RAILROAD RETIREMENT BOARD v. ALTON RAILWAY COMPANY 295 U.S. 330 (1935)

In the spring of 1935, as the franklin d. roosevelt administration made plans for a general social security act, the Supreme Court held unconstitutional the railroad retirement act of 1934, which established a program of compulsory retirement and old age pensions for railroad workers engaged in interstate commerce. Justice owen roberts, for a five-member majority, found the act violative of due process of law and unauthorized by the commerce clause. By exacting a percentage of payrolls for a pension fund, the act, Roberts said, was a "naked appropriation of private property" for the benefit of workers. The act was also "bad" because no reasonable connection existed between the welfare of railroad workers and the efficiency or safety of interstate transportation.

Chief Justice charles evans hughes, joined by Justice louis d. brandeis, benjamin n. cardozo, and harlan fiske stone, dissented. The majority opinion shocked Hughes because it went beyond the invalidation of this particular pension plan; the majority's "unwarranted limitation" on the commerce clause denied wholly and forever the power of Congress to enact any social welfare scheme. Relying on gibbons v. ogden (1824) for the scope of the commerce power, Hughes observed that its exercise had the widest range in dealing with interstate railroads. He accepted Congress's judgment that the plan enhanced efficiency and safety. Moreover, the precedents supported the constitutionality of the act, he argued; the act did not differ in principle from workmen's compensation acts for railroad employees, which the Court had sustained. It had also upheld a congressional enactment that empowered the Interstate Commerce Commission to take excess profits from some railroads for the benefit of others. (See dayton goose creek railroad co. v. united states.) The Court's opinion helped provoke the constitutional crisis of 1937.

Leonard W. Levy
(1986)