Wichita Board of Trade v. United States

352 F. Supp. 365, 1972 U.S. Dist. LEXIS 13544
CourtDistrict Court, D. Kansas
DecidedMay 26, 1972
DocketCiv. A. W-4730
StatusPublished
Cited by6 cases

This text of 352 F. Supp. 365 (Wichita Board of Trade v. United States) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wichita Board of Trade v. United States, 352 F. Supp. 365, 1972 U.S. Dist. LEXIS 13544 (D. Kan. 1972).

Opinion

OPINION OF THE COURT

PER CURIAM.

This is an action to enjoin, annul, set aside, and suspend orders of the Interstate Commerce Commission entered by the Commission, Division 2, on April 16, 1971, and by the Commission en banc on September 21, 1971, in proceedings entitled Investigation and Suspension Docket No. 8548, Inspection in Transit, Grain and Grain Products, reported at 339 I. C.C. 364 and 340 I.C.C. 69 respectively. A three-judge court was convened to hear the case. The suit is brought pursuant to the provisions of Sections 1336, 1398, 2284 and 2321-2325 of Title 28 U. S.C.

By the reports and orders here assailed, the Commission has found just *367 and reasonable the establishment of tariff provisions applicable throughout the West at the rate of $13.36 per car for the first in-transit inspection services historically provided by the rail carriers under the line-haul rates. The Commission did not require a reduction in the line-haul rates in relation to the reduced service.

The in-transit inspection service with which we are here concerned has reference to the practice of stopping railroad cars loaded with grain and grain products and placing them on railroad track facilities for the purpose of permitting inspection of the contents of the car, awaiting disposition orders from shippers after inspection, and the subsequent movement of the railroad car. The sample or samples tested determine the official grade of the contents of the car for the purpose of establishing its value at market.

This transit service has been historically provided by the rail carriers in the West as part of the line-haul rates. Until 1968, federal law required official federal inspection and sampling. That function was performed by federal officials. That requirement was eliminated by Congress in 1968. 82 Stat. 761, 7 U.S.C. § 71 et seq. The primary purpose of Congress was to effect an increased utilization' of rail cars. In its brief the Commission noted that ear shortages on a nation-wide basis was a grave problem and that “the Commission’s action here represents a determination to employ all rational and lawful means to attempt to alleviate the difficulty.”

After extensive hearings the Commission found that: (1) the proposed charges do not apply in any instance where applicable line-haul rates plus the charge would exceed the maximum reasonable rates set forth in Grain and Grain Products, 205 I.C.C. 301 (1934), 215 I.C.C. 83 (1936), (2) inspection of grain is no longer a mandatory requirement of federal law, (3) there is a need for inspection at some point in the grain marketing process, but inspection in-transit is not essential, and (4) grain inspection in-transit is an “accessorial” service for which a charge separate from the basic line-haul charges may be properly assessed. The Commission then found that the proposed charges were just and reasonable in that the railroads established by substantial evidence that the costs associated with in-transit inspection correspond to the level of the proposed charges and that delays resulting from in-transit inspection amount to more than three days per car. There is substantial evidence in support thereof.

The Commission recognized that the Western railroads were not presently assessing a charge in their line-haul rates for the first stop for inspection. The protestants here contend that under these circumstances the railroads could not segregate the inspection service and assign to it a separate charge without presenting substantial evidence that the new aggregate rate, composed of the line-haul plus inspection-transit rates, represent a just and reasonable rate for all of the services.

In its discussion and conclusions, the Commission found that: “A requirement that the reasonableness of the proposed charges cannot be determined without ‘reference to the line-haul rates, the services furnished thereunder, and the cost thereof’ effectively precludes respondents from ever establishing a separate charge for the accessorial first stop for inspection regardless of the need for such a charge. This inability was not present in the cited proceeding (Transit Charges, Southern Territory, 332 I.C.C. 664 [1968]) — However, there is a more significant distinguishing feature that persuades us that the prior decision is not controlling here. That difference is that the line-haul rate applicable to any movement of grain within the West when coupled with the proposed charge is less than the maximum reasonable level determined by this Commission.” In its brief the Commission refers to the “extreme difficulty” involved in putting *368 together thousands of such rates for the purpose of determining the reasonableness of a charge for a separate accessorial service. The Commission ultimately justified its rationale predicated upon the maximum level of rates which it established some 35 years ago in its Docket No. 17000 proceedings, Grain and Grain Products, supra.

While purporting to “distinguish” the instant decision from its prior decisions, the Commission discovered that which had been known for years: the maximum reasonable rates established in its Docket No. 17000 eases. This discovery suddenly became a “significant distinguishing feature” in its decision here.

There may be facts and circumstances justifying a Commission reversal of its well established rule that whenever a proposal is made for the establishment of an additional charge for a service that has been provided at the line-haul rates, the reasonableness of the proposed charge may not be divorced from the line-haul rates, the services thereunder, and the cost thereof. Transit Charges, Southern Territory, 332 I.C.C. 664 (1968); Grand Forks Chamber of Commerce, et al. v. Great Northern Railway Company, et al., 321 I.C.C. 356 (1963); Investigation and Suspension Docket No. 5146, Terminal Charges at Pacific Coast Ports, 255 I.C. C. 673 (1943); Unloading Lumber to New York Harbor, 256 I.C.C. 463 (1943); Reeonsignment Case No. 3, 53 I.C.C. 455 (1919). The difficulty generated by the Commission’s ruling here is that instead of repudiating its long established rule that it will not allow a separate charge for an accessorial service previously performed as part of the line-haul rates without substantial evidence that such an additional charge is justified measured against the overall services rendered and the overall reasonableness of the increased line-haul rate resulting therefrom — which may be legally justified — it has attempted to “distinguish” this case from its prior rulings. In our judgment the Commission has failed in this respect. In effect, the Commission “excuses” the respondent railroads in the case before us from meeting the substantial proof requirement in satisfaction of its long established rule predicated upon the rail carriers “inability” to meet that obligation here. In other words, the rule is viable and applicable where the Commission determines that the railroads are “able” to carry the burden of proof but it is not applicable in those instances where the Commission determines that the rail carriers are unable to do so. Such a departure is impermissible. Secretary of Agriculture v. United States, 347 U.S. 645, 74 S.Ct. 826, 98 L.Ed. 1015 (1954), is dispositive of this issue.

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352 F. Supp. 365, 1972 U.S. Dist. LEXIS 13544, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wichita-board-of-trade-v-united-states-ksd-1972.