Chicago, Milwaukee, and St. Paul Railway Co. v. Minnesota
Significance: The Supreme Court, in holding that the courts had the power to review utility rates, incorporated part of the due process clause of the Fourteenth Amendment and applied it to the states.
Justice Samuel Blatchford wrote the 6-3 majority opinion in this case, which struck down a statute forbidding judicial review of railroad shipping rates set by a state commission. The case laid the foundation for the modern regulatory state by departing from the Supreme Court's ruling in Munn v. Illinois (1877). Although the decision was vague, the general direction was to break away from the Court's past constitutional standard in which the Court was able to judge only whether a particular branch could act in an area, not whether it acted reasonably in doing so. One basic modern administrative law principle is that due process requires judicial review of bureaucratic decisions to determine compatibility with constitutional standards. The Court stated that courts had the authority to judge the reasonableness of utility rates set by other branches of government. After this decision, the Court began to review not only whether one of the three branches had the authority to act but also whether the government procedures arrived at reasonable decisions.