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ONTARIO FREIGHT LINES CORP. v. UNITED STATES

March 22, 1948

ONTARIO FREIGHT LINES CORPORATION
v.
UNITED STATES et al.



The opinion of the court was delivered by: MADDEN

The plaintiff herein seeks to set aside a cease and desist order of the Interstate Commerce Commission directing the plaintiff to give shippers from Brooklyn, New York, to Syracuse, New York, the benefit of a cheaper intrastate route rather than a more expensive interstate route used by plaintiff to transport such shipments.

Plaintiff's attack upon the order is threefold: First, that the Commission was without authority in law to enter such an order; second, that the action of the Commission is arbitrary and capricious and not founded upon the evidence before it; and third, that the report and order entered thereon is not supported by any explication or sufficient explication as required by law.

 The Interstate Commerce Commission has intervened in accordance with the provisions of Section 212 of the Judicial Code, 36 Stat.L. 1150, 28 U.S.C.A. 45a. Hearing was held at which time the record before the Interstate Commerce Commission, including the exhibits, was introduced in evidence, oral argument heard and briefs submitted.

 It appears that the plaintiff is a motor carrier of freight for hire and holds a certificate from the Interstate Commerce Commission for an interstate route and a certificate from the State of New York for an intrastate route or routes.

 The plaintiff's certificated interstate route was from Brooklyn, New York, through the Holland Tunnel to plaintiff's terminal at East Rutherford, New Jersey, thence to Hillburn, New York, Newburgh, Kingston, Albany, Schenectady, Amsterdam, Palatine Bridge, Utica, Oneida and Syracuse.

 The plaintiff's interstate route, as found by the Commission to be generally used by plaintiff, was from Brooklyn, through the Holland Tunnel to plaintiff's terminal at East Rutherford, New Jersey, thence to Hillburn, New York, Newburgh, Kingston, Middlebury, Palatine Bridge, Utica, Oneida and Syracuse.

 The plaintiff's certificated intrastate route was from Brooklyn, New York, up through Manhattan to Tarrytown, Peekskill, Poughkeepsie, Hudson, Albany, Schenectady, Amsterdam and Palatine Bridge where it joined the other route or routes.

 The record discloses that the plaintiff was carrying a great deal of freight for the Great Atlantic & Pacific Tea Co., from Brooklyn, New York, to Syracuse, New York, in 1943 and 1944, and charged the shipper according to the more expensive interstate route over which the shipments actually moved while the shipper demanded that its goods move over the cheaper intrastate route and that it (shipper) receive the benefit in its shipping charges. With this request plaintiff refused to comply and the shipper then complained to the Interstate Commerce Commission.

 The portion of the report and decision of the Commission complained of is as follows:

 'We further find that the action of the defendant in transporting the shipments under consideration herein over its interstate route, instead of over its lower rated intrastate route, was an unreasonable practice, and that a reasonable practice would have been to transport such shipments over its authorized intrastate route and to apply to such transportation the lower intrastate rates legally applicable thereto.

 'The record does not clearly establish the manner in which complainant's shipments are being transported at present. The defendant (plaintiff here) will be expected to cease and desist from the practice found unlawful. If it does not, and the matter is called to our attention by the complainant, we shall give consideration to the entry of an appropriate order. The proceeding will be closed.'

 With this review of the history of the matter, we take up the first question, i.e.: 'Did the Commission have the authority in law to determine that plaintiff had been guilty of unreasonable practice and make the order it did?'

 The pertinent part of the statute (quoted in full in the margin) *fn1" is as follows:

 Speaking of the Commission's power in relation to motor freight, Mr. Justice Rutledge said, for the Supreme Court, in Eastern-Central Motor Carriers Association et al. v. United States et al., 321 U.S. 194, 205, 64 S. Ct. 499, 505, 88 L. Ed. 668:

 'But with the evolution of other forms of carriage, particularly motor carriage, and the Commission's acquisition of control over their rates and operations, a new situation arose. The Commission's task no longer was merely the regulation of a single form of transport, to secure reasonable and nondiscriminatory rates and service. It became, not merely the regulator, but to some extent the coordinator of different modes of transportation. With the addition of motor and water carriage to its previous jurisdiction over rails, it was charged not only with seeing that the rates and services of each are reasonable and not unduly discriminatory, but that they are coordinated in accordance with the National Transportation Policy, as declared by the later legislation. This, while intended to secure the lowest rates consistent with adequate and efficient service and to preserve within the limits of the policy inherent advantages of each mode of transportation, at the same time was designed to eliminate destructive competition not only within each form but also between or among the different forms of carriage.' (Italics ours.)

 So that it seems clear to this court that the Interstate Commerce Commission had the legal authority to make the cease and desist order of which plaintiff complains.

 We come now to the second question. 'Was the action of the Commission arbitrary and capricious and not founded upon the evidence before it?'

 To aid this court in its determination of whether the Interstate Commerce Commission acted in an arbitrary and capricious manner an examination of the proceedings before that body is in order. This examination ...


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