Humble Oil & Refining Co. v. Great Northern Railway Co.

• Decision Date: 31 December 1962
• Docket Number: Civ. No. 251.
• Citation: 212 F. Supp. 747
• Court: U.S. District Court — District of Montana
• Parties: HUMBLE OIL & REFINING COMPANY, a Delaware corporation (Substituted for The Carter Oil Company, a West Virginia corporation), Plaintiff, v. GREAT NORTHERN RAILWAY COMPANY, a corporation, Northern Pacific Railway Company, a corporation, and Spokane International Railroad, a corporation, Defendants.

212 F. Supp. 747

HUMBLE OIL & REFINING COMPANY, a Delaware corporation (Substituted for The Carter Oil Company, a West Virginia corporation), Plaintiff, v. GREAT NORTHERN RAILWAY COMPANY, a corporation, Northern Pacific Railway Company, a corporation, and Spokane International Railroad, a corporation, Defendants.

Civ. No. 251.

United States District Court D. Montana, Billings Division.

December 31, 1962.

Fred W. File, Tulsa, Okl., John D. Knodell, Denver, Colo., and Burke, Hibbs & Sweeney, Billings, Mont., for plaintiff.

R. Paul Tjossem, Roger J. Crosby, Seattle, Wash., and Lamey, Crowley, Kilbourne, Haughey & Hanson, Billings, Mont., for defendants.

JAMESON, District Judge.

Plaintiff seeks damages by way of reparations for alleged overcharges made by defendants in the transportation of petroleum products from East Billings, Montana, to points in Idaho and Washington between December 12, 1953 and December 8, 1955, plaintiff claiming that the rates charged were in excess of the legal tariff. Plaintiff filed overcharge claims, which were denied.¹ Plaintiff then filed a complaint with the Interstate Commerce Commission pursuant to 49 U.S.C.A. § 13. In Docket No. 32,101, by order dated April 23, 1959, the Commission awarded reparations to plaintiff in the amounts sought in this action. Defendants failed to pay the award, and this action was instituted pursuant to Section 16(2) of the Interstate Commerce Act, 49 U.S.C.A. § 16(2).²

Effective May 2, 1952, the defendants had amended their tariff by reducing the rate for the transportation of petroleum products from East Billings to Spokane, Washington from 71.3 cents per 100 pounds to 55 cents. Subsequently defendants published and filed with the Commission tariff supplements reducing the rate from 55 cents to 53 cents³ to be effective January 10, 1953. The reduced tariffs were suspended by the Commission until August 9, 1953,⁴ and thereafter voluntarily postponed by the defendants until 12:01 A.M., December 9, 1953, in I & S Docket No. 6062, 291 ICC 101 and 292 ICC 317. By order dated November 25, 1953, the Commission approved the reduced rates and discontinued the proceedings.

At 4:00 P.M. on December 8, 1953, certain truck and barge lines which had opposed the reduced rates in I & S 6062 obtained a temporary restraining order in the United States District Court for the District of Oregon in Cause No. 7278, entitled "Pacific Inland Tariff Bureau et al. plaintiffs, v. United States of America et al. defendants" which, among other things, temporarily restrained and enjoined the Interstate Commerce Commission from carrying into effect the terms and conditions of the Commission's order dated November 25, 1953, and temporarily restrained and enjoined the defendants "from publishing or making effective and from assessing, charging, collecting, or enforcing" the reduced rates named in the supplements. When the restraining order was obtained at 4:00 P.M., Pacific Standard Time in Portland, Oregon, it was 7:00 P.M., Eastern Standard Time in Washington, D. C., the place where the Interstate Commerce Commission's Office for filing tariffs is situated, and the office had been closed for two hours at the time the restraining order was issued.

The defendants promptly moved the court to quash the restraining order on the ground that the court lacked jurisdiction to restrain rates which were on file with the Interstate Commerce Commission. This motion was denied, and a three-judge court was convened. The injunction was continued in effect until December 9, 1955, when it was canceled and set aside by the three-judge court.

In I & S Docket No. 6062 plaintiff appeared in support of the carrier's application to reduce rates. Plaintiff was not a party to the proceedings in the United States District Court in Oregon.

By letter dated December 10, 1953, the defendants notified plaintiff that the restraining order had been entered and served and stated: "Under these circumstances the rates which became effective under the published tariffs on December 9, 1953 cannot be charged because to do so would put the rail carriers in contempt of court. * * * (I)t will be necessary * * * to assess and collect the rates in effect on December 8, 1953, on all traffic moving until the restraining order is dissolved."

Telegrams were sent to defendants by the Interstate Commerce Commission as follows:

1. On December 11, 1953, "Commission is advised that the Federal District Court for Oregon on December 8 temporarily restrained railroads from making effective petroleum rates approved by Commission in I&S 6062. It is assumed that in deference to Court's order your company will forthwith cancel rates which became effective December 9, and restore former rates. Advise."

2. On December 14, 1953, "You may have and apparently do have valid excuse for making these rates effective despite Court order but I see no reason why either Commission or Court's order should excuse you for violating the Interstate Commerce Act by charging rates other than those stated in your tariff as you are doing and propose to continue doing."

3. On December 23, 1953, "Validity of Court order not questioned here but neither is it construed as authorizing carriers to violate the Interstate Commerce Act by disregarding tariffs in collecting charges. Such violations could have been avoided and unless Court order was dissolved on the eighteenth further violations should be avoided by promptly amending tariffs as suggested by telegram eleventh."

For the period December 9, 1953 to December 9, 1955, when the restraining order and injunction were canceled, the defendants continued to charge on the basis of the rate in effect on December 8, 1953, i. e., 55 cents from East Billings to Spokane. Immediately upon cancellation of the injunction the defendants commenced charging the rates named in the tariff supplements, i. e., 53 cents from East Billings to Spokane. No amended tariff supplements were filed and published at any time.⁵

The question for determination is whether plaintiff is entitled to the two cent difference in rate for all shipments between December 9, 1953 and December 8, 1955. The parties have agreed upon the amounts of the alleged overcharges and have agreed further that if plaintiff is entitled to recover, it is also entitled to interest at 4% per annum from the respective dates of payment of the overcharges and to attorney fees.

Plaintiff contends: (1) That the tariff as filed and published is binding upon both the shipper and the carrier, has the effect of statute, and that any evidence with respect to the restraining order and injunction granted by the court in Oregon is incompetent; (2) that if this evidence is received, the restraining order and injunction would not change the rates filed and published in defendants' tariff; (3) that the defendants took no action to change the effective tariff; and (4) that even if the defendants, in obedience to the restraining order and injunction, were required to collect the higher rates in effect, upon dissolution of the injunction, plaintiff was entitled to the benefit of the lower rates which were legally in effect.

Defendants contend: (1) That the reduced rate did not become effective until the United States District Court for Oregon dissolved its injunction on December 9, 1955; (2) that the plaintiff was not damaged by the action of the defendants in not canceling their supplements naming the reduced rates or in not publishing a notice that the reduced rates were subject to the restraining order; (3) that the defendants' refusal to contract for transportation at the enjoined rates during the life of the injunction was compelled by the injunction and this is a complete defense; and (4) that the order of the Interstate Commerce Commission in Docket No. 32,101 is erroneous and unlawful.

While counsel for plaintiff contend that any evidence with respect to the injunction is incompetent and inadmissible, I agree with counsel for the defendants that, in effect, plaintiff is contending that the facts relied upon by the defendants with respect to the injunction do not constitute a defense. That, it appears to me, is the real issue presented. All objections to the introduction of evidence are overruled, and all evidence submitted will be considered by the court.

Subparagraph 1 of Section 6 of the Interstate Commerce Act (49 U.S.C.A. § 6(1)) provides that common carriers shall file with the Interstate Commerce Commission, and print and keep open to public inspection, schedules showing all rates, fares, and charges for transportation. It provides further that the schedules shall be plainly printed in large type and posted in two public and conspicuous places in every depot, station, or office where passengers or freight are received for transportation. Subparagraph 7 provides in pertinent part that no carrier shall "charge or demand or collect or receive a greater or less or different compensation for such transportation of passengers or property, or for any service in connection therewith, between the points named in such tariffs than the rates, fares, and charges which are specified in the tariff filed and in effect at the time * * *."

One of the principal purposes of the Interstate Commerce Act was to prevent discrimination by granting preferential rates. Accordingly there was imposed "upon all carriers the positive duty to establish schedules of reasonable rates which should have a uniform application to all and which should not be departed from so long as the established schedule remained unaltered in the manner provided by law." Texas & P. R. Co. v. Abilene Cotton Oil Co., 1907, 204 U.S. 426, 439, 27 7S.Ct. 350, 51 L.Ed. 553, 558.

The Court of Appeals for the Ninth Circuit had occasion to consider the effect of a tariff on file with the Commission in Chicago, M., St. P. & P. R. Co. v. Alouette Peat Products, 1957, (rehearing denied 1958), 253 F.2d 449, where the...