The Coca-Cola Company v. The Atchison, Topeka, and Santa Fe Railway Company

608 F.2d 213, 1979 U.S. App. LEXIS 9669
CourtCourt of Appeals for the Fifth Circuit
DecidedDecember 14, 1979
Docket77-1610
StatusPublished
Cited by93 cases

This text of 608 F.2d 213 (The Coca-Cola Company v. The Atchison, Topeka, and Santa Fe Railway 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
The Coca-Cola Company v. The Atchison, Topeka, and Santa Fe Railway Company, 608 F.2d 213, 1979 U.S. App. LEXIS 9669 (5th Cir. 1979).

Opinion

SIMPSON, Circuit Judge:

The Coca-Cola Company filed three substantially identical complaints in the district court against three different railroads 1 on August 27,1973, seeking refunds for freight charges paid on import shipments of coffee. The complaints asserted overcharges in violation of railroad tariffs. The district court, applying the doctrine of primary jurisdiction, 2 referred one action 3 to the Interstate Commerce Commission (ICC) for preliminary determination. The three cases were consolidated and stayed pending ICC decision. The ICC referred the matter to an administrative law judge (ALJ) who found that the railroads had properly applied the tariff. App. at 118-20. Coca-Cola filed exceptions to the initial decision of the ALJ with the ICC. The ICC agreed with the findings of the ALJ and dismissed Coca-Cola’s complaint. App. at 137-38. Coca-Cola, by a fourth suit naming the ICC and the United States as defendants, sought reversal of the ICC order. 4 The district court ordered the four cases consolidated on February 3, 1976. The district court ruled that the ICC (and the ALJ) had correctly interpreted the applicable tariff and hence that Coca-Cola was not entitled to refund on any of the freight charges paid to the railroads. App. at 257-61. The district court order is before us for review on Coca-Cola’s appeal. We determine that while the district court selected an incorrect standard of review of the ICC decision, its final conclusion, that the ICC had properly construed the applicable tariff, is correct. We therefore affirm.

The disputed freight charges concern shipments of green coffee imported by *216 Coca-Cola through the Port of Houston and shipped on appellees’ railroads to Omaha, Nebraska. The charges for this movement are set forth in Items 6234 and 9644-C of the governing tariff. 5 Items 6234 and 9644-C list in tabular form the applicable rate expressed in cents per hundred pounds for various minimum weights. The rates are subject to a reference consisting of the circled number “17” (circle reference 17). The meaning of circle reference 17 is explained in the tariff:

Applicable on import traffic only. A charge of 12 cents per 100 pounds must be assessed in addition to rates subject to this reference mark. This charge accrues to the line-haul port railroad which performs the port terminal service or bears the expense of such service.

SWL Tariff 108-U, I.C.C. 4654, quoted in App. at 55.

The charge is referred to as a “waterborne charge” and is imposed on certain import shipments because carriers provide more facilities and services for import shipments than for domestic shipments. 6 All parties agree that Coca-Cola’s shipments were subject to the Item 6234 and Item 9644-C rates and the waterborne charge imposed by circle reference 17. The disagreement concerns Item 317-H of the tariff. SWL Tariff 108-U, I.C.C. 4654.

Item 317-H provides that as a part of the “from shipside rate” the carrier railroad absorbs wharfage charges up to a stated maximum. 7 Amounts in excess of the stated maximum absorption are chargeable to the shipper, Coca-Cola in the instant case. The maximum absorption rates were adopted because although wharfage charges were historically included as a part of the “from shipside” rate, the services are actually performed by port operators over whom neither the railroads nor the ICC has control. Sharply escalating port terminal expenses threw the brunt of these charges on the railroads. The railroads responded by publishing maximum absorption rates in order to control the economics of the increased port operator charges. According to railroad witness Donald S. Benyon, the railroads reduced their rates by the amount of the unabsorbed wharfage expense at the time the maximum absorption tariffs were published. App. at 105. Coca-Cola has not presented evidence to the contrary.

Coca-Cola argues that exception 1 to Item 317-H excepts it from the maximum absorption provision. Exception 1 provides:

Rates published in this tariff, which in addition to the line-haul rates also provide stated amounts for port terminal services or for loading or unloading, are not subject to the provisions of this item.

Item 317-H SWL Tariff 108-U, I.C.C. 4654.

Coca-Cola contends that the waterborne charge imposed by circle reference 17 is a rate “published ... in addition to the line haul rates” and that the waterborne charge provides “stated amounts for port terminal services.” Therefore, argues Coca-Cola, they are not subject to the maximum absorption tariff.

But the ALJ found against Coca-Cola:

The question for determination is whether the waterborne charge is a stated amount for port terminal services or for loading in addition to the line-haul rate within the meaning of the exception to the application of the loading charge less the charge which is to be absorbed. Exceptions provisions must be strictly construed. The exception here provides that the rates (1) must be in addition to the line-haul rates and (2) must be for port terminal services or for loading. *217 The complainant’s position is grounded upon two assumptions, both of which are wrong. It assumes (1) that the waterborne charge is in addition to the line-haul rate and (2) that the waterborne charge is for port services because it accrues to the carrier performing the port terminal services. The waterborne charge is not an addition to the line-haul rate, but is one of two parts of the line-haul rate and accrues to the carrier performing the port terminal services, whereas the other part accrues to all the carriers in the movement, including the port terminal carrier. It is not identified as applying for any port terminal service.

The ICC agreed with the findings of the ALJ and further held that Exception 1 applies only to “two factor” rates of the type described in Cancellation of Wharfage Absorption, 335 I.C.C. 477, 482-83 (1969). App. at 137-38. Two factor rates are rates which state one charge for the line haul service (movement from point a to point b) and another charge for all port terminal services. The maximum absorption provisions obviously do not apply to two factor rates because all port terminal charges are billed to the shipper. 8 Indeed, application of the maximum absorption tariff to two factor rates would result in a double charge for the same service. There is no double charge involved in the instant case; there was uncontradicted evidence that the railroads reduced their tariffs by the amount of the unabsorbed charges at the time the maximum absorption provisions were adopted.

The district court refused to set aside the ICC’s order and held that: the ICC’s order *218

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Bluebook (online)
608 F.2d 213, 1979 U.S. App. LEXIS 9669, Counsel Stack Legal Research, https://law.counselstack.com/opinion/the-coca-cola-company-v-the-atchison-topeka-and-santa-fe-railway-company-ca5-1979.