State of New York v. United States
| Decision Date | 09 May 1946 |
| Docket Number | Civil Actions No. 2311,2337. |
| Citation | 65 F. Supp. 856 |
| Parties | STATE OF NEW YORK et al. v. UNITED STATES. ATCHISON, T. & S. F. RY. CO. et al. v. SAME. |
| Court | U.S. District Court — Northern District of New York |
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Parker McCollester and Frank J. Clark, Sp. Asst. Attys. Gen., for the State of New York.
Herbert T. Ferguson, Asst. Atty. Gen., for the State of Wisconsin.
Kenneth L. Sater and Hugh S. Jenkins, both of Columbus, Ohio, for the State of Ohio.
Robert Peacock, Deputy Atty. Gen., for the State of New Jersey.
Henry E. Foley, of Boston, Mass., for New England Governors.
Vincent G. Hart, of New York City, for Department of Law of the State of New York.
H. C. Barron, D. Robert Thomas, and Douglas F. Smith all of Chicago, Ill., for Western Railroads.
Edward H. Miller, Sp. Asst. to Atty. Gen. , for the United States.
Daniel W. Knowlton, Chief Counsel to the U. S. Interstate Commerce Commission, of Washington, D. C., for Interstate Commerce Commission.
George T. Simpson, of St. Paul, Minn., for J. A. A. Burnquist, Atty. Gen., and the State of Minnesota.
J. V. Norman, of Louisville, Ky., for the Southern States and Southern Governors' Conference.
Byron M. Gray, of Topeka, Kan., for States of North Dakota, South Dakota, Kansas, Nebraska, Oklahoma, Texas, and Arkansas, and their respective State Commissions.
C. E. Logwood, Public Service Commission of South Carolina, for Public Service Commission.
Robert F. Park, of Montgomery, Ala., for Alabama Public Service Commission.
Lewis Petteway, of Tallahassee, Fla., for Florida Railroad Commission.
Karl J. Stipher, Deputy Atty. Gen., of Indiana, for the State of Indiana.
J. C. Murray, of Little Rock, Ark., for State of Arkansas, the Governor of Arkansas, and the Arkansas Public Service Commission.
Neal E. Williams, of Fargo, N. D., for Nels G. Johnson, Atty. Gen. of North Dakota, and Public Service Commission, State of North Dakota.
H. Emerson Kokjer, Deputy Atty. Gen. of Nebraska, for State of Nebraska and Nebraska State Railway Commission.
Duane T. Swanson, of Lincoln, Neb., for State Railway Commission.
C. B. Bee, of Oklahoma City, Okl., for Governor Robert S. Kerr, State of Oklahoma, Corporation Commission, and Western and Southwestern States.
Walter R. McDonald, Georgia Public Service Commission, of Atlanta, Ga., for Southeastern Association of Railroad and Utilities Commissioners.
Jerry W. Carter, of Tallahassee, Fla., for Florida Railroad Commission.
James Noel, Asst. Atty. Gen., for State of Texas and Railroad Commission of Texas.
Before CHASE, Circuit Judge, and KNOX and BRENNAN, District Judges.
The Commission acted, in making the investigations and the resulting orders, pursuant to its conception of its duties as the agency created to administer the Interstate Commerce Act (49 U.S.C.A. § 1), which will hereinafter be called the Act. Its action was taken particularly with reference to Section 1(4), which imposes upon every railroad which is a common carrier in interstate commerce the duty "to provide and furnish transportation upon reasonable request therefor, and to establish * * * just and reasonable rates, fares, charges, and classifications applicable thereto; * * *."
And to Section 1(5) (a), which provides that:
"All charges made for any service rendered or to be rendered in the transportation of passengers or property, * * * or in connection therewith, shall be just and reasonable, and every unjust and unreasonable charge for such service or any part thereof is prohibited and declared to be unlawful."
Also to Section 3(1), which, as amended by the Transportation Act of 1940, 49 U.S. C.A. § 3(1), provides that it shall be unlawful:
"For any common carrier * * * to make, give, or cause any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, association, locality, port, port district, gateway, transit point, region, district, territory, or any particular description of traffic, in any respect whatsoever; or to subject any particular person, company, firm, corporation, association, locality, port, port district, gateway, transit point, region, district, territory, or any particular description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever: * * *."
"That whenever, after full hearing, upon a complaint made as provided in section 13 of this part, or after full hearing under an order for investigation and hearing made by the commission on its own initiative, either in extension of any pending complaint or without any complaint whatever, the commission shall be of opinion that any individual or joint rate, fare, or charge whatsoever demanded, charged, or collected by any common carrier or carriers subject to this part for the transportation of persons or property, as defined in the first section of this part, or that any individual or joint classification, regulation, or practice whatsoever of such carrier or carriers subject to the provisions of this part, is or will be unjust or unreasonable or unjustly discriminatory or unduly preferential or prejudicial, or otherwise in violation of any of the provisions of this part, the commission is hereby authorized and empowered to determine and prescribe what will be the just and reasonable individual or joint rate, fare, or charge, or rates, fares, or charges, to be thereafter observed in such case, or the maximum or minimum, or maximum and minimum, to be charged, and what individual or joint classification, regulation or practice is or will be just, fair and reasonable, to be thereafter followed, and to make an order that the carrier or carriers shall cease and desist from such violation to the extent to which the commission finds that the same does or will exist, and shall not thereafter publish, demand, or collect any rate, fare, or charge for such transportation other than the rate, fare, or charge so prescribed, or in excess of the maximum or less than the minimum so prescribed, as the case may be, and shall adopt the classification and shall conform to and observe the regulation or practice so prescribed." 49 U.S.C.A. § 15(1).
The inquiries were commenced, the reports filed, and the order made as provided in Sections 13(2), 14(1) and 15(1) of the Act, 49 U.S.C.A. §§ 13(2), 14(1), 15(1).
In the first of the two suits which were brought the plaintiffs and the intervenors who support them attack the ad interim order on the grounds that it is an attempt to regulate industrial conditions by means of rate making; that it is the result of political agitation; that findings essential to support the order are lacking and that the evidence does not support the findings made, in that there is no proof of facts to support so-called ultimate findings above quoted to keep them from being merely arbitrary and capricious. These so-called preliminary findings which are lacking and of which proof is also lacking are said to be that there is no finding of a threatened rate war which would jeopardize the revenues of the railroads in Official Territory; or that the existing class rates are not fully compensatory to railroads in Official Territory for the transportation services for which they are charged; or that they are so low as to cast an undue burden upon other traffic. Also it is argued that the finding of undue prejudice and preference created as between territories by the present class rates is arbitrary because not based upon preliminary findings made on proof by means of substantial evidence to the effect that the class rates published are the rates at which the freight moves; because findings and proof of a competitive relationship between the party preferred and the party prejudiced are lacking; because findings and proof of substantial injury to the party found to be prejudiced and of substantial benefit to the party found to be preferred are lacking; because findings and proof that the same carrier or carriers are responsible for or control both the preferential and prejudicial rates are lacking; because findings and proof that the carriers charge existing class rates on the same kinds of freight moved into Official Territory which is carried at class rates within Official Territory are lacking; because findings and proof that similar freight is carried under similar conditions in each territory are lacking; and perhaps there are other grounds of similar nature. The suit brought by the Western Lines and supported by the intervenors aligned with them adds the ground that the ad interim reduction in the class rates in the West is confiscatory.
The potency of much of the argument in support of the grounds relied on by the plaintiffs depends upon the effect to be given the before mentioned amendment to section 3(1) of the Act by the Transportation Act of 1940 and to section 5(b) of the latter, 49 U.S.C.A. § 3 note. The change thus made in section 3(1) of the Act was the addition of the words "region, district, territory" following "transit point" in the enumeration of the persons, places and traffic as to which preference and prejudice was expressly made unlawful and prohibited. In accordance with what has become a somewhat common practice, the Transportation Act of 1940 contains a declaration of policy which in part is "to encourage the establishment and maintenance of reasonable charges for transportation services, without unjust discriminations, undue preferences or advantages or unfair or destructive competitive practices." 54 Stat. 899. And in section 5(b) is found what is known as the Ramspeck Resolution, where it is provided that:
"The Interstate...
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