Mkt. St. R. Co. v. R.R. Comm'n of Cal. - 324 U.S. 548, 65 S. Ct. 770 (1945)

Rule:

Due process requires that commissions proceed upon matters in evidence and that parties have opportunity to subject evidence to the test of cross-examination and rebuttal. But due process deals with matters of substance and is not to be trivialized by formal objections that have no substantial bearing on the ultimate rights of parties.

Facts:

The Market Street Railway Company at the commencement of these proceedings operated a system of passenger transportation by street car and by bus in San Francisco and its environs. The Railroad Commission of California instituted on its own motion an inquiry into the Company's rates and service. After hearings, an order was promulgated reducing the fare from seven to six cents. The Company, after rehearing was denied, obtained review by the Supreme Court of California. It also obtained a stay of the Commission's order, conditioned upon impounding the disputed one cent per passenger to abide settlement of the issues upon which its ownership would depend. The Supreme Court of California affirmed the order and appeal is taken to this Court. Meanwhile the Company sold its operative properties to the City of San Francisco. The case is saved from being moot only because its decision is necessary to determine whether the Company is entitled to the impounded portion of the fares or whether the money shall be refunded to passengers making claims and unclaimed amounts thereof be paid over to the state, as required by conditions of the stay order. The appeal raises constitutional issues only. The contention is that the order deprives the appellant of its property without due process of law, contrary to the Fourteenth Amendment. 

Issue:

Was the Commission’s action of considering matters outside the record to justify the decision it had made violative of due process requirements?

Answer:

No

Conclusion:

The court affirmed the judgment of the state court. The court dismissed the second of two appeals filed by the Company. The court held that the first appeal was taken from a final order and that it had jurisdiction to decide the case on the merits. The court found that the Company had reasonable notice that its rates were under attack and was not denied opportunity to be heard thereon. The court ruled that the basis for the Commission’s judgment was in the record and that it was not a denial of due process for a commission so experienced as appellee was with the affairs of the Company to draw inferences as to the probable effect on traffic of a given rate decrease. The court ruled that the Commission’s action of considering matters outside the record to justify the decision it had made was not violative of due process requirements. The court found that nothing had been taken from the Company to find a due process violation.