The North Carolina State Utilities Commission brought suit to enjoin enforcement of an order of the Interstate Commerce Commission. 258 I.C.C. 133. The Federal Economic Stabilization Director acting through the Price Administrator sought and was granted the right to intervene as a party plaintiff. A federal district court of three judges denied the injunction, 56 F.Supp. 606, and the case is here on direct appeal under § 210 of the Judicial Code, 28 U.S.C.A. § 41(27) note.
This clash between state and federal agencies came about because the State Commission and the Interstate Commerce Commission each claimed the paramount power to fix railroad rates in North Carolina. The North Carolina Commission ordered railroads doing business in the state to charge no more than 1.65 cents per mile for carrying intra-state coach passengers from one point in the state to another. Despite this State Commission order, the Interstate Commerce Commission authorized the same railroads to charge 2.2 cents per mile for the same type of carriage.
The Interstate Commerce Commission asserted its power to prescribe these purely intra-state rates under § 13(4) of the Interstate Commerce Act. 49 U.S.C. § 13(4), 49 U.S.C.A. § 13(4). That section, which is set forth below, empowers the Interstate Commerce Commission to prescribe intrastate railroad rates under certain conditions, despite conflicting state orders as to the same rates. The conditions that Congress imposed as a prerequisite to Commission action are that the Commission shall hold a 'full hearing' and find that the state-prescribed rates either caused (1) undue or unreasonable advantage, preference, or prejudice, as between persons or localities in intra-state commerce on the one hand, and interstate commerce on the other hand, or (2) undue, unreasonable, or unjust discrimination against interstate commerce. The Commission held hearings which are challenged on various grounds as falling short of 'full' hearings. It made findings and concluded that the 1.65 state rate was unduly prejudicial to interstate passengers, and that the state rate constituted an undue and unjust discrimination against interstate commerce. These conclusions are attacked on the ground that they are supported neither by findings nor evidence. The crucial question nvolved in all these contentions is whether the indispensable prerequisites to the exercise of the Federal Commission's power over intra-state rates have been shown to exist with sufficient certainty. Before making any detailed reference to the hearings, findings or evidence, it would be helpful to set out certain guiding principles which lead us to a resolution of the crucial question.
Section 13(4) does not relate to the Commission's power to regulate interstate transportation as such. As to interstate regulation, the Commission is granted the broadest powers to prescribe rates and other transportation details. See United States et al. v. Penn. R.R. Co., et al., 323 U.S. 612, 65 S.Ct. 471. No such breadth of authority is granted to the Commission over purely intra-state rates. Neither § 13 (4), nor any other congressional legislation, indicates a purpose to attempt wholly to deprive the states of their primary authority to regulate intra-state rates. Since the enactment of § 13(4), as before its enactment, a state's power over intra-state rates is exclusive up to the point where its action would bring about the prejudice or discrimination prohibited by that section. When this point-not always easy to mark-is reached, and not until then, can the Interstate Commerce Commission nullify a state-prescribed rate.