TXO Production Corp. v. Alliance Resources Corp., 509 U.S. 443, 12 (1993)

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454

TXO PRODUCTION CORP. v. ALLIANCE RESOURCES CORP.

Opinion of Stevens, J.

Amendment imposes substantive limits "beyond which penalties may not go." Seaboard Air Line R. Co. v. Seegers, 207 U. S. 73, 78 (1907). See also St. Louis, I. M. & S. R. Co. v. Williams, 251 U. S. 63, 66-67 (1919); Standard Oil Co. of Ind. v. Missouri, 224 U. S. 270, 286 (1912).16 Moreover, in Southwestern Telegraph & Telephone Co. v. Danaher, 238 U. S. 482 (1915), the Court actually set aside a penalty imposed on a telephone company on the ground that it was so "plainly arbitrary and oppressive" as to violate the Due Process Clause. Id., at 491.17 In an earlier case the Court had stated that it would not review state action fixing the penalties for unlawful conduct unless "the fines imposed are so grossly excessive as to amount to a deprivation of property without due process of law." Waters-Pierce Oil Co. v. Texas (No. 1), 212 U. S. 86, 111 (1909).

16 In each of those cases, the Court actually found no constitutional violation. Thus, in the Seaboard Air Line R. Co. case, the Court concluded: "We know there are limits beyond which penalties may not go—even in cases where classification is legitimate—but we are not prepared to hold that the amount of penalty imposed is so great or the length of time within which the adjustment and payment are to be made is so short that the act imposing the penalty and fixing the time is beyond the power of the State." 207 U. S., at 78-79.

17 In doing so, however, the Court emphasized the fact that the company was punished for conduct that had been undertaken in complete good faith. It noted: "There was no intentional wrongdoing; no departure from any prescribed or known standard of action, and no reckless conduct. Some regulation establishing a mode of inducing prompt payment of the monthly rentals was necessary. It is not as if the company had been free to act or not as it chose. It was engaged in a public service which could not be neglected. The protection of its own revenues and justice to its paying patrons required that something be done. It acted by adopting the regulation and then impartially enforcing it. There was no mode of judicially testing the regulation's reasonableness in advance of acting under it, and, as we have seen, it had the support of repeated adjudications in other jurisdictions. In these circumstances to inflict upon the company penalties aggregating $6,300 was so plainly arbitrary and oppressive as to be nothing short of a taking of its property without due process of law." 238 U. S., at 490-491.

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