United Railways & Electric Co. OF Baltimore v. West 280 U.S. 234 (1930)
UNITED RAILWAYS & ELECTRIC CO. OF BALTIMORE v. WEST 280 U.S. 234 (1930)
This obscure case has no significance except to illustrate how the Supreme Court manipulated the fair return rule of smyth v. ames (1898) to prevent rate regulation, which the Court disapproved. A public service commission fixed rates that permitted the company to earn a profit of 6.26 percent. The company sought rates returning 7.44 percent. The Court used substantive due process to void the commission's rates and decided that rates returning "7 percent, or even 8 percent, on the value of the property" might be "necessary to avoid confiscation." Justices louis d. brandeis, oliver w. holmes, and harlan fiske stone dissented.
Leonard W. Levy
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