Chicago, Rock Island & Pacific R. v. United States

233 F. Supp. 381, 1964 U.S. Dist. LEXIS 8200
CourtDistrict Court, E.D. Missouri
DecidedAugust 24, 1964
DocketNo. 63 C 145(3)
StatusPublished
Cited by3 cases

This text of 233 F. Supp. 381 (Chicago, Rock Island & Pacific R. v. United States) is published on Counsel Stack Legal Research, covering District Court, E.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chicago, Rock Island & Pacific R. v. United States, 233 F. Supp. 381, 1964 U.S. Dist. LEXIS 8200 (E.D. Mo. 1964).

Opinion

REGAN, District Judge.

This action is brought to enjoin, set aside, suspend and annul the Interstate Commerce Commission’s Report and Order dated July 6, 1962, as amended by a Corrected Order dated January 30, 1963, and served February 25,1963. -The Commission, in those orders, found that railroad rates on grain and grain products for outbound shipment from certain river ports to inland destinations, which grain had previously been transported by for-hire barges, were discriminatory and in violation of sections 2 and 3(4) of the Interstate Commerce Act, 49 U.S.C. §§ 2, 3(4).

The controversy has a long history. The original complaint before the Commission filed January 4, 1951, by three water carriers (all intervening defendants herein) alleged that the railroads serving southern, southwestern and western trunkline territories charged discriminatory rates on shipments of grain and grain products previously transported by the complaining barge lines on the movements from transhipping ports on the Mississippi, Missouri, Ohio and Tennessee Rivers to inland destinations. [383]*383The rates established on ex-barge shipments, until changed by the Commission’s orders, were flat-rates or stated rates from a named origin (or port) to a named destination. The rate was not dependent on the prior or subsequent transportation. On the other hand, the railroads maintained rates over all-rail routes, some hauls based on a combination of factors and others on single factor rates. On ex-rail grain, rates made on a combination of factors provided a published reshipping proportional rate from a port normally lower than the flat rate which applied to ex-barge grain. These lower proportionals applied to ex-rail grain whether or not the grain was stopped at the ports for processing or storage before the outbound shipments. In the instances where a single-factor joint rate applied to all-rail routes through a port, the various railroads performing service from the port to destination, would receive agreed-to divisions which were not published. In almost all instances the divisions from port to destination were substantially lower than the flat-rate level. The division, like the ex-rail published proportional rates, remained the same whether the grain was stopped at the ports for transit, or whether the shipment was continuous.

The water carriers complained that ex-barge rates were discriminatory insofar as they exceeded the proportional rates assessed by the railroads on all-rail shipments from the same ports on the Mississippi, Missouri and Ohio Rivers, and to the extent that the rates exceeded the division of joint-through rail rates through Mississippi and Tennessee River Ports to points in Southern Classification Territory. The water carriers asserted violations of sections 1, 2, 3(1) and 3(4) of the Interstate Commerce Act. The Commission, in its first report, found that none of the alleged violations had been sustained by the evidence, and denied to the water carriers the right to obtain data relating to the applicable divisions of all-rail joint rates which the plaintiffs sought to compare with the ex-barge rates.

Subsequently, two actions were brought to set aside the Commission’s-first report: American Barge Line Co., v. United States in this District, and Arrow Transportation Co. v. United States-in the Northern District of Alabama.. The cases were stayed when the Commission on its own motion reopened the-proceedings to review the controversy in the light of Dixie Carriers, Inc. v. United States, 351 U.S. 56, 76 S.Ct. 578, 100 L.Ed. 934 (1956). In that case the' complaining barge lines sought joint barge-rail routes and rates comparable to the all-rail proportional rates. The-Commission found that the Dixie Carriers case was distinguishable in that the carriers in that case were willing to-assume the expense of transfer of the ladings to rail cars and the tender off the cars to the outbound rail lines. The-Commission further found that Dixie-Carriers did not answer the controversy regarding the applicability of divisions-of all-rail joint rates but was only concerned with a situation involving published rail proportionals.

The next report of the Commission, dated March 24, 1959, followed an oral reargument on all issues. The Commission reversed its holding as to the alleged unlawfulness of the ex-barge rates-compared with the proportional rates on all-rail movements. The Commission held that under Mechling [Interstate-Commerce Commission v. Mechling, 330 U.S. 567, 67 S.Ct. 894, 91 L.Ed. 1102 (1947)] and Dixie Carriers, supra, cases1that section 3(4) required that no higher1 rate could apply to ex-barge traffic from a river port than that applicable to ex-rail traffic from that port where there was no significant difference in the service beyond that port. In so holding, the Commission determined that the barge and rail carriers were “connecting carriers” under Section 3 (4). The action of the Commission was sustained in Atchison, T. & S. F. Ry. Co. v. United States, 194 F.Supp. 438 (D.Kansas 1961).

In that order, however, the Commission further held that the Mechling and Dixie Carrier Cases had no application [384]*384to ex-barge rates in comparison to divisions of all-rail joint through rates and decline .to reconsider that issue.

Thereafter, Arrow Transportation Company brought suit challenging the Commission’s denial of relief where ex-barge rates exceeded the divisions of all-rail rates from Tennessee River ports. In Arrow Transportation Co. v. United States, 176 F.Supp. 411 (N.D.Ala.1959) the court sustained the position of the water carrier stating at p. 419:

“ * * * In either event the yardstick for measuring discrimination against ex-barge traffic is the compensation received by the outbound rail carrier on ex-rail traffic from the same port to the same destination. This is not to suggest that the division received by the outbound railroad on ex-rail traffic necessarily establishes the exact rate at which ex-barge traffic must be handled. We simply hold that the fact that the inbound carrier is a barge line rather than a railroad is not a factor which may properly be considered in fixing the charge for the outbound rail movement and that the divisions received on ex-rail movements are prima facie evidence as to what charge should be assessed upon ex-barge movements. The plaintiffs attempted to show the divisions received by the railroads on ex-rail traffic, but the Commission refused to receive the evidence. In this the Commission erred. Dixie Carriers v. United States, supra.

The Court further held, p. 421:

“When Congress authorized the building of a modern navigable channel in the Tennessee River, it meant for that river to be coordinated with the existing transportation system so as to make its full benefits available to shippers. The Commission has a positive duty to prescribe rates for ex-barge grain which will accomplish that end. Whether the rates are published as proportional rates or as joint rates, the charges paid by the shipper for the movement of ex-barge grain beyond the ports must be on a level which preserves intact the savings on the water leg of the journey, at ports where the inbound and outbound rail carriers are different.

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Bluebook (online)
233 F. Supp. 381, 1964 U.S. Dist. LEXIS 8200, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chicago-rock-island-pacific-r-v-united-states-moed-1964.