Erco Industries Limited, a Corporation v. Seaboard Coast Line Railroad Company

644 F.2d 424, 1981 U.S. App. LEXIS 13630
CourtCourt of Appeals for the Fifth Circuit
DecidedMay 4, 1981
Docket80-5370
StatusPublished
Cited by65 cases

This text of 644 F.2d 424 (Erco Industries Limited, a Corporation v. Seaboard Coast Line Railroad Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Erco Industries Limited, a Corporation v. Seaboard Coast Line Railroad Company, 644 F.2d 424, 1981 U.S. App. LEXIS 13630 (5th Cir. 1981).

Opinion

FRANK M. JOHNSON, Jr., Circuit Judge:

Erco Industries Limited brought this action pursuant to 28 U.S.C.A. § 1336(a) and the Interstate Commerce Act § 16(2), 49 U.S.C.A. § 16(2), to enforce an order of the Interstate Commerce Commission awarding damages to Erco because certain rates charged by the defendant railroad companies were unjust and unreasonable in violation of 49 U.S.C.A. § l. 1 The railroads *427 appeal from the district court’s grant of summary judgment in favor of Erco. We affirm.

Erco, a producer of chemicals, entered into long term contracts for the supply of phosphate rock which it used in its chemical production. Erco entered into one such contract with American Cyanamid Company (“Cyanamid”) and another with the Phosphate Rock Export Association. Cyan-amid’s contractual obligations to Erco were fulfilled by Brewster Phosphates, a partnership composed of Cyanamid and Kerr-McGee Corporation, while the Association delegated its contractual obligations owed to Erco to one of its members, International Minerals and Chemical Corporation (“IMC”). IMC and Brewster were the consignors of the phosphate shipments to Erco, which was the named consignee on the railroad bills of lading. Erco ultimately bore the transportation charges, which had been prepaid to the railroads by the consignors, by reimbursing the consignors for such charges. The consignors placed orders for rail cars with Seaboard Coast Line Railroad (“Seaboard”) which was the originating carrier on all of the shipments involved in this case. The phosphate rock was shipped from Florida to Canada.

Throughout the pertinent period in this case, from March to April 1973, the joint single-car rate under the tariff to which all the defendants were parties was $12.73 per net ton whereas the joint multiple-ear rate was $8.74 per net ton. The required minimum weight per car for the multiple-car rate was 140,000 pounds, with a total required minimum weight per shipment of 3,500 tons. The consignors utilized multiple-car rates on all phosphate rock shipments to Erco prior and subsequent to the period covered by the complaint. On March 6, 1973, the Interstate Commerce Commission responded to a severe rail car shortage caused by increased demand for phosphate rock with a service order which limited origin demurrage free time from 48 to 24 hours and substantially increased demur-rage charges. Seaboard, the originating carrier, was unable to meet the requests for cars from shippers on its lines, and in light of that situation Erco agreed to accept shipments weighing less than 3,500 tons. As a result, the railroads charged the consignors at the higher single-car rate on shipments moving to Erco during March and April of 1973.

On August 11, 1975, Erco filed a complaint with the Commission averring that the railroads unjustly and unreasonably charged it at the single-car rate which was substantially higher than the multiple-car rate to which Erco alleged it was entitled. An administrative law judge dismissed Erco’s complaint but the Commission on administrative appeal reversed the administrative law judge and awarded Erco reparation constituting the difference between the single-car rate and the multiple-car rate. Erco Industries, Ltd. v. Seaboard Coast Line R.R. Co., 356 I.C.C. 652 (1977) (“Erco I”). The Commission’s decision in Erco I was based on its prior opinion in Ormet Corp. v. Illinois Central R. Corp., 341 I.C.C. 647 (1972), which held that, during the existence of outstanding car service orders where the originating carrier, i. e., the railroad responsible for supplying the cars, is unable to furnish an adequate number of cars to enable a shipper to satisfy the published tariff minimum weight requirements for the multiple-car rate, the carrier’s application of the single-car rate is prima facie unjust and unreasonable to the extent the multiple-car rate is exceeded. However, a shipper must affirmatively show that it was in a position to take advantage of the lower multiple-car rate, that it timely ordered the requisite number of cars from the carrier, and that it was able to accept and load the cars ordered, only to find that the carrier railroad was unable to furnish a sufficient number of cars prior to the commencement of demurrage charges.

*428 In order to obtain judicial review of the Commission’s order in Erco I, the railroads refused to pay, thus prompting Erco to file its enforcement suit in district court. The district court denied Erco’s motion for summary judgment and remanded to the Commission for clarification of an ambiguity in the Commission’s findings in Erco I. The Commission’s statement in its factual recitations that the consignors rather than Erco ordered the cars from Seaboard was contradicted by its conclusion that the evidence was convincing that Erco timely ordered the equipment from Seaboard. The district court in remanding to the Commission stated that the finding as to which entity actually ordered the cars from Seaboard was significant because it might be determinative as to which party had the responsibility of allocating the cars to Erco.

On remand the Commission found that the orders for the cars were placed by the consignors rather than by Erco. 361 I.C.C. 814 (1979) (“Erco II”). However, the Commission stated that whether Erco or the consignors placed the orders was not of material significance because

The evidence demonstrates that the consignors could not have accumulated enough cars for the ERCO movement without incurring demurrage, even if all the transportation needs of all other consignees had been ignored.

The Commission in Erco II reaffirmed its earlier ruling in favor of Erco and held that the requirements of Ormet Corp. v. Illinois Central R. Co., supra, 341 I.C.C. 647, were satisfied by Erco. The Commission found that Erco relied on Ormet in agreeing to accept shipments whose total weight was below that required for the multiple-car rate.

After the Commission rendered its decision in Erco II, Erco filed its second motion for summary judgment. The district court granted Erco’s motion and rendered judgment in favor of Erco. The court noted that the Commission in Erco II clarified the ambiguity that had existed in Erco I.

The railroads on appeal urge that the district court erred in granting summary judgment because genuine issues of material facts exist and because the Commission’s decision was arbitrary and unsupported by substantial evidence. They also contend that the district court’s failure to provide them with an oral evidentiary hearing on Erco’s motion for summary judgment was a denial of due process. Finally, they argue that the district court failed in its summary judgment order to adequately consider whether the Commission properly applied Ormet and also failed to state the reasons for its enforcement of the Commission’s order.

Under Fed.R.Civ.P. 56, summary judgment may only be granted “if everything in the record — pleadings, depositions, interrogatories, affidavits, etc.

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Bluebook (online)
644 F.2d 424, 1981 U.S. App. LEXIS 13630, Counsel Stack Legal Research, https://law.counselstack.com/opinion/erco-industries-limited-a-corporation-v-seaboard-coast-line-railroad-ca5-1981.