272 U.S. 658 (1926), Virginian Railway Company v. United States

Citation:272 U.S. 658, 47 S.Ct. 222, 71 L.Ed. 463
Party Name:Virginian Railway Company v. United States
Case Date:December 13, 1926
Court:United States Supreme Court

Page 658

272 U.S. 658 (1926)

47 S.Ct. 222, 71 L.Ed. 463

Virginian Railway Company


United States

United States Supreme Court

Dec. 13, 1926




1. Whether a rate is unjustly discriminatory is a question on which the finding of the Interstate Commerce Commission, supported by substantial evidence, is conclusive, unless there was some irregularity in the proceeding or some error in the application of rules of law. P. 663.

2. The fact that the purpose of a carrier in making a trackage arrangement with another is to increase its own business is not a legal excuse for unjust discrimination in through rates, resulting from the arrangement, among shippers on the carrier's line. P. 663.

3. An order of the Interstate Commerce Commission for abatement of unjust discrimination among shippers on a carrier's line resulting from a trackage arrangement may be directed to that carrier as well as to the other with which the arrangement exists, although the latter alone may be responsible for the rates granted the favored shippers. P. 665.

Page 659

4. A finding of the Commission that a rate is unreasonable is binding on this Court when supported by evidence, without regard to the soundness of the Commission's reasoning and conclusions or their consistency with findings in other proceedings. P. 665.

5. Section 15(3) of the Act to Regulate Commerce does not require that the Commission make a special finding of public interest before it can prescribe how an existing through rate found to be unreasonable and discriminatory shall be made conformable to law. P. 666.

6. The fact that an order of the Commission requiring a carrier to establish through rates from its lines over lines of two other carriers may result, through duplication of routes, in discrimination against shippers on lines of those carriers does not make it unreasonable or otherwise illegal. P. 667.

7. The force and effect of a decree of a federal court dismissing a bill and dissolving an interlocutory injunction are not suspended as a mere consequence of an appeal to this Court, even if a supersedeas is allowed. P. 668.

8. Under the Act of October 22, 1913, the district court of three judges has power to grant a stay of an order of the Interstate Commerce Commission pending appeal to this Court from a decree refusing a temporary injunction and dismissing the bill. P. 668.

9. The Act of 1913, in this respect, is in pari materia with § 266 of the Judicial Code, and to be similarly construed. P. 671.

10. A stay of an order of the Interstate Commerce Commission pending appeal from a decree refusing an injunction is not a matter of right, even if irreparable injury may otherwise result to the appellant, and requires much stronger and more special reasons for its justification when the decree has dismissed the bill on the merits than where it is interlocutory. P. 672.

11. When not otherwise apparent to the parties and the appellate court, the grounds of a decision of the district court should be indicated by an opinion -- particularly in equity matters involving complicated facts. P. 675.

No. 281, affirmed.

No. 282 reversed.

Cross-appeals from a decree of the district court refusing a temporary injunction and dismissing the bill in a suit against the United States and the Interstate Commerce Commission to enjoin an order of the latter respecting rates on coal. The appeal of the defendants was from

Page 660

so much of the decree as restrained enforcement of the order pending the perfecting and determination of the primary appeal.

BRANDEIS, J., lead opinion

MR. JUSTICE BRANDEIS delivered the opinion of the Court.

An extensive territory in West Virginia, comprising the coal mining districts known as New River, Tug River, and Pocahontas, is served by three railroad systems. Each grants blanket rates to destination from the mines within the district served by it. The blanket rates to each destination are the same on all the systems. Two of them, the Chesapeake & Ohio and the Norfolk & Western, have lines extending from the Atlantic Ocean to the Middle West. The line of the third, the Virginian, extends only eastward to tidewater. Some mines in the district are served directly by only one of these railroads, some by more. Nintey-nine mines are located only on the Virginian. Of these, 45 enjoy, by reason of the trackage agreements to be described, the same rates to the West as do mines on the Chesapeake & Ohio and on the Norfolk & Western. The remaining 54 are denied the opportunity of reaching the Western markets.

Some of the 54 made complaint to the Interstate Commerce Commission that they are denied access to the

Page 661

Western markets, and sought relief under both § 1 and § 3 of the Act to Regulate Commerce. For most of these 54 mines, access to these markets was and is physically possible through a junction of the Virginian and the Chesapeake & Ohio. But that route is closed commercially, because these two carriers have not established any joint rates to the West from any of these 54 mines, and the combination of the Virginian's local rate from the mines to the junction with the Chesapeake & Ohio's rates from the junction to the West results in charges so high as to be prohibitive. The complainants contended before the Commission that the existing rate schedule to the West subjects [47 S.Ct. 224] them to unjust discrimination, and also that the combination rates are unreasonable. To establish the discrimination, the shippers relied, among other things, upon the fact that 45 other mines located only on the Virginian enjoy the favorable blanket rates to the West. To establish the unreasonableness, they showed, among other things, that mines similarly situated, located only on the Chesapeake & Ohio and on the Norfolk & Western, enjoy those rates.

The Chesapeake & Ohio did not oppose granting to the 54 mines the relief sought. The Virginian resisted strenuously. The complete record of the proceedings before the Commission occupies 713 pages of the printed record in this Court, besides 67 exhibits, many of them elaborate -- one covering 89 pages. The proceedings before the Commission, begun on May 15, 1922, did not close until February, 1923. The proposed report of the examiner was served on April 30, 1924, was submitted to Division 3 of the Commission on June 30, 1924, and its original report was filed on March 10, 1925. The Commission found that the existing rates from the mines in question subjected the shippers to undue prejudice, and also that the rates were themselves unreasonable. Wyoming Coal Co. v. Virginian Railway Co., 96 I.C.C. 359, and 98 I.C.C.

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448. It ordered the carriers, "according as they participate in the transportation," to cease and desist from collecting, for the transportation of coal from certain stations on the Virginian Railway to interstate destinations in the West, rates which exceed those to be prescribed pursuant to the order, and then directed the carriers to establish "rates which shall not exceed the district rates maintained on like traffic" by those carriers respondents to the same destinations

from mines in the New River districts of the Chesapeake & Ohio Railway Company and the Virginian Railway Company, respectively, and the Pocahontas and Tug River districts of the Norfolk & Western Railway Company, those districts forming part of what is generally referred to as the Outer Crescent.

See Bituminous Coal to Central Freight Association Territory, 46 I.C.C. 66, 69. A petition for reargument before the whole Commission was denied on April 14, 1925, but an amended report and order was filed on May 19, 1925.

This suit was brought by the Virginian against the United States, the Interstate Commerce Commission, and the Chesapeake & Ohio, in the federal court for the Southern District of West Virginia, to enjoin the enforcement of the order and to set it aside. All three defendants answered, the Chesapeake & Ohio asserting its readiness to comply with the Commission's order. Several coal companies intervened as defendants. The case was heard, on May 28, 1925, before three judges, upon application for an interlocutory injunction and also upon final hearing. The order was assailed mainly on the ground that the findings made were unsupported by evidence. It was also...

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