American Trucking Associations v. Atchison, Topeka and Santa Fe Railway Company National Automobile Transporters Association of Detroit, Michigan v. Atchison, Topeka and Santa Fe Railway Company United States v. Atchison, Topeka and Santa Fe Railway Company 60, s. 57

Citation87 S.Ct. 1608,18 L.Ed.2d 847,387 U.S. 397
Decision Date29 May 1967
Docket Number59,Nos. 57,s. 57
PartiesAMERICAN TRUCKING ASSOCIATIONS, Inc., et al., Appellants, v. The ATCHISON, TOPEKA, AND SANTA FE RAILWAY COMPANY et al. NATIONAL AUTOMOBILE TRANSPORTERS ASSOCIATION OF DETROIT, MICHIGAN, Appellant, v. The ATCHISON, TOPEKA, AND SANTA FE RAILWAY COMPANY et al. UNITED STATES et al., Appellants, v. The ATCHISON, TOPEKA, AND SANTA FE RAILWAY COMPANY et al. , and 60
CourtUnited States Supreme Court

See 88 S.Ct. 11.

[Syllabus from pages 397-399 intentionally omitted] Robert W. Ginnane and Richard R. Sigmon, Washington, D.C., for appellants.

Thormund A. Miller, Francis M. Shea, Washington, D.C., Paul R. Duke, Philadelphia, Pa., and D. Robert Thomas, Chicago, Ill., for appellees.

Mr. Justice FORTAS delivered the opinion of the Court.

These three cases present the following question: Does the Interstate Commerce Commission have authority to promulgate rules providing (1) that railroads which offer trailer-on-flatcar (TOFC or 'piggyback') service to the public under open-tariff publications must make such service available on the same terms to motor and water common and contract carriers, and (2) that motor and water carriers may, subject to certain conditions, utilize TOFC facilities in the performance of their authorized service? Ex parte 230, Substituted Service Charges and Practices of For-Hire Carriers and Freight Forwarders (Piggyback Service), 322 I.C.C. 301 (1964).

A three-judge district court, convened under 28 U.S.C. §§ 1336, 2284, 2321—2325, at the request of various railroads and freight forwarders, set aside the rules which the ICC had promulgated in a rulemaking proceeding initiated on its own motion. 244 F.Supp. 955 (D.C.N.D.Ill.1965). The case is here on direct appeal. 28 U.S.C. §§ 1253 and 2101(b). 384 U.S. 902, 86 S.Ct. 1337, 16 L.Ed.2d 356 (1966).

The appellees are the railroads and freight forwarders who initiated the District Court proceeding. The appellants are the United States and the ICC (No. 60), together with the American Trucking Associations, Inc., et al. (No. 57), and the National Automobile Transporters Association (No. 59), which intervened below as defendants.

More specifically, the issue presented is the validity of Rules 2 and 3, promulgated by the Commission in Ex parte 230, supra. 49 CFR §§ 500.2 and 500.3 (Supp.1967). Rule 2 provides that 'TOFC service, if offered by a rail carrier through its open-tariff publications, shall be made available' at the same charge to all other persons. In substance, it is a paraphrase of § 2 of the Interstate Commerce Act, 24 Stat. 379, as amended, 49 U.S.C. § 2 (hereinafter cited only to U.S.C.). Rule 3 provides that, with certain qualifications and subject to certain conditions, 'motor common and contract carriers, water common and contract carriers, and freight forwarders may utilize TOFC service in the performance of all or any portion of their authorized service through the use of open-tariff TOFC rates published by a rail carrier.' The District Court held that the Commission has no authority to compel railroads to make opentariff TOFC service available to such carriers, and that such carriers may not be authorized to use TOFC except if and as the railroad consents.

The background of the controversy may be briefly described. The growth of trailer-on-flatcar service has been 'explosive' since the latter half of the 1950's.1 From the time of passage in 1935 of Part II of the Act regulating motor carriers, until the institution of the present proceeding, the Commission appears to have regarded trailer-on-flatcar service not as bimodal, but as an adjunct of transportation by railroad—as a facility essentially of, by and for the railroads. This attitude is summed up by the ICC's definition of TOFC in 1954 in Movement of Highway Trailers by Rail, 293 I.C.C. 93 (the so-called New Haven case), which provided the basic legal framework upon which the development of TOFC traffic has been based. In that case, the Commission described TOFC or piggyback service as transportation of 'a freight-laden trailer secured to a flatcar, which in turn is coupled in a train being drawn by a locomotive over steel rails laid on the railroad's right-of-way * * *.' Id., at 100—101.2

Even prior to the New Haven case, beginning in 1939, in Substituted Freight Service, 232 I.C.C. 683, it was the Commission's position that a railroad could grant or deny TOFC service to common carriers by motor.3 Even if the railroad offered such service generally to the public, it could withhold it from for-hire motor carriers. Except for limited uses of rail open tariffs permitted by certain railroads,4 contract and common carriers by motor participated in piggyback service only by agreement, including through route-joint rate arrangements between a railroad and a trucker (see Plan V, infra), and railroad acceptance of trailers or containers of truckers, the shipment moving under motor carrier tariffs and the railroad's compensation being based upon a division of charges arrived at through negotiations between the carriers (Plan I, infra). These arrangements had to be voluntary for it has been the prevailing view that the railroads, as common carriers, had no duty to service truckers under their open tariffs, and, although § 216(c), 49 U.S.C. § 316(c), authorizes motor common carriers to establish through routes and joint rates with rail common carriers, the Commission had no power to compel such joint arrangements.

According to the Commission, five basic forms of piggyback service evolved (322 I.C.C., at 304—305, 309—312). They are:

Plan I (Joint Intermodal):

Railroad movement of trailers or containers of motor common carriers, with the shipment moving on one bill of lading and billing being done by the trucker. Traffic moves under rates in regular motor carrier tariffs, and the railroad's compensation is arrived at by negotiation between the two carriers.

Plan II (All-Rail):

Door-to-door service performed by the railroad, which moves its own trailers or containers on flatcars under open tariffs usually similar to those of truckers.

Plan III (All-Rail):

Ramp-to-ramp rates to private shippers and freight forwarders, based on a flat open-tariff charge, regardless of the contents of trailers or containers, which are usually owned or leased by freight forwarders or shippers. No pick-up or delivery is performed by the railroad.

Plan IV (All-Rail):

Flat open-tariff charge for loaded- or empty-car movement, the railroad furnishing only power and rails. Shipper or forwarder furnishes a trailer or container-loaded flatcar, either owned or leased.

Plan V (Joint Intermodal):

Joint railroad-truck or other combination of coordinated service rates. Either mdoe may solicit traffic for through movement, and traffic moves on originating carrier's bill of lading.

While data are not available precisely to define the growth of traffic under the various plans, the evidence indicates that major growth has been primarily in the all-rail, open-tariff plans—that is, plans under which traffic moves at rail rates and on rail billings.Th e Commission's summary of responses to piggyback questionnaires, contained in the Record, shows that virtually all of the reporting railroads participate in Plans II and III and about three-fourths participate in Plan IV. However, only 'somewhat more than half' of the reporting railroads participate in truckerrail arrangements under either Plan I or V, and traffic in Plan V (joint railroad-truck rates-through routes) 'generally is extremely limited.' A number of the largest railroads do not offer to move trailers or containers for motor carriers on motor carrier bills of lading and billing under regular motor carrier tariffs (Plan I,),5 or offer it only for limited types of traffic such as automobiles or only to their own subsidiaries. Over 80% of rail movement of motor carrier-rail piggyback is under Plan I. ICC Bur. of Econ., Piggyback Traffic Characteristics 21 (1966).

Faced with the explosive growth of piggyback service on the basis of principles which had evolved in the infancy of the development of piggyback, the Commission by notice dated June 29, 1962, commenced this proceeding which was its 'first general investigation of what is probably the most significant recent development in transportation—trailer-on-flatcar or piggybank service.' 322 I.C.C., at 303. Proposed rules were furnished to participants, opportunity was given to all of them to file statements, and an examiners' report was filed. After exceptions and oral argument, the Commission rendered its decision on March 16, 1964. The Commission stated that 'It is our purpose and our hope to encourage the growth of this transportation phenomenon.' 322 I.C.C., at 322. The rules which it prescribed incorporate the basic principles here at issue: that 'when TOFC service is offered by a rail carrier to the public generally,' it should likewise be available to motor or water common or contract carriers in lieu of their authorized transportation between service points, or to for-hire carriers. Id., at 336. These rules also include ancillary or implementing provisions which are not here at issue; for example, it is provided that the motor carrier must give notice in its tariff publication if TOFC is to be used, and the user of the water or motor carrier may specify 'that in any particular instance TOFC service not be utilized' (49 CFR §§ 500.3(b), (c)(d) (Supp.1967)); and that these carriers may tender and receive traffic, TOFC, only at points that they are authorized to serve. Id., § 500.3(e).

The three-judge District Court concluded that Rules 2 and 3 (and Rule 5, id., § 500.5, insofar as it amplified those Rules) exceeded the Commission's authority and set them aside. In substance it held that the Interstate Commerce Act did not forbid a railroad to refuse to carry the trailers or containers of a...

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