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PENNSYLVANIA R. CO. v. UNITED STATES

October 9, 1943

PENNSYLVANIA R. CO. et al.
v.
UNITED STATES (INTERSTATE COMMERCE COMMISSION et al., Interveners)



The opinion of the court was delivered by: BIGGS

The suit at bar was brought under the provisions of Acts of Congress approved June 18, 1910, 36 Stat. 539, March 3, 1911, 36 Stat. 1148 and October 22, 1913, 38 Stat. 219, 28 U.S.C.A. §§ 41(28) and 43 to 48 inclusive, by some fifteen trunk line rail carriers to set aside an order of the Interstate Commerce Commission entered by the Commission in its proceedings at Nos. 25728 and 27878 on October 13, 1941. Though the amended petition complains of two other orders, they are supplementary to or in aid of the order of October 13, 1941, and therefore it is the order of October 13, 1941, with which we are really concerned. Since the case at bar requires extensive findings of fact we shall endeavor to reduce this opinion to essentials in an endeavor to make a complicated factual situation plain. The findings of fact filed with this opinion will state the facts more fully.

 The order of October 13, 1941, *fn1" requires some fifty-two rail carriers, accordingly as they participate in through-rail and water routes with Seatrain Lines, Inc., in interstate commerce between Belle Chasse (New Orleans), Louisiana, and Hoboken, New Jersey, to cease and desist from prohibiting the interchange of their freight cars with Seatrain. The order also requires the rail carriers to establish reasonable rules for freight car interchange with Seatrain at a per diem rate of $1.00 per day per car but provides also that the per diem is to be paid by Seatrain only for such periods of time as the cars are in its actual possession. The Interstate Commerce Commission, Seatrain, New Orleans & Lower Coast Railroad Company, hereinafter referred to as Lower Coast, and Hoboken Manufacturers Railroad Company, hereinafter referred to as Hoboken Railroad, have intervened in this proceeding as parties defendant.

 From 1929 to 1932 Seatrain and its predecessor company operated its ships between Belle Chasse and Havana exclusively. During this period most of the petitioners in the case at bar allowed their cars to be delivered freely to Seatrain ships to be delivered to Cuban railroads. In 1931 Seatrain contemplated the extension of its operations into interstate commerce by the use of the Port of New York and in 1932 made arrangements to effect that end with Hoboken Railroad. These arrangements are described at length in our prior opinion. See 47 F.Supp. at page 783. Just prior to the inauguration of Seatrain's interstate service, the American Railway Association (to which trunk line railroads including the petitioners belong) promulgated a car service rule which was intended to eliminate Seatrain as a competitor. The rule (Rule 4) provides, "Cars of railway ownership must not be delivered to a steamship, ferry or barge line for water transportation without permission of the owner filed with the Car Service Division."

 The promulgation of this rule by the American Railway Association and the refusal of many of the petitioners to permit the delivery of their cars to Seatrain brought an immediate reaction. Hoboken Railroad and the Lower Coast filed two separate complaints with the Commission and attacked the refusal of the railroads to allow their freight cars to be used by Seatrain. Seatrain was permitted to intervene in both proceedings. The two complaints were subsequently consolidated and the consolidated cause has been before the Commission for hearings and argument on at least three different occasions. In 1935 the Commission held in its report in Investigation of Seatrain Lines, Incorporated, at No. 25,565, *fn2" 206 I.C.C. 328, that Seatrain was a common carrier by water and subject to the jurisdiction of the Commission; that the service of Seatrain between Hoboken and New Orleans was in the public interest and (most important of all in so far as the legal questions presented in this case are concerned) that where through routes existed between rail carriers and water carriers the Commission had jurisdiction to require rail carriers who were parties to such through routes to interchange cars with water carriers if such was the reasonable and appropriate method of interchanging traffic moving over such through routes. The Commission stated: "We find nothing in the act imposing any duty upon or giving us jurisdiction to require a rail carrier to permit delivery of its cars to a water carrier where through routes between such rail and water carriers do not exist." The Commission also went on to say: "Whether defendants [including some of the petitioners in the case at bar] who refuse to permit delivery of their cars to Seatrain participate in through routes with Seatrain cannot be determined upon this record."

 The Commission reopened for further hearing the proceedings at Nos. 25,728 and 25,878, Hoboken Manufacturers Railroad Company v. Abilene & Southern Railway Company, and New Orleans & Lower Coast Railroad Company v. The Akron, Canton & Youngstown Railroad Company, to determine on what terms and conditions, including compensation, the petitioners should be required to interchange their feright cars with Seatrain. On October 13, 1941, after completing its hearings the Commission announced its final decision (248 I.C.C. 109) and entered the cease-and-desist order of October 13, 1941, complained of in this proceeding. The Commission reaffirmed its jurisdiction to require rail carriers, parties to through routes with Seatrain, to permit the use of their freight cars in Seatrain's service. *fn3" The Commission found that the rail carriers' refusal to permit interchange of cars between themselves and Seatrain was a violation of the Interstate Commerce Act, 49 U.S.C.A. § 1 et seq., and that the current code of per diem rates governing the interchange of freight cars between the various railroads, including the current inter-railroad rate of $1 per day, should be payable by Seatrain, though only for such periods as the railcarriers' cars were in its actual possession. *fn4" On the same day the order complained of was entered by the Commission. *fn5"

 The petitioners contend that the order of October 13, 1941, should be set aside or at least mitigated for three reasons. First, they assert that there is no duty on rail carriers to deliver their freight cars for the use of, or to interchange their cars with, a water carrier and that the Commission has no authority to direct such delivery or interchange. second, they contend that the Commission is without power to require rail carriers to permit their cars to be taken and used on ocean-going vessels of a water carrier for transportation from place to place in the United States, such transporation going into a foreign port and through foreign waters. They assert last that the compensation fixed by the Commission for the use of the rail carriers' freight cars by Seatrain is confiscatory and that the orders of the Commission "exempting" Seatrain from paying for the use of railroad cars held for acceptance by it (as distinguished from cars actually in its possession) are unreasonable and arbitrary.

 I

 The parties have suggested to the court that this case may be moot because of circumstances brought on by war. This point was raised, we believe, merely for the purpose of fully informing the court as to present conditions governing Seatrain's service. Without going into details as to the nature of this service, it is sufficient to state that the order of the Commission is presently in effect and that that order requires the petitioners not only to abstain from enforcing present rules, regulations and practices which prohibit the interchange of their freight cars for transportation by Seatrain in interstate commerce, but also requires the petitioners to establish on or before a specified date, and thereafter to observe, rules and regulations with respect to the interchange of their freight cars for transportation by Seatrain in interstate commerce. We conclude that there is a justiciable controversy before this court within the purview of the Urgent Deficiencies Act, 38 Stat. 219, 28 U.S.C.A. § 41 (28) and §§ 43 to 48, inclusive. The Commission's order is a continuing one and embraces not only a negative duty upon the petitioners but requires affirmative conduct upon their part as well. Though the circumstances of Seatrain's service have been changed by the war, the case is not moot and the petitioners are entitled to a review of the order complained of. See Federal Trade Commission v. Goodyear Tire & Rubber Co., 304 U.S. 257, 58 S. Ct. 863, 82 L. Ed. 1326, and the cases cited therein.

 II

 The petitioners contend that the history of the Interstate Commerce Act demonstrates that common carriers by rail have no duty to interchange cars with common carriers by water and the Commission has no power to direct interchange of cars between such carriers. If this be true the relief sought by the petitioners must be granted. To ascertain the correctness of this legal proposition a brief history of the Interstate Commerce Act and of some of the amendments to it is necessary.

 Section 1 of the original Act of February 4, 1887, 24 Stat. 379, defined the term "railroad". We shall deal more specifically with other provisions of Section 1 at a later point, under heading III, of this opinion. Section 3 provided in part that: "Every common carrier subject to the provisions of this act shall, according to their respective powers, afford all reasonable, proper, and equal facilities for the interchange of traffic between their respective lines, and for the receiving, forwarding, and delivering of passengers and property to and from their several lines and those connecting therewith, and shall not discriminate in their rates and charges between such connecting lines; * * *." The provisions quoted have remained in substance in the Act since 1887. Section 12 set forth the duties of the Commission which were largely those of an investigatory body.

 The Hepburn Act of June 29, 1906, 34 Stat. 584, increased the powers of the Commission and made it to some extent a regulatory as well as an investigatory body. The Hepburn Act also enlarged the definition of a railroad to include water carriers when both are used for continuous carriage or shipment in interstate commerce. The term "railroad" was defined to include the facilities required for "transportation" and the term "transportation" was itself defined so as to include cars. Section 1 of the Hepburn Act provided that it should "be the duty of every carrier subject to the provisions of this Act * * * to establish through routes and just and reasonable rates applicable thereto". The Hepburn Act required connections between lateral or branch-line ...


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