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January 24, 2007
Big (Bad?) Yellow Taxi
I'd never paid much attention to the case before, so I went and looked it up after class. And as I looked at it, I sort of wanted to clean my glasses to make sure I was seeing it right. It's a 1947 case holding that taxis ferrying people from their homes to an interstate travel depot like a railroad station were outside the reach of the Sherman Antitrust Act because Congress lacked power to regulate them under the interstate commerce clause.
Yellow Cab was overruled on a different point of law by Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984). But so far as I can tell, on the Commerce Clause point, the decision has never been formally overruled, and lower federal courts were still citing it as recently as the 1980s.
Am I missing something here, or is this decision an utterly inexplicable outlier? How can it possibly be that Congress lacks power to block a monopoly in taxi cabs picking up people at their homes and dropping them at a railroad or an airport for interstate or international travel?
UPDATE: A brief email exchange on this with a friend and colleague who shall remain nameless (so as to protect the identity of Orin Kerr) leads me to update this post. A more careful reading of Justice Murphy's opinion for the Court in Yellow Cab reveals that the Court was purporting to interpret not the reaches of the Commerce power, but the reaches of the Sherman Act, when it reasoned that
the common understanding is that a traveler intending to make an interstate rail journey begins his interstate movement when he boards the train at the station and that his journey ends when he disembarks at the station in the city of destination. What happens prior or subsequent to that rail journey, at least in the absence of some special arrangement, is not a constituent part of the interstate movement.In other words, the Yellow Cab Court apparently saw the connection of these local taxi rides to interstate commerce as being so remote that Congress didn't intend the Sherman Act intended to cover them.
For my money, this reasoning comes mighty close to the long-condemned view of the Supreme Court in the 1895 E.C. Knight case that the Sherman Antitrust Act could not reach a monopoly in sugar refining because manufacture precedes interstate commerce and has too indirect an effect on it. That's why I was shocked to see it in a 1947 case. But Yellow Cab purports to be about the Sherman Act rather than the Commerce Clause itself, so that is a distinction that must be noted. (On this point, Murphy's Yellow Cab opinion did not get the votes of Justices Black or Rutledge, and Douglas did not participate. One wonders whether it would command a majority today.)
Posted by Eric at January 24, 2007 4:24 PM
Comments
I practiced antitrust law for the first few years of my career (and that was a long time ago) and I have never even heard of this case. I know this is not definitive, but that makes me think it is an outlier.
Posted by: China Law Blog at January 28, 2007 8:44 AM