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Telegraph :: 1866 :: Post Roads Act Litigation

Supreme Court of the United States. Chief Justice Waite. 1888. LOC.

What rights the Post Roads Act in fact bestowed on telegraph companies, and how they should be properly classified, would be litigated over the next six decades.

All of these cases consider the Post Roads Act as authority for federal restraint on state authority. In analyzing the issues before the Court, the Court considers:

• The Commerce Clause of the Constitution
• The Constitutional authority of Congress over post-offices and post roads, which the Court referred to as "interstate intercourse" or "interstate transmission of intelligence." This rationale appeared in the early Court decisions but quickly vanishes in favor of the Interstate Commerce rationale
• The Reserve Power Clause of the Constitution
• The Post Roads Act.

The tone of the Supreme Court decisions suggests that even the Court was taken aback by the brazenness of Western Union's claims - particularly in the context of Western Union's claim of the power of eminent domain.

"It is a misconception, however, to suppose that the franchise or privilege granted by the act of 1866 carries with it the unrestricted right to appropriate the public property of a State. It is like any other franchise, to be exercised in subordination to public as to private rights... It never could have been intended by the Congress of the United States in conferring upon a corporation of one State the authority to enter the territory of any other State and erect its poles and lines therein, to establish the proposition that such a company owed no obedience to the laws of the State into which it thus entered, and was under no obligation to pay its fair proportion of the taxes necessary to its support." [St. Louis, 148 U.S. at 100]

Responding to Western Union's argument that railroads had morphed into "public highways" and that Western Union could therefore enter railroad land without restraint, the Court retorted "Counsel, in advancing the argument, exhibits a consciousness of taking an extreme position". [PA RR I, 195 U.S. at 573] [PA RR II, 195 U.S. at 597 ("they have carried the analogies between ordinary highways and railroads too far; indeed, have gone beyond analogy, and have contended for almost legal coincidence in attributes and effect.")] See also [Gottlieb, 190 U.S. at 425 ("Every one of the fundamental propositions, therefore, contended for by [Western Union, was] unsound.")] [Massachusetts, 125 U.S. at 549 ("It never could have been intended by the Congress of the United States, in conferring upon a corporation of one state the authority to enter the territory of any other state and erect its poles and lines therein, to establish the proposition that such a company owed no obedience to the laws of the state into which it thus entered, and was under no obligation to pay its fair proportion of the taxes necessary to its support.")]

Of the 20 Post Roads Act litigations* which reached the Supreme Court, telegraph company interests won five (25%) and lost 15 (75%) of the cases. In the first five years of Supreme Court cases, telegraph won 71% of the cases. After 1889, telegraph interests lost every case. Telegraph companies initially were successful on interstate commerce cases. Having learned their lesson from these and similar railroad cases, states were careful to have their jurisdiction end at the state border. After 1889, litigations generally involved telegraph companies seeking to avoid state taxes or oversight - and losing each round. Post Road Act Supreme Court cases were frequent for 35 years (with an odd outlier in 1928 concerning whether the Emergency Fleet Corp. qualified for the government telegraph rate under the Post Roads Act); thats an average of a case every two years.

Western Union had become the dominant telegraph company and this is reflected in who the stakeholders were in these litigations. Seventeen of the cases (85%) involved Western Union (or its officers or affiliates) as a party; two cases involved Postal Telegraph (a company which did not exist at the time the Post Roads Act was enacted), and one case involved a Bell Telephone company seeking to take advantage to the benefit of access to right of way bestowed by the Post Roads Act.

* Note that this is an analysis of Supreme Court cases that considered the Post Roads Act. It does not include any of the other litigations raised on other statutes or other grounds - such as the transcontinental acts or litigation considering common carrier obligations.

Caselaw

Both Western Union and Postal Telegraph repeatedly litigated issues previously resolved by the court. This was at a time when the court had less discretion in accepting appeals. The Court grew terse in its disposals of these reruns. In Alabama State Board of Assessments, the Court stated "The question on which the jurisdiction of this Court depends has been decided in this Court so frequently of late years, several of the decisions having been made since the judgment of the Supreme Court of Alabama was delivered, that but little remains to be said in the present case except to show that it comes within the principles of the cases referred to." Again, in Charleston, the court stated "The questions thus suggested have been so frequently and so recently considered and decided by this court, in well-known cases, that our duty will be sufficiently performed by briefly citing and applying those cases." Again, in Gottlieb, the Court remarked "We think the question has been answered by this court." Postal Telegraph repeatedly raised arguments that Western Union had already attempted, and got shot down. In Mackay Telegraph, the court stated the issue of state taxation "is so thoroughly settled by previous decisions of this court that no further discussion is called for." [Mackay, 250 U.S. at 99] The Judiciary Act of 1891 and the Judiciary Act of 1925 were both enacted to reduce the work load of the Supreme Court, reducing the number of cases that the Court mandatorily had to review. Litigations that constitute repetitions are noted below with Ý.

Why did the telegraph companies re-litigate issues they had already lost? Did they expect a miraculously different result from the Court? Or was the threat of perpetual litigation a negotiating tool used by the telegraph companies as leverage to extract terms from local governments who may have been less than inclined to bankroll litigation up to the Supreme Court on every dispute? One of the justifications for the creation of the FCC in 1934 was that AT&T as a national corporation was running roughshod over smaller government authorities; the creation of a federal expert agency was designed in part to match the size of AT&T Ð to counter the bullying of smaller local authorities by large corporations.

See also Telegraph Reference Caselaw

Post Roads Act Supreme Court Litigation	Outcome Relative to telegraph	PRA?
Emergency Fleet Corp. v. Western Union Telegraph Co., 275 US 415 - Supreme Court 1928 (whether plaintiff should be charged the government rate or the commercial rate, stating that "For the fiscal years beginning July 1, 1921, and July 1, 1922, they were fixed for domestic telegrams substantially at 40 per cent of the commercial rate; and for cablegrams at 50 per cent of the commercial rate.") [Emergency Fleet, 275 U.S. at __] [See also The Ghost Fleet of Mallows Bay, The History Guy, Youtube (the abandonment of the Emergency Fleet in the lower Potomac)]	Lose	PRA
Postal Telegraph-Cable Company v. City of Freemont, 255 U.S. 124 (1921) (city imposed a $60 / year license fee on intrastate business. Postal Telegraph had paid fee for several years, but was operating intrastate service at a loss, and had to subsidize intrastate service with interstate service - therefore argued this was a tax on interstate service. Postal Telegraph raised a PRA claim in the lower court - but only brought the Commerce Clause claim before the Supreme Court - therefore this is NOT a S. Ct. PRA case. The Court ruled against Postal Telegraph.) [Freemont, 255 U.S. at 124]	Lose Ý	No
Mackay Telegraph & Cable Company v. City of Little Rock, 250 U.S. 94 (1919) ("That a reasonable tax upon the maintenance of poles and wires erected and maintained by a telegraph company within the limits of a city pursuant to authority granted by its ordinances is not an unwarranted burden upon interstate or foreign commerce or upon the functions of the company as an agency of the government, and does not infringe rights conferred by the act of Congress, is so thoroughly settled by previous decisions of this court that no further discussion is called for.") [Mackay, 250 U.S. at 94]	Lose Ý	PRA
Postal Telegraph-Cable Company v. City of Richmond, 249 U.S. 252 (1919) (affirming city license tax and pole tax on intrastate telegraph business, where tax exceeded intrastate revenue and therefore had to be paid out of interstate revenue, arguing therefore it was a tax on interstate business, finding that the tax was "moderate in amount." Court's decision is almost entirely based on Commerce Clause, but PRA is referenced.) [Postal Telegraph v. Richmond, 249 U.S. at 252]	Lose	PRA
Postal Telegraph-Cable Company v. City of Newport, Kentucky, 247 U.S. 464, 473 (1918) A strange case involving a municipal fee but where Postal Telegraph reorganized so many times during the proceeding that the Supreme Court held that the Postal Telegraph Company was not a party to the previous proceeding and res judicata did not apply. The trail court had concluded, in response to Postal Telegraph's PRA argument, that Postal Telegraph's predecessor in interest had consented to the tax. Tax at issue was $100 annually. [Newport, 247 at 464]	Remanded	No
Town of Essex, Appt. v. New England Telegraph Company of Massachusetts, 239 U.S. 313 (1915) (New England Telegraph - a Postal Telegraph Company. Incorporated in 1884, NETC applied for local authorization to construct and operate - receiving no local govt response, NETC proceeded to construct and operate. 20 years later, needing repairs, NETC applied for authorization to repair and relocate poles. Loc govt refused and told NETC it was operating without authority. Essex argued before S.Ct. that PRA was unconstitutional. Held: Local government enjoined from interferring with NETC, subject to proper reasonable local regulations.)	Win Ý	PRA
Williams v. Talladega, 226 U.S. 404, 416, 33 Sup. Ct. 116, 57 L. Ed. 275 (1912) ("the privilege given under the terms of the act to use the military and post roads of the United States for the poles and wires of the company is to be regarded as permissive in character and not as creating corporate rights and privileges to carry on the business of telegraphy, which were derived from the laws of the State incorporating the company,") [Talladega, 226 U.S. 404]	Win Ý	PRA
Western Union Telegraph Co. v. Richmond, 224 U.S. 160 (1912) (The act of Congress of course conveyed no title and did not attempt to found one by delegating the power to take by eminent domain) [Richmond, 224 U.S. at __] [k]	Lose Ý	PRA
Western Union Telegraph Co. v. Kansas, 216 U.S. 1 (1909) (Kansas statute required franchise tax of foreign corporations in order to do business in Kansas. When WU refused to pay, Kansas sought to restrain WU from doing business in Kansas. Held: Only Congress has authority to regulate interstate commerce; state cannot tax property outside its jurisdiction) [Kansas, 224 U.S. at __] [k]	Win	PRA
Western Union Telegraph Co. v. Pennsylvania Railroad, 195 U.S. 594 (1904) ("does not confer upon telegraph companies, the right to enter upon private property without the consent of the owner or grant them the right of eminent domain") [PA RR II, 195 U.S. 594, __] Western Union Tel. Co. v. Pennsylvania R. Co., 195 U.S. 540 (1904) [PA RR I, 195 U.S. at __] [k] (PP RR I addresses primarily WU's arguments concerning the Post Roads Act; PP RR II addresses primarily WU's rights under state law as a lessee, finding that the rights belonged to the lessor not the lessee)	Lose Ý	PRA
Postal Telegraph Cable Co. v. Taylor, 192 U.S. 64 (1904) Postal Telegraph had poles and wires in the borough of Taylor, but conducted no business in Taylor. Taylor imposed pursuant to police powers a fee for inspection and safety of the poles, but never in fact inspected, protected, or ensured the safety of the poles. While affirming the authority of the local government to impose taxes pursuant to police taxes, held this tax was invalid as excessive. Stating that the tax "passed as a police inspection measure and used for the purpose of raising revenue; that the enactment as a police measure may be used as a mere subterfuge for the purpose of raising revenue." [Taylor, 192 at 64]	Won	PRA
Western Union Telegraph Co. v. Gottlieb, 190 U. S. 412, 23 Sup. Ct. 730, 47 L. Ed. 1116 (1903) (WU sought to avoid state tax assessment, repeating now resolved argument that it is franchised by USG pursuant to the Post Roads Act and that the tax was excessive. Held, the Post Roads Act "was merely permissive" and was not authority for the establishment of the corporation and does not give WU the ability to avoid state taxes; and whether state taxes are excessive is appropriately reviewed by the state judiciary)" [Gottlieb, 190 U.S. at __]	Lose Ý	PRA
Atlantic and Pacific Telegraph Company v. Philadelphia, 190 U.S. 160 (1903) (a license fee for police supervision of property, "the municipality is not bound to furnish such supervision for nothing, and may, in addition to ordinary property taxation, subject the corporation to a charge for the expense of the supervision." Atlantic and Pacific Telegraph had acquired WU) [Philadelphia, 190 U.S. __]	Lose Ý	PRA
Western Union Telegraph Company v. Borough of New Hope, 187 U.S. 419 (1902) (local "license fee upon telegraph poles and wires within its limits" "was a charge in the enforcement of local governmental supervision, and as such not itself obnoxious to the" Constitution) [New Hope, 187 U.S. at __] [k]	Lose Ý	PRA
Western Union Tel. Co. v. Ann Arbor Railroad Co., 178 U.S. 239 (1900) (Post Roads Act "did not confer on telegraph companies the right to enter on private property without the consent of the owner, and erect the necessary structures for their business; `but it does provide that, whenever the consent of the owner is obtained, no state legislation shall prevent the occupation of post roads for telegraph purposes by such corporations as are willing to avail themselves of its privileges.'") [Ann Arbor, 178 U.S. 239 ]	Lose	PRA
Richmond v. Southern Bell Telephone and Telegraph Co., 174 U.S. 761 (1899) [Southern Bell, 174 U.S. at __] [k] "No Rights in Akron Streets Except Those Conferred by Alleged Franchise," Akron daily Democrat, Vol. 8, no. 28, (Akron, Ohio), 23 May 1899: 1. Chronicling America: Historic American Newspapers. Lib. of Congress (reporting on Richmond v. Southern Bell Telephone & Telegraph, Co., 174 U.S. 761 (1899))	Lose	PRA
Western Union v. James, 162 U.S. 650, 654 (1896) (holding that federal Post Roads Act did not preempt state law that fined telegraph companies $100 for failure to deliver telegraphs "with due diligence," stating the Post Roads Act does not "touch the subject-matter of the delivery of messages as provided for in the state statute.")	Lose	PRA
United States v. Union Pacific Railway Co. & Western Union Telegraph Co., 160 U. S. 1 (1895) (Pursuant to the Post Roads Act, "no railroad company operating a post-road of the United States, over which interstate commerce is carried on, can bind itself, by agreement, to exclude from its roadway any telegraph company") [Union Pacific, 160 U.S. at __] [k]	Lose	PRA
Postal Cable Telegraph Company v. Adams, 155 U.S. 688 (1895)(Mississippi's tax on telegraph company, "according to the amount and value of the property measured by miles," in lieu of other taxes, was within the power of the state to charge) [Adams, 155 U.S. at ] [k]	Lose Ý	PRA
Postal Telegraph Cable Co. v. Charleston, 153 U.S. 692 (1894) (affirming authority of Charlestown to impose license fee on telegraph companies for business conducted within Charleston excluding interstate commerce and U.S. government business ) [Charleston, 153 U.S. __]	Lose Ý	PRA
St. Louis v. Western Union Telegraph Company, 148 U.S. 92, 37 L.Ed. 380, 13 Sup.Ct.Rep. 485 (1893) (rejecting WU's argument that the Post Roads Act WU was entitled to occupy the streets of St Louis without charge to the city - WU objecting to a charge of $5 per pole for purposes of upkeep and maintenance of the road and sidewalk where the pole was installed. 99: The court anticipates the streets of cities becoming overwhelmed with telegraph and telephone lines: "By sufficient multiplication of telegraph and telephone companies the whole space of the highway might be occupied, and that which was designed for general use for purposes of travel entirely appropriated to the separate use of companies and for the transportation of messages.") [St. Louis, 148 U.S. at ]	Lose	PRA
Western Union Tel. Co. v. Alabama State Board of Assessment, 132 U.S. 472 (1889) (Alabama tax on gross receipts of all telegraph business done in the state, including "receipts from messages carried partly within and partly without the state," held the gross receipts for intra and interstate telegraphs can be separated, and Alabama courts's affirmation of the tax is reversed)[Alabama, 132 U.S. at __] [k]	Win Ý	PRA
Leloup v. Port of Mobile, 127 U.S. 640, 645 (1888) (state license tax on telegraph company's right to do business in state, "a large part of whose business is the transmission of messages from one State to another and between the United States," held to be unconstitutional. Leloup was WU agent.) [Leloup, 127 U.S. at __] [k]	Win	PRA
Ratterman v. Western Union Telegraph Co., 127 U.S. 411 (1888) ("A single tax, assessed under the laws of a State upon receipts of a telegraph company which were partly derived from interstate commerce and partly from commerce within the State, and which were capable of separation but were returned and assessed in gross and without separation or apportionment, is invalid in proportion to the extent that such receipts were derived from interstate commerce, but is otherwise valid." Leloup was an agent of WU) [Ratterman, 127 U.S. at ][k]	Lose	PRA
Western Union Telegraph Co. v. Massachusetts, 125 U.S. 530, 554, 31 L. ed. 790, 795, 8 Sup. Ct. Rep. 961 (1888) (rejecting WU's attempt to operate within Massachusetts under the authority of the Post Roads Act exempt from state taxation - a tax imposed by the laws of Massachusetts upon the Western Union Telegraph Company, a corporation of the State of New York, on account of the property owned and used by it within Massachusetts, was valid.) [Massachusetts, 125 U.S. __] [k] See alsoMass. v. Western Un. Tel. Co., 141 U.S. 40 (1891) (a follow up litigation where parties quibbled over how Western Union could pay for the taxes due, and whether WU "was entitled to the benefit of the sum paid into court.")	Lose	PRA
Western Union Telegraph Co. v. Pendleton, 122 U.S. 347 (1887) (Complaint based on Indiana law, for failure to deliver in Iowa a telegraph originated in Indiana addressed to plaintiff in Iowa - holding that whatever jurisdiction a state may have over telegraphs in its own state, it does not extend into another state) [Pendleton, 122 U.S. at __] [k]	Win	PRA
Telegraph Co. v. Texas, 105 U.S. 460 (1882) (464 A Texas tax on all telegraphs, "so far as it operates on private messages sent out of the State, it is a regulation of foreign and inter-state commerce and beyond the power of the State. ... As to the government messages, it is a tax by the State on the means employed by the government of the United States to execute its constitutional powers, and, therefore, void.") [Texas, 105 U.S. at ] [k]	Win	PRA
Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U.S. 1 (1877) (states may not franchise state telegraph monopolies: The Post Roads Act "substantially declares, in the interest of commerce and the convenient transmission of intelligence from place to place by the Government of the United States and its citizens, that the erection of telegraph lines shall, so far as state interference is concerned, be free to all who will submit to the conditions imposed by Congress, and that corporations organized under the laws of one State for constructing and operating telegraph lines shall not be excluded from prosecuting their business within its jurisdiction, if they accept the terms proposed by the National Government for this national privilege.") [Pensacola Telegraph, 96 US at] [k]	Win	PRA

Postal Telegraph-Cable Co. v. Railroad Commission, 200 Cal. 463, 254 P. 258 (Cal. 1927) (held California Railroad Commission cannot order Postal Telegraph to procure a certificate of public convenience and necessity for the construction and operation of a telegraph line; Postal Telegraph is franchised by Congress by the Post Roads Act pursuant to Constitutional authority) [Railroad Commission, 200 Cal. __]

Postal Telegraph Co. v. City of Portland, 228 Fed. 254 (D.Or. 1915) ("The privilege granted by Congress under the Post Roads Act to use the military and post roads of the United States for the poles and wires of the company is permissive in character only, and is not to be regarded as creating corporate rights or privileges to carry on the business of telegraphy. Those rights and privileges are derived from the laws of the state under which the company is incorporated, and the state is not, by reason of the Post Roads Act, prevented from taxing the real or personal property belonging to the company within its borders, nor from imposing a license tax upon the right to do a local business within the state.") [City of Portland, 228 Fed. 254]

Postal Telegraph-Cable Co. v. Los Angeles, 164 Cal. 156, 128 P. 19 (Cal. 1912) [Los Angeles, 128 P. at]

Western Union Telegraph Co. v. American Union Telegraph Co., ALR Vol. 28, No. 3, p. 173 (Cir. Court, District of Indiana, Mar. 1880) [American Union, Cir. Court at 173] In 1870 Wabash RR entered into an exclusive contract with WU. Gould took control of Wabash; Wabash agreed to let Gould's American Union Telegraph build lines. WU sued for injunction pursuant to contract agreement. J. Harlan held pursuant to Pensacola, Post Roads Act does not permit exclusive contracts with railroads. Lose.