Chicago Eastern Illinois Railroad Co v. United States, 275

• Decision Date: 02 December 1963
• Docket Number: No. 275,275
• Parties: CHICAGO & EASTERN ILLINOIS RAILROAD CO. et al. v. UNITED STATES et al
• Court: U.S. Supreme Court

375 U.S. 150

84 S.Ct. 224

11 L.Ed.2d 217

CHICAGO & EASTERN ILLINOIS RAILROAD CO. et al.

v UNITED STATES et al.

No. 275.

Supreme Court of the United States

December 2, 1963

Richard M. Freeman and F. F. Vesper, for appellants.

Solicitor General Cox, Assistant Attorney General Orrick, Lionel Kestenbaum, Elliott H. Moyer, Robert W. Ginnane and Stanton P. Sender, for the United States and Interstate Commerce Commission.

Richard J. Murphy, John W. Hanifin and Robert H. Bierma, for rail carrier appellees.

PER CURIAM.

The motion to add the Baltimore and Ohio Railroad Company et al., as parties appellee, is granted. The motions to affirm are granted and the judgment is affirmed.

Mr. Justice BLACK, with whom Mr. Justice DOUGLAS concurs, dissenting.

In the Transportation Act of 1940 Congress amended the Interstate Commerce Act to authorize the Interstate Commerce Commission to regulate rates of interstate water carriers as well as of railroads and motor carriers. 54 Stat. 929, 49 U.S.C. § 901 et seq. At the time the Act was passed there was active opposition in Congress from those who feared that the Commission in exercising the power granted it would be too 'railroad-minded.' 84 Cong.Rec. 5965; see also id., at 5880—5883. For this reason, as was pointed out in Interstate Commerce Comm'n v. Mechling, 330 U.S. 567, 574—577, 67 S.Ct. 894, 897—899, 91 L.Ed. 1102, and Interstate Commerce Comm'n v. Inland Waterways Corp., 319 U.S. 671, 692, 63 S.Ct. 1296, 1307, 87 L.Ed. 1655 (dissenting opinion), the draftsmen of the legislation specifically wrote into the Act the 'National Transportation Policy,' 54 Stat. 899, 49 U.S.C. preceding § 1, making explicit the command of Congress that there should be a 'fair and impartial regulation of all modes of transportation subjec to the provisions of this Act, so administered as to recognize and preserve the inherent advantages of each.' In the Mechling case, decided in 1947, and several times in recent years this Court and District Courts have had to protect inland barge lines from Commission action which would have frustrated the intent of Congress to secure for them the benefit of the inherent advantages of their low-cost mode of carriage. See generally Arrow Transportation Co. v. Southern R. Co., 372 U.S. 658, 673, 83 S.Ct. 984, 992, 10 L.Ed.2d 52 (dissenting opinion). Sometimes the Commission has used procedural delaying devices to deny barge lines their inherent advantage over railroads, see Arrow Transportation Co. v. United States, 176 F.Supp. 411 (D.C.N.D.Ala.), aff'd sub nom. State Corporation Comm'n v. Arrow Transportation Co., 361 U.S. 353, 80 S.Ct. 406, 4 L.Ed.2d 362¹ again, the Commission has taken away the inherent advantage of barge lines through 'the device of a joint rate allowed carriers by rail but denied carriers by water,' see Dixie Carriers, Inc., v. United States, 351 U.S. 56, 59, 76 S.Ct. 578, 580, 100 L.Ed. 934. Sometimes, as in the present case, the Commission has resorted to use of inadequate or obscure findings of fact. See, e.g., Interstate Commerce Comm'n v. Mechling, 330 U.S. 567, 67 S.Ct. 894, 91 L.Ed. 1102; see also Mechling Barge Lines, Inc., v. United States, 368 U.S. 324, 331, 82 S.Ct. 337, 341, 7 L.Ed.2d 317 (dissenting opinion).² And barge lines have been denied the benefit of their inherent advantage when railroad rates challenged and later found to be unlawful have been permitted to take effect because of the long delay of the Commission in passing upon their unlawfulness.³

Therefore it may be significant that the Commission in the present case, at the instance of the large Eastern railroads and without finding basic facts to support its conclusion, disallowed as non-compensatory a proposed joint rate of a small railroad and a barge line which would give shippers of coal from West Virginia and eastern Kentucky to Chicago the advantage of a rate appreciably less than that charged by the Eastern railroads for the same haul. 315 I.C.C. 129. In doing this the Commission denies ths small railroad the right to ship coal for a division of $2.04 per ton in a barge-rail rate and leaves it with no alternative, if it wants this business, but to accept a division of $1.66 per ton for a substantially identical haul in combination with one of the large Eastern railroads. The obscure report of the Commission leaves an impression that its order may, in violation of the congressional will, have nullified an inherent advantage of the barge line and the cooperating railroad. It is true that the Commission clearly found as an ultimate fact that the joint barge-rail rate was noncompensatory, and also set forth a series of figures which it said represented elements of cost and added them together to obtain a figure 5.6 cents per ton higher than the proposed rate. I have checked the Commission's addition, and find it correct. But when I turn to what should be the basic findings of fact to support the accuracy of these figures, any illusory clarity in the Commission's report vanishes. I have examined the report with all the care of which I am capable in an effort to determine whether its ultimate conclusion is supported by substantial evidence. I am compelled to say that the Commission could have informed me just as well if it had written its so-called findings in ancient Sanskrit. I get no more enlightenment from the findings of fact and law of the District Court which left this Commission order standing on the legal assumption, plainly erroneous under decisions of this Court as I shall later point out, that the Commission's ultimate conclusion was enough, without the support of basic findings of fact. Nor have the labored and at times inconsistent efforts of government counsel and counsel for the Eastern railroads been successful in transforming the Commission's 'findings' into meaningful English. Nevertheless, our Court approves both the action of the Commission and the ruling of the District Court without even permitting the proponents of the barge-rail rate to be heard in oral argument. While such summary treatment often is warranted,⁴ I am constrained to say that in the present case it is so unjustified as to deny the right of direct appeal from the District Court which Congress authorized, see 28 U.S.C. § 1253, and which should never be treated lightly since it makes ours the only existing court of review. I am sorry that the Court has not chosen to write an opinion to support its affirmance. I must admit for myself that I would find the task impossible and the attempt embarrassing.

Summary affirmance is particularly out of place here because the District Court proceeded on a clearly incorrect assumption of law, one contrary on its face to the command of Congress in the Administrative Procedure Act, and one which, in being approved here, apparently overrules a line of previous decisions of this Court. The District Court ruled that 'the Commission is only required to set out ultimate and not evidentiary facts supporting its conclusions.' With this contrast the requirement of § 8(b) of the Administrative Procedure Act, 5 U.S.C. § 1007(b), that '(a)ll decisions * * * shall * * * include a statement of (1) findings and conclusions, as well as the reasons or basis therefor, upon all the material issues of fact * * *.' Contrast also statements by this Court that '(fi)ndings based on the evidence must embrace the basic facts which are needed to sustain the order,' Morgan v. United States, 298 U.S. 468, 480, 56 S.Ct. 906, 911, 80 L.Ed. 1288, and that '(w)e have repeatedly emphasized the need for clarity and completeness in the basic or essential findings on which administrative orders rest.' Colorado-Wyoming Gas Co. v. Federal Power Comm'n, 324 U.S. 626, 634, 65 S.Ct. 850, 854, 89 L.Ed. 1235. See also, e.g., Atchison, T. & S.F.R. Co. v. United States, 295 U.S. 193, 201—202, 55 S.Ct. 748, 752, 79 L.Ed. 1382; Florida v. United States, 282 U.S. 194, 215, 51 S.Ct. 119, 125, 75 L.Ed. 291.

The insufficiency of the Commission's basic findings is made clearer by the facts and circumstances of this case. The Chicago and Eastern Illinois Railroad, appellant here, operates a line from the southern Indiana town of Mount Vernon, on the Ohio River, to the steel plants of the Chicago area. Most coal shipped to Chicago for steelmaking comes from the West Virginia area over the large Eastern railroads, intervening appellees, which, although authorized if not required by §§ 3(4), 15(3) and 15(4) of the Interstate Commerce Act, 24 Stat. 380, 384, as amended, 49 U.S.C. §§ 3(4), 15(3), 15(4), have refused to establish joint rates with any barge line. Some years ago the C&EI filed a tariff for hauling coal which came to Mount Vernon by barge. The Eastern roads protested. The Commission refused to approve a rate lower than $2.045 per ton, which it found to be the C&EI's 1957 cost. 308 I.C.C. 87; 310 I.C.C. 181. The C&EI then turned to the Ohio River Company, a barge line operating down the Ohio from the coal mines to Mount Vernon, and established with it a joint rate of $3.36, of which the railroad's share was to be $2.04. The joint rate saved paperwork and the expense of weighing coal transferred from the barges. The Eastern lines were charging $4.75 for the all-rail shipment.

The Eastern roads swiftly demanded that the ICC set aside the joint rate, claiming it was below cost and therefore illegal under § 1(5) of the Interstate Commerce Act, 24 Stat. 379, as amended, 49 U.S.C. § 1(5). Both the C&EI and the Eastern roads presented cost averages for each step of the operation. There were disputes on many factual points, and when the smoke had cleared the Commission emerged with its own set of figures, unlike that of either party, though the Commission did not make clear, and no one else in my judgment could tell, exactly why. In its opinion the Commission simply added up the figures it had mysteriously produced, found the sum to be $3.416, and held the rate proposed by the C&EI...