City of Danville v. Chesapeake & O. Ry. Co.

• Decision Date: 10 August 1940
• Docket Number: No. 3698,3699.,3698
• Citation: 34 F. Supp. 620
• Court: U.S. District Court — Western District of Virginia
• Parties: CITY OF DANVILLE et al. v. CHESAPEAKE & O. RY. CO. et al. DANVILLE HOTEL CO., Inc., et al. v. SAME.

34 F. Supp. 620

CITY OF DANVILLE et al. v. CHESAPEAKE & O. RY. CO. et al.

DANVILLE HOTEL CO., Inc., et al. v. SAME.

Nos. 3698, 3699.

District Court, W. D. Virginia, at Danville.

August 10, 1940.

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Harry C. Ames, of Washington, D. C., and Frank Talbott, Jr., and John W. Carter, both of Danville, Va., for plaintiffs.

Charles Clark, of Washington, D. C., Grasty Crews, of Danville, Va., W. H. T. Loyall, of Norfolk, Va., H. T. Hall, of Roanoke, Va., M. Carter Hall and Elmer Beach, both of Richmond, Va., Lucian H. Cocke, Jr., of Roanoke, Va., and John C. Donnally, D. Lynch Younger, and W. N. McGehee, all of Washington, D. C., for defendants.

PAUL, District Judge.

By agreement these two cases, involving the same questions, were heard together without the intervention of a jury. They are suits brought under authority of Section 16 of what is known as the Interstate Commerce Act, 49 U.S.C.A. § 16, to recover damages based on orders of the Interstate Commerce Commission awarding reparation for freight charges on coal shipments which the Commission held were unreasonable.

The petitioners in case No. 3698 filed complaint before the Interstate Commerce Commission in May, 1931, assailing as unreasonable rates on coal transported from mines in Virginia and West Virginia over lines of defendants to Danville, Virginia. The complaints in case No. 3699 were filed before the Commission in March and June of 1933 attacking rates from the same mines to Danville and to Gretna, Virginia. The first complaint was docketed by the Commission as No. 24482 and a hearing before an examiner was had in November, 1931, at which considerable evidence was introduced and upon this the Commission, on January 30, 1933, made a report and finding to the effect that the assailed rates were unreasonable, that the complainants had made the shipments and paid the charges described in their complaint, and had been damaged in the amount of the difference between the charges paid and those found to be reasonable; and that they were entitled to reparation with interest.

Being unable to ascertain the exact amount of reparation due, the Commission directed that complainant comply with Rule V of the Rules of Practice, which provides for the filing of a statement showing details of the shipments on which reparation is claimed, this including the date of the shipment, its place of origin, the weight of the shipment, the charges paid and date of payment, and other details designed to enable an accurate statement of the amount of reparation to be arrived at. Such a statement was filed by the complainants, but the carriers declined to certify or agree to its correctness, and a further hearing was had before an examiner on October 6, 1933, for the purpose of receiving proof of the amounts claimed and to determine the amount of reparation due. During the pendency of the proceedings on this complaint, No. 24482, and probably as a result of the Commission's finding of January 30, 1933, the other complaints were filed in March and June, 1933, as heretofore noted. These latter were docketed by the Commission as No. 25947 and No. 25947 (Sub-No. 1). Inasmuch as the reasonableness of the rates to Danville had been tried out in complaint No. 24482, the parties agreed that the evidence in No. 24482 should be considered as part of the record in the later complaints without the necessity of repetition. The hearing of October 6, 1933, to determine the amount of reparation involved all of the complaints.

Following this hearing, the examiner prepared reports recommending certain findings and to these exceptions were filed by various parties. On April 27, 1935, the Commission made its final report, in which it stated that all of the complaints here involved (as well as several others) presented similar issues and would be dealt with in one report. The report recited the prior proceedings in No. 24482, including the finding (January 30, 1933) that the rates there assailed were unreasonable. It further recited the agreement of the parties that the evidence in 24482 should be considered as part of the record in 25947 and 25947 (Sub-No. 1) and found the rates assailed in the latter complaints unreasonable. This report excluded certain claims of shippers because of lack of proof and approved others which had been questioned. It found that the complainants, who were listed by name, were entitled to reparation with interest in amounts specifically shown in an order accompanying the report. This final order, dated April 27, 1935, directed that payment of reparations to the parties and in the amounts named be made on or before July 27, 1935.

The defendant carriers failed to make payment within the time prescribed, and several months later these suits were instituted in this Court pursuant to the terms of the Interstate Commerce Act, § 16(2), 49 U.S.C.A. § 16(2), providing that when a carrier has failed to comply with an order of the Commission for the payment of money, the complainant for whose benefit the order was made may file his petition in the district court setting forth his claim for damages based on the order of the Commission.

To the petitions filed in this Court, the defendants filed a demurrer and pleas of non-assumpsit and not guilty. Amendment of the petitions was allowed to meet certain grounds of demurrer and the defendants filed grounds of defense under their pleas. As the pleadings were finally determined, the defenses, stated briefly and in substance, were:

(1) The order of the Commission does not contain and is not supported by essential findings of fact necessary to support an award.

(2) The order is not supported by substantial evidence of record before the Commission.

(3) The finding of facts made by the Commission in its reports of January 30, 1933, and April 27, 1935, require a determination that the rates in question were not unreasonable.

(4) The evidence of record before the Commission requires a determination that the questioned rates were not unreasonable and that none of the complainants are entitled to reparation.

(5) That the Commission was without authority to condemn the rates as unreasonable in the past and to award reparation based thereon, for the reasons that: (a) The Commission had previously approved said rates as not unreasonable; (b) the Commission had previously approved as not unreasonable rates on coal similar to those assailed; (c) the rates assailed had long been maintained and under them a substantial traffic had moved without complaint as to reasonableness; (d) the rates assailed compare favorably with other rates contemporaneously maintained from the same general origin to the same general destination; (e) that the prior approval of the rates, their long maintenance and the movement of substantial traffic under them were facts upon which the carriers were entitled to rely in determining their reasonableness to the extent of not thereafter being called on to make reparation based on them.

(6) That the Commission exceeded its power, acted arbitrarily and denied the defendants due process of law in violation of the Fifth Amendment.

In considering the issues raised by the above enumerated defenses, attention should be called to certain principles which seem settled by the long line of decisions involving actions brought under this statute. The action is not upon the award as such or to enforce compliance with the Commission's order. Meeker v. Lehigh Valley R. Co., 236 U.S. 412, 35 S. Ct. 328, 59 L.Ed. 644, Ann.Cas.1916B, 691; Lewis, etc., Co. v. Southern Pacific R. Co., 283 U.S. 654, 661, 51 S.Ct. 592, 75 L. Ed. 1333. The action is one for damages, which according to the terms of the statute (49 U.S.C.A. § 16(2), proceeds as all other suits for damages, subject to the condition that upon the trial the findings and order of the Commission shall be prima facie evidence of the facts stated therein. It is also true that it is a condition precedent to bringing such an action for damages in court that there shall have been a prior finding by the Commission that the rate charged was unreasonable. Lewis, etc., Co. v. Southern Pacific R. Co., supra, and cases there cited. The plaintiffs could not have come into this Court as an original proposition asking this Court to determine that a rate charged was unreasonable and for a judgment for damages based on the excessive charge. It is well settled that the courts have no rate-making power. That power and duty has been vested in the Interstate Commerce Commission alone. Texas & Pacific R. Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 448, 27 S.Ct. 350, 51 L.Ed. 553, 9 Ann. Cas. 1075; Mitchell Coal & Coke Co. v. Pennsylvania R. R., 230 U.S. 247, 258, 33 S.Ct. 916, 57 L.Ed. 1472; Pennsylvania R. Co. v. International Coal Mining Co., 230 U.S. 184, 196, 33 S.Ct. 893, 57 L.Ed. 1446, Ann.Cas.1915A, 315. And when such cases come before the court, after findings of unreasonableness by the Commission, it is not the province of the court to substitute its judgment for that of the Commission where the latter has been based on substantial evidence taken in due course. The court will not weigh the evidence to determine whether in its judgment the rate was unreasonable. Chicago, R. I. & P. R. Co. v. United States, 274 U.S. 29, at page 33, 47 S.Ct. 486, 71 L.Ed. 911. To permit this would be to allow the courts to determine rates in each instance where they differed with the Commission as to the weight of the evidence adduced before the Commission; they would become the ultimate rate-making body to the practical disregard of the statute which vests that power in the Interstate Commerce Commission.

Applying these principles, it would seem that while the plaintiff must, as in any other suit, prove that he has been damaged and the amount of his damage, this requirement is satisfied by introduction of the Commission's order determining the fact of damage...