Denver & R. G. W. R. Co. v. Public Service Commission, 7832

• Decision Date: 03 August 1953
• Docket Number: No. 7832,7832
• Citation: 259 P.2d 873,123 Utah 362
• Court: Utah Supreme Court
• Parties: DENVER & R. G. W. R. CO. et al. v. PUBLIC SERVICE COMMISSION et al.

Page 873

259 P.2d 873

123 Utah 362

DENVER & R. G. W. R. CO. et al. v. PUBLIC SERVICE COMMISSION et al.

No. 7832.

Supreme Court of Utah.

Aug. 3, 1953.

Bryan P. Leverich, M. J. Bronson, A. U. Miner, Howard F. Coray, D. A. Alsup and Marvin J. Bertoch, Salt Lake City, for plaintiffs.

Clinton D. Vernon, Atty. Gen., Cheney, Marr, Wilkins & Cannon, Paul B. Cannon, Salt Lake City, for defendants.

WADE, Justice.

The Denver and Rio Grande Western Railroad Company and the Union Pacific Railroad Company bring this action to review an order of the Public Service Commission of Utah wherein that commission granted the railroad companies' petition to charge the American Smelting & Refining Company's plants at Garfield and Murray, Utah, and the United States Smelting, Refining & Mining Company's plant at Midvale, Utah the same for its switching movements in intrastate traffic as they did for interstate traffic, but conditioned such permission upon the railroads reducing their line-haul compensation so that the overall revenue of the railroads would be the same with the increased charges as it had been before the change had been allowed.

The American Smelting & Refining Company had commenced to do its own switching in its plants and so was not concerned with the hearing before the Commission and made no appearance.

The railroads contend that the commission did not regularly pursue its authority in ordering the reduction of line-haul rates so that the overall revenue would not be increased as a result of the increases in switching rates granted because the question of the adequacy or inadequacy of line-haul rates was not before the Commission in this proceeding, and the railroads had no notice that such a question would be considered; and also there was no evidence upon which the Commission could base its finding that the established line-haul rates included compensation for switching.

In their petition the railroads set out that the Interstate Commerce Commission had made certain investigations of switching services performed by the railroads for the smelters which had resulted in the Commission finding that these services were not reasonably compensated for in addition to that received in the line-haul rates charged, and resulted in the smelters receiving preferential service not given to other shippers. As a result of these investigations and the orders of the I.C.C. the railroads published separate charges for switching done for interstate traffic. They further alleged that the same services were performed by the railroads in switching for intrastate traffic as were performed for interstate traffic and in order to avoid any discrimination against interstate traffic they asked the P.S.C.U. for the right to publish tariffs charging the same for intrastate as for interstate traffic.

The U. S. S. R. & M. Co. filed a protest to the railroads' petition which they entitled 'Petition for Dismissal' in which it alleged that line-haul rates already included compensation for switching services rendered by the railroads to the smelters and that this fact had been admitted by the railroads in the proceedings before the I.C.C. and also in various court proceedings.

At the hearing evidence was introduced of the historical background of the linehaul rates and the investigations by the I.C.C. of the services which were included in them by railroads for the smelters and the conclusions of the Commission that certain switching services accorded the smelters went beyond that given to other industries under the line-haul rates. The railroads appealed the decisions based on these findings to the courts, contending that there was no discrimination against other industries in the services given the smelters under line-haul rates because those services which were rendered were taken into consideration when line-haul rates were fixed. A United States District Court held in favor of the railroads' contention, but the United States Supreme Court in United States v. U. S. Smelting, Refining & Min. Company, 339 U.S. 186, 70 S.Ct. 537, 94 L.Ed. 750 eventually held that the I.C.C. had the right to determine where line-haul ended and that the question of compensatory rates was not involved; that if the line-haul rates actually included charges for switching beyond the points where the Commission had determined was the end of the line-haul, then a separate hearing could be had to determine the reasonableness of the rates charged for line-haul.

A line-haul is the beginning and end of transportation service by the railroads. As stated by the court in U. S. v. U. S. Smelting, Refining & Min. Co., supra, 339 U.S. at page 189, 70 S.Ct. at page 540...