Thurston Motor Lines, Inc. v. Jordan K. Rand, Ltd.

Thurston Motor Lines, Inc. (Thurston) (plaintiff) was a common carrier that was authorized by the Interstate Commerce Commission to transport commodities. As a common carrier, Thurston was required by the Interstate Commerce Act to collect tariffs from its customers. Jordan K. Rand, Ltd. (Rand) (defendant) was a customer of Thurston. After Rand failed to pay over $660 in tariffs for transport services, Thurston filed a lawsuit in federal district court to recover the unpaid fees. Thurston asserted that the district court had federal-question jurisdiction over the case under the Interstate Commerce Act. The district court dismissed the case for lack of jurisdiction, holding that the case arose under state contract law rather than the Interstate Commerce Act. Thurston appealed. The court of appeals affirmed the district court’s dismissal. In doing so, the court of appeals attempted to distinguish Thurston’s case from Louisville & Nashville Railroad v. Rice, in which the United States Supreme Court held that a railroad’s attempt to recover unpaid tariffs regulated by the Interstate Commerce Act was a federal question over which federal-question jurisdiction could be exercised. The court of appeals argued that the result in Rice depended on the defense asserted by the defendant in that case rather than on the complaint filed by the plaintiff railroad. The court of appeals also suggested that Rice was no longer good law, though the United States Supreme Court had never overruled its decision in the case. The United States Supreme Court granted certiorari.