State of Florida v. United States

• Decision Date: 17 January 1929
• Parties: STATE OF FLORIDA v. UNITED STATES et al. WILSON LUMBER CO. v. SAME. BROOKS-SCANLON CORPORATION et al. v. SAME.
• Court: U.S. District Court — Northern District of Georgia

30 F.2d 116 (1929)

STATE OF FLORIDA v. UNITED STATES et al.

WILSON LUMBER CO. v. SAME.

BROOKS-SCANLON CORPORATION et al. v. SAME.^*

District Court, N. D. Georgia.

January 17, 1929.

Chas. E. Cotterill, of Atlanta, Ga., August G. Gutheim, of Washington, D. C., Fred H. Davis, Atty. Gen., Edward P. Sanborn, of St. Paul, Minn., Norman, Quirk & Graham and J. V. Norman, all of Louisville, Ky., H. P. Adair, G. L. Rutherford, H. P. Osborne and E. W. Mitchell, all of Jacksonville, Fla., and T. T. Turnbull, of Monticello, Fla., for complainants.

Wm. J. Donovan, Asst. Atty. Gen., and Elmer B. Collins, Sp. Asst. Atty. Gen., for the United States.

J. Stanley Payne, Sol., of Washington, D. C., for defendant Interstate Commerce Commission.

James A. Perry, Sol., of Atlanta, Ga., for intervener Georgia Public Service Commission.

Before WALKER, Circuit Judge, and DAWKINS and SIBLEY, District Judges.

SIBLEY, District Judge.

Three bills, one by the state of Florida, one by the Wilson Lumber Company, and one by Brooks-Scanlon Corporation, Wilson Cypress Company, and Cummer Cypress Company, were brought against the United States and the Interstate Commerce Commission to enjoin and set aside so much of an order of the Commission, dated August 2, 1928, as required the Atlantic Coast Line Railroad Company to establish and put in force in intrastate commerce, within the state of Florida, certain rates on logs which were, in the same order, fixed as reasonable in interstate commerce. The Georgia Public Service Commission was allowed to intervene in all three cases in behalf of the order attacked. The bills make similar allegations of fact and substantially similar contentions as to the invalidity of the order. The state of Florida is especially concerned because of its claim of an unwarranted invasion of its control over intrastate freight rates, and the other complainants, because of their interest as shippers, in continuing the much lower rates superseded by the order. The contentions of invalidity make these main questions: (1) Is the order within the lawful powers of the Commission? (2) Is it within the issues sought to be investigated and made after full hearing of them? (3) Is it arbitrary because unsupported by sufficient evidence? (4) The state of Florida and Wilson Lumber Company, construing the order as abrogating the Coast Line's intrastate log rates throughout the state of Florida rather than within the limited territory for which new interstate rates were fixed, make the special and newly raised contention of an entire want of evidence to support so broad an order. The assailed order arose out of a complaint filed by the Georgia Public Service Commission against the Atlantic Coast Line Railroad Company touching Coast Line interstate rates on logs from Florida to Georgia and intrastate rates thereon within Florida. The Governor of Florida was duly notified thereof and the Florida Railroad Commission appeared in defense of its rates. The other defendants here, with other sawmill operators and railroad companies, intervened, but expressly without enlarging the issues proposed. The proceedings had are clearly stated in the report of the Commission together with the history of the rates involved and the scope of the evidence taken, and these need not be repeated. The result was an order passed by Division 4, afterwards confirmed by the whole Commission, fixing new interstate rates from points on the Atlantic Coast Line Railroad north of and including Jacksonville, Gainesville, Burnett's Lake, and High Springs, Fla., to destinations on its lines in Georgia, and then ordering a conformity thereto of intrastate rates.

1. The order touching the intrastate rates is based upon a finding that the former intrastate rates "did and would result in undue preference and advantage of shippers of intrastate traffic within the State of Florida, in undue prejudice to shippers of interstate traffic from points in the State of Florida to points in the State of Georgia, and in unjust discrimination against interstate commerce." This finding is in the very words of section 13(4) of the Interstate Commerce Act taken from the Transportation Act of 1920 (41 Stat. 484; 49 USCA § 13(4). The subsection declares that when, in investigating a rate made or imposed by authority of any State, such a condition is found, the Commission "shall prescribe the rate, fare, or charge, * * * thereafter to be observed, in such manner as, in its judgment, will remove such advantage, preference, prejudice, or discrimination. Such rate, fare, or charge * * * shall be observed * * * the law of any State or the decision or order of any State authority to the contrary notwithstanding." Assuming for the present the propriety of the preliminary finding, the order here made is clearly within the duty prescribed and the power given by the quoted words. No attack has been made before us upon the constitutionality of the enactment. Such an attack would probably be sufficiently met by what was said in the suit of Wisconsin Railroad Commission v. C. B. & Q. R. R. Co., 257 U. S. 563, 42 S. Ct. 232, 66 L. Ed. 371, 22 A. L. R. 1086. We recognize that because of the practical involvement and competition of almost all business done interstate with similar business done intrastate, the power here given may easily lead to an almost complete fixing of intrastate rates by the Interstate Commerce Commission. This results from the precedence to be given, under the Constitution, to regulations by federal power of what is under federal control over conflicting regulations by state power of what is under state control. Undue encroachment of federal power is to be guarded against in this as in other fields by a scrupulous care to act with caution and comity, and particularly where the activity is only incidental to a superior federal authority, as is the case in the direct prescription of an intrastate rate, must the intrusion upon state authority be limited to the actual, plain, and substantial necessities of the particular situation.

The contention that the intrastate rates here investigated by the Commission were not those contemplated by section 13(4), because they were voluntarily initiated by the carrier, and therefore not "made or imposed by authority of any State," within the description of section 13(3), we must overrule. The rate as originally proposed by the carrier was required to be substantially modified before it was allowed filed by the Florida Railroad Commission; and independently of that fact, its status as a lawful rate depended upon its allowance by the Florida Commission. It was established as a rate in accordance with and under the laws of Florida, and was for this reason alone a rate made, though not imposed, by authority of the state.

The further contention is made that the power in the Interstate Commerce Commission to directly prescribe an intrastate rate, which was introduced by the Transportation Act, is to be limited to cases of general horizontal raises in state rate systems, based on a finding that the state rate system is prejudicing interstate commerce by not affording its fair proportion of financial support to the carrier, and that such findings are appropriate only to investigations instituted by the Commission itself. We think the contention unsustainable in whole or in part. It may be true, as stated in the argument, that all previous direct prescription of intrastate rates by the Commission have been on its own initiative, but the language of the act is without any such restriction. Section 13(4) begins: "Whenever in any such investigation the Commission, after full hearing, finds." The words "such investigation" plainly relate to the preceding section, 13(3), enacted at the same time, which in turn begins thus: "Whenever in any investigation under the provisions of this Chapter, * * * there shall be brought in issue any rate, * * * made or imposed by * * * any State." The preceding, older, portions of section 13 deal with investigations initiated by any person, firm, or corporation, or by the common carrier, or by a railroad commission, or the Interstate Commerce Commission itself. Inevitably subsection 4 includes state rate investigations of all origins. Further, these words are not especially descriptive of general horizontal raises in all rates, but the Commission is authorized to "prescribe the rate, fare, or charge, or the maximum or minimum, or maximum and minimum, thereafter to be...