Interstate Commerce Commission v. Oregon Pacific Industries, Inc.

420 U.S. 184, 95 S. Ct. 909, 43 L. Ed. 2d 121, 1975 U.S. LEXIS 133
CourtSupreme Court of the United States
DecidedFebruary 19, 1975
Docket73-1210
StatusPublished
Cited by24 cases

This text of 420 U.S. 184 (Interstate Commerce Commission v. Oregon Pacific Industries, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Interstate Commerce Commission v. Oregon Pacific Industries, Inc., 420 U.S. 184, 95 S. Ct. 909, 43 L. Ed. 2d 121, 1975 U.S. LEXIS 133 (1975).

Opinions

Opinion of the Court by

Mr. Justice Douglas,

announced by Mr. Chief Justice Burger.

This is an appeal from a judgment of a three-judge District Court, 28 U. S. C. § 1253, which held invalid an order of the Interstate Commerce Commission promul[185]*185gating a car Service Order 1 under § 1 (15) of the Interstate Commerce Act, as amended, 41 Stat. 476, 49 U. S. C. § 1 (15).2 Oregon Pacific Industries v. United States, 365 F. Supp. 609 (Ore. 1973).

[186]*186Lumber is often moved to market on a wholesalers' sale-in-transit schedule. Cars are sent to hold points, where in time reconsignment orders are received for shipment to customers of wholesalers. The tariffs allow indefinite holding, subject to demurrage charges for detention in excess of 24 hours, but the Commission found that these demurrage charges never discouraged shippers from lengthy holding of cars. In 1973 there was, according to the Commission, a transportation “emergency” which required “immediate action to promote car service in the interest of the public and the commerce of the people.” Accordingly, on May 8, 1973, the Commission, sua sponte, without notice and hearing, entered its Service Order No. 1134 which limited the hold time at reconsignment points to five days (120 hours), exclusive of Saturdays, Sundays, and holidays. If the lumber cars were held at reconsignment points longer than five working days, the reconsignment privilege would be lost and the shippers would be subject to local or joint tariff rates from the point of origin to the hold point, and from the hold point to the ultimate destination.

The District Court held that there were four, categories of emergency action which the Commission could take under § 1 (15):

“(a) to suspend . . . rules, regulations, or practices then established with respect to car service . . . ,
[187]*187“(b) to make . . . directions with respect to car service ... during such emergency as ... will best promote . . . service . . . [and provide compensation as between carriers].
“(c) to require . . . common use of terminals, . . . and
■ “(d) to give directions for preference or priority in transportation . . .

The District Court held that the Commission’s authority under (b), (c), or (d) would not support the order in this case and that the order could be sustained, if at all, only under (a). It concluded that (a) was not adequate since the challenged order did not “suspend” any rule or regulation “with respect to car service.” It reasoned that the order “condones the practice of sales-in-transit” for an indefinite time but requires shippers employing the practice to pay a higher rate to the carriers than the demurrage rate under the prior order. That was, in its view, a rate order having no place under § 1 (15), which gives the Commission power to act sua sponte in an “emergency” in a narrow group of cases. 365 F. Supp., at 612.

The District Court pointed out that § 1 (10) defines “car service” as “the use . . . movement . . . and return of . . . cars . . . used in the transportation of property . . . by any carrier by railroad”; and it emphasized that “ 'car service’ connotes the use to which the vehicles of transportation are put [by a carrier]; not the transportation service rendered by means of them,” 365 F. Supp., at 611 ; Peoria & P. U. R. Co. v. United States, 263 U. S. 528, 533. We emphasized in United States v. Allegheny-Ludlum Steel Corp., 406 U. S. 742, 743, that car service rules dealt with the management of “a single common pool” of cars “used by all roads,” and that they pertain to railroad use [188]*188of cars. Since “railroad use” involves shippers, we think the District Court read § 1 (15) too narrowly.

We noted in Allegheny-Ludlum that § 1 (15) traces back to the Esch Car Service Act of 1917, 40 Stat 101.3 406 U. S., at 744. The use of freight cars as warehouses — the practice which prompted the Commission to act in the present case — was one of the evils at which the original Car Service Act was aimed.

Mr. Esch, sponsor of the legislation, said: 4

“Another cause of car shortage is the holding of cars on the part of shippers themselves, using the car as a species of warehouse, instead of promptly unloading it. I think that is quite a universal evil throughout the United States, but it is due in some measure to the lack of warehouse and elevator facilities at the terminals.
“Mr. MADDEN. If the gentleman will yield to me, I would like to ask him one question. I would like to ask the gentleman if there is any provision in this bill to compel railroad companies to pay demurrage to the shippers in case they failed to furnish the cars within the time they were required for the shipment of the goods?
“Mr. ESCH. The gentleman means reciprocal demurrage?
“Mr. MADDEN. This gives the Interstate Commerce Commission the right to authorize them to charge certain demurrage of the shipper if he fails to unload the car. Ought not the shipper to have a claim against the railroad company in case they fail to furnish the cars?
[189]*189“Mr. ESCH. I have no doubt under the proposed amendment, in case of emergency, the commission could make any rules or regulations that they saw fit that would promote the transit of freight, because the power is very broad, and necessarily so.”

And the Reports make clear that one aim of the Act was “to the end that the public may receive the best possible service in transportation.” 5 Car shortages, it was found, resulted in short supplies of basic foods in the markets “with attendant high prices.” 6 The interests of shippers and consumers — not the carriers alone— were very much in the forefront.

As we have noted, Peoria & P. U. R. Co., supra, emphasized that the car service authority extends to the “use” of cars and not to a “transportation service,” but there the issue was whether one carrier was bound to perform switching services for another carrier. The Court held that it was not; power over the “use” of cars, however, was left undisturbed. In this connection it is obvious that a shipper by rail does not “rent” a vehicle as do shippers by truck. The cars are all “used” under the management of carriers, who naturally receive directions or requests from shippers. The cars cannot be used efficiently to serve the needs of shippers and consumers if they are used not as carriers but as warehouses.

In Turner Lumber Co.v. Chicago, M. & St. P. R. Co., 271 U. S. 259

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Bluebook (online)
420 U.S. 184, 95 S. Ct. 909, 43 L. Ed. 2d 121, 1975 U.S. LEXIS 133, Counsel Stack Legal Research, https://law.counselstack.com/opinion/interstate-commerce-commission-v-oregon-pacific-industries-inc-scotus-1975.