American Sugar Refining Co. v. Delaware, L. & W. Ry. Co.

• Decision Date: 21 November 1912
• Citation: 200 F. 652
• Parties: AMERICAN SUGAR REFINING CO. v. DELAWARE, L. & W. RY. CO. SAME v. NEW YORK CENT. & H.R.R. CO.
• Court: U.S. District Court — District of New Jersey

200 F. 652

AMERICAN SUGAR REFINING CO. v. DELAWARE, L. & W. RY. CO.

SAME v. NEW YORK CENT. & H.R.R. CO.

United States District Court, D. New Jersey.

November 21, 1912

Chauncey G. Parker, of Newark, N.J., and William A. Glasgow, Jr., of Philadelphia, Pa., for plaintiff.

John L Seager, of New York City, for defendant Delaware, L. & W. Ry Co.

Albert C. Wall, of Jersey City, N.J., for defendant New York Cent. &amp H.R.R. Co.

RELLSTAB District Judge.

These actions were decided in favor of the defendants at the conclusion of the argument. At that time the court stated some of the reasons which influenced its judgment, offering to file a written memorandum, if counsel so desired. The following is in response to the request for such memorandum and contains the result of the court's additional reflection, as well as some of the reasons that appeared to be controlling at the time of such decision.

These actions were tried together before the court, without a jury, and are to recover an allowance of two cents per 100 pounds from the full rate mentioned in certain tariffs which the defendants filed with the Interstate Commerce Commission, which allowances, as per said tariffs, are for carting certain shipments of sugar (car load lots) from the plaintiff's refinery to the cars or stations of said defendants. In the case of the New York Central & Hudson River Railroad Company the principal sum claimed as the aggregate of such allowances is $2,880.06, covering shipments from October 6, 1908, to April 16, 1909, inclusive; and in the case of the Delaware, Lackawanna & Western Railway Company such aggregate sum is $5,195.59, covering shipments from March 5, 1908, to May 1, 1909, inclusive.

The validity of these allowances was made the subject of investigation by the Interstate Commerce Commission, on its own motion, under section 13 of 'the Act to Regulate Commerce' (Act Feb. 4, 1887, c. 104, 24 Stat. 383 (3 U.S. Comp. St. 1901, p. 3164)), and on December 12, 1908, were declared to be rebates, and in violation of said act and the acts amendatory thereof and supplementary thereto. In the Matter of Allowances for Transfer of Sugar, Op. No. 742, 14 Interst.Com.Com'n R. 619. No formal order annulling such allowance was entered in such cause; the Commission stating in that behalf:

'No order will be made at this time; but the Commission will expect the carriers in question at once to conform their tariffs and practices to the principles here announced. If this is not done, the Commission will take such steps to enforce compliance with its views in this connection, either by an order in this proceeding (jurisdiction of which is reserved for that purpose), or by such other means as it may deem advisable in the premises.'

In obedience to such decision, the defendants desisted from making such allowances, though no corrected tariffs in conformity therewith were filed with such Commission by either defendant until after the expiration of the period covered by the claims in suit.

Inter alia, the jurisdiction of the court over such actions was challenged, on the ground that by the first section of the act of June 18, 1910, c. 539, 36 Stat. 539 (now section 207 of the Judiciary Act of March 3, 1911, c. 231, 36 Stat. 1148 (U.S. Comp. St. Supp. (1911, p. 216)), creating the Commerce Court, the District Courts were stripped of their jurisdiction over such actions. This challenge is based upon the theory that these actions are, in substance, but legal proceedings to annul the order of the Interstate Commerce Commission, and therefore within the second class of enumerated cases, over which the Commerce Court is given exclusive jurisdiction by such section. As I have reached the conclusion that judgment must be rendered in favor of the defendants, even if controlling effect be given to the form in which the plaintiff has stated its causes of actions, it is unnecessary to consider the effect of the act in question upon the general jurisdiction of the court over suits which, in effect, would be to annul the decision of the Interstate Commerce Commission.

These actions are based upon the idea that the tariffs, as filed, constituted a contract between the defendants and shippers, and so continued in their entirety, regardless of the decision of the Commission declaring the allowances invalid. This, in my judgment, is erroneous. 'The Act to Regulate Commerce' endowed the Commission with plenary administrative power to supervise freight tariffs, and charged it with the duty to annul any tariffs in contravention of such act, and generally to enforce the provisions thereof. It also evinces a clear purpose to require shippers seeking reparation predicated upon the unreasonableness of a published rate to primarily invoke redress through the Commission, which alone is vested with power to entertain original proceedings for the alteration of such established schedule, notwithstanding that sections 9 and 22 of such act seemingly give the aggrieved party the option of bringing suit in the first instance in the District Court to recover damages for violation of the provisions of said act. Texas & Pac. Ry. Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 438, 442, 448, 27 Sup.Ct. 350, 51 L.Ed. 553, 9 Ann.Cas. 1075; B. & O.R. Co. v. Pitcairn Coal Co., 215 U.S. 481, 30 Sup.Ct. 164, 54 L.Ed. 292; Proctor & Gamble v. United States, 225 U.S. 282, 32 Sup.Ct. 761, 56 L.Ed. 1091; Morrisdale Coal Co. v. P.R.R. Co. (C.C.) 176 F. 748, affirmed 183 F. 929, 106 C.C.A. 269. See, also, Erie R. Co. v. Wanaque L. Co., 75 N.J.Law, 878, 69 A. 168.

The effect of the Commission's decision was to eliminated such allowances from the filed tariffs. No co-operation by the defendants was required to bring about such result. They were as much bound to refrain from making such rebates from the time of such decision until it should be reversed, or its operation suspended, as if the tariffs had never contained such allowances. To do...