Wabash, St. L. & P. Ry. Co. v. Illinois, 118 U.S. 557 (1886)

Facts

  • Illinois enacted a statute penalizing railroads for charging the same or higher rates for a shorter haul than for a longer haul over the same line for the same class of freight.
  • Wabash, a multistate railroad, carried freight under through arrangements from Illinois points (including Peoria and Gilman) to New York City.
  • On the same day, Wabash charged a lower through rate from Peoria to New York than from Gilman to New York, although the freight was of the same class and moved over the same line.
  • The Peoria shipment traveled farther within Illinois than the Gilman shipment, yet cost less overall.
  • Illinois prosecuted Wabash for “unjust discrimination” based on the rate differential for these interstate shipments.

Issues

  1. Whether a state may apply a long- and short-haul anti-discrimination rate statute to a continuous shipment moving from points within the state to a destination in another state.
  2. Whether applying such a statute to through interstate rates constitutes a direct regulation of interstate commerce in violation of the Commerce Clause.
  3. Whether state power to regulate in the absence of congressional legislation extends to prescribing or constraining charges for the in-state portion of an interstate transportation contract.

Decision

  • The U.S. Supreme Court reversed the judgment against Wabash.
  • Transportation under a single continuous interstate contract is “commerce among the states,” including the portion of the movement occurring within the originating state.
  • Illinois could not apply its long- and short-haul statute to through shipments from Illinois to New York because it imposed a direct burden on interstate commerce.
  • The Court recognized that states may regulate rates for transportation that begins and ends within the state and is not connected to carriage outside the state.
  • A continuous shipment from one state to another is interstate commerce throughout the journey, even while physically within a single state.
  • Direct state regulation of interstate transportation rates is unconstitutional; authority to regulate interstate commerce is vested in Congress.
  • States may regulate intrastate transportation rates when the movement is wholly within the state and not part of an interstate transaction.
  • Prior decisions upholding state regulation of rail-related charges were not read to authorize state control of rate structures governing interstate carriage.

Conclusion

The Court held that Illinois’s long- and short-haul rate statute, as applied to through interstate shipments, was an invalid direct regulation of interstate commerce; only Congress may regulate interstate railroad rate structures, while states retain authority over purely intrastate transportation.