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Market Street Railway v. Railroad Commission
United States Supreme Court
324 U.S. 548 (1945)
The Railroad Commission (defendant) opened a proceeding to establish the rates of Market Street Railway (Market Street) (plaintiff). The commission ordered Market Street to reduce its rate from seven cents to six cents. The commission believed that lowering the rate would stimulate demand enough to create sufficient revenue for Market Street to cover its expenses and make a profit. In its order, the commission relied on Market Street’s operating revenues from January to August 1943. Specifically, the commission found that the company’s revenues had increased by 20 percent as compared to the same period from the previous year. The commission also extrapolated the January – August 1943 revenues to predict Market Street’s revenues for the remainder of 1943. The 1943 revenue numbers came from Market Street’s monthly reports filed with the commission, but the commission did not enter the reports into the administrative record. Market Street brought suit, arguing that the commission’s order violated its due process rights by relying on revenue numbers outside of the administrative record. The United States Supreme Court granted certiorari.
Rule of Law
Holding and Reasoning (Jackson, J.)
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