190 F. 943 (Fed. Cir. 1911), 21, Goodrich Transit Co. v. Interstate Commerce Commission

Docket Nº:21-24.
Citation:190 F. 943
Case Date:October 05, 1911
Court:United States Commerce Court

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190 F. 943 (Fed. Cir. 1911)







Nos. 21-24.

Commerce Court.

October 5, 1911

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Ralph M. Shaw, for petitioners.

J. A. Fowler, Asst. Atty. Gen., and Charles W. Needham, for respondents.

Before KNAPP, Presiding Judge, and ARCHBALD, CARLAND, HUNT, and MACK, Associate Judges.

HUNT, Judge.

The Goodrich Transit Company, a corporation organized under the laws of Maine, filed this bill in equity on December 29, 1910, in the Circuit Court of the United States for the Northern District of Illinois, Eastern Division, to obtain an injunction against the enforcement of certain orders of the Interstate Commerce Commission. For the sake of brevity, we will hereafter refer to the Goodrich Transit Company as the Transit Company and to the Interstate Commerce Commission as the Commission.

It appears from the bill that the Transit Company has its principal operating office in Chicago, Ill., and since its organization in 1906 has been engaged in the transportation of passengers and freight on Lake Michigan, Lake Huron, and the rivers tributary thereto. It owns and operates steamers and dock properties in Illinois, Wisconsin, and Michigan; several of such dock properties being near the mouths of rivers. The docks are used as landing places, where freight and passengers are discharged and taken off. The steamers carry passengers and freight originating at ports of the states of Michigan, Wisconsin, and Illinois, and destined to ports in each of the said states. This transportation is entirely by water, and unconnected with any land transportation whatever, and is spoken of as 'port-to-port interstate business.' The Transit Company's steamers also carry passengers and freight originating at and destined to ports in the same state. and not passing out of said state en route, and this business is spoken of as 'port-to-port intrastate business.'

The bill alleges that the Transit Company had voluntarily agreed with some of the interstate railroad carriers of the United States to establish certain through routes over which passengers and freight were being carried under joint tariffs, and that for the purpose of establishing such through routes it had voluntarily filed with the Commission its joint tariffs or its concurrence in tariffs filed by such railroad carriers, and that the Transit Company's steamers carry for hire passengers and freight under said joint tariffs over the water portion of said through routes. It is alleged with some detail that the principal part of the business of the Transit Company is derived from its port-to-port and intrastate business, and that competition is active and open to any who may desire to engage in such business, which includes the privilege of the use of docking and terminal facilities. The bill alleges that on June 11, 1910, the Commission entered the following order:

'It is ordered, that Special Report Series Circular No. 10, prepared under the direction of this Commission by Henry C. Adams, in charge of statistics and accounts, be, and the same is hereby, approved; that a copy of the said Special Report Series Circular No. 10 be sent to each and every carrier

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by water within the jurisdiction of this Commission; that each and every of the said carriers by water be required to make full and true answers to the several inquiries contained in the said Special Report Series Circular No. 10, and to verify its said answers by the oath of the president or other principal officer of such company; and that the said oath be in the form provided in the said Special Report Series Circular No. 10.'

Attached to the petitioners bill is a copy of the Special Report Series Circular No. 10, referred to in the order of the Commission, dated June 11, 1910, to which said special report we shall have occasion hereafter to refer.

Service of the order is alleged to have been made, and notification was given that, unless answers to the questions propounded in the special report were made before December 31, 1910, the Transit Company would be liable to the penalties prescribed in section 20 of the act to regulate commerce, as amended by the act approved June 18, 1910.

The petitioner avers that the interrogatories contained in the special report just referred to made no distinction between the business transacted by the Transit Company, which was solely intrastate business, and that transacted which was wholly port-to-port business, and that which was the result of joint rail and water routes, to which the Transit Company became a voluntary party; and it is alleged that, inasmuch as the Transit Company had voluntarily become a party to the joint rail and water routes referred to, the Commission insisted that it had jurisdiction over all the business of the Transit Company, without regard to its nature or the places between which it was transacted. The bill sets up that since the creation of the Commission, in 1887, never, prior to the entry of the order above referred to, had the Commission required any reports from water carriers generally, or any report of any kind from this particular petitioner.

It is further alleged that the Commission, on January 7, 1909, construed the act to regulate commerce as subjecting carriers of interstate commerce by water to the provisions of the act only in respect to traffic transported under a common control, management, or arrangement with a rail carrier.

It is set forth that the inquiries made by the Commission were not for the purpose of exacting evidence under any complaint filed for violation of the act to regulate commerce, or for the purpose of making investigations that might have been made the object of a complaint, that a large number of the questions propounded in the special report called for pertained solely to the internal affairs of the company, and that it is impossible to answer them without reporting to the Commission details in connection with the internal management of the business of the Transit Company; and it is pleaded that the Commission has no constitutional authority to regulate or to inquire into the internal affairs of the Transit Company, and is without power to regulate commerce which is wholly intrastate or to make inquiries respecting commerce which is wholly intrastate.

The order of the Commission is alleged to be void because of lack of power in the Commission, and because to enforce the order would be a violation of the fourth amendment to the Constitution of the

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United States, prohibiting unreasonable searches or seizures, and because the information sought by the inquiries is a property right, and because to enforce the order of the Commission would be to take the property of the Transit Company without compensation and without due process of law.

The relief prayed for is an interlocutory order suspending the order of the Commission and restraining that body from taking any steps to enforce the order, and that upon final hearing the order of the Commission should be annulled. There is a further prayer to the effect that if, however, it should be found that the Commission had authority to require an answer to any of the questions contained in the Report No. 10, referred to, upon final hearing the court would enter an order specifically designating such questions in said report as the Commission could lawfully require to be answered, and that the Commission be restrained from attempting to enforce answers to any questions not included in the designation made by the court.

The Commission interposed a demurrer, based upon the ground that the bill failed to state any equity. The Circuit Court for the Northern District of Illinois, Eastern Division, upon December 31, 1910, stayed the order of the Commission until the further order of the court.

After the opening of the United States Commerce Court, and pursuant to section 6 of the act to create the said court (Act June 18, 1910, c. 309, 36 Stat. 544), the case was transferred, and is now here to be proceeded with as may be proper.

By leave had the United States has intervened and filed an answer, admitting the allegations of fact contained in the bill, but setting forth that the requirements made by the orders of the Commission do not make distinction between the books which petitioner might keep and its method of accounting for its income and expenses in connection with its interstate business and its port-to-port business, as separate from its business as a result of its joint rail and water routes, because (1) while the income from each of the different kinds of business stated in the bill can be ascertained with reasonable accuracy, yet it is impossible to determine with any substantial degree of accuracy the expenses incurred in either of them, as separate and distinct from those incurred in the others, and (2) because it is essential that the Commission be informed as to the total income derived by the Transit Company, in order that the Commission may determine what are reasonable and just rates to be charged by petitioner in its joint rail and water business, and to determine whether it complies with the provisions of the law regulating interstate commerce.

The United States also sets up that the system of bookkeeping devised by the Commission is the result of long experience, and well adapted to the preservation of data for the information of the Commission, and that in the absence of a method prescribed by the Commission a carrier might manipulate its books and reports in a way to conceal rather than to reveal the true state of its business, and that it is of vital...

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