Capitol Packing Co. v. United States

167 F. Supp. 420, 1958 U.S. Dist. LEXIS 4288, 1958 WL 95372
CourtDistrict Court, D. Colorado
DecidedSeptember 23, 1958
DocketCiv. 5567
StatusPublished

This text of 167 F. Supp. 420 (Capitol Packing Co. v. United States) is published on Counsel Stack Legal Research, covering District Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Capitol Packing Co. v. United States, 167 F. Supp. 420, 1958 U.S. Dist. LEXIS 4288, 1958 WL 95372 (D. Colo. 1958).

Opinion

ALFRED A. ARRAJ, District Judge.

This is an action challenging the validity of the report and order of the Interstate Commerce Commission dated September 19, 1955, encompassing the issues raised in Docket No. 30710 Sub-No. 24, which was heard as part of the proceedings entitled Rath Packing Co. et al. v. Ahnappe and Western Railway Co. et al., Docket No. 30710, reported at 296 I.C.C. 693. For a proper understanding of the issues involved herein, it will be necessary to trace briefly the background under which this dispute arose.

Plaintiffs here are packing companies and a substantial portion of their business consists of shipping fresh meat between Denver and the eastern United States via railroad. In 1930 the Interstate Commerce Commission issued a decision and order, reported as Western Trunk Line Class Rate Case, 164 I.C.C. 1, 200, which established zones and boundary lines for Western Trunk Line Territory for purposes of establishing rates to be charged by the railroads. Zone 1 of Western Trunk Line Territory was described fully, with St. Louis being on the boundary line, and illustrated: by a map at Appendix G of that case. In 1947 and 1948 the Commission, in two emergency orders, Ex Parte 166, 270 I. C.C. 403, 456, and Ex Parte 168, 276 I. C.C. 9, 113, allowed the railroads to increase their western rate factor by adding to the base rate increases of 20% and 8% for goods traveling from one point within Western Territory to another point within Western Territory other than Zone 1, and increases of 22% % and 9% for goods traveling from one point within Western Territory (other than Zone 1) to a point within Zone 1. Although it was clear under the 1930 decision that St. Louis', being on the boundary, was not to be treated as within Zone 1, the ex parte increases made no provision concerning the treatment of border points. Thereafter the railroads treated St. Louis as a point within Zone 1 for purposes of calculating the authorized increases, and applied their published tariffs, with the higher rate, to plaintiffs’ goods traveling between Denver and St. Louis.

This action of the railroads in treating St. Louis as within Zone 1 was challenged before the Commission, and in its decision, Increased Freight Rates, 1947, 279 I.C.C. 303 (referred to as the Border Point case), the Commission noted that the railroads had departed from the usual rule regarding treatment of border points but also stated that,

“The treatment of border points is not specifically dealt with in the reports in Ex Partes Nos. 166 and 168, except (as to Cairo, 111.).”

The Commission found that the increased rates arrived at by treating St. Louis as within Zone 1,

“ * * * have resulted in rates which are, and for the future will • be, unjust and unreasonable and unduly prejudicial to the extent that they exceed the rates hereinafter prescribed as maximum reasonable rates for the future, and our previous findings in Ex Parte No. 166 and 168 are hereby modified accordingly.”

The Commission then set out new rate increases arrived at by applying the usual rule. Apparently, the Commission adopted the view in the (Border.Point) decision that, inasmuch as the railroads were not specifically bound to any particular rule regarding treatment of border [422]*422points by the two ex parte orders, they (the railroads) were free to apply a different rule to the increases and disregard the usual rule, until such time as the Commission specifically ordered otherwise.

In their complaint before the Commission, plaintiffs sought, as reparations from certain railroads, the difference between the rates arrived at by regarding St. Louis as on the boundary of Zone 1 and the rates arrived at by regarding St. Louis as within Zone 1, for the period between the dates the increases were authorized and the date of the Commission’s decision in the Border Point case. There was no dispute over rates charged prior to the ex parte increases or subsequent to the Border Point case.

Plaintiff alleged that the rate increases applied, by the defendant railroads were in violation of Sections 1(5), 8(1) and 6 (7) of the Interstate Commerce Act. Sec. 1(5) prohibits unjust and unreasonable rates, and Sec. 3(1) makes unlawful rates that give any undue or unreasonable preference or advantage. However, plaintiffs did not urge these grounds before the Commission, but relied on the argument that the rates were inapplicable under Sec. 6(7), which prohibits charging higher rates than those in effect at the time. Plaintiffs contended that the rates charged were inapplicable and therefore unlawful because they violated the Commission orders in the Western Trunk Line Class Rate Case, supra, and the two ex parte orders. By its report and order of September 19, 1955, the Commission found that the rates assigned were not shown to have been or to be inapplicable, unjust, unreasonable, or otherwise unlawful, and plaintiff’s complaint together with the several other complaints contained in Docket No. 30710 were dismissed. The Commission found that the Border Point case modified rather than affirmed the two ex parte cases and that therefore the rates imposed prior to the Border Point case were not inapplicable.

This case was originally assigned to a specially constituted District Court of 3 Judges. Defendant’s Answer asserted that it was not a proper action for consideration by a 3 Judge District Court and upon hearings duly had the 3 Judge Court sustained defendant’s contention and the 3 Judge Court was dissolved.

The defendant, the U. S. A., did not oppose the Commission’s order and did not participate in its defense. The position of the Commission is that the order challenged by plaintiffs is valid and lawful in all respects and asks that plaintiffs’ complaint be dismissed.

Plaintiffs now advance two major grounds for remanding the case to the Commission. First, plaintiffs contend that the Border Point case did not modify prior orders because St. Louis was prescribed as a border point at all times during the period complained of by orders in existence prior thereto, and that the order is arbitrary, unreasonable and null and void because the Commission applied the decisions in the Border Point, supra, and Hormel, infra, cases retrospectively. Second, plaintiffs contend that the Commission failed to make essential findings of fact to support its order.

Assuming that St. Louis had previously been prescribed as a border point in Commission orders, it should be noted that the ex parte orders did not expressly include any rule or order regarding treatment of points on the boundary of a zone. Ex Parte 168, supra, quoted and relied on by plaintiffs, says,

“Cairo, Illinois, should be treated as a border point between the east and the southwest rather than as a point within eastern territory. Zone 1 of Western Trunk-Line Territory adjoins eastern territory on the west and its northern, western and southern limits are as defined in our decision in Western Trunk Line Class Rates, 164 I.C.C. 1, at page 200, and in the map opposite page 248.”

Granting plaintiffs’ claim that this is a binding order, yet it merely determines boundaries and says nothing concerning treatment of points on those boundaries.

[423]*423In its decision in this case, the Commission, at pages 710-711, said,

“Following the decisions in Ex Parte Nos. 166 and 168, the carriers, in publishing rates reflecting the increases therein authorized, treated St.

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Bluebook (online)
167 F. Supp. 420, 1958 U.S. Dist. LEXIS 4288, 1958 WL 95372, Counsel Stack Legal Research, https://law.counselstack.com/opinion/capitol-packing-co-v-united-states-cod-1958.