CHICAGO, M., ST. P. & PR CO. v. Alouette Peat Products

• Decision Date: 11 April 1958
• Docket Number: 15277.,No. 15276,15276
• Citation: 253 F.2d 449
• Parties: CHICAGO, MILWAUKEE, ST. PAUL & PACIFIC RAILROAD COMPANY, Union Pacific Railroad Company, Southern Pacific Company, Great Northern Railway Company, and Northern Pacific Railway Company, Appellants, v. ALOUETTE PEAT PRODUCTS, Limited, et al., Appellees. INTERSTATE COMMERCE COMMISSION, Appellant, v. ALOUETTE PEAT PRODUCTS, Limited, et al., Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

253 F.2d 449 (1958)

CHICAGO, MILWAUKEE, ST. PAUL & PACIFIC RAILROAD COMPANY, Union Pacific Railroad Company, Southern Pacific Company, Great Northern Railway Company, and Northern Pacific Railway Company, Appellants, v. ALOUETTE PEAT PRODUCTS, Limited, et al., Appellees.

INTERSTATE COMMERCE COMMISSION, Appellant, v. ALOUETTE PEAT PRODUCTS, Limited, et al., Appellees.

Nos. 15276, 15277.

United States Court of Appeals Ninth Circuit.

December 26, 1957.

Rehearing Denied April 11, 1958.

Harold G. Boggs, Robert F. Garing, B. E. Lutterman, R. Paul Tjossem, Seattle, Wash., Robert W. Ginnane, General Counsel, C. H. Johns, Jr., Asst. General Counsel, I.C.C., Washington, D. C., for appellants.

Wright, Booth & Beresford, Robert O. Beresford, JoAnn R. Locke, Seattle, Wash., for appellee.

Before HEALY and FEE, Circuit Judges, and MURRAY, District Judge.

W. D. MURRAY, District Judge.

This is an appeal from a judgment of the District Court reversing orders of the Interstate Commerce Commission dismissing complaints before the Commission seeking recovery of alleged overcharges in freight charges for the transportation of peat from British Columbia points to destinations in the United States. The District Court held in effect that the rates in question were unlawful because not established as directed by the statute (49 U.S.C.A. Sec. 6, Par. 3), and resulted in overcharges to the shippers, which they were entitled to recover. The judgment ordered the Interstate Commerce Commission to require the railroads to refund to the shippers the difference between the charges paid under the unlawful rates and those which should have been charged under the last lawfully established rates.

On December 5, 1946, in proceedings denominated as Ex Parte 162, Increased Railway Rates, Fares, and Charges, 1946, 266 I.C.C. 537, the Interstate Commerce Commission made an order allowing the nation's carriers certain increases in freight rates. Insofar as material here, Ex Parte 162 provided in Appendix 1 (266 I.C.C. 618):

"Basic freight rates, whether class or commodity, and charges, on the commodities hereinafter specified, may be increased in the amounts and in the manner set forth as to each commodity class or group. The commodity group numbers (or commodity class numbers) used in this appendix, and throughout the entire report and order, for convenience, are those specified in the order of division 4 of November 22, 1927, In the Matter of Freight Commodity Statistics, which was in effect at the date of the submission herein, although a new list of commodity classes with articles assigned thereto has been promulgated by order of division 1, September 24 and October 16, 1946, to become effective January 1, 1947. They are intended generally to cover the items customarily included by carriers in their reports to the Commission under each numbered description, as of the date for the submission."

In the same appendix, Ex Parte 162 set forth the following allowed increase in freight rates (266 I.C.C. 623):

"Fertilizers, N.O.S., Including Potash — Group 640 Diatomaceous or Infusorial Earth — Group 701.

"Twenty percent, subject to a maximum of 6 cents per 100 pounds, or $1.20 per net ton."

Commodity Group No. 640 of the Freight Commodity Statistics referred to by the Commission, included peat, ground or unground, as a fertilizer, and accordingly the authorized increase in the rate for the shipment of peat under Ex Parte 162 was 20 percent, subject however, to a maximum of 6 cents per 100 pounds, or $1.20 per net ton.

Ex Parte 162 further provided (266 I.C.C. 617):

"The authorized increased rates and charges may be made effective in the period January 1, 1947, to February 28, 1947, upon not less than 5 days\' notice to the Commission and to the general public, by filing and posting in the manner prescribed in the Interstate Commerce Act."

Appellees are engaged in the production of peat at various points in British Columbia, Canada.

The appellant carriers, subsequent to Ex Parte 162, filed with the I.C.C. a special commodity rate on peat shipped from points in British Columbia to destinations in the United States, effective January 1, 1947, which included the full 20 percent increase, and this 20 percent increase was put into effect on 5 days' notice to the public. The 20 percent increase in freight rates on peat moving from British Columbia to destinations in the United States was unauthorized by Ex Parte 162, because it exceeded the 6 cents per hundred pounds maximum increase therein provided for; and it was only authorized increases which were permitted by Ex Parte 162 to be made effective on 5 days' notice.

Upon representations that rates on peat from origins in eastern Canada to points in the United States east of the Mississippi River were on the fertilizer basis and were increased a maximum of 6 cents, the carrier appellants reduced the transcontinental rates on peat between and on December 1, 1947, and March, 29, 1948, to reflect a maximum increase of 6 cents. However, the carriers refused to reduce the rates on peat from origins in British Columbia to points in Northern California to a maximum increase of 6 cents, and republished rates reflecting the full 20 percent increase.

Two complaints were filed by appellees¹ before the Interstate Commerce Commission alleging that the rates charged on numerous shipments of peat which moved on and between January 1, 1947, and March 29, 1948, from points in British Columbia to points in the United States were inapplicable, unjust and unreasonable and unduly preferential and prejudicial. The complaints also alleged that the rates from origins in British Columbia to points in Northern California (which had not been reduced to the 6 cents maximum increase) are and for the future will be unjust and unreasonable and unduly preferential. The Commission was asked to award reparations and to prescribe lawful rates for the future to the Northern California points.

After extended proceedings and on April 7, 1950, the Commission entered a report and order awarding reparations to appellees and ordering the unauthorized increases removed. In this report and order of the Commission the reparations were awarded because, in the words of the Commission, "Increased rates on ground peat * * * have resulted in charges for hauls within the United States that were unjust and unreasonable", and reparations were ordered to the extent that the rates were found to be unjust and unreasonable.

Thereafter the carriers filed a petition for reconsideration by the entire Commission which was denied by order dated January 7, 1952.

The parties then submitted their Rule 100² statement, showing the amount due under the Commission's findings and under date of December 30, 1953, the Commission issued its order setting forth the amount due appellees and directing the carriers to pay the same by February 19, 1954. The carriers elected not to pay the amounts found due and to await the shippers' court action based on the Commission's order.

This order of the Commission of December 30, 1953, ordinarily would have terminated the administrative proceedings. However, at about the same time, the Commission, in the case of F. W. Bolgiano & Co., Inc. v. Baltimore & O. R. Co., 291 I.C.C. 659, which contained facts and arguments substantially similar to those involved in the peat rate case, and which had granted reparations upon the same grounds as they had been granted in the peat case, reversed itself and dismissed the complaint in that case. As a result of such action of the Commission the carriers here involved, on March 8, 1954, filed a petition for leave to file a further petition for reconsideration on the strength of the Commission's action in the Bolgiano case. This petition was granted over appellees' objection and by order of June 21, 1954, the Commission reopened this proceeding for reconsideration upon the record already made. On October 4, 1954, the Commission issued its report and order on reconsideration, in which it reversed its prior order for the payment of reparations, and ordered a dismissal of the complaints based on its decision in Bolgiano & Co., Inc. v. Baltimore & O. R. Co., supra. Appellees then filed a petition for reconsideration which was denied by order of January 3, 1955, and these actions were filed in the District Court. The two actions involve common questions of law and fact and were consolidated in the District Court.

A certified copy of the administrative record was filed with the Court, hearing was had and briefs were filed and the cause argued and the Court held:

1. That the Commission\'s order of June 21, 1954, reopening the proceeding for reconsideration, despite Commissioner\'s Rule 101(f),³ amounted to a denial of due process to appellees;

2. That the assailed rates published and filed on less than 30 days\' notice without express Commission approval were illegal and void;

3. That those rates damaged appellees by causing a loss of market.

The Court remanded the matter to the Commission for the purpose of entering a reparation order awarding appellees reparation to the extent of the difference between the rates paid and the basic rate previously existing before either the 6 cents or 20 percent increase. Both the carriers and the Commission appealed from the Court's decision.

Appellants contend that the District Court erred in holding that the Commission's order of June 21, 1954, granting a second petition to reopen and reconsider the proceedings constituted a denial of procedural due process to appellees. An examination of this point indicates a serious problem in administrative law is involved, but in our view of this case a decision on the question of due process is unnecessary to dispose of the case and we express no opinion on that point.

Appellants likewise contend that the trial Court erred in holding that the assailed rates published and filed on less than the statutory 30 days'...