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Cite as 1 D.V.H. 1 (1897)

SUPREME COURT OF THE UNITED STATES

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No. 02-3426
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The Biloxi, Louisiana and Hattiesville Railroad

Corporation v. The State of Yazoo

Upon writ of error appeal by the Biloxi, Louisiana and Hattiesville Railroad to the
Supreme Court of the United States

[October 30, 1897]

CHIEF JUSTICE DYKHOUSE delivered the opinion of the Court. JUSTICES

BEANS, BRILLION, GAY, TAYLOR, and TRAVNIK joined in the opinion.

In the case of The Biloxi, Louisiana, and Hattiesville Railroad Corporation v.

the State of Yazoo, hereafter known as B.L.A.H v. Yazoo, the Supreme Court is
urged to rule on the fate of the Yazoo Grain Elevator Licensure Act of 1896. The
issues presented within the case are determined as whether the Act violates the
Interstate Commerce Clause, and whether B.L.A.H is entitled to Due Process of
Law under the 14th Amendment. It is the opinion of this Court that the Act in
question does not violate the Interstate Commerce Clause, nor does it deprive
B.L.A.H of due process under the law.

Both B.L.A.H and Yazoo agree to the facts of the case, thus making any
question over the facts inadmissible before the Court. It is agreed upon that the
state of Yazoo incorporated B.L.A.H in order to establish a railroad amongst the
specified towns within Yazoo. B.L.A.H proceeded to purchase grain elevators,
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milling, and bakery facilities within and without the state of Yazoo, establishing a
baking monopoly. Yazoo established the YGEL Act in order to provide for the
health and safety of its citizens, and required licenses for the grain elevators within
the state of Yazoo. The case of B.L.A.H v. Yazoo arose out of a grain elevator
operator·s refusal to pay the fines levied upon him for not having the appropriate
license. B.L.A.H contended that the Act violates both the Due Process Clause of the
14th Amendment as well as the Interstate Commerce Clause.
I.

The first issue that this Court must address is whether or not the actions of
B.L.A.H constitute interstate commerce. It is clear from the facts of the case that
B.L.A.H has established railroad lines both within the borders of Yazoo, and also
outside the borders of the state. The precedent of the Court established in Gibbons
v. Ogden 9 Wheaton 1 (1824) has been to recognize interstate navigation and
transportation as interstate commerce, under the jurisdiction of Congress. Thus, it
would seem as though the operations of B.L.A.H fall under interstate commerce.
However, the Court does not view Gibbons v. Ogden as a controlling case on the
issue of interstate commerce. Instead, it is apparent that transportation is only a
secondary concern in the case and thus does not prove interstate commerce.

More recent precedent of the Supreme Court establishes the basis for Yazoo·s
power to regulate in light of the conduct of interstate transportation by B.L.A.H. In
Gladson v. Minnesota 166 U.S. 427 (1897), this Court ruled that states may
regulate a railroad corporation created by the state for the purposes of the local
government and the people of the state. The railroad in question in this case also
had lines that ran outside of the state, and yet was still subject to the regulation of
the Court. The facts of the case before us hold that B.L.A.H was a railroad
corporation created by the state. Therefore, the precedent of Gladson v. Minnesota
applies to this case and allows Yazoo to regulate B.L.A.H on the basis of its
upholding state regulation of the B.L.A.H railroad corporation.
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The plaintiff also argues that the Act in question directly impacts interstate
commerce, which must be regulated by Congress through the precedent set by E.C.
Knight Corporation v. United States 156 U.S. 1 (1895). However, the Court finds no
reason to believe the health and safety laws placed upon the grain elevators directly
effects interstate commerce. The grain elevators, as stated in B.L.A.H·s argument
are merely a place of storage. In no way can the Court apply the definition of
interstate commerce to storage, for storage is neither transportation nor
intercourse, nor does it directly effect transportation of intercourse. Because it is
the opinion of the Court that the regulation of the grain elevators is merely an
indirect impact on interstate commerce, the precedent of Smith v. Alabama 124 U.S.
465 (1888) must hold true. Thus, there is no conflict between the YGEL Act and the
Interstate Commerce Clause of the United States Constitution.

II.

The other issue to be considered by this Court is whether the Act in question
violates the corporations right to due process under the 14th Amendment. The
plaintiff argues that they have a right to due process under the precedent of Santa
Clara v. Southern Pacific Railroad 118 U.S. 394 (1886). This right may indeed be
found through inspection of Supreme Court precedent, however, the extent of due
process for corporations is a matter of closer scrutiny.

It has been the practice of the Supreme Court to view due process in a
distinct manner. This manner, procedural due process, deals specifically with
access to the courts. Procedural due process is fulfilled by the ability to appear and
argue in front of a court of law. Ultimately, procedural due process provides the
´deprivedµ party notice, the ability to bring a case to court, and a neutral judge.
What B.L.A.H is suggesting is a unique application of due process that would seek
justification from the government of Yazoo for the perceived ´deprivation of
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property.µ The Court can find no reason to grant such an application of due process.
It is clear in the precedent of this court that corporations may be granted procedural
due process Chicago B & Q Railroad Company v. Chicago 166 U.S. 226 (1897).
However, the Court refuses to apply due process in a way that would promote the
economic interests of the corporation. Because B.L.A.H is able to appeal to the
court and its procedural due process is in no way impeded upon by the Act, Munn v.
Illinois 94 U.S. 113 (1877) is a controlling case.

The precedent of Munn v. Illinois establishes the ability of the state of Yazoo
to regulate the grain elevators of B.L.A.H. In Munn, this Court ruled that private
property used for a public good was considered under the regulatory power of the
state. Both the plaintiff and the defendant agree in their statement of facts that
B.L.A.H was formed as a railroad monopoly to serve the public good. Because
B.L.A.H was incorporated under the state, its business practices can be regulated
by the state. This Court holds that the Yazoo Grain Elevator Licensure Act is not in
violation of the Due Process Clause of the 14th Amendment of the Constitution of
the United States.

III.

It is important to consider the consequences of restricting the states ability to

regulate B.L.A.H in such a situation as this. A monopoly incorporated by the state,
controlling every aspect of the baking industry within the state, and yet not subject
to the regulation of the state due to a marginal level of commerce would be
extremely detrimental to the good of the public. This Court affirms the police power
of the state to regulate monopolies within its borders. When the interest of
enterprises has come into conflict with the public interest, Supreme Court
precedent has sided with the police power of the states to protect the common good.
Slaughterhouse Cases 16 Wallace 36 (1873). The Court even has held that the
public good must be protected, even to the detriment of corporations and businesses.
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Mugler v. Kansas 123 U.S. 623 (1887). The police power of the state is supreme in
matters concerning the public good, which the facts of both sides agree the Act in
question does indeed concern the public good.

The opinion of this Supreme Court of the United States holds that it is not
only the right, but also the duty of the states to protect the public from monopolies.
When a state has established a monopoly, and eliminated the competition in order
to do so, the government must then impose regulations on the monopoly.
Otherwise, the public would be at risk of coercion by the monopoly in the forms of
price fixing and the control of production. Police power granted through preceding
cases is affirmed in this case, with the goal that monopolies within the various
states may not damage the public good.

* * * * * *

For the reasons stated, the Supreme Court of the United States upholds the
ruling of the Yazoo State Supreme Court.

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