the upbringing and education of children under their control."[120] As to a student, neither his liberty to pursue his happiness nor his property or property rights were infringed when he was denied admission to a State university for refusing to comply with a law requiring renunciation of allegiance to, or affiliation with, a Greek letter fraternity. The right to attend such an inst.i.tution was labelled, not an absolute, but a conditional right; inasmuch as the school was wholly under the control of the State, the latter was competent to enact measures such as the present one regulating internal discipline thereat.[121] Similarly, "the Fourteenth Amendment as a safeguard of 'liberty' [does not] confer the right to be students in the State university free from obligation to take military training as one of the conditions of attendance."[122]

Liberties Safeguarded by the First Eight Amendments.--In what has amounted to a const.i.tutional revolution, the Court, since the end of World War I, has substantially enlarged the meaning of the term, "liberty," appearing in the due process clause of the Fourteenth Amendment. As a consequence of this altered interpretation, States and their local subdivisions have been restrained in their attempts to interfere with the press, or with the freedom of speech, a.s.sembly, or religious precepts of their inhabitants, and prevented from withholding from persons charged with commission of a crime certain privileges deemed essential to the enjoyment of a "fair trial." Cases revealing to what extent there has been incorporated into the "liberty" of the due process clause of the Fourteenth Amendment the substance of the First Amendment are set forth in the discussion presented under the latter amendment; whereas the decisions indicating the scope of the absorption into the Fourteenth Amendment of the procedural protection afforded by the Fourth, Fifth, Sixth, and Eighth Amendments are included in the material hereinafter presented under the subt.i.tle, Criminal Proceedings.

Liberty of Contract (Labor Relations)

In General.--Liberty of contract, a concept originally advanced by Justices Bradley and Field in the Slaughter-House Cases,[123] was elevated to the status of accepted doctrine in 1897 in Allgeyer _v._ Louisiana.[124] Applied repeatedly in subsequent cases as a restraint on State power, freedom of contract has also been alluded to as a property right, as is evident in the language of the Court in Coppage _v._ Kansas:[125] "Included in the right of personal liberty and the right of private property--partaking of the nature of each--is the right to make contracts for the acquisition of property. Chief among such contracts is that of personal employment, by which labor and other services are exchanged for money or other forms of property. If this right be struck down or arbitrarily interfered with, there is a substantial impairment of liberty in the long-established const.i.tutional sense."

However, by a process of reasoning that was almost completely discarded during the depression, the Court was nevertheless able, prior thereto, to sustain State ameliorative legislation by acknowledging that freedom of contract was "a qualified and not an absolute right. * * * Liberty implies the absence of arbitrary restraint, not immunity from reasonable regulations and prohibitions imposed in the interests of the community.

* * * In dealing with the relation of the employer and employed, the legislature has necessarily a wide field of discretion in order that there may be suitable protection of health and safety, and that peace and good order may be promoted through regulations designed to insure wholesome conditions of work and freedom from oppression."[126] Through observance of such qualifying statement the Court was induced to uphold the following types of labor legislation.

Laws Regulating Hours of Labor.--The due process clause has been construed as permitting enactment by the States of laws: (1) limiting the hours of labor in mines and smelters to eight hours per day;[127] (2) prescribing eight hours a day or a maximum of 48 hours per week as a limitation of the hours at which women may labor;[128] and (3) providing that no person shall work in any mill, etc., more than ten hours per day (with exceptions) but permitting overtime, not to exceed three hours a day, on condition that it is paid at the rate of one and one-half times the regular wage.[129] Because of the almost plenary powers of the State and its munic.i.p.al subdivisions to determine the conditions under which work shall go forward on public projects, statutes limiting the hours of labor on public works were also upheld at a relatively early date.[130]

Laws Regulating Labor in Mines.--The regulation of mines being so patently within the police power, States have been upheld in the enactment of laws providing for appointment of mining inspectors and requiring payment of their fees by mine owners,[131] compelling employment of only licensed mine managers and mine examiners, and imposing upon mine owners liability for the wilful failure of their manager and examiner to furnish a reasonably safe place for workmen.[132] Other similar regulations which have been sustained have included laws requiring that entries be of a specified width,[133] that boundary pillars be installed between adjoining coal properties as a protection against flood in case of abandonment,[134] and that washhouses be provided for employees.[135]

Laws Prohibiting Employment of Children in Hazardous Occupations.--To make effective its prohibition against the employment of persons under 16 years of age in dangerous occupations, a State has been held to be competent to require employers at their peril to ascertain whether their employees are in fact below that age.[136]

Laws Regulating Payment of Wages.--No unconst.i.tutional deprivation of liberty of contract was deemed to have been occasioned by a statute requiring redemption in cash of store orders or other evidences of indebtedness issued by employers in payment of wages.[137]

Nor was any const.i.tutional defect discernible in laws requiring railroads to pay their employees semimonthly[138] and to pay them on the day of discharge, without abatement or reduction, any funds due them.[139] Similarly, freedom of contract was held not to be infringed by an act requiring that miners, whose compensation was fixed on the basis of weight, be paid according to coal in the mine car rather than at a certain price per ton for coal screened after it has been brought to the surface, and conditioning such payment on the presence of no greater percentage of dirt or impurities than that ascertained as unavoidable by the State Industrial Commission.[140]

Minimum Wage Laws.--The theory that a law prescribing minimum wages for women and children violates due process by impairing freedom of contract was finally discarded in 1937.[141] The current theory of the Court, particularly when labor is the beneficiary of legislation, was recently stated by Justice Douglas for a majority of the Court, in the following terms: "Our recent decisions make plain that we do not sit as a superlegislature to weigh the wisdom of legislation nor to decide whether the policy which it expresses offends the public welfare. The legislative power has limits * * *. But the state legislatures have const.i.tutional authority to experiment with new techniques; they are ent.i.tled to their own standard of the public welfare; they may within extremely broad limits control practices in the business-labor field, so long as specific const.i.tutional prohibitions are not violated and so long as conflicts with valid and controlling federal laws are avoided."[142] Proceeding from this basis the Court sustained a Missouri statute giving employees the right to absent themselves four hours on election day, between the opening and closing of the polls, without deduction of wages for their absence. It was admitted that this was a minimum wage law, but, said Justice Douglas, "the protection of the right of suffrage under our scheme of things is basic and fundamental,"

and hence within the police power. "Of course," the Justice added, "many forms of regulation reduce the net return of the enterprise * * * Most regulations of business necessarily impose financial burdens on the enterprise for which no compensation is paid. Those are part of the costs of our civilization. Extreme cases are conjured up where an employer is required to pay wages for a period that has no relation to the legitimate end. Those cases can await decision as and when they arise. The present law has no such infirmity. It is designed to eliminate any penalty for exercising the right of suffrage and to remove a practical obstacle to getting out the vote. The public welfare is a broad and inclusive concept. The moral, social, economic, and physical well-being of the community is one part of it; the political well-being, another. The police power which is adequate to fix the financial burden for one is adequate for the other. The judgment of the legislature that time out for voting should cost the employee nothing may be a debatable one. It is indeed conceded by the opposition to be such. But if our recent cases mean anything, they leave debatable issues as respects business, economic, and social affairs to legislative decision. We could strike down this law only if we returned to the philosophy of the _Lochner_, _Coppage_, and _Adkins_ cases."[143]

Workmen's Compensation Laws.--"This Court repeatedly has upheld the authority of the States to establish by legislation departures from the fellow-servant rule and other common-law rules affecting the employer's liability for personal injuries to the employee.[144] * * *

These decisions have established the propositions that the rules of law concerning the employer's responsibility for personal injury or death of an employee arising in the course of employment are not beyond alteration by legislation in the public interest; that no person has a vested right ent.i.tling him to have these any more than other rules of law remain unchanged for his benefit; and that, if we exclude arbitrary and unreasonable changes, liability may be imposed upon the employer without fault, and the rules respecting his responsibility to one employee for the negligence of another and respecting contributory negligence and a.s.sumption of risk are subject to legislative change."[145]

Accordingly, a State statute which provided an exclusive system to govern the liabilities of employers and the rights of employees and their dependents, in respect of compensation for disabling injuries and death caused by accident in certain hazardous occupations,[146] was held not to work a deprivation of property without due process of law in rendering the employer liable irrespective of the doctrines of negligence, contributory negligence, a.s.sumption of risk, and negligence of fellow-servants, nor in depriving the employee, or his dependents, of the higher damages which, in some cases, might be rendered under these doctrines.[147] Likewise, an act which allowed an injured employee an election of remedies permitting restricted recovery under a compensation law although guilty of contributory negligence, and full compensatory damages under the Employers' Liability Act did not deprive an employer of his property without due process of law.[148] Similarly, an elective statute has been sustained which provided that, in actions against employers rejecting the system, the inquiry should be presumed to have resulted directly from the employer's negligence and the burden of reb.u.t.ting said presumption shall rest upon the latter.[149]

Contracts limiting liability for injuries, consummated in advance of the injury received, may be prohibited by the State, which may further stipulate that subsequent acceptance of benefits under such contracts shall not const.i.tute satisfaction of a claim for injuries thereafter sustained.[150] Also, as applied to a nonresident alien employee hired within the State but injured on the outside, an act forbidding any contracts exempting employers from liability for injuries outside the State has been construed as not denying due process to the employer.[151] The fact that a State, after having allowed employers to cover their liability with a private insurer, subsequently withdrew that privilege and required them to contribute to a State Insurance Fund was held to effect no unconst.i.tutional deprivation as applied to an employer who had obtained protection from an insurance company before this change went into effect.[152] Likewise, as long as the right to come under a workmen's compensation statute is optional with an employer, the latter, having chosen to accept benefits thereof, is estopped from attempting to escape its burdens by challenging the const.i.tutionality of a provision thereof which makes the finding of fact of an industrial commission conclusive if supported by any evidence regardless of its preponderance.[153]

When, by the terms of a workmen's compensation statute, the wrongdoer, in case of wrongful death, is obliged to indemnify the employer or the insurance carrier of the employer of the decedent, in the amount which the latter were required under said act to contribute into special compensation funds, no unconst.i.tutional deprivation of the wrongdoer's property was discernible.[154] By the same course of reasoning neither the employer nor the carrier was held to have been denied due process by another provision in an act requiring payments by them, in case an injured employee dies without dependents, into special funds to be used for vocational rehabilitation or disability compensation of injured workers of other establishments.[155] Compensation also need not be based exclusively on loss of earning power, and an award authorized by statute for injuries resulting in disfigurement of the face or head, independent of compensation for inability to work, has been conceded to be neither an arbitrary nor oppressive exercise of the police power.[156]

Collective Bargaining.--During the 1930's, liberty, in the sense of freedom of contract, judicially translated into what one Justice has labelled the Allgeyer-Lochner-Adair-Coppage doctrine,[157]

lost its potency as an obstacle to the enforcement of legislation calculated to enhance the bargaining capacity of workers as against that already possessed by their employers. Prior to the manifestation, in Senn _v._ Tile Layers Protective Union,[158] decided in 1937, of a greater willingness to defer to legislative judgment as to the wisdom and need of such enactments, the Court had, on occasion, sustained measures such as one requiring every corporation to furnish, upon request, to any employee, when discharged or leaving its service, a letter, signed by the superintendent or manager, setting forth the nature and duration of his service to the corporation and stating truly the cause of his leaving.[159] Added provisions that such letters shall be on plain paper selected by the employee, signed in ink and sealed, and free from superfluous figures, and words, were also sustained as not amounting to any unconst.i.tutional deprivation of liberty and property.[160] On the ground that the right to strike is not absolute, the Court in a similar manner upheld a statute by the terms of which an officer of a labor union was punished for having ordered a strike for the purpose of enforcing a payment to a former employee of a stale claim for wages.[161]

The significance of the case of Senn _v._ Tile Layers Protective Union[162] as an indicator of the range of the alteration of the Court's views concerning the const.i.tutionality of State labor legislation derives in part from the fact that the statute upheld therein was not appreciably different from that voided in Truax _v._ Corrigan.[163] Both statutes were alike in that they withheld the remedy of injunction; but by reason of the fact that the invalidated act did not contain the more liberal and also more precise definition of a labor dispute set forth in the later enactment and, above all, did not affirmatively purport to sanction peaceful picketing only, the Court was enabled to maintain that Truax _v._ Corrigan, insofar as "the statute there in question was * * *

applied to legalize conduct which was not simply peaceful picketing,"

was distinguishable. Specifically, the Court in the Senn Case gave its approval to the application of a Wisconsin statute which authorized the giving of publicity to labor disputes, declared peaceful picketing and patrolling lawful, and prohibited the granting of injunctions against such conduct to a controversy in which the matter at issue was the refusal of a tiling contractor employing nonunion workmen to sign a closed shop agreement unless a provision requiring him to abstain from working in his business as a tile layer or helper should be eliminated.

Inasmuch as the enhancement of job opportunities for members of the union was a legitimate objective, the State was held competent to authorize the fostering of that end by peaceful picketing, and the fact that the sustaining of the union in its efforts at peaceful persuasion might have the effect of preventing Senn from continuing in business as an independent entrepreneur was declared to present an issue of public policy exclusively for legislative determination.[164]

The policy of many State legislatures in recent years, however, has been to adopt legislation designed to control the abuse of the enormous economic power which previously enacted protective measures enabled labor unions to ama.s.s; and it is the const.i.tutionality of such restrictive measures that has lately concerned the Court. Thus, in Railway Mail a.s.sociation _v._ Corsi,[165] section 43 of New York's Civil Rights Law which forbids a labor organization to deny any person membership by reason of race, color, or creed, or to deny any member, on similar grounds, equal treatment in designation for employment, promotion, or dismissal by an employer was sustained, when applied to an organization of railway mail clerks, as not interfering unlawfully with the latter's right to choose its members nor abridging its property rights, or liberty of contract. Inasmuch as it held "itself out to represent the general business needs of employees" and functioned "under the protection of the State," the union was deemed to have forfeited the right to claim exemption from legislation protecting workers against discriminatory exclusion.[166] Similarly approved as const.i.tutional in Lincoln Union _v._ Northwestern Co.[167] and American Federation of Labor _v._ American Sash Co.[168] were State laws outlawing the closed shop; and when labor unions invoked in their own defense the freedom of contract doctrine that hitherto had been employed to nullify legislation intended for their protection, the Court, speaking through Justice Black announced its refusal "to return, * * * to * * * [a] due process philosophy that has been deliberately discarded. * * * The due process clause," it maintained, does not "forbid a State to pa.s.s laws clearly designed to safeguard the opportunity of nonunion workers to get and hold jobs, free from discrimination against them because they are nonunion workers."[169] Also in harmony with the last mentioned pair of cases is Auto Workers _v._ Wisconsin Board[170] in which was upheld enforcement of the Wisconsin Employment Peace Act which proscribed as an unfair labor practice efforts of a union, after collective bargaining negotiations had become deadlocked, to coerce an employer through a "slow-down" in production achieved by the irregular, but frequent, calling of union meetings during working hours without advance notice to the employer or notice as to whether or when the employees would return, and without informing him of the specific terms sought by such tactics.

"No one," declared the Court, can question "the State's power to police coercion by * * * methods" which involve "considerable injury to property and intimidation of other employees by threats."[171] Finally, in Giboney _v._ Empire Storage Co.,[172] the Court acknowledged that no violation of the Const.i.tution results when a State law forbidding agreements in restraint of trade is construed by State courts as forbidding members of a union of ice peddlers from peacefully picketing a wholesale ice distributor's place of business for the sole purpose of inducing the latter not to sell to nonunion peddlers.

REGULATION OF CHARGES; "BUSINESSES AFFECTED WITH A PUBLIC INTEREST"

History

In endeavoring to measure the impact of the due process clause upon efforts by the States to control the charges exacted by various businesses for their services, the Supreme Court, almost from the inception of the Fourteenth Amendment, has devoted itself to the examination of two questions: (1) whether that clause precluded that kind of regulation of certain types of business, and (2) the nature of the restraint, if any, which this clause imposes on State control of rates in the case of businesses as to which such control exists. For a brief interval following the ratification of the Fourteenth Amendment, the Supreme Court appears to have underestimated the significance of this clause as a substantive restraint on the power of States to fix rates chargeable by an industry deemed appropriately subject to such controls. Thus, in Munn _v._ Illinois,[173] the first of the "Granger"

cases, in which maximum charges established by a State legislature for Chicago grain elevator companies were challenged, not as being confiscatory in character, but rather as a regulation beyond the power of any State agency to impose, the Court, in an opinion that was largely an _obiter dictum_, declared that the due process clause did not operate as a safeguard against oppressive rates, that if regulation was permissible, the severity thereof was within legislative discretion and could be ameliorated only by resort to the polls. Not much time was permitted to elapse, however, before the Court effected a complete withdrawal from this position; and by 1890[174] it had fully converted the due process clause into a positive restriction which the judicial branch is duty bound to enforce whenever State agencies seek to impose rates which, in its estimation, are arbitrary or unreasonable.

In contrast to the speed with which the Court arrived at those above mentioned conclusions, more than fifty years were to elapse before it developed its currently applicable formula for determining the propriety of subjecting specific businesses to State regulation of their prices or charges. Prior to 1934, unless a business were "affected with a public interest," control of its prices, rates, or conditions of service was viewed as an unconst.i.tutional deprivation of liberty and property without due process of law. During the period of its application, however, this standard, "business affected with a public interest,"

never acquired any precise meaning; and as a consequence lawyers were never able to identify all those qualities or attributes which invariably distinguished a business so affected from one not so affected. The best the Court ever offered by way of enlightenment was the following cla.s.sification of businesses subject to regulation, prepared by Chief Justice Taft.[175] These were said to comprise: "(1) Those [businesses] which are carried on under the authority of a public grant of privileges which either expressly or impliedly imposes the affirmative duty of rendering a public service demanded by any member of the public. Such are the railroads, other common carriers and public utilities. (2) Certain occupations, regarded as exceptional, the public interest attaching to which, recognized from earliest times, has survived the period of arbitrary laws by Parliament or Colonial legislatures for regulating all trades and callings. Such are those of the keepers of inns, cabs and grist mills. * * * (3) Businesses which though not public at their inception may be fairly said to have risen to be such and have become subject in consequence to some government regulation. They have come to hold such a peculiar relation to the public that this is superimposed upon them. In the language of the cases, the owner by devoting his business to the public use, in effect grants the public an interest in that use and subjects himself to public regulation to the extent of that interest although the property continues to belong to its private owner and to be ent.i.tled to protection accordingly."

Through application of this now outmoded formula the Court found it possible to sustain State laws regulating charges made by grain elevators,[176] stockyards,[177] and tobacco warehouses,[178] and fire insurance rates[179] and commissions paid to fire insurance agents.[180]

Voided, because the businesses sought to be controlled were deemed to be not so affected, were State statutes fixing the price at which gasoline may be sold,[181] or at which ticket brokers may resell tickets purchased from theatres,[182] and limiting compet.i.tion in the manufacture and sale of ice through the withholding of licenses to engage therein.[183]

Nebbia _v._ New York

In upholding, by a vote of five-to-four, a depression induced New York statute fixing prices at which fluid milk might be sold, the Court, in 1934, finally shelved the concept of "a business affected with a public interest."[184] Older decisions, insofar as they negatived a power to control prices in businesses found not "to be clothed with a public use"

were now reviewed as resting, "finally, upon the basis that the requirements of due process were not met because the laws were found arbitrary in their operation and effect. Price control, like any other form of regulation, is [now] unconst.i.tutional only if arbitrary, discriminatory, or demonstrably irrelevant to the policy the legislature is free to adopt, and hence an unnecessary and unwarranted interference with individual liberty." Conceding that "the dairy industry is not, in the accepted sense of the phrase, a public utility"; that is, a "business affected with a public interest," the Court in effect declared that price control henceforth is to be viewed merely as an exercise by the State of its police power, and as such is subject only to the restrictions which due process of law imposes on arbitrary interference with liberty and property. Nor was the Court disturbed by the fact that a "scientific validity" had been claimed for the theories of Adam Smith relating to the "price that will clear the market." However much the minority might stress the unreasonableness of any artificial State regulation interfering with the determination of prices by "natural forces,"[185] the majority was content to note that the "due process clause makes no mention of prices" and that "the courts are both incompetent and unauthorized to deal with the wisdom of the policy adopted or the practicability of the law enacted to forward it."

Having thus concluded that it is no longer the nature of the business which determines the validity of a regulation of its rates or charges but solely the reasonableness of the regulation, the Court had little difficulty in upholding, in Olsen _v._ Nebraska,[186] a State law prescribing the maximum commission which private employment agencies may charge. Rejecting the contentions of the employment agencies that the need for such protective legislation had not been shown, the Court held that differences of opinion as to the wisdom, need, or appropriateness of the legislation "suggest a choice which should be left to the States"; and that there was "no necessity for the State to demonstrate before us that evils persist despite the compet.i.tion" between public, charitable, and private employment agencies. The older case of Ribnik _v._ McBride,[187] which founded the invalidation of similar legislation upon the now obsolete concept of a "business affected with a public interest" was expressly overruled.

JUDICIAL REVIEW OF PUBLICLY DETERMINED RATES AND CHARGES

Development

In Munn _v._ Illinois,[188] its initial holding concerning the applicability of the Fourteenth Amendment to governmental price fixing,[189] the Court, not only a.s.serted that governmental regulation of rates charged by public utilities and allied businesses was within the States' police power but added that the determination of such rates by a legislature was conclusive and not subject to judicial review or revision. Expanding the range of permissible governmental fixing of prices, the Court, in the Nebbia Case,[190] more recently declared that prices established for business in general would invite judicial condemnation only if "arbitrary, discriminatory, or demonstrably irrelevant to the policy the legislature is free to adopt." The latter standard of judicial appraisal, as will be subsequently noted, represents less of a departure from the principle enunciated in the Munn Case than that which the Court evolved, in the years following 1877, to measure the validity of State imposed public utility rates, and this difference in the judicial treatment of prices and rates accordingly warrants an explanation at the outset. Unlike operators of public utilities who, in return for the grant of certain exclusive, virtually monopolistic privileges by the governmental unit enfranchising them, must a.s.sume an obligation to provide continuous service, proprietors of other businesses are in receipt of no similar special advantages and accordingly are unrestricted in the exercise of their right to liquidate and close their establishments. At liberty, therefore, as public utilities invariably are not, to escape, by dissolution, the consequences of publicly imposed charges deemed to be oppressive, owners of ordinary business, presumably for that reason, have thus far been unable to convince the courts that they too, no less than public utilities, are in need of that protection which judicial review affords.

Consistently with its initial p.r.o.nouncement in the Munn Case, that the reasonableness of compensation allowed under permissible rate regulation presented a legislative rather than a judicial question, the Court, in Davidson _v._ New Orleans,[191] also rejected the contention that, by virtue of the due process clause, businesses, even though subject to control of their prices or charges, were nevertheless ent.i.tled to "just compensation." Less than a decade was to elapse, however, before the Court, appalled perhaps by prospective consequences of leaving business "at the mercy of the majority of the legislature," began to reverse itself. Thus, in 1886, Chief Justice Waite, in the Railroad Commission Cases,[192] warned that "this power to regulate is not a power to destroy; [and] the State cannot do that in law which amounts to a taking of property for public use without just compensation or without due process of law"; or, in other words, cannot impose a confiscatory rate.

By treating "due process of law" and "just compensation" as equivalents, the Court, contrary to its earlier holding in Davidson _v._ New Orleans, was in effect a.s.serting that the imposition of a rate so low as to damage or diminish private property ceased to be an exercise of a State's police power and became one of eminent domain. Nevertheless, even the added measure of protection afforded by the doctrine of the Railroad Commission Cases proved inadequate to satisfy public utilities; for through application of the latter the courts were competent to intervene only to prevent legislative imposition of a confiscatory rate, a rate so low as to be productive of a loss and to amount to a taking of property without just compensation. Nothing less than a judicial acknowledgment that when the "reasonableness" of legislative rates is questioned, the courts should finally dispose of the contention was deemed sufficient by such businesses to afford the relief desired; and although as late as 1888[193] the Court doubted that it possessed the requisite power, it finally acceded to the wishes of the utilities in 1890, and, in Chicago, M. & St. P.R. Co. _v._ Minnesota[194] ruled as follows: "The question of the reasonableness of a rate * * *, involving as it does the element of reasonableness both as regards the company and as regards the public, is eminently a question for judicial investigation, requiring due process of law for its determination. If the company is deprived of the power of charging rates for the use of its property, and such deprivation takes place in the absence of an investigation by judicial machinery, it is deprived of the lawful use of its property, and thus, in substance and effect, of the property itself, without due process of law * * *"

Despite a last hour attempt, in Budd _v._ New York,[195] to reconcile Munn _v._ Illinois with Chicago, M. & St. P.R. Co. _v._ Minnesota by confining application of the latter decision to cases wherein rates had been fixed by a commission and denying its pertinence to rates directly imposed by a legislature, the Court, in Reagan _v._ Farmers' Loan and Trust Co.,[196] set at rest all lingering doubts as to the scope of judicial intervention by declaring that, "if a carrier," in the absence of a legislative rate, "attempted to charge a shipper an unreasonable sum," the Court, in accordance with common law principles, will pa.s.s on the reasonableness of its rates and has "jurisdiction * * * to award to the shipper any amount exacted * * * in excess of a reasonable rate; * * * The province of the courts is not changed, nor the limit of judicial inquiry altered, because the legislature instead of a carrier prescribes the rates."[197] Reiterating virtually the same principle in Smyth _v._ Ames,[198] the Court not only obliterated the distinction between confiscatory and unreasonable rates, but also contributed the additional observation that the requirements of due process are not met unless a court reviews not merely the reasonableness of a rate but also determines whether the rate permits the utility to earn a fair return on a fair valuation of its investment.

Limitations on Judicial Review

As to what courts will not do, when reviewing rate orders of a State commission, the following negative statements of the Supreme Court appear to have enduring value. As early as 1894, the Court a.s.serted: "The courts are not authorized to revise or change the body of rates imposed by a legislature or a commission; they do not determine whether one rate is preferable to another, or what under all circ.u.mstances would be fair and reasonable as between the carriers and the shippers; they do not engage in any mere administrative work; * * * [however, there can be no doubt] of their power and duty to inquire whether a body of rates * * * is unjust and unreasonable, * * *, and if found so to be, to restrain its operation."[199] And later, in 1910, although it was examining the order of a federal rate-making agency, the Court made a similar observation which appears to be equally applicable to the judicial review of regulations of State agencies. The courts cannot, "under the guise of exerting judicial power, usurp merely administrative functions by setting aside" an order of the commission within the scope of the power delegated to such commission, upon the ground that such power was unwisely or inexpediently exercised.[200]

Also inferable from these early holdings, and effective to restrict the bounds of judicial investigation, is the notion that a distinction can be made between factual questions which give rise only to controversies as to the wisdom or expediency of an order issued by a commission and determinations of fact which bear on a commission's power to act; namely those questions which are inseparable from the const.i.tutional issue of confiscation, and that judicial review does not extend to the former.

This distinction is accorded adequate emphasis by the Court in Louisville & N.R. Co. _v._ Garrett,[201] in which it declared that "the appropriate question for the courts" is simply whether a "commission,"

in establishing a rate, "acted within the scope of its power" and did not violate "const.i.tutional rights * * * by imposing confiscatory requirements" and that a carrier, contesting the rate thus established, accordingly was not ent.i.tled to have a court also pa.s.s upon a question of fact regarding the reasonableness of a higher rate charged by it prior to the order of the commission. All that need concern a court, it said, is the fairness of the proceeding whereby the commission determined that the existing rate was excessive; but not the expediency or wisdom of the commission's having superseded that rate with a rate regulation of its own.

Likewise, with a view to diminishing the number of opportunities which courts may enjoy for invalidating rate regulations of State commissions, the Supreme Court has placed various obstacles in the path of the complaining litigant. Thus, not only must a person challenging a rate a.s.sume the burden of proof,[202] but he must present a case of "manifest const.i.tutional invalidity";[203] and if, notwithstanding his effort, the question of confiscation remains in doubt, no relief will be granted.[204] Moreover, even though a public utility, which has pet.i.tioned a commission for relief from allegedly confiscatory rates, need not await indefinitely a decision by the latter before applying to a court for equitable relief,[205] the latter ought not to interfere in advance of any experience of the practical result of such rates.[206]