Boston and Maine Railroad v. United States

• Decision Date: 18 March 1969
• Docket Number: 68-79-G.,Civ. A. No. 56-1004-G
• Parties: BOSTON AND MAINE RAILROAD et al., Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants. BOSTON AND MAINE CORPORATION, Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants.
• Court: U.S. District Court — District of Massachusetts

297 F. Supp. 615

BOSTON AND MAINE RAILROAD et al., Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants.

BOSTON AND MAINE CORPORATION, Plaintiff, v. UNITED STATES of America and Interstate Commerce Commission, Defendants.

Civ. A. Nos. 56-1004-G, 68-79-G.

United States District Court D. Massachusetts.

March 18, 1969.

John J. Nee, Roslindale, Mass., and William Crooks, Jr., Marblehead, Mass., for B & M Corp.

Edmund M. Sweeney, Boston, Mass., for New York, New Haven & Hartford R.R.

David G. Scannell and M. Lauck, Walton, Donovan, Leisure, Newton & Irvine, New York City, for B & M and N. Y., New Haven & Hartford.

Richard J. Ferriter, Boston, Mass., and John C. Danielson, Chicago, Ill., for Chicago & North Western R. Co. et al.

Andrew Lane and John O. Parker, Boston, Mass., for Southern R. Co., and Chicago, Milwaukee, St. Paul and Pacific R. Co.

Jerome Shapiro and John Colgren, New York City, Richard R. Bongartz, Philadelphia, Pa., for Penn Cent. R. Co.

John E. O'Keefe, Boston, Mass., Richard H. Stokes, Jamaica, N. Y., for Long Island R. Co. and others.

MacDonald & McInerny, Washington, D. C., for Southern R. Co., etc.

Paul F. Markham, U. S. Atty., Edward F. Harrington, Asst. U. S. Atty., Boston, Mass., for United States.

Jerome Nelson, Washington, D. C., Ramsey Clark, Atty. Gen., Dept. of Justice, Washington, D. C., for defendant, ICC.

Stephen Hopkins, Neal Holland, Sherburne, Powers & Needham, Boston, Mass., Sidley & Austin, Martin M. Lucente, Chicago, Ill., for Atchison, Topeka & Santa Fe and others.

Before WOODBURY,^* Senior Circuit Judge, and WYZANSKI and GARRITY, District Judges.

OPINION OF THE COURT.

WOODBURY, Senior Circuit Judge.

This is another chapter in protracted litigation, primarily between long-haul freight originating railroads and short-haul freight terminating railroads, over the price one railroad should pay for the use on its line of another railroad's freight cars. In a previous chapter this court held, one judge dissenting, that the Interstate Commerce Commission had jurisdiction to enter an order at the behest of the long-haul roads that the rates for freight car use fixed by the Association of American Railroads (AAR) were just, reasonable and otherwise lawful and must be observed. Boston & Marine Railroad v. United States, 162 F.Supp. 289 (U.S.D.C., Mass.1958). But the court remanded, directing the Commission to give further and more detailed consideration to the propriety of basing the rate, at least in part, on the distance a foreign car traveled on a using railroad's line instead of solely upon the time the car was on the user's line as had been the practice since about the turn of the century.¹ The Supreme Court, on representations of the Commission that it would follow the mandate of this court and undertake a study in depth of the problem under the power conferred upon it by § 1(14) (a) of the Interstate Commerce Act,² dismissed cross appeals as prematurely presenting the question of the Commission's jurisdiction to issue a declaratory order in the premises. Boston & Maine Railroad v. United States, 358 U.S. 68, 79 S.Ct. 107, 3 L.Ed.2d 34 (1958).

Pursuant to its memorandum to the Supreme Court, the Commission reopened the case remanded to it and, consolidating with it two other cases pending before it under § 1(14) (a), embarked upon a thorough, full-scale study of the problem. In January 1968 the Commission handed down a decision and order in the consolidated cases in which it concluded upon consideration of the voluminous record that the past calculations of the AAR were based upon statistics and apportionments of such limited probative value as to render them unsatisfactory as a measure of past per diem costs. In consequence it found that the complainants in the original case asking for a declaratory order that the AAR rates were just, reasonable and otherwise lawful, that is, the long-haul railroads, had failed to sustain their burden of proving that the rates in issue were indeed just, reasonable and non-discriminatory for use in determining per diem charges with respect to the defendants, the short-haul railroads. In the other cases before it the Commission in the exercise of its powers under § 1(14) (a), supra, fixed separate rates for freight car use for each year from 1953 to 1965, inclusive, and provided that car use rates thereafter should be calculated in accordance with a rate table which itemized and valued each factor included in calculating the rate. The Commission's study convinced it that a line-haul mileage factor should be included in the rate for car use and provided that future rates should be separately calculated, assessed and paid not only with respect to the number of days cars are held on line but also with respect to the number of miles moved by users in line-haul service.³ Consequently the Commission required railroads to keep records of line-haul use as well as records of days cars are on a user's line. The Commission did not base past per diem rates in any part upon mileage because it said no records existed upon which to determine the actual mileages of foreign per diem cars during past periods, or even to make any reliable estimate of the mileages of such cars.

The consolidated actions before us are to enjoin, set aside and annul the report and order of the Commission outlined above.

"In attempting to find a measure of the just apportionment of car-hire costs, the railroads and the Commission have had to face a condition of extraordinary complexity, and not a theory. The Fifth Amendment does not command the impossible. It does not demand that the power and duty of the Commission to make the apportionment be thwarted by requiring it to adopt a standard of unattainable exactness. The validity of what is of necessity a rule of thumb, best adapted to secure a just apportionment, can hardly depend upon a perfect precision in its application; its imperfections in this respect are themselves compensated by an advisedly sought simplicity and convenience of operation." Mr. Justice Stone, dissenting in Chicago R. I. & P. Railway Co. v. United States, 284 U.S. 80, 116, 52 S.Ct. 87, 99, 76 L.Ed. 177 (1931).

Viewing the cases before us in the light of the above observations, in which Justices Holmes and Brandeis concurred, and which we think eminently appropriate, we find no error in the Commission's actions.

Several medium and long-haul railroads as intervenors make common cause with the United States in supporting the Commission's action. Short-haul railroads, primarily the Boston and Maine and the Trustees of the New York, New Haven and Hartford, for convenience B & M and N H hereinafter, challenge the Commission's action on several grounds.

The challengers strenuously assert that the Commission by its action requires them to pay certain car repair items twice.

Under the rules of the AAR car owners are responsible for repairs attributable to ordinary wear and tear, and car users are responsible for car repairs made necessary by damage "due to unfair usage or improper protection by the using line." Obviously certain car repairs have to be made to foreign cars when on a user's line to make the cars safe and serviceable. Such repairs are made by the using line which charges the repairs to the car owner at rates fixed by the AAR for specific repairs. The complaining railroads contend that the rates fixed by the AAR are below cost which results in a car repair deficiency in the amount, they say, of about 98 million dollars per year. They assert that the Commission has included this figure in fixing the per diem whereby the railroads pay this deficiency twice, once when they repair the foreign car and again in the per diem rate for the use of the car.

The Commission did not overlook this assertion. It said: "Upon all evidence, it is found that the car repair deficiency to the extent that it actually exists, should be corrected by adjustment in the AAR billing rates, and...