All States Freight, Inc. v. New York, New Haven & Hartford Railroad
Dissenting Opinion
dissenting.
In my view, the record in this case is inadequate to support the action taken by the Commission and I would vacate the judgment below and remand to . the Commission for further proceedings. I dissent, however, from the Court’s categorical ruling which in any and all circumstances bars the application of § 1 (6) to any set of rates which bears a cómmodity rate label.
Section 1 (6) imposes upon carriers the “duty : . . to. establish, observe, and enforce just and reasonable classifications of property for transportation.” The Court seems to accept the act of excluding. commodity rates from this broad imperative as well within the mainstream of Commission functions. I have great difficulty coming to any different answer concerning the Commission’s task with respect to §1 (6) now that the" Commission has changed its mind, or modified its views,- and believes it best serves transportation policy and the goal, of just and. reasonable rates to subject at least some commodity rates to scrutiny under § 1(6).
Nor will it do to say that if the past decisions of the Commission are to be changed, the job should be left to Congress. This is an erroneous view. If there is a task for Congress, it is the one the Court has itself performed. The dissenting commissioners, with whom the Court essentially agrees, felt constrained to acknowledge that further erosion of the principles of classification might well be in the province of Congress but defended their views as vigorous and wise transportation policy within the realm of proper administrative action. Their difference with the majority of the Commission was over policy, and it is precisely this area which it seems to me the Court invades. Our task on review is a far more limited one. With all due respect, I dissent.
Opinion of the Court
delivered the opinion of the Court.
This is an appeal from the judgment of a three-judge district court setting aside an order of the Interstate Commerce Commission which had disallowed certain freight rates filed by the New York, New Haven & Hartford Railroad Company (hereafter “the New Haven”) and other rail carriers. The issue presented is whether
A general word as to the basic distinction between class rates and commodity rates may be appropriate before proceeding to the specifics of the present case. Class
In the summer of 1958 the rail carriers competing with the New Haven established a trailer-on-flatcar service.. Under this system truck-trailers loaded with various commodities are brought to the railroad’s loading ramp for carriage on freight cars to destination for delivery to the consignee at the railroad’s unloading ramp. . This type' of service was instituted in an effort to meet motor carrier competition. Eastern Central Motor Carriers Assn. v. Baltimore & O. R. Co., 314 I. C. C. 5. The New Haven had physical clearance problems and equipment shortages which prevented its participation in this type of freight transportation, and during the first two months that the trailer-on-flatcar rates were in effect bn competing railroads, the New Haven lost the equivalent of more than 350 cars of traffic from Boston to St. Louis, and suffered substantial further losses of traffic westward from othdr New England points.
In order to compete with the trailer-on-flatcar rates, and in an effort to cope with a significant imbalance between eastbound and westbound traffic over its lines,
The Commission initially suspended the rates, but allowed them to become effective on July 6, 1959, and they have remained in effect since that date. Various motor carrier associations and some of their individual members protested the rates, but in February 1961, Division 2 of the Commission filed a report approving them. 313 I. C. C. 275. On reconsideration later that year, the full Commission held by a divided vote that the rates violated § 1 (6) of the Act. 315 I. C. C. 419.
At the time of the enactment of the Interstate Commerce Act the vast preponderance of rail freight traffic moved pn class rates. These classes as well as the rates applicable to them varied greatly among different railroads and different sections of the country. When the Interstate Commerce Act was formulated, consideration was given to empowering the Commission to prescribe classifications, but it was finally concluded that the provisions of the bill which required publication of rates and classifications, together with the provisions regulating unreasonable rates, would ultimately prove adequate to achieve the desired uniformity of classifications.
The Commission had succeeded in exercising power over classifications in proceedings under §§ 1, 2, and 3 of the Act, and in many cases had declared classifications of particular commodities to be unreasonable.
It was against this background that § 1 (6) was enacted in 1910 as part of the Mann-Elkins Act, which also gave the Commission power to find classifications unreasonable and to. prescribe reasonable classifications for the future.
During the course of the debate on the proposed bill in the House of Representatives, Congressman Russell, a member of the Committee on Interstate and Foreign Commerce, said
“[T]he shipper can be extorted from; he can be made to pay an unjust rate just as well through classification as he can through the fixing of a rate. The . carriers can put an article in one classification, subject to a given rate, and if the Interstate Commerce Commission sees fit to declare that rate unreasonable, and reduce it, declaring what shall be a reasonable rate to take its place, the carrying corporation can obtain the same benefit and put the shipper under the same disadvantages by simply changing the classification of the article;”15
Chairman Mann stated that “classification of freight is just as "important as rates, because by. moving a particular article from one class to another you affect the rates.”
This conclusion is amply confirmed by the pattern of the Commission’s decisions since § 1 (6) was enacted. The course of those decisions makes clear that the Commission has given full consideration to the question of whether § 1 (6) applies to all-commodity rates, and has squarely decided that the section is inapplicable. All-commodity rates first came under scrutiny of the Commission more than 25 years ago. In 1937 and 1938, the Commission approved all-commodity rates on four different occasions without the slightest suggestion that the rates were subject to the provisions of § 1 (6). The principal concern of the Commission’s inquiry in these cases was to ascertain whether the rates were prejudicial to any person, locality, or déscription of traffic.
“Respondents now maintain a full line of class rates . governed by the western classification from and to all of the points involved in this proceeding, as required by section 1 (6) of the Interstate Commerce Act. They also maintain hundreds of lower rates as exceptions to the classification,. including commodity rates, that are not subject to the classification ratings nor to rules as to mixing of commodities in carloads.
*353 “Class rates normally reflect the maximum of reasonableness on goods falling within the various classes of traffic. Commodity rates are established, and necessary or desirable exceptions to the classification are made, when circumstances and conditions suggest that the class basis is too high for application on the traffic. We have approved this basis of rate making, and have never required commodity rates to conform to the ratings of the classification.” 248 I. C. C., at 86-87,
In a separate concurrence, Commissioner Eastman said:
“As is well known, the classifications; of freight which the railroads publish are for the purpose of governing the application of their class rates. The latter are used when no . rate has been published applying specifically to the movement in question, such specific rates being called commodity rates. The railroads carry, of course, a vast multitude of separate and distinct commodities, and the class rates are a convenient device for avoiding the publication of a like multitude of separate and distinct rates. . . .” 248 I. C. C., at 88.
Thereafter, the Commission rejected other challenges to all-commodity rates based on § 1 (6) upon the authority of the Pacific Freight decision,
Thus both the legislative history and the course of the Commission’s decisions clearly impel the conclusion that § 1 (6) does not apply to all-commodity rates. In reaching this conclusion, we hardly need add that, as the Act is structured, these rates are subject to full policing by the Commission under other provisions. If a commodity rate is too high, the Commission may reduce it.
Affirmed.
“It is made the duty of all common carriers subject to the provisions of this chapter to establish, observe, and enforce just and reasonable classifications of property for transportation, with reference to which rates, tariffs, regulations, or practices are or may be made or prescribed, and just and reasonable regulations and practices affecting classifications, rates, or tariffs, the issuance, form, and substance of tickets, receipts, and bills of lading, the manner and method of presenting, marking, packing, and delivering property for transportation, the facilitiés for transportation, the carrying of personal, sample, and excess baggage, and all other matters relating to or connected with the receiving,'handling, transporting, storing, and delivery of property subject to the provisions of this chapter which may be necessary or proper to. secure the safe and prompt-receipt, handling, transportation, and delivery of property subject to the provisions of this chapter upon just and reasonable terms, and every unjust and unreasonable classification, regulation, and practice is prohibited and declared to be unlawful.” 49 U. S. C. § 1 (6) (1958 ed.).
The characteristics of a commodity which are generally considered in determining the classification to which it should be assigned are:
1. Shipping weight per cubic foot.
2. Liability to damage.
3. Liability to damage other commodities with which it is transported.
4. Perishability.
5. Liability to spontaneous combustion or explosion.
6. Susceptibility to theft.
7. Value per pound in comparison with other articles.
8. Ease or difficulty in loading or unloading.
9. Stowability.
10. Excessive weight.
11. Excessive length.
12. Care or attention necessary in loading and transporting;
13. Trade conditions.
14. Value of service.
15. Competition with other commodities transported. Motor Carrier Rates in New England, 47 M. C. C.. 657, 660-661; Class Rate Investigation, 1939, 262 I. C. C. 447, 508; Investigation and Suspension Docket No. 76, 25 I. C. C. 442, 472-473.
Every day the New Haven was dispatching approximately 150 émpty boxcars to Chicago and St. Louis, with' an annual carrying capacity of 3,000,000 tons.
The rates did not apply to import, export, or ex-water traffic. In addition, certain commodities were excluded, such as livestock, explosives, scientific equipment, and easily damaged goods.
The Commission’s report also spoke of the rates as “constituting a destructive competitive practice in contravention, of the national transportation policy,” but in a brief filed here the Commission has pointed out that this statement was “merely an adjunct to the Commission’s ruling that the rates violated Section 1 (6),” and that this conclusion “cannot be sustained as an independent basis for disallowing the rates, in the absence of additional findings.”
The Commission and the United States did not appeal. • Instead, the Commission reopened the case for further hearings, since it entertained doubt as.;to the adequacy of its findings. Those further hearings have been postponed pending resolution of this' appeal. . The Commission has filed a brief on the merits, however, agreeing,-as do . all the parties, that the § 1 (6) issue is necessarily presented by "this appeal. We agree, and further agree with the Commission that there
S. Rep. No. 46,49th Cong., 1st Sess., 188.
1 I. C. C. Ann. Rep. 30-32 (1887).
8 I. C. C. Ann. Rep. 38-39. See also 5 I. C. C. Ann. Rep. 33.
34 Stat. 589, 49.U. S. C. § 15 (1) (1958 ed.).
James Pyle & Sons v. East Tennessee, Virginia & Georgia R. Co., 1 I. C. C. 465 (1888); Thurber v. New York Central & H. R. Co., 3 I. C. C. 473 (1890); see National Hay Assn. v. Lake Shore & M. S. R. Co., 9 I. C. C. 264 (1902).
Interstate Commerce Commission v. Lake Shore & M. S. R. Co., 134 F. 942, aff’d by an equally divided Court, 202 U. S. 613. In this case the court struck down a Commission order commanding the reclassification of hay and straw to a lower-rated class.
36 Stat. 546, 551, 552; 49 U. S. C. §§ 1 (6), 15 (1), 15 (7) (1958. ed.).
H. R. Rep. No. 923, 61st Cong., 2d Sess., 3.
45 Cong. Rec. 5142.
45 Cong. Rec. 4578.
Ibid.
The Senate Report stated:
“Some doubt has been raised as to whether, under the provisions of section 15 of the existing act, the commission is empowered to review classifications of freight as well as rates, and to make orders dealing with improper classifications. (Judson on Interstate Com-' merce, Ed. of 1908, secs. 209, 210.) By section 9 of the bill, this*351 doubt is removed and the power is expressly vested in the commission.” S. Rep. No. 355, 61st Cong., 2d Sess., 8 (1910). The authority primarily relied on by the Judson treatise was the Lake Shore casa, note 12, supra.
Freight from Boston to East Hartford, 223 I. C. C. 421 (Div. 4, 1937); Commodities between Chicago, Ill., and Twin Cities, 226 I. C. C. 356 (Div. 3, 1938); All Freight between Boston & Maine Railroad Points, 226 I. C. C. 387 (Div. 4, 1938); All Freight from Chicago and St. Louis to Birmingham, 226 I. C. C. 455 (Div. 3, 1938).
All Freight between Harlem River, N. Y., and Boston, 234 I. C. C. 673 (Div. 3, 1939). See also Commissioner Alldredge’s dissents in the following cases: All Freight from Chicago and St. Louis to Santa Rosa, N. Mex., 243 I. C. C. 517 (Div. 2, 1941); All Freight between Los Angeles and Albuquerque, 28 M. C. C. 161 (Div. 3, 1941).
All Freight from Eastern Ports to the South, 245 I. C. C. 207 (Div. 3, 1941). See also the decision under §216 (b) of the Interstate- Commerce Act by Commissioners Alldredge and Johnson in AU Freight from Chicago and St. Louis to El Paso, Tex., 28 M. C. C. 727 (Div. 2, 1941).
All Freight from Butte, Mont., to Spokane, Wash., 251 I. C. C. 291 (Div. 2, 1942); All Freight Rates to Points in Southern Territory, 253 I. C. C. 623 (1942).
All Freight from Eastern Ports to the South, 251 I. C. C. 361 (1942).
See All Freight, Straight Carloads, to and from the South, 258 I. C. C. 579 (Div. 2, 1944); All-Commodity Rates between Calif. and Ore., Wash., 293 I. C. C. 327 (Div. 3, 1954).
Eastern Central Motor Carriers Assn. v. Baltimore & O. R. Co., 314 I. C. C. 5, 48-49. The trailer-on-flatcar rates, unlike the all-commodity rates involved in the present case-, are subject to a mixing rule requiring that the lading consist of at least two commodities, no one of which shall exceed 60% of- the total volume of the lading. But the New.Hayen points out that this mixing-rule is satisfied whenever two straight trailerloads, each containing a different commodity, are tendered at the same loading platform under a single bill of lading, even though they may be consigned by different shippers and destined for different consignees.
49 U. 8. C. §§ 1 (5) and 15 (Í) (1958 ed.).
49 U. S. C. §§ 2 and 15 (1) (1958 ed.).
49 U. S. C. §§3 (1) and 15 (1) (1958 ed.).
49 U. 8. C. §§ 1 (5), 15a (2), 15a (3), and 15 (1) (1958 ed.).
Reference
- Full Case Name
- ALL STATES FREIGHT, INC. v. NEW YORK, NEW HAVEN & HARTFORD RAILROAD CO.
- Cited By
- 14 cases
- Status
- Published