Tuesday, May 19, 2015

The U.S. Commerce Court, 1910-1913

William Howard Taft, April 1909 (LC)
[Here's the other essay from this year's exam in American Legal History, on a short-lived attempt to subject administration to a court-centered notion of the rule of law, dreamed up by that "progressive conservative," William Howard Taft.]

Before 1906, the Interstate Commerce Commission could not prospectively set the rates railroads charged shippers.  It had to wait until a shipper challenged a railroad's existing rate and decide whether it was reasonable or unreasonable.  The railroad was then free to try again.  Further, an ICC order only became effective if a federal court decided to enforce it.  In making that decision, the court was free to take evidence not presented to the ICC and make up its own mind where the weight of the evidence lay. The Hepburn Act of 1906 fundamentally changed this by allowing the ICC to set future rates and by making ICC orders effective immediately and forcing the railroads to go to court to overturn them.  In these proceedings, the federal courts could not take new evidence, but whether they had to defer to the ICC's factual findings or were free to weigh the evidence themselves was not clear from the statute.  The Supreme Court finally addressed that issue in the Illinois Central case, decided in January 1910.

Three days before the Court announced its decision in Illinois Central, President William Howard Taft called upon Congress to create the US Commerce Court.  No American President had greater experience in the courts.  In the 1880s and 1890s, Taft had been a prosecutor in a rural Ohio county, a trial judge in Cincinnati, and a federal appellate judge.  He believed that because the Hepburn Act had granted the ICC "a legislative function," the commission should not also perform the judicial one of finally determining the legality of the rates it prescribed.  He proposed that this judicial power be entrusted to a Commerce Court with exclusive jurisdiction over challenges to ICC orders.  Such a court would allow the federal judiciary to acquire the expertise needed for the "effective, systematic, and scientific enforcement" of federal railroad law.  At present, generalist judges on the U.S. Courts of Appeals often failed to master the "great volume of conflicting evidence" in railroad rate cases.  Too often they let stand ICC orders that "robbed" railroads of a reasonable return upon their investment.

As established by the Mann-Elkins Act of June 18, 1910, the Commerce Court consisted of five newly appointed and life-tenured judges who served during good behavior for five-year terms.  After their term expired, they would join one of the existing Circuit Court of Appeals.  The Chief Justice of the United States would appoint replacements from among the existing bench of federal appellate judges.  Judges were not eligible to return to the Commerce Court during the year following their service.  The Commerce Court had exclusive jurisdiction over all challenges to ICC orders.  The only appeal was by certiorari to the US Supreme Court.

Journalists dubbed the Commerce Court Taft's "pet project."  When it was before Congress, the legal profession said little about it one way or the other.  Progressive Republicans, including Wisconsin's Robert M. La Follette, and Democrats opposed it.  They thought the ICC was already protecting the public interest by keeping railroads from charging shippers (and, ultimately, consumers) too much.  They were sure the Commerce Court would "usurp" the jurisdiction of the ICC and do the bidding of the railroads.  Shippers saw things the same way, but the railroads did not enthusiastically support the court either.  They preferred the existing system of appeals to the various Circuit Courts of Appeals, where their able advocates could overwhelm a nonspecialist bench. 

The Commerce Court convened for the first time in February 1911.  Its chief judge was Martin Knapp, a former chairman of the ICC.  He believed that the current ICC favored shippers excessively and seemed bent on keeping it in check.  Another judge was Julian Mack, a Jewish lawyer and reformer from Chicago.  A third, Robert Archibald, owed his position to "Boss" Penrose, who dominated Pennsylvania's Republican Party.  Archibald's impeachment in 1912 for using his influence over railroads to secure contracts for his associates did not directly tarnish the other judges.  Still, contemporaries thought the scandal underlined "the peculiar character" of the Commerce Court.

More general was the complaint that the Commerce Court was attempting to "overshadow and dwarf" the ICC by intrusively reviewing and then reversing its orders.  In four of its first five cases, the court reversed a shipper-friendly order of the ICC, only to be itself reversed by the US Supreme Court, which reinstated the ICC's original order.  George W. Wickersham, Taft’s Attorney General, blamed the ICC for not clearly setting out the facts justifying its orders.  The commission's opinions, he complained, blended "facts and observations and deductions and conclusions of law"; "everything enters into it.  It is exceedingly difficult to go through that and pick out the facts."  He hoped that the Commerce Court's reversals would induce the ICC to produce better findings.  For its part, the ICC blamed the Commerce Court's intrusive standard of review.  The court's assertion of a right to reject orders that were "clearly and palpably against the weight of the evidence" meant that 99 out of 100 of its orders were at risk of reversal, the commissioners maintained.

In a sympathetic account of the Commerce Court published in 1928, Felix Frankfurter argued that its judges had not engaged in "a conscious attempt . . . to usurp authority" but had struggled in good faith to work out their jurisdiction.  He hinted that an administrative court might be worth trying again.  But during the Taft and Wilson administrations, most congressmen felt otherwise.  J. Harry Covington (D-Maryland), who would later found the law firm Covington & Burling, warned that "we have drifted far away from constitutional landmarks in the creation of special courts in this country."  He believed that "the best jurisprudence of America" had been created by judges who could resolve "all the varied questions which came before the courts."  The judgments of specialized courts were more "often warped than well-rounded."

A bill to abolish the Commerce Court passed both houses of Congress in 1912 but fell to Taft's veto.  After Woodrow Wilson took office in 1913, the court was abolished and its judges assigned elsewhere in the federal judiciary.

No comments: