Dixie Carriers, Inc. v. United States

• Decision Date: 31 July 1956
• Docket Number: Civ. A. 9544.
• Citation: 143 F. Supp. 844
• Parties: DIXIE CARRIERS, Inc., Gulf-Canal Lines, Inc., Mississippi Valley Barge Line Company, American Barge Line Company, Union Barge Line Corporation, John I. Hay Company, Coyle Lines Incorporated, Federal Barge Lines, Inc., Waterways Freight Bureau, Plaintiffs, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — Southern District of Texas

143 F. Supp. 844

DIXIE CARRIERS, Inc., Gulf-Canal Lines, Inc., Mississippi Valley Barge Line Company, American Barge Line Company, Union Barge Line Corporation, John I. Hay Company, Coyle Lines Incorporated, Federal Barge Lines, Inc., Waterways Freight Bureau, Plaintiffs, v. UNITED STATES of America, Defendant.

Civ. A. 9544.

United States District Court S. D. Texas, Houston Division.

July 31, 1956.

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Donald Macleay, Harry C. Ames, Jr., Washington, D. C., Alan S. Dale, Houston, Tex., on the brief, Nuel D. Belnap, Belnap & McAuliffe, Chicago, Ill., T. S. Christopher, Christopher & Bailey, Fort Worth, Tex., Ames, Hill & Ames, Washington, D. C., Francis W. McInerny, Macleay, Lynch & MacDonald, Washington, D. C., Eastham, Hinds & Dale, Houston, Tex., for plaintiffs.

John C. Ridley, Houston, Tex., Harvey Huston, Richard J. Murphy, Chicago, Ill., Palmer Hutcheson, Jr., Houston, Tex., on the brief, Edwin N. Bell, Baker, Botts, Andrews & Shepherd, Houston, Tex., Harry E. Boe, Chicago, Ill., Robert G. Boes, Cleveland, Ohio, J. T. Clark, Cleveland, Ohio, William E. Davis, Kansas City, Mo., William R. McDowell, Dallas, Tex., Walter G. Treanor, St. Louis, Mo., Robert H. Bierma, Chicago, Ill., Ralph M. Buzek, Cincinnati, Ohio, Hutcheson, Taliaferro & Hutcheson, Houston, Tex., for intervenor Railroad Carriers.

John H. Earle, Atty., Dept. of Justice, Washington, D. C., Gordon Kroll, Asst. U. S. Atty., Houston, Tex., on the brief, Stanley Barnes, Asst. Atty. Gen., Malcolm R. Wilkey, U. S. Atty., Houston, Tex., for the United States.

H. Neil Garson, Asst. Gen. Counsel, Interstate Commerce Commission, Washington, D. C., Robert W. Ginnane, General Counsel, Interstate Commerce Commission, Washington, D. C., on the brief for defendant, Interstate Commerce Comm.

Before JOHN R. BROWN, Circuit Judge, HANNAY, Chief Judge, and INGRAHAM, District Judge.

JOHN R. BROWN, Circuit Judge.

Involving the vacating of an Order suspending proposed rates, this case¹ is a parallel of Amarillo-Borger Express v. United States, D.C.N.D.Tex., 138 F. Supp. 411 (three-Judge), and the variation in Long Island Railroad Co. v. United States, D.C.E.D.N.Y., 140 F. Supp. 823 (three-Judge), expressly approving it. We too, without the necessity of restating the matter so fully developed there, adopt the opinion, conclusion and reasoning of that case. The only substantial factual difference is that here the proposed rates required express Section Four approval by the Commission under the Long and Short Haul provision, 49 U.S.C.A. § 4(1) of the National Transportation Act, 49 U.S.C.A. § 1 et seq.

The Railroads, to regain a competitive position lost to interstate Water and Motor Carriers largely as the result, they claimed, of voluntary ex parte increases (Ex Parte 162, 166, 168, 175) in railroad rates, on September 19, 1955, published (to become effective October 26, 1955) drastic reductions in their rates for the movement of steel and wroughtiron pipe, in carloads, moving from the mills in the industrial areas East of the Mississippi River to destinations in the States of Arkansas, Louisiana, Oklahoma and Texas. Concealed in the lexicography of the complex tariff papers is the battle for transportation revenues running annually, it is asserted, from $6,000,000 to $9,000,000 and constituting about 15% of water carrier revenues for the movement of fabricated steel pipe for current and immediate use in the oil fields and for pipeline transmission facilities in the great Southwest.

This case does not involve the question of the extent of the right, so often asserted by the Railroads, as a part of management responsibility, to publish reduced rates to meet competition, see Atlanta & St. Andrews Bay Ry. Co. v. United States, D.C.M.D.Ala., 104 F.Supp. 193, 198, and which would, subject only to the possibility of suspension for a seven months period under 49 U.S.C.A. § 15(7), make them effective until determined by hearing to be unlawful. For here, by the choice of the Railroads, the proposed rates were less for the longer distance from the steel mill areas to rail-head delivery points in the Southwest than rates for the movement of the same commodity for shorter distances within both origin and destination territories. They were thus confessedly in violation of the Act² unless, upon application and after investigation by the Commission, finding it to be a special case, and the rates reasonably compensatory for the services performed, express approval were given.

Consequently, as permitted by the Act, the Railroads simultaneously filed (September 19, 1955) Fourth Section Application No. 31120 for approval of the rates. But until the Fourth Section Application was granted, the rates could not go into effect. Conversely, so long as they were suspended, they could not be effective and approval under Fourth Section would be a sterile, useless academic decision.

Water and Motor Carriers then filed Protests against Fourth Section approval and Petitions for Suspension, each of which normally are administratively handled by separate Boards³ of Commission employees. On October 20, 1955, the Suspension Board, on positive findings⁴ identical with Amarillo-Borger, supra, ordered an investigation into the lawfulness of the rates and suspended them for the full seven months to May 25, 1956. With the rates suspended, there was nothing which the I & S Board could do on FSA 31120.

The Railroads, presumably accepting the findings, note 4, supra, as an adequate, articulate "statement in writing of the Commission's reasons for such suspension"⁵ since no complaint by them has yet been made, filed on October 26, 1955, a Petition in I & S 6491 for reconsideration of the suspension order and, on the same day, filed in FSA 31120 a "Petition of Railroad Applicants for Immediate Issuance of the Authority Sought by Application herein, dated September 16, 1955." This was not⁶ a Petition for reconsideration and those preparing and proposing it treated it as a Petition for initial action on the original Fourth Section Application.

Through Commission administrative channels the Petition for Reconsideration of the Suspension Order came before Division 2 acting as an appellate division. On December 7, 1955, by an Order⁷ in all respects identical with that roundly condemned in Amarillo-Borger, supra, the Suspension Order was vacated, and on December 9, 1955, an order of ambiguous⁸ origin was entered granting temporary Fourth Section relief effective December 17, 1955.

The Water and Motor Carriers then filed separate Petitions for Reconsideration of the Orders of December 7 and 9 requesting in those Petitions the Stay granted by the Act⁹ where the initial Order is handed down by a Board or Division. By notice dated December 15, 1955, the full Commission declined to act and on the following day, December 16, notice and order were issued¹⁰ denying the Petitions in I & S 6491.

Thus the matter stood when, on February 16, 1956, this verified complaint was filed. And on that record, we are of the clear opinion that the Order of December 7, vacating the prior suspension, is invalid. The simple phrase "and good cause appearing therefor" is inadequate to upset prior positive findings, and for the reasons¹¹ set forth in Amarillo-Borger cannot, on judicial review,¹² stand.

Nor, do we think, does the matter stand differently because of subsequent efforts¹³ of the Commission to indicate that it had in fact met the teachings of that case. This was not a permissible nunc pro tunc order correcting clerical, ministerial errors or omissions. It was an attempt to substitute reasons where none had appeared¹⁴ or been recorded. Moreover, we agree with Long Island Railroad Co., supra, 140 F.Supp. 823, at page 828 (in which, at the very same time, March 1, 1956, a similar "corrected order" was entered), applying Amarillo-Borger, that in the face of positive, strong findings of probable illegality merely to restate the conclusion in negative form is inadequate. We do not regard this in a technical light at all. If administrative agencies, no matter how highly motivated their particular action may be, can, under the form of nunc pro tunc corrective orders, presumably "correct" the subject order to meet the objections specifically urged in a petition for judicial review, effective review would be denied. The vice of the "and good cause appearing" technique is that it affords nothing the parties or court can take hold of to scrutinize and measure as the basis for the action. That is compounded if, on a challenge, review is then thwarted by substituting something else. There is no way to tell whether, in the processes of deliberation and adjudication, the Division meant "and good cause appearing" to be the negative of the initial suspension findings or something different. Whatever it was, "these suitors were justly entitled to a recital of what it was that indicated the disappearance of the prima facie case, and the necessity for an investigation, namely, that the announced result was the exercise of a discretion based upon sound reasoning", Long Island Railroad Co., supra, 140 F. Supp. 823, at page 828.

The order of December 7, 1955, vacating the suspension must therefore be set aside, and the matter remanded to the Commission for further and not inconsistent proceedings. The question is not the simple one of a suspension beyond the statutory maximum of seven months (expired May 25, 1956) for this is all intertwined¹⁵ with the Fourth Section Application. And rates which have been approved under the Fourth Section Application which would not, and could not, have been effectually determined so long as the rates were suspended, must resume their former status.

That leads us to the plaintiffs' further contention that under these circumstances the Order of December 9, 1955, approving the Fourth Section Application is invalid. In this they contend that tempora...