MINNESOTA RATE CASES 230 U.S. 352 (1913)

In these cases a unanimous Supreme Court reaffirmed state power to regulate intrastate commerce even if it should indirectly affect interstate commerce. Justice charles evans hughes stressed the supremacy of federal authority but, reaching back to cooley v. board of wardens of philadelphia (1852), held that states could regulate interstate commerce when Congress had not yet chosen to act.

The cases before the Court represented extensive litigation throughout the country. The Railroad & Warehouse Commission of Minnesota and the state legislature had issued orders fixing maximum rail rates within the state. Although the rates they set were purely intrastate, both sides agreed that interstate rates would be affected. The cases arose as stockholders ' suits to prevent the application of the prescribed rates to interstate operators. (See ex parte young.) On the principal question whether the orders fixed rates that interfered with interstate commerce, Hughes agreed that if the rates imposed a direct burden on commerce, they must fall. He then began a lengthy exposition of the nature of commercial regulation in the federal system, concluding that "it is competent for a state to govern its internal commerce … although interstate commerce may incidentally or indirectly be involved." Unless and until Congress acted, state action might well be legal even if touching interstate commerce. Only Congress could judge the necessity for action and, having decided to, it could intervene "at its discretion for the complete and effective government" of even local conduct affecting interstate commerce. The Minnesota actions were, therefore, within the state's power but would be superseded if Congress acted. The Court thus broadly upheld state ratemaking authority; it also implicitly affirmed federal power over intrastate railroad activity affecting interstate commerce, a significant step it would take explicitly the following year in houston, east & west texas railway company v. united states, (1914).

David Gordon
(1986)