e limit of
judicial inquiry altered, because the legislature instead of a carrier
prescribes the rates."[197] Reiterating virtually the same principle in
Smyth _v._ Ames,[198] the Court not only obliterated the distinction
between confiscatory and unreasonable rates, but also contributed the
additional observation that the requirements of due process are not met
unless a court reviews not merely the reasonableness of a rate but also
determines whether the rate permits the utility to earn a fair return on
a fair valuation of its investment.
Limitations on Judicial Review
As to what courts will not do, when reviewing rate orders of a State
commission, the following negative statements of the Supreme Court
appear to have enduring value. As early as 1894, the Court asserted:
"The courts are not authorized to revise or change the body of rates
imposed by a legislature or a commission; they do not determine whether
one rate is preferable to another, or what under all circumstances would
be fair and reasonable as between the carriers and the shippers; they
do not engage in any mere administrative work; * * * [however, there can
be no doubt] of their power and duty to inquire whether a body of rates
* * * is unjust and unreasonable, * * *, and if found so to be, to
restrain its operation."[199] And later, in 1910, although it was
examining the order of a federal rate-making agency, the Court made a
similar observation which appears to be equally applicable to the
judicial review of regulations of State agencies. The courts cannot,
"under the guise of exerting judicial power, usurp merely administrative
functions by setting aside" an order of the commission within the scope
of the power delegated to such commission, upon the ground that such
power was unwisely or inexpediently exercised.[200]
Also inferable from these early holdings, and effective to restrict the
bounds of judicial investigation, is the notion that a distinction can
be made between factual questions which give rise only to controversies
as to the wisdom or expediency of an order issued by a commission and
determinations of fact which bear on a commission's power to act; namely
those questions which are inseparable from the constitutional issue of
confiscation, and that judicial review does not extend to the former.
This distinction is accorded adequate emphasis by the Court in
Louisville & N.R. Co. _v._ Garrett,[201] in which it declared that "the
approp
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