Central & Southern Motor Freight Tariff Ass'n v. United States

345 F. Supp. 1389, 1972 U.S. Dist. LEXIS 12851
CourtDistrict Court, D. Delaware
DecidedJuly 7, 1972
DocketCiv. A. No. 3761
StatusPublished
Cited by2 cases

This text of 345 F. Supp. 1389 (Central & Southern Motor Freight Tariff Ass'n v. United States) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Central & Southern Motor Freight Tariff Ass'n v. United States, 345 F. Supp. 1389, 1972 U.S. Dist. LEXIS 12851 (D. Del. 1972).

Opinion

OPINION

Before HASTIE, Senior Circuit Judge, WRIGHT, District Judge, and LAYTON, Senior District Judge.

LAYTON, Senior District Judge.

This case is before this three-judge Court pursuant to the provisions of 28 U.S.C. § 1336, in an attempt to set aside and annul part of a Report and Order of the Interstate Commerce Commission, dated April 16, 1969, and receive any other relief which the Court might deem appropriate. This Court is no stranger to the matters raised in this case, for many of them were discussed by this Court in a previous action between these same parties, Central & Southern Motor Freight Tariff Association, Inc. v. United States.1

That action also had been brought under 28 U.S.C. § 1336 to set aside two Reports and Orders of the Interstate [1391]*1391Commerce Commission.2 In the former proceeding, the Commission found that the concept and use of an aggregate rate were just and reasonable for the Railway Express Agency; in the latter proceeding, the Commission found that the specific rate structure published by REA was compensatory.

Aggregate rates available to Railway Express Agency customers are discount rates applicable to shipments of goods and materials from a single shipper to multiple consignees, providing that the gross weight of the goods tendered by the shipper met certain weight minima. The discount increases as the weight increases from 300 through 10,000 pounds.

Aggregate rate-making was first successfully employed in 1957 from seven West Coast origin points to all destinations.3 As originally published, the shipper received a discount if his shipment grossed 300 pounds and further discounts if his shipments weighed 1500 pounds or 2500 pounds. These 1957 rates were the subject of an investigation, inaugurated on August 31, 1955, which culminated in a Division 3 Opinion4 sustaining the rates as just and reasonable.5 The 1957 Opinion noted that the rates were instituted to compete with parcel post, and to utilize REA’s substantial unused capacity. The Opinion further spoke of “apparent” economies in handling aggregated traffic. These contemplated economies were in pickup, delivery, and in billing and bookkeeping.

Subsequently, REA put these aggregate rates into effect for New York City shippers to 435 destinations for aggregations of 10,000, 15,000, and 20,000 pounds. In 1959, the Commission required that REA make its aggregate rates available to all origins and destinations throughout the United States. In fulfilling that requirement, REA published a new tariff extending the aggregate rates to the entire continental United States, causing the plaintiffs and other competitors of REA to complain. These complaints resulted in a temporary suspension of the proposed tariff, but vehement protests by REA’s shippers resulted in a recision of the suspension order. In January of 1963, one and one-half years later, Division 2 entered its opinion without having obtained a report from the hearing examiner. This 1963 Opinion, in the main, dealt with the legality of a consolidation rule. In December, 1965, the Commission handed down an Opinion finding that the aggregate rates were compensatory.

The plaintiffs raised before this Court a broad based attack on the Commission’s procedures and Opinions. Among the issues singled out were (1) the aggregate tariff is discriminatory within the meaning of 49 U.S.C. § 2 (1959);6 (2) REA’s use of a wholly-owned consolidator violates 49 U.S.C. §§ 2, 3 [1392]*1392(1959);7 (3) the Commission failed to comply with the Administrative Procedure Act in that the Report of the examiner was bypassed perfunctorily; and (4) the Commission failed to set forth a complete statement of the reasons supporting its findings of reasonableness.8

In its opinion, the Court found that it lacked sufficient information to determine whether the cost differentials existing between aggregated and ordinary traffic were discriminatory or cost justified,9 that the “inadequate treatment” of the issue of the wholly-owned consolidator left the Court unable to take action on the judgment of the Commission,10 and that by the failure of the Commission to provide reasons for its summary dispensing with the Report of the examiner and its superficial, perfunctory treatment of issues raised by plaintiffs, the Commission had fallen short of the requirements of the Administrative Procedure Act.11

The Court disposed of the case on October 2, 1967, by vacating the Commission Orders which had been appealed and remanding the cause of action to the Commission for proceedings not inconsistent with its opinion.

The Commission issued an Order on October 9, granting to any party the

right to seek a further hearing and excluding from the issues to be discussed in such a proceeding the matter of the wholly-owned consolidator. No party at any time sought a further evidentiary hearing, nor did the Commission require that such a proceeding occur. On January 15, 1968, the Commission, upon its own motion, consolidated for decision with Aggregate Rates on Wearing Apparel — Railway Express Agency, another proceeding which had been remanded by the United States District Court for the Eastern District of Michigan: Chemi-

cals in Aggregate Shipments.

In the spring of 1969, one and one-half years after this Court’s judgment, the Commission issued a Report and Order which reaffirmed its original holding that the aggregate rates did not violate 49 U.S.C. § 2.12

The plaintiffs have filed a timely appeal with this Court seeking to enjoin that part of the 1969 Report and Order which deals with them and receive such other relief as this Court may deem appropriate. They base their claims upon several issues, including: (1) The

Commission failed to hold the aggregate tariff discriminatory under 49 U.S.C. § 2 (1959); (2) the facts asserted by the Commission do not support its conclusion; and (3) the Commission failed to [1393]*1393even mention, much less discuss, the omission of the Report of the Examiner.

In our first opinion, remanding this cause to the Commission, we criticized the paucity of both findings and reasons for the conclusions reached by the Commission regarding the issue of discriminatory rates under 49 U.S.C. § 2. We recognized that reduced costs for one type of shipment can justify charging a lower rate for that shipment.

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Bluebook (online)
345 F. Supp. 1389, 1972 U.S. Dist. LEXIS 12851, Counsel Stack Legal Research, https://law.counselstack.com/opinion/central-southern-motor-freight-tariff-assn-v-united-states-ded-1972.