Hanna Furnace Corp. v. United States

53 F. Supp. 341, 1943 U.S. Dist. LEXIS 1896
CourtDistrict Court, W.D. New York
DecidedDecember 3, 1943
DocketCiv. No. 1408
StatusPublished
Cited by6 cases

This text of 53 F. Supp. 341 (Hanna Furnace Corp. v. United States) is published on Counsel Stack Legal Research, covering District Court, W.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hanna Furnace Corp. v. United States, 53 F. Supp. 341, 1943 U.S. Dist. LEXIS 1896 (W.D.N.Y. 1943).

Opinions

KNIGHT, District Judge.

This suit is brought pursuant to statute and under the equity power of this court to enjoin, set aside and annul an order of the Interstate Commerce Commission prohibiting payment to the plaintiff by the defendant-carriers for car switching service performed by the plaintiff within its plant.

Plaintiff (hereinafter called “shipper”) is the owner of an industrial plant, situate within the limits of the City of Buffalo, Erie County, State of New York. It produces and ships pig iron and an occasional car-load of other freight. Its inbound railroad line-haul shipments, averaging 10 to 15 carloads daily, consist mainly of coke, but include some coal, dolomite, scrap iron, lime and brick. Its outbound shipments of pig iron range from 40 to 50 carloads per day. This pig iron makes up about three-quarters of all the line-haul switching service. Save for some miscellaneous materials, that is all of the carload shipments out or in. Raw materials to make pig iron, other than coke, are delivered through the Union Ship canal at the north border of the plant. Among the plant structures and facilities are blast furnaces, engine rooms, boiler houses, shops, storage yards, sheds, brick and various single buildings and equipment, etc., located at various points within the limits of the plant property. The shipper has within the plant 66 standard gauge tracks, in total length of 14 miles, with the rails weighing 80 to 90 pounds. It also owns and operates over these tracks seven locomotives, two of which are Diesels weighing 100 tons each and the other two units weighing 55 to 75 tons, some fifty gondola and hopper cars and some other railroad equipment. The plant is served by direct track connection with the Pennsylvania Railroad Company and the South Buffalo Railway Company (a switching road) and by the Lehigh Valley Railroad Company with trackage rights over the Pennsylvania.

The practice is for these carriers to place and pick up cars on so-called interchange tracks just inside the shipper’s plant — one set connected with the Pennsylvania Railway and consisting of eight parallel tracks, and one connected with the South Buffalo Railway and consisting of three parallel, tracks. The shipper with its own power switches the cars to any desired location in the plant and returns them to the interchange tracks. The Pennsylvania and Le-high each makes an allowance of 90‡ per loaded car handled by these railroads in line-haul service. Coke constitutes most of the material brought in by the South Buffalo Railway, and no allowance is made: [343]*343on these shipments, because they come from a company affiliated with the shipper. Deliveries of other materials, however, are brought in to the South Buffalo Railway interchange tracks by several other roads on which an allowance of 90^ for each line-haul car is made.

The Commission found that the duty of the carriers to perform ended at the interchange tracks and that the allowance made as aforesaid was an 'unlawful rebate. It purported to act under Section 6(7), of the Interstate Commerce Act, 49 U.S.C.A. § 6(7), which, among other things, prohibits the transportation of property except in conformity with published tariffs and also provides that no carrier shall “refund or remit in any manner or by any device any portion of the rates, fares, and charges” specified in the tariffs. This section prohibits such transportation whether or not any discrimination between shippers results. It provides that “the term ‘transportation’ * * * shall include * * * all services in connection with the receipt, delivery, elevation, and transfer in transit, * * * of property transported.” 1(3) (Sections 2 and 3 of the Act prohibit rebates which are discriminatory.) No discrimination is claimed here.

A carrier can not deviate from any rate specified in the tariff for any service rendered in transportation. Lowden v. Simonds-Shields-Lonsdale Grain Co., 306 U.S. 516, 59 S.Ct. 612, 83 L.Ed. 953; rehearing denied 307 U.S. 649, 59 S.Ct. 792, 83 L.Ed. 1528. The form which the rebate takes is of no consequence. Tap Line Cases United States v. Louisiana & P. R. Co., 234 U.S. 1, 34 S.Ct. 741, 58 L.Ed. 1185. 49 U.S.C.A. § 15(13) permits an allowance only “if the owner of property transported under this chapter (Chapter 1 Interstate Commerce Act) directly or indirectly renders any service connected with such transportation, * * In order that an allowance may be made the service performed must be a part of the carrier’s duty to perform, and if the service is not a part of the transportation required of the carrier, payment therefor constitutes an unlawful rebate. Baltimore & O. R. Co. v. United States, 305 U.S. 507, 59 S.Ct. 284, 83 L.Ed. 318; Merchants’ Warehouse Co. v. United States, 283 U.S. 501, 51 S.Ct. 505, 75 L.Ed. 1227. Transportation includes delivery and what is asked as to complete it the carrier must do. New York Cent. & H. R. R. Co. v. General Electric Co., 219 N.Y. 227, 114 N.E. 115, 1 A.L.R. 1417. So the question here is where “transportation” ends. Is the service performed by the shipper part of the transportation undertaking of the carriers?

In 1931, the Interstate Commerce Commission, upon its own motion, instituted an investigation relating to the payment of allowances by carriers to industries for the performance of terminal switching. This proceeding is known as Ex parte 104. Extended hearings resulting in some sixty-seven supplemental reports and involving literally hundreds of industrial plants receiving allowances were held, and out of these came the report of the Commission that industry spotting service under certain conditions was not included in line-haul and that any allowance to the shipper therefor was illegal and in violation of Section 6, supra. The investigation was particularly directed to the matter of service in spotting cars in large industries. The report is most comprehensive. It sets out certain principles for the practical application of rules as to spotting service. Among these it defined the extent of service required of the carrier. It declared that any “service beyond the point of interruption or interference is an excess of that performed in simple switching or team track delivery” and that “Payment for, or assumption by the carrier of the cost of service performed beyond such points of interruption or interference is found to be unlawful in violation of Section 6 of the act.” Rules 8, 9 and 10 formulated by the Traffic Executive Association Eastern Territory, July 18, 1929, are incorporated as a part of the report of the commission. These Rules define the extent of service to be performed by the carrier and certain physical conditions which are to be considered as plant interruption or interference. They limit the extent of service required by the carrier to “point of placement or delivery performed without plant interruption or interference,” and provide that “if plant interruption or interference is encountered service after such * * * shall be charged to the plant.”

It is patent that conditions in various plants differ and that each case must be determined upon the facts established as to it. United States v. American Sheet & Tin Plate Co., 301 U.S. 402, 57 S.Ct. 804, 81 L.Ed. 1186. The Commission has found [344]

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53 F. Supp. 341, 1943 U.S. Dist. LEXIS 1896, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hanna-furnace-corp-v-united-states-nywd-1943.