The Fuller Court (1888–1910)
In what decision did the Fuller Court strike down a state statute regulating railway rates?
The Fuller Court unanimously ruled 7–0 (Justices Fuller and McKenna did not participate) in Smyth v. Ames (1898) that a Nebraska statute regulating the rates of railways was unconstitutional. The Court determined that “the basis of all calculations as to the reasonableness of rates to be charged by a corporation maintaining a highway under legislative sanction must be the fair value of the property being used by it for the convenience of the public.”
Looking at the evidence presented, the Court determined that the rates mandated by the Nebraska law were too low and “would deprive the railroad companies of the compensation they were legally entitled to receive.” The Court established the precedent that the courts had the power to review rates by public utilities. This law remained in good standing until the Court overruled it in Federal Power Commission v. Hope Natural Gas Co. (1944).