Legally, all businesses involved in public transportation are designated common carriers.
In the eyes of the law in both the United States and Great Britain, a distinction is made between ordinary businesses and those that have a special obligation to the public. In the case of common carriers, in British common law (a subcategory of “common callings”), the latter are distinguished from the former by the fact that their services are available to the general public. The social and economic welfare of the community is much affected by the quality and cost of such services.
Because of their intimate involvement with the community good, common carriers in Great Britain were charged with three specific obligations. First, they could not discriminate among those who sought their services. They were compelled by law to make these services available to all who applied for them. Second, common carriers were prohibited from assessing unreasonable rates or conditions on those who wanted and needed their services. Third, the liability standards applied to them were much more stringent than those applied to ordinary businesses. Regulation was imposed upon common carriers strictly for the good of the entire community they served.
In the United States, before the Interstate Commerce Commission (ICC) was established in 1887, the obligations that had long been a part of British common law were essentially observed and enforced. In the first century of U.S. independence, the laws regarding interstate commerce, which under Article I, section 8, of the U.S. Constitution bestowed the power of regulation on Congress, were enforced by individual judges who adjudicated the cases that came before them. This created a chaotic situation often marked by inequities, favoritism, and, in some cases, graft and corruption.
In New Jersey Steam Navigation Co. v. Merchants’ Bank of Boston
It was not until Munn v. Illinois
The Munn decision established clearly the difference between ordinary businesses and those that had a profound effect on the social and economic welfare of American society. This doctrine established that grain storage facilities and railroads were businesses “affected with a public interest.” The Court further ruled that in the absence of federal mandates regarding the rates charged by businesses with special obligations to the public, the responsibility for regulating interstate transportation would fall to state legislatures. This solution created more problems than it solved and resulted in a chaotic network of railroad charges from one state to another.
The Court sought to remedy this situation in its decision in Wabash, St. Louis, and Pacific Railway Co. v. Illinois
Blandford, Linda A. Supreme Court of the United States, 1789-1980: An Index to Opinions Arranged by Justice. 2 vols. Millwood, N.Y.: Kraus International, 1983. Friedman, Leon, and Fred L. Israel, eds. The Justices of the United States Supreme Court: Their Lives and Major Opinions. 5 vols. New York: Chelsea House, 1997. Galloway, Russell. Justice for All? Rich and Poor in Supreme Court History, 1790-1990. Durham, N.C.: Carolina Academic Press, 1991. Hoogenboom, Ari, and Olive Hoogenboom. A History of the ICC: From Panacea to Palliative. New York: Norton, 1976. Wright, Charles Alan. The Law of Federal Courts. 5th ed. St. Paul, Minn.: West Publishing, 1994.
Interstate Commerce Commission (ICC)
Munn v. Illinois
Wabash, St. Louis, and Pacific Railway Co. v. Illinois