Columbus & Greenville Ry. Co. v. United States

• Decision Date: 31 July 1942
• Docket Number: No. 161.,161.
• Court: U.S. District Court — Northern District of Mississippi
• Parties: COLUMBUS & GREENVILLE RY. CO. v. UNITED STATES et al.

46 F. Supp. 204

COLUMBUS & GREENVILLE RY. CO. v. UNITED STATES et al.

No. 161.

District Court, E. D. Mississippi, N. D.

July 31, 1942.

Forrest B. Jackson, of Jackson, Miss., R. C. Stovall, of Okolona, Miss., and Z. P. Hawkins, of Columbus, Miss., for Columbus & Greenville Ry. Co.

Daniel H. Kunkel, Office of Chief Counsel, Interstate Commerce Commission, of Washington, D. C., for Interstate Commerce Commission.

Robert L. Pierce, Sp. Atty., Department of Justice, of Washington, D. C., for United States.

John E. McCullough, of St. Louis, Mo., for St. Louis-San Francisco Ry. Co.

Erle J. Zoll, Jr., of Chicago, Ill., for Illinois Cent. R. Co.

Before HOLMES, Circuit Judge, and DAWKINS and MIZE, District Judges.

MIZE, District Judge.

The validity of the order of the Interstate Commerce Commission requiring the plaintiff, C. & G. Railway Company, to cancel certain provisions of a cut-back rate tariff is posed for determination by this suit. The Commission found plaintiff's freight tariff 9-B I.C.C. No. 81 to be in violation of sections 1(6), 6(4), and 6(7) of the Interstate Commerce Act, 49 U.S.C.A. § 1(6), 6(4, 7). The basis for the Commission's action is contained in two reports, being I. & S. Docket No. 4599, 238 I.C.C. 309, and No. 28590 decided January 3, 1942. The last mentioned report being the one that is particularly in controversy, the record and report of the former being made part of the record in the latter.

The facts in the case are not in dispute. The tariff provisions which the Commission has condemned, provide that when cottonseed is transported by a railroad other than the C. & G. Railway Co. to a mill point and is there processed and its products subsequently reshipped over the line of C. & G. Railway Co. the C. & G. Railway Co. will make a prescribed refund to the shipper, based upon the inbound shipment and the length of movement from origin to milling point. This provision is contained in plaintiff's tariff No. 81, being Item 5 thereof, and which provides that it shall be applicable on cottonseed in carloads from stations on the C. & G. Railway and on cottonseed from stations on connecting lines via such lines to mill points on the C. & G. Railway where in both cases subsequent shipment of the product is made from such mill points via the C. & G. Railway. Item 40 of the tariff provides for a scale of rates based upon the distance of the inbound movement.

The effect of this tariff is that the schedule of rates prescribed is used as a measure for making refunds on the subsequent reshipments of the product out of the mill point and is not applied in the first instance upon the inbound movements. On inbound movement a local rate is charged and collected and subsequently upon shipment out of the mill point over the C. & G. Railway the C. & G. Railway Company refunds to the shipper the difference between the local rate inbound and the rate prescribed in tariff No. 81, depending upon the length of the inbound movement. This tariff is applied on all inbound movements by rail, whether such transportation is performed by the C. & G. Railway Company or any other carrier serving the mill point. The line of the C. & G. Railway Co. lies wholly within the state of Mississippi. Movement of cottonseed products from any of the mill points on its lines to points outside of the state of Mississippi involves movement over the line of the C. & G. Railway and the connecting carrier. The C. & G. Railway Co. has joint rates on cottonseed products in effect from origin on its line to destination reached by connecting carriers, and such joint rates are properly concurred in by all participating carriers.

The report of the Commission shows that the investigation was instituted upon its own motion concerning the lawfulness of the rates. The St. Louis-San Francisco Railway Co. and the I. C. Railway Co., competitors of the C. & G. Railway Co., intervened in the hearing. Each of these interveners has a tariff substantially identical with the tariff of plaintiff, except that the tariff of each of these provides for a cut-back only upon cottonseed products processed from cottonseed originating inbound on the lines of such carrier. The rates for the inbound movements of cottonseed are published in tariffs local or joint governing the movement to the mill point. The rates on cottonseed products from the mill point are published in tariffs local or joint governing the movement from the mill point.

It is the contention of the plaintiff that the rate provided in the tariff is reasonable, just, not discriminatory, and that it is necessary in order to meet the competition of the trunk line carriers, and that the amount of freight paid by the shipper when moving outbound products over plaintiff's line is identically the same as it would be if the products moved out over its competitors' lines; that unless this tariff is permitted to stand, plaintiff, of course, is unable to meet the rate in effect by its competitors; that the processed products of the cottonseed become free freight at the mill points and that plaintiff is entitled to compete for free freight upon substantially equal terms with its competitors. That tariff No. 81 is not a joint tariff.

Interveners object to the tariff upon the theory that it attempts to name rates for account of their lines without their concurrence. That (1) their tariffs apply solely on shipments of cottonseed which they transport over their lines to the mill point; (2) to permit plaintiff's tariff to remain would in effect permit it to charge a less rate than that shown by its joint tariff and without concurrence of those carriers concurring in the joint rate.

The testimony shows without dispute that this tariff is profitable to plaintiff; that by its provisions and enforcement none of the capital investment of plaintiff is impaired; that the connecting carriers receive the entire proceeds from the rates as published applicable to them; and that plaintiff absorbs the entire amount of this cut-back. The testimony shows too that it does not vary in any respect whatsoever from the published tariff.

The tariff sets up a procedure by which the shippers of the outbound products are required to file through the claim channels of plaintiff the original bill of lading upon the inbound cottonseed within fifteen months and that then, in accordance with this tariff, the refund is made. The Commission did not find that the tariff was unreasonable, unjust or discriminatory, but determined that the form and manner in which the tariff is published does not conform to the requirements of Section 6(4) and 6(7) of the Act, and that it was unlawful by virtue of Section 1(6) of...