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ARKADELPHIA MILLING CO. V. ST. L. S.W. RY. CO., 249 U. S. 134 (1919)

U.S. Supreme Court

Arkadelphia Milling Co. v. St. L. S.W. Ry. Co., 249 U.S. 134 (1919)

Arkadelphia Milling Company v.

St. Louis Southwestern Railway Company

Nos. 92, 93, 94, 95

Submitted December 17, 1918

Decided March 3, 1919

249 U.S. 134


Orders of a state commission fixing railroad rates under legislative authority are state laws within the meaning of the provision of the Judiciary Act of 1891, § 5, and Jud.Code, § 238, allowing direct appeals from the district court to this Court in cases in which a law of a state is claimed to contravene the federal Constitution. P. 249 U. S. 141.

When this Court, having jurisdiction on constitutional grounds, under Jud.Code, § 238, reverses a final injunction decree of the district court on direct appeal, with directions to dismiss the bill without prejudice, and the district court, acting under a reservation in its own decree, and within authority for further proceedings allowed by the mandate, assesses and decrees the damages caused by its injunctions, such supplementary decree is part of the main cause, and appealable directly to this Court. Id.

Upon reversal of final injunction decrees of the district court with directions to dismiss the bills without prejudice, the mandates allowed further proceedings in the causes in conformity with the opinion and decree of this Court, according to right and justice, etc. Held that the district court was thus empowered to determine and

Page 249 U. S. 135

decree damages arising under the injunction bonds prior to the reversed decrees. St. Louis, Iron Mountain Southern, Ry. Co. v. McKnight, 244 U. S. 368, explained. P. 249 U. S. 143.

In awarding final injunctions restraining the enforcement of railway rates as fixed by state authority, the district court ordered that the preliminary injunction bonds be released and the sureties thereon discharged from further liability. Held that a failure to appeal from and assign error to this action created no obstacle to the assessment of damages under the bonds, after reversal of the final decrees by this Court, where the mandate allowed further proceedings and the district court had retained jurisdiction to make further orders if necessitated by changed conditions. Id.

In suits by railroads to determine the adequacy of rates fixed by a state commission, injunction orders restraining enforcement pendente lite were obtained on bonds conditioned for refund to shippers if it should eventually be decided that the orders should not have been made. Held: (1) that the conditions were broken by ultimate failure of plaintiffs to prove the inadequacy of the rates and ultimate denial of relief on that ground, although there was no specific adjudication that the preliminary injunctions were improper; (2) that the period of the obligation ended with final decrees of the district court awarding permanent injunctions, and that the sureties were not liable for claims arising thereafter and before reversal by this Court. Pp. 249 U. S. 144-145.

A railroad company which, in virtue of an erroneous final decree of injunction, collects charges in excess of rates lawfully fixed by a state is equitably liable to make refunds to the shippers when the decree is reversed on appeal. P. 249 U. S. 145.

For the purpose of claiming such restitution in the injunction suit, shippers not named as parties and represented theretofore only by the state railroad commission, but who have been subjected to the injunction as a class and obliged to pay the overcharges, may intervene in a reference to a master, ordered by the district court. P. 249 U. S. 146.

And although such reference be ordered under a rule of court relating only to damages recoverable on injunction bonds, it may still furnish foundation for a decree against the railroad on the theory of restitution also, if the merits are fully heard and the facts undisputed. Id.

In its relation to the rights of shippers to recover overcharges, whether under injunction bonds or on the theory of restitution, a decree reversing the final injunctive decree of the district court, with a direction to dismiss the bill, is nonetheless conclusive because

Page 249 U. S. 136

made without prejudice to the right of the carrier to bring future suit under changed conditions. P. 249 U. S. 146.

Interest is recoverable upon such overcharges from the dates of payment. P. 249 U. S. 147.

Semble that a carrier which has failed in a suit to enjoin the enforcement of state rates as confiscatory is still free to contest the validity of particular schedules as applied to particular shippers in supplemental proceedings for restitution. P. 249 U. S. 148.

The objection that a state rate discriminates between shipper, in violation of the equal protection clause of the Fourteenth Amendment, is not available to a carrier. P. 249 U. S. 149. Lake Shore & Michigan Southern Ry. Co. v. Smith, 173 U. S. 684, and Cotting v. Kansas City Stock Yard Co., 183 U. S. 79, distinguished.

A movement of rough lumber from the woods to milling points in the same state, where it remains for some months in the process of manufacture before being sold and shipped as finished products to purchasers and destinations previously unidentified, is not a movement in interstate commerce, although the shipment of the rough material is actuated by a belief, which is justified by experience and market conditions, that 95% of the products will be marketed and shipped outside of the state. P. 249 U. S. 150.

Nos. 92, 93 reversed.

Nos. 94, 95 modified and affirmed.

The cases are stated in the opinion.

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