Cantlay & Tanzola v. United States, 15166.

CourtUnited States District Courts. 9th Circuit. United States District Court (Southern District of California)
Citation115 F. Supp. 72
Decision Date24 September 1953
Docket NumberNo. 15166.,15166.
PartiesCANTLAY & TANZOLA, Inc. et al. v. UNITED STATES et al.

115 F. Supp. 72

CANTLAY & TANZOLA, Inc. et al.

No. 15166.

United States District Court, S. D. California, C. D.

September 24, 1953.

115 F. Supp. 73
115 F. Supp. 74
Edward M. Berol, Bertram S. Silver and Marvin Handler, San Francisco, Cal., for plaintiffs Cantley & Tanzola, Inc., and others

Stevenson & Richman, Los Angeles, Cal., for International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers,—American Federation of Labor, Local Unions Nos. 104, 310, and 224.

Marvin Handler, San Francisco, Cal., for intervening plaintiffs Whitfield Transportation, Inc. and E. B. Law and Son, Inc.

Frederick G. Pfrommer, Robert L. Pierce, Chas. W. Burkett, Jr., San Francisco, Cal., C. W. Cornell, E. L. H. Bissinger, Walt A. Steiger, Los Angeles, Cal., and J. E. Lyons, San Francisco, Cal., for defendants Southern Pacific Co. and others.

Edward M. Reidy, Chief Counsel, Allen Crenshaw, Assoc. Chief Counsel, Ellis V. Gregory, Washington, D. C., William L. Harrison, San Francisco, Cal., for intervening defendant Interstate Commerce Commission.

Laughlin E. Waters, U. S. Atty., Los Angeles, Cal., Edward P. Hodges, Acting Asst. Atty. Gen., E. Riggs McConnell, James E. Kilday, William J. Hickley, Sp. Assts. to the Atty. Gen., Washington, D. C., Max F. Deutz, Asst. U. S. Atty., Los Angeles, Cal., for the United States.

Before STEPHENS, Circuit Judge, and MATHES and JAMES M. CARTER, District Judges.

MATHES, District Judge.

Certain tank-truck motor carriers of bulk petroleum products, joined by various locals of International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers, seek by this action to enjoin and annul an order of the Interstate

115 F. Supp. 75
Commerce Commission entered January 12, 1953 in proceeding entitled "Investigation and Suspension Docket No. 6010—Petroleum, Los Angeles and El Paso to Arizona and New Mexico." See 287 I.C.C. 731 (1953)

Jurisdiction of this court is invoked under 28 U.S.C. § 1336. See also: Id. §§ 2321-2325, 2284; 49 U.S.C.A. § 17 (9); 5 U.S.C.A. § 1009; Am. Trucking Ass'ns v. United States, 1953, 344 U.S. 298, 318-320, 73 S.Ct. 307; United States v. L. A. Tucker Truck Lines, 1952, 344 U.S. 33, 73 S.Ct. 67.

In the language of the Commission: "By schedules filed to become effective on June 9, 1952, the respondents rail carriers proposed reduced rates on refined petroleum products and distillate fuel oils, in tank-car loads, from Los Angeles, Calif. * * * shipping points, and El Paso, Tex., to Phoenix and Tucson, Ariz., and intermediate and related points in Arizona and New Mexico." Petroleum, Los Angeles and El Paso to Arizona and New Mexico, supra, 287 I.C.C. at 731; see 49 U.S.C.A. § 6.

Following protest by plaintiff tank-truck carriers and others, the Commission entered upon a hearing concerning the lawfulness of the proposed rates, pursuant to 49 U.S.C.A. § 15(7) which provides that:

"Whenever there shall be filed with the commission any schedule stating a * * * rate, * * * the commission shall have * * * authority * * * upon reasonable notice, to enter upon a hearing concerning the lawfulness of such rate * * * and pending such hearing and the decision thereon the commission, upon filing with such schedule and delivering to the carrier or carriers affected thereby a statement in writing of its reasons for such suspension, may from time to time suspend the operation of such schedule and defer the use of such rate * * * but not for a longer period than seven months beyond the time when it would otherwise go into effect * * *. At any hearing involving a change in a rate * * * the burden of proof shall be upon the carrier to show that the proposed changed rate * * * is just and reasonable * * *."

The Commission on June 6, 1952 ordered operation of the schedules suspended until January 9, 1953—for the entire seven-months' period permitted by law. 49 U.S.C.A. § 15(7). It later appeared that the Commission would not reach decision prior to expiration of this suspension period, and the rail carriers voluntarily further postponed the effective date of the proposed reduced rates until February 8, 1953.

Meantime hearing was had before an examiner, 49 U.S.C.A. § 17(10), who recommended to the Commission a finding that "the proposed rates under the circumstances are shown to be not unreasonable or otherwise unlawful." Exceptions were filed to the report of the examiner and, upon application of the parties, the Commission sat en banc on December 18, 1952 to hear oral argument in the matter.

The Commission divided sharply in reaching a decision. Six of the eleven members joined in a report declaring: "We find that the proposed schedules are just and reasonable, and are not shown to be unlawful"; and accordingly on January 12, 1953 directed entry of the challenged order that the proceeding be discontinued. The other five Commissioners, including the Chairman, dissented; three joined in a dissenting report. 287 I.C.C. at 737; id. at 737-739.

Various petitions for reconsideration and for leave to intervene thereafter filed were denied on April 6, 1953. 49 U.S.C.A. § 17(6-9).

After petitioning for reconsideration by the Commission of the majority report and order of January 12, 1953, plaintiff tank-truck carriers learned shortly prior to February 4, 1953 that defendant rail carriers had requested the Commission's permission, thereafter granted, to advance the effective date of the reduced rates, then under voluntary

115 F. Supp. 76
suspension, from February 8 to February 5, 1953. See 49 U.S.C.A. § 6(3)

The Commission having refused to suspend its order of January 12, 1953, 49 U.S.C.A. § 16(6), plaintiffs on February 4, 1953 filed this action in the United States District Court for the Northern District of California. The court that day issued a temporary restraining order enjoining the rail carriers "from publishing or making effective rates lower than those in effect on January 12, 1953, for the transportation of petroleum products in tank cars from the Los Angeles, California, area, and from El Paso, Texas, to points in Arizona * * *"; and enjoining the Commission "from carrying into effect the terms and conditions of said order * * * dated January 12, 1953 * * *." Cf. I. C. C. v. Mechling, 1947, 330 U.S. 567, 573-574, note 6, 67 S.Ct. 894, 91 L.Ed. 1102.

It was thereafter shown that venue was not properly laid in the Northern District, 28 U.S.C. § 1398, and on February 12, 1953 that court ordered the case transferred here. 28 U.S.C. § 1406 (a).

Defendant rail carriers promptly moved to dissolve the temporary restraining order upon the ground, inter alia, that because plaintiffs had filed a petition for reconsideration, not then acted upon by the Commission, they had not as yet exhausted their administrative remedies; and upon the further ground that, shortly prior to notice of the temporary restraining order, the rail carriers had mailed to the Commission a tariff supplement covering the lower rates in controversy, "which tariff supplement was delivered to said Commission * * * on February 4, 1953 * * * and thereupon filed, and * * * became effective by its terms on February 5, 1953." See 49 U.S.C.A. § 6(3, 7).

As to the ground first stated the danger of immediate and irreparable injury to plaintiffs, had they awaited action of the Commission on their petition for reconsideration, was sufficiently clear to warrant judicial intervention in advance of final administrative action, by way of exception to "the long-settled rule of judicial administration see Eccles v. Peoples Bank, 1948, 333 U.S. 426, 434, 68 S.Ct. 641, 92 L.Ed. 784 that no one is entitled to judicial relief for a * * * threatened injury until the prescribed administrative remedy has been exhausted." Myers v. Bethlehem Shipbuilding Corp., 1938, 303 U.S. 41, 50-51, 58 S.Ct. 459, 463, 82 L.Ed. 638; cf. United States v. Illinois Cent. R. Co., 1934, 291 U.S. 457, 463, 54 S.Ct. 471, 78 L.Ed. 909; Delaware & Hudson Co. v. United States, 1925, 266 U.S. 438, 448-449, 45 S.Ct. 153, 69 L.Ed. 369.

As to other grounds urged in support of the motion to dissolve, it having appeared without dispute that defendant rail carriers did not at any time prior to the presentation of the motion take any steps to comply with the provisions of the temporary restraining order sought to be dissolved, United States v. United Mine Workers, 1947, 330 U.S. 258, 290-294, 67 S.Ct. 677, 91 L.Ed. 884; United States v. Shipp, 1906, 203 U.S. 563, 573, 27 S.Ct. 165, 51 L.Ed. 319, they were held "precluded from applying for any order of any kind" in this action until after they should have made every reasonable effort to comply. See: Hovey v. Elliott, 1897, 167 U.S. 409, 428, 436, 440, 17 S.Ct. 841, 42 L.Ed. 215; Early v. Early, 1919, 49 App.D.C. 123, 261 F. 1003, 1004; Exploration etc. Co. v. Pacific Hdw. etc. Co., 9 Cir., 1910, 177 F. 825, 834; Wartman v. Wartman, C.C. D.Md.1853, 29 Fed.Cas., pages 303, 305, No. 17,210; Houston etc. Freight Lines v. Local No. 745, D.C.N.D.Tex.1939, 27 F.Supp. 262, 265; Weeks v. Superior Court, 1922, 187 Cal. 620, 203 P. 93; Soderberg v. Soderberg, 1923, 63 Cal. App. 492, 219 P. 82; Campbell v. Justices of Superior Court, 1905, 187 Mass. 509, 73 N.E. 659, 69 L.R.A. 311; Michel v. O'Brien, 1894, 6 Misc. 408, 27 N.Y.S. 173.

Accordingly the motion to dissolve was dismissed and the temporary restraining order continued in force pending

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hearing and determination of plaintiffs' application for an interlocutory injunction. 28 U.S.C. § 2325. The rail-carrier defendants thereafter requested and obtained authority from the Commission to restore the status quo ante, and on April 18, 1953 restored the higher rates which prevailed before February 5, 1953. See 49 U.S.C.A. § 6(3)

Meantime this court heard and submitted plaintiffs' application for an interlocutory injunction and set the case for trial. Upon the trial, the entire record of the...

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