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Law School Case Brief

Rice v. Santa Fe Elevator Corp. - 331 U.S. 218, 67 S. Ct. 1146 (1947)


There is an assumption that the historic police powers of the states are not to be superseded by a federal act unless that is the clear and manifest purpose of Congress. Such a purpose may be evidenced in several ways. The scheme of federal regulation may be so pervasive as to make reasonable the inference that Congress left no room for the states to supplement it. Or the Act of Congress may touch a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject. Likewise, the object sought to be obtained by the federal law and the character of obligations imposed by it may reveal the same purpose. Or the state policy may produce a result inconsistent with the objective of the federal statute. It is often a perplexing question whether Congress has precluded state action or by the choice of selective regulatory measures has left the police power of the states undisturbed except as the state and federal regulations collide.


Respondents in the two consolidated cases were warehousemen engaged in the business of operating public warehouses for the storage of grain in Illinois. Their warehouses were operated under licenses issued by the Secretary of Agriculture pursuant to the United States Warehouse Act, 39 Stat. 486, as amended, 7 U. S. C. § 241 et seq. The Rice partnership, one of the petitioners, was an owner, shipper, and dealer in grain and was a customer of respondents. The Illinois Commerce Commission, another petitioner, has certain regulatory jurisdiction over public grain warehouses and other public utility companies. In 1944, Rice filed a complaint with the Commission, alleging respondents violated the Illinois Public Utilities Act, Ill. Rev. Stats. ch. 111 2/3 (1945), and the Illinois Grain Warehouse Act, Ill. Rev. Stats. ch. 111, para. 189 et seq. Respondents filed a petition to enjoin further proceedings on the complaint. The district court dismissed the respondents’ petition; however, the decision was reversed by the appellate court, holding that the United States Warehouse act superseded state regulation of respondents licensed thereunder as to the matters presented in the complaint. Petitioners challenged the judgment of the appellate court.


Did the United States Warehouse Act preempt all regulation under state law?




The United States Supreme Court affirmed in part and reversed in part. The Court held that The United States Warehouse Act of August 11, 1916, 39 Stat 486, chapter 313, as amended, 7 USC 241 et seq., did not preclude the applicability to warehousemen licensed thereunder of provisions of a state utilities act requiring approval of the State Commerce Commission for management, construction, engineering, supply, financial and other contracts between public warehousemen and affiliates, approval of contracts and leases between warehousemen and other public utilities, and approval of issuance of securities. The Court found that the other nine matters raised in petitioners' complaint were regulated exclusively by federal law.

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