Ajayem Lumber Corp. v. Penn Central Transportation Co.

350 F. Supp. 111, 1972 U.S. Dist. LEXIS 12209
CourtDistrict Court, E.D. New York
DecidedAugust 24, 1972
DocketNos. 69 C 1585, 69 C 1586
StatusPublished
Cited by2 cases

This text of 350 F. Supp. 111 (Ajayem Lumber Corp. v. Penn Central Transportation Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ajayem Lumber Corp. v. Penn Central Transportation Co., 350 F. Supp. 111, 1972 U.S. Dist. LEXIS 12209 (E.D.N.Y. 1972).

Opinion

BARTELS, District Judge.

This action arises from the filing by the Traffic Executive Association-Eastern Railroads (“TEA-ER”) of a master tariff increasing the joint freight rates 1 of the Long Island Rail Road (“LIRR”) and plaintiff railroads by 6% allegedly without the authority of the LIRR. Underlying the present controversy is the claim of the LIRR that its divisions of joint rates are inadequate as evidenced by the complaint filed by it on August 20, 1969 with the Interstate Commerce Commission (“Commission”),2 antecedent to the present action, seeking a change in the existing divisions of joint freight rates, which claim has not yet been decided. The LIRR, objecting to the 6% increase and claiming that the master tariff was filed on its behalf by TEA-ER without authority, refused to accept freight cars interchanged to it without receiving its local rates as its divisions of the joint rates.3 To prevent irreparable injury to themselves and to the public, plaintiffs instituted this action to enjoin the LIRR from refusing (1) to accept freight cars tendered to it, and (2) to accept as its divisions of their joint rates the percentages and proportions previously established by mutual agreement until the Commission made its final determination in the LIRR’s divisions complaint above described. Before proceeding to the issues here involved, some background of the controversy is necessary.

Background

The LIRR is a member of the TEA-ER, an association of railroads, authorized by Section 5a of the Interstate Commerce Act (“Act”), 49 U.S.C. § 5b(6), and approved by the Commission, which executed an agreement with its members authorizing joint actions, sometimes termed “rate legislation” within the framework of the agreement. The agreement also provides, as Section 5a requires, that each member retains the right to take independent action by [114]*114giving appropriate notice of its intended action either before or after any TEA-ER determination. Prior to May 1, 1907, the date on which the Commission freight-tariff rule became effective, there was no uniform rule followed by carriers in regard to concurrence in joint tariffs, and the publication of joint rates without the affirmative consent of connecting carriers was a common practice. If at that time a non-consenting carrier objected to the proposed rate it could file a notice of non-concurrence, described as a negative concurrence. This system was inadequate as it did not afford sufficient notice to shippers relying upon the file tariff. In addition, the practice was subject to abuse by non-consenting connecting carriers which would abide by the joint tariff for a time and later, when convenient, reject the same upon the claim that it had not concurred therein although such carrier was often shown to have accepted traffic and collected charges in accordance with such tariff up to the date of filing the notice of non-concurrence.

Tariff Circulars 14-A and 20, issued in 1907, were designed to eliminate the uncertainties of this negative concurrence practice. Rule 17 of Tariff Circular 14-A abolished negative concurrences, and Rule 52 of Tariff Circular 20 (49 CRF § 1300.52) provided that a carrier named a party to a joint tariff without authority was not bound thereby and must charge the previously effective rate. In other words, old negative concurrences were abolished in favor of affirmative concurrences. To facilitate the filing and publishing of tariffs by an association, such as TEA-ER, as agent on behalf of one or more of its members, the Commission authorized a carrier to do so by filing with the Commission a limited or unlimited power of attorney or concurrence in accordance with the provisions and forms established in Rules 17, 18 and 19 of Tariff Circular 20 (49 CRF 1300.17, 1300.18 and 1300.19). Rule 26(b) provides that such powers of attorney and concurrences may be revoked on “not less than sixty days’ notice by filing a notice of revocation with the Commission and serving at the same time a copy thereof on the agent * * Rule 26(c) provides that when the power of attorney or concurrence is revoked, corresponding revisions in the tariff must be made no later than the effective date stated in the tariff or else the previous tariffs remain effective.

Whenever a power of attorney or a concurrence is properly revoked by a carrier, the changes sought in the tariff must, pursuant to Section 15(1) of the Act, be filed, all persons given notice, and the carrier involved must subject its proposed rates to the statutory rate investigatory proceeding by the Commission. These new rules as well as the Act4 were meant to guarantee to the public that once a local or joint tariff was filed with the Commission, the public might rely thereon in making their shipments, and that all carriers named in the tariff would be bound thereby until the tariff was changed pursuant to proper procedures.

There are on file with the Commission several powers of attorney from the LIRR appointing the TEA-ER as its tariff-filing agent, and several concurrences to freight tariffs filed by the Le-high Valley Railroad. There are on file no revocations of these powers of attorney or concurrences. On October 7th [115]*115the LIRR received notice from its representative who attended the meeting of the TEA-ER, that a joint increase in railroad revenues was discussed but the carriers could not agree on the amount of the increase. On October 9th the TEA-ER wrote a letter to the LIRR regarding the petition for joint rates to be filed on October 10th, notifying it that the TEA-ER assumed that the LIRR desired “to join with other railroads in the petition now being prepared for filing and the name of your company will be included as a petitioner. If this should be contrary to your desires, you may direct me to eliminate the name of your company and the petition will be amended accordingly.” The petition sought a 6% increase in joint freight rates of the member railroads and was filed with the Commission on October 10th. However, the October 9th letter was not received by the LIRR until October 14th. In the meantime on October 10th there appeared in the New York Times a story that on that date the railroads would file a petition with the Commission seeking a 6% general increase in rates. After reading this story in the Times, the LIRR on the same day wired the TEA-ER and the Secretary of the Commission that it was not agreeable to the increase and did not desire to be made a party to the petition. This wire was not received until October 13th, after the petition had been filed.

The Commission, by special permission, dated October 14, 1969, after it had received the LIRR’s telegram, nevertheless authorized the carriers in whose behalf the petition was filed to use the short form method of publication by filing a master tariff containing the 6% increase effective no sooner than November 18, 1969. Also by separate order the Commission initiated an investigation of the tariffs which was docketed as Ex Parte No. 262 Increase Freight Rates 1969. The master tariff, as originally filed on October 10th and issued on October 16th, became effective on November 18th but because of the telegram of the LIRR, the TEA-ER filed amendments to the tariffs exempting the 6% rate increase from any local rates or charges of the LIRR.

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Bluebook (online)
350 F. Supp. 111, 1972 U.S. Dist. LEXIS 12209, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ajayem-lumber-corp-v-penn-central-transportation-co-nyed-1972.