Anchor Coal Co. v. Public Service Commission

• Decision Date: 10 June 1941
• Docket Number: 9189.
• Citation: 15 S.E.2d 406,123 W.Va. 439
• Parties: ANCHOR COAL CO. et al. v. PUBLIC SERVICE COMMISSION et al.
• Court: West Virginia Supreme Court

15 S.E.2d 406

123 W.Va. 439

ANCHOR COAL CO. et al. v. PUBLIC SERVICE COMMISSION et al.

No. 9189.

Supreme Court of Appeals of West Virginia.

June 10, 1941

Brown, Jackson & Knight, Price, Smith &amp Spilman, Robert G. Kelly, Robert S. Spilman, and Howard R Klostermeyer, all of Charleston, for appellants.

C W. Strickling, of Huntington, and Horace L. Walker and M Carter Hall, both of Richmond, Va., for appellees.

FOX Judge.

This is a complaint of the Anchor Coal Company, Boone County Coal Corporation, and Colcord Coal Company, hereinafter referred to as "petitioners", operating on Coal River, against The Chesapeake and Ohio Railway Company, hereinafter referred to as the "railway company", complaining of rates of eighty-seven and eighty-eight cents per ton from their mines to South Charleston. In the petition filed with the Public Service Commission on October 27, 1938, it is alleged that the present rates are unjust, unreasonable and prejudicial to the petitioners, and the maintenance of said rates is asserted to be a violation of law. Petitioners ask that an order be entered commanding the railway company to cease and desist from such alleged violation, and for such other and further orders as may be reasonable and just in the premises. An extended hearing was held and the Commission, in effect, denied their prayer and dismissed the petition, and we are now asked to review that action.

It should be said at the outset that this controversy involves a contest for access to the coal market in South Charleston, a manufacturing district, which consumes in excess of six hundred thousand tons of bituminous coal annually. Inasmuch as it is contended by the petitioners that the existing rates applicable to mines, other than those of petitioners, located in what is known as the Kanawha Coal District, bear upon the reasonableness of rates from petitioners' mines to South Charleston, it seems necessary, at this point, to detail briefly the history of rates as applied to

the Kanawha District, which includes Coal River and other competing mines.

What is known as the Kanawha Coal District includes mines and covers territory principally located west of Deepwater and south of the Great Kanawha River, in cluding the territory drained by Coal River and Guyandotte River, the last known as the Logan field. Mines on Gauley River and on Elk seem also to be included in this district, but these mines are not directly involved in this proceeding. The Kanawha Freight Rate District covers roughly the same territory. Prior to September 17, 1923, rates were applied, except as to minor differentials, to all mines in this district as a unit. Prior to the date named a rate to Charleston of $1.03 per net ton was in effect on coal mined on Cabin Creek and Gauley branches of the Kanawha field, as well as certain mines on its main line, while at the same time the rate in effect from the Coal River field was $1.13 per ton, a differential against Coal River of ten cents per ton. These rates were changed, effective as of September 17, 1923, and were reduced as to Cabin Creek mines and points on the main line west of Deepwater to eighty-eight cents, while the rates from Coal River and Gauley branches were reduced to ninety-eight cents, and from the Logan field and New River district the reduction was to $1.08. It will be observed that the ten cent differential against Coal River mines was maintained. On December 14, 1932, the rate on coal shipped from Coal River, the Kanawha Central Railway and Gauley branch was reduced to eighty-eight cents, with the indicated purpose of assisting the Coal River producers in meeting competition from Cabin Creek in the Charleston market. In Case No. 2228, by order effective June 30, 1934, the Public Service Commission reduced the eighty-eight cent rate to Charleston, from a portion of the mines on Cabin Creek to seventy cents, but the rate as to Coal River remained the same, thus creating a differential of eighteen cents against Coal River. This order was made on the 16th day of May, 1934, Twenty-First Annual Report Public Service Commission, 111, and from a reading of that report it will appear that cost of service and other pertinent matters were considered, and the result reached on the idea that the eighty-eight cent rate, as applied to the mines covered by the order, was unreasonable and should be reduced. This order was entered upon what appears to have been a complete appraisement of the entire rate situation in the Kanawha Freight Rate District. This was not the end of rate changes. At this point truck and water transportation entered the picture, and various shippers and consumers filed complaints seeking a reduction in rates, so far as they applied to Cabin Creek and the main line of the railway company east of South Charleston and west of Deepwater. In Cases Nos. 2381, 2382, 2383, and 2397, a joint order was entered on the 3rd day of February, 1936, Twenty-Third Annual Report Public Service Commission, 85, whereby the rate as to mines located on the Cabin Creek branch, its tributaries and subdivisions, to South Charleston was fixed at fifty-five cents, by consent of the railway company, the shippers, and those who instituted the complaints. This was purely a consent order, and operators on Coal River were not parties to the proceedings in which it was entered. The defendant, the Chesapeake and Ohio Railway Company, at that time insisted that such a rate (fifty-five cents) would be less than a maximum reasonable rate, and it was there stated by the commission that "Having in mind, however, the findings of the Commission in previous cases, Nos. 2231 and 2228, to the effect that the carriers' eighty-eight cent group to the Charleston district as it formerly existed was too extensive and that a rate of eighty-eight cents had not been justified for the shorter distances involved in these cases, and also having in mind the actual competition now being encountered and probable future competition in the Charleston district with coal transported by water, and in order to effect a compromise adjustment along liberal lines which will be to the interest, not only of the complainants in the particular cases here under consideration, but also to the advantage of all other producers and shippers of coal in the origin territory here involved, as well as to the advantage of consumers in the Charleston industrial district, the defendant, The Chesapeake and Ohio Railway Company, is willing to consent to the establishment, by order of this Commission, of a group rate of fifty-five cents per net ton from the mines located on its lines, as hereinafter described, to South Charleston and Charleston, the average distance from said mines to South Charleston being approximately thirty miles."

It therefore clearly appears that the order of February 3, 1936, conceded nothing on the part of the railway company as to the reasonableness of the rate imposed, but was entered as a matter of compromise, and in what was believed to be the joint interest of the railway company, the shippers and the consumers in the Charleston industrial district. Whether this rate, so established, was an "approved" rate or a "prescribed" rate is immaterial. The rate was authorized and its effect on mines in other fields, competing with Cabin Creek, was the same whichever definition we adopt.

The establishment of other rates in the territory covered by the Kanawha district may be of interest. On March 23, 1936, the railway company established a domestic rate of eighty-seven cents from mines in the New River, Kanawha and Coal River fields to Huntington, West Virginia; and it voluntarily established a fifty-five cent rate from mines on Coal River, Cabin Creek and in the Logan field to river points at Huntington, covering shipments to these points for river transportation beyond that point. An eighty-seven cent rate was in effect as to one or more mines on Coal River to South Charleston. Distance being an element to be considered, it should here be stated that the average distance from Cabin Creek mines to South Charleston is 30.6 miles, and the average distance from mines of the petitioners to South Charleston is 57.9 miles. The distance from the Cabin Creek and Coal River fields to Huntington is somewhat greater than the distance from Coal River to South Charleston.

It will be observed from the foregoing that the final result of the rate changes has been to create a differential of thirty-two and thirty-three cents against Coal River and in favor of Cabin Creek. In all other respects the operators stand on an equal plane with other shippers in the Kanawha...