Daugherty Lumber Co. v. United States

• Decision Date: 31 May 1956
• Docket Number: Civ. No. 8541.
• Citation: 141 F. Supp. 576
• Parties: DAUGHERTY LUMBER CO. et al., Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants, Atlas Lumber Company et al., Intervenors—Pro-Plaintiff, Star Lumber Company, a copartnership, et al., Intervenors—Pro-Plaintiff, The National Industrial Traffic League, Intervenor—Pro-Defendant, West Coast Lumbermen's Association, Western Pine Association and California Redwood Association, Intervenors —Pro-Defendant.
• Court: U.S. District Court — District of Oregon

141 F. Supp. 576

DAUGHERTY LUMBER CO. et al., Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants Atlas Lumber Company et al., Intervenors—Pro-Plaintiff Star Lumber Company, a copartnership, et al., Intervenors—Pro-Plaintiff The National Industrial Traffic League, Intervenor—Pro-Defendant West Coast Lumbermen's Association, Western Pine Association and California Redwood Association, Intervenors —Pro-Defendant.

Civ. No. 8541.

United States District Court D. Oregon.

May 31, 1956.

John M. Hickson, Portland, Or., for plaintiffs.

John M. Hickson, Portland, Or., Bartle, Allen & Anderson, Eugene, Or., for intervenor Star Lumber and others.

William C. McCulloch, Winfree, McCulloch, Shuler & Sayre, Portland, Or., for intervenor West Coast Lumbermen's Ass'n and others.

Burchmore, Good & Bobinette, Chicago, Ill., for intervenor National Industrial Traffic League.

James E. Kilday, John H. D. Wigger, Attys., Dept. of Justice, Washington, D. C., Stanley N. Barnes, Asst. Atty. Gen., Robert W. Ginnane, Gen. Counsel, Leo H. Pou, Associate Gen. Counsel, Interstate Commerce Commission, Washington, D. C., C. E. Luckey, U. S. Atty. for Dist. of Oregon, Portland, Or., for United States and Interstate Commerce Commission.

Before STEPHENS, Circuit Judge, and SOLOMON and EAST, District Judges.

EAST, District Judge.

The plaintiffs, Daugherty Lumber Co., et al., consist of some five business organizations engaged in the business of buying and selling lumber on a wholesale basis and as such utilize railway transportation for the movement of such lumber products from the Pacific Northwest to other portions of the United States. One of the plaintiffs is a manufacturer of lumber products and disposes of its products to the mentioned wholesale lumber brokers.

The intervenors, Atlas Lumber Company, et al., pro-plaintiff, consist of some sixty-three business organizations engaged in the sale and transport of lumber products through interstate commerce throughout the United States.

The intervenors, Star Lumber Company, et al., pro-plaintiff, consist of some six business organizations engaged in the manufacture and distribution of lumber products through interstate commerce originating from the State of Oregon.

The intervenor, the National Industrial Traffic League, pro-defendant, is a voluntary national association composed of and representing business organizations engaged in the shipment and receipt of commodities transported by railroads in every state of the United States.

The intervenors, West Coast Lumbermen's Association, et al., pro-defendant, are Associations representing business oganizations engaged in the manufacture, sale and distribution of lumber products throughout the Pacific Northwest.

The defendants are the United States of America and its administrative agency, the Interstate Commerce Commission (Commission).

Commission's Order.

On March 19, 1956, the Commission issued Service Order No. 910, to be effective 12:01 a. m., April 9, 1956.

The plaintiffs complained and by order, per EAST, D. J., dated April 7, 1956, the Commission was temporarily restrained in the execution of said order.

On April 13, 1956, the Commission made a "Corrected Service Order No. 910", to be dated as of March 19, 1956. The order, as corrected, to our concern, reads:

"It appearing, that an acute shortage of freight cars exists in all sections of the country; that the movement of loaded freight cars is being delayed solely for the purpose of gaining additional time; that present rules, regulations, and practices with respect to the use, supply, control, movement, distribution, exchange, interchange, and return of freight cars are insufficient to promote the most efficient utilization of cars; it is the opinion of the Commission that an emergency exists requiring immediate action to promote car service in the interest of the public and the commerce of the people. Accordingly, the Commission finds that notice and public procedure are impracticable and contrary to the public interest, and that good cause exists for making this order effective upon less than thirty days' notice."

Whereupon the following regulations of concern were prescribed:

"(1) No common carrier by railroad subject to the Interstate Commerce Act shall wilfully delay the movement of loaded freight cars by holding such cars in yards, terminals, or sidings for the purpose of increasing the time in transit of such loaded cars.

"(2) Loaded cars shall not be set out between terminals except in cases of emergencies or sound operating requirements.

"(3) Backhauling loaded cars for the purpose of increasing the time in transit shall constitute wilful delay and is prohibited.

"(4) Through loaded cars shall not be handled on local or way freight trains for the purpose of increasing the time in transit of such loaded cars.

"(5) The use by any common carrier by railroad, for the movement of loaded freight cars over its line, of any route other than its usual and customary fast freight route from point of receipt of the car from consignee or connecting line, except in emergencies, or for the purpose of according a lawfully established transit privilege (not including a diversion or reconsignment privilege), is hereby prohibited."

Furthermore, the Commission, in deference to the mentioned restraining order, stated in its official report that "No action will be taken to enforce Service Order No. 910 until further order of the Commission."

Authority of the Commission.

Section 1(15) of the Interstate Commerce Act, 49 U.S.C.A. § 1(15), reads as follows:

"Whenever the commission is of opinion (italics ours) that shortage of equipment, congestion of traffic, or other emergency requiring immediate action exists in any section of the country, the commission shall have, and it is hereby given, authority, either upon complaint or upon its own initiative without complaint, at once, if it so orders, without answer or other formal pleading by the interested carrier or carriers, and with or without notice, hearing, or the making or filing of a report, according as the commission may determine: (a) to suspend the operation of any or all rules, regulations, or practices then established with respect to car service for such time as may be determined by the commission; (b) to make such just and reasonable directions with respect to car service without regard to the ownership as between carriers of locomotives, cars, and other vehicles, during such emergency as in its opinion will best promote the service in the interest of the public and the commerce of the people, upon such terms of compensation as between the carriers as they may agree upon, or, in the event of their disagreement, as the commission may after subsequent hearing find to be just and reasonable; * * *."

It is conceded by all of the parties that the Commission acted upon its own initiative without complaint and without notice, hearing or the making or filing of any report except to publicize Order No. 910 after issuance in the Federal Register.

Contentions of Plaintiffs and Intervenors, Pro-Plaintiffs.

These parties, through plaintiffs' petition, assert that for many years last past plaintiffs and other lumber manufacturers and wholesalers of lumber products situated in the States of Oregon, Washington and California, have traditionally operated their respective businesses in the following manner:

Upon completion of loading a car of lumber, the bill of lading and ownership of said car has been transferred to a lumber wholesaler or lumber broker who thereupon pays the invoice price of said car even though said wholesaler or broker has no present customer for said car; said wholesaler then normally commences the movement of said car toward the Eastern Seaboard without instructions to the railroad to expedite the movement of said car, but with instructions to the railroad to keep the wholesaler advised of the progress of said car toward a particular transfer or diversion point; during the Eastward progress of said car, the wholesaler finds a purchaser for same, and upon finding such purchaser the railroad is notified to move said car to destination forthwith.

They claim that said Service Order No. 910 of the Interstate Commerce Commission, the subject of this Bill, would overnight change this traditional method of buying, selling and transporting lumber between points on the Pacific Coast and points in the eastern parts of the United States without affording to lumber manufacturers or wholesalers an opportunity, if such were possible, to revise their methods of operation.

Further, "that if said Service Order No. 910 were allowed to become effective, it would seriously and adversely affect plaintiffs in the conduct of their respective businesses in the following manner:

"1. That wholesalers would refuse to purchase cars of lumber from sawmills until such time as they had a specific order for said cars and therefore plaintiffs would have to accumulate large inventories of lumber far beyond their capacity to finance same, or in the alternative, plaintiffs would have to stop production until such time as plaintiffs should receive an order for a specific type of lumber and then proceed to cut same and load the car and invoice the wholesaler.

"2. That said order would prevent plaintiffs and others similarly situated from maintaining an efficient and economic production schedule in that they would no longer be able to set up...