387 U.S. 397 (1967), 57, American Trucking Associations, Inc. v. Atchison, Topeka & Santa Fe Railway Co.

Docket Nº:No. 57
Citation:387 U.S. 397, 87 S.Ct. 1608, 18 L.Ed.2d 847
Party Name:American Trucking Associations, Inc. v. Atchison, Topeka & Santa Fe Railway Co.
Case Date:May 29, 1967
Court:United States Supreme Court
 
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Page 397

387 U.S. 397 (1967)

87 S.Ct. 1608, 18 L.Ed.2d 847

American Trucking Associations, Inc.

v.

Atchison, Topeka & Santa Fe Railway Co.

No. 57

United States Supreme Court

May 29, 1967

Argued April 13 and 17, 1967

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

Syllabus

Faced with the explosive growth of trailer-on-flatcar (TOFC or "piggyback") service the Interstate Commerce Commission (ICC) instituted a general investigation of all aspects of that service. Following hearings, the ICC promulgated rules providing that (1) "TOFC service, if offered by a rail carrier through its open-tariff publications, shall be made available" at the same charge to all other persons (Rule 2), and (2) motor and water carriers, and freight forwarders, "may utilize TOFC service in the performance of all or any portion of their authorized service through the use of open-tariff TOFC rates published by a rail carrier" (Rule 3). In a suit brought by railroads and freight forwarders, a three-judge District Court set these rules aside.

Held:

1.

[I]n light of the mandate of the National Transportation Policy, the Commission had authority derived from the common carrier obligations of the railroads as reflected in §§ 1(4), 2, and 3(1) of the Interstate Commerce Act to promulgate Rule 2 requiring that any railroad offering TOFC service through its open-tariff publications must make that service available "to any person" on nondiscriminatory terms.

Pp. 406-413.

(a) "The fact that the person tendering traffic is a competitor does not permit the railroad to discriminate against him or in his favor." Pp. 406-408.

(b)

In Seatrain [United States v. Pennsylvania R. Co., 323 U.S. 612 (1945)], this Court emphatically rejected the analysis upon which the District Court here essentially based its position -- that, since the Act regulates rail, motor, and water carriers separately, in Titles I, II, and III, the Commission may not compel the mutual furnishing of services and facilities other than as expressly directed.

Pp. 408-411.

Page 398

(c) The proviso to § 3(1) of the Act "certainly was not intended . . . to grant license to discriminate against traffic offered to the railroad by another carrier."

The proviso means that the prohibition against "undue or unreasonable preference or advantage" is not to be construed to forbid practices, otherwise lawful, solely because they operate to the prejudice of another carrier.

Pp. 411-412.

2.

[T]here is no adequate reason to construe the Act so as to deprive the Commission of the power to authorize the carriers by motor vehicle to use TOFC when that service is offered by railroads to the public on open tariff.

Pp. 413-420.

(a) The District Court and the appellees concede that a motor carrier may utilize TOFC with the consent of the railroad concerned. Because such consensual utilization of open-tariff TOFC differs importantly from a voluntary motor-rail through route and joint rate arrangement under § 216(c) of the Act, the exception for consensual TOFC undermines the argument that motor carriers are not authorized under their franchise to substitute rail transportation for transportation by road. There are other circumstances, too, in which a motor carrier may use the services of another mode of transportation.

We may properly assume, therefore, that the Act cannot be construed to require that the trucker must always transport its cargo exclusively by road.

Pp. 413-415.

(b) Although some prior ICC decisions have held that railroad concurrence is essential to motor carrier use of TOFC service,

the Commission, faced with new developments or in light of reconsideration of the relevant facts and its mandate, may alter its past interpretation and overturn past administrative rulings and practice.

Pp. 415-416.

(c) Although

the attention of the Congress had been called to the need for action to secure the relief which the Commission subsequently granted in its rules,

the resulting legislative history does not demonstrate "a congressional construction of the meaning of the statute. . . ." Nor is the ICC's advocacy of legislation "evidence of an administrative interpretation of the Act which should tilt the scales" against the ICC's conclusion in this case as to its authority. Pp. 416-418.

(d)

The mere fact that the truckers, by reason of the Commission's Rules 2 and 3, may utilize open-tariff TOFC service, where offered generally, certainly does not convert their activity into freight forwarding, in conflict with the Act.

Pp. 418-420.

Page 399

3.

The controlling fact of the matter is that all piggyback service is, by its essential nature, bimodal. . . . In the absence of congressional direction, there is no basis for denying to the ICC the power to allocate and regulate transportation that partakes of both elements, and there is no basis whatever for denying to the Commission the power to carry out its responsibilities under the National Transportation Policy. . . .

Pp. 420-422.

244 F.Supp. 955, reversed.

FORTAS, J., lead opinion

MR. JUSTICE FORTAS delivered the opinion of the Court.

These three cases present the following question: does the Interstate Commerce Commission have authority to promulgate rules providing (1) that railroads which offer trailer-on-flatcar (TOFC or "piggyback") service to the

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public under open-tariff publications must make such service available on the same terms to motor and water common and contract carriers, and (2) that motor and water carriers may, subject to certain conditions, utilize TOFC facilities in the performance of their authorized service? Ex parte 230, Substituted Service -- Charges and Practices of For-Hire Carriers and Freight Forwarders (Piggyback Service), 322 I.C.C. 301 (1964).

A three-judge district court, convened under 28 U.S.C. § 1336, 2284, 2321-2325, at the request of various railroads and freight forwarders, set aside the rules which the ICC had promulgated in a rulemaking proceeding initiated on its own motion. 244 F.Supp. 955 (D.C.N.D.Ill.1965). The case is here on direct appeal. 28 U.S.C. §§ 1253 and 2101(b). 384 U.S. 902 (1966).

The appellees are the railroads and freight forwarders who initiated the District Court proceeding. The appellants are the United States and the ICC (No. 60), together with the American Trucking Associations, Inc., et al. (No. 57), and the National Automobile Transporters Association (No. 59), which intervened below as defendants.

More specifically, the issue presented is the validity of Rules 2 and 3, promulgated by the Commission in Ex parte 230, supra. 49 CFR §§ 500.2 and 500.3 (Supp. 1967). Rule 2 provides that "TOFC service, if offered by a rail carrier through its open-tariff publications, shall be made available" at the same charge to all other persons. In substance, it is a paraphrase of § 2 of the Interstate [87 S.Ct. 1611] Commerce Act, 24 Stat. 379, as amended, 49 U.S.C. § 2 (hereinafter cited only to U.S.C.). Rule 3 provides that, with certain qualifications and subject to certain conditions,

motor common and contract carriers water common and contract carriers, and freight forwarders may utilize TOFC service in the performance of all or any portion of their authorized service

Page 401

through the use of open-tariff TOFC rates published by a rail carrier.

The District Court held that the Commission has no authority to compel railroads to make open-tariff TOFC service available to such carriers, and that such carriers may not be authorized to use TOFC except if and as the railroad consents.

The background of the controversy may be briefly described. The growth of trailer-on-flatcar service has been "explosive" since the latter half of the 1950's.1 From the time of passage in 1935 of Part II of the Act regulating motor carriers until the institution of the present proceeding, the Commission appears to have regarded trailer-on-flatcar service not as bimodal, but as an adjunct of transportation by railroad -- as a facility essentially of, by and for the railroads. This attitude is summed up by the ICC's definition of TOFC in 1954 in Movement of Highway Trailers by Rail, 293 I.C.C. 93 (the so-called New Haven case), which provided the basic legal framework upon which the development of TOFC traffic has been based. In that case, the Commission described TOFC or piggyback service as transportation of

a freight-laden trailer secured to a flatcar, which in turn is coupled in a train being drawn by a locomotive

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over steel rails laid on the railroad's right-of-way. . . .

Id. at 100-101.2

Even prior to the New Haven case, beginning in 1939, in Substituted Freight Service, 232 I.C.C. 683, it was the Commission's position that a railroad could grant or deny TOFC service to common carriers by motor.3 Even if the railroad offered such service generally to the public, it could withhold it from for-hire motor carriers. Except for limited uses of rail open tariffs permitted by certain railroads,4 contract and common carriers by motor participated in piggyback service only by agreement, including through route-joint rate arrangements between a railroad and a trucker (see Plan V, infra), and railroad acceptance of trailers or containers of truckers, the shipment moving under motor carrier tariffs and the railroad's compensation [87 S.Ct. 1612] being based upon a division of charges arrived at through negotiations between the carriers (Plan I, infra). These arrangements had to be voluntary, for it has been the prevailing view that the railroads, as common carriers, had no duty to service truckers under their open...

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