Dixie Carriers v. United States

• Decision Date: 31 December 1954
• Docket Number: Civ. A. No. 8171.
• Citation: 129 F. Supp. 28
• Parties: DIXIE CARRIERS, Inc., Coyle Lines Incorporated, American Barge Line Company, Federal Barge Lines, Inc., Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants. The New York Central Railroad Company, Chicago & Eastern Illinois Railroad Company, Illinois Terminal Railroad Company, and Wabash Railroad Company, Intervening Defendants.
• Court: U.S. District Court — Southern District of Texas

129 F. Supp. 28

DIXIE CARRIERS, Inc., Coyle Lines Incorporated, American Barge Line Company, Federal Barge Lines, Inc., Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants The New York Central Railroad Company, Chicago & Eastern Illinois Railroad Company, Illinois Terminal Railroad Company, and Wabash Railroad Company, Intervening Defendants.

Civ. A. No. 8171.

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

December 31, 1954.

Donald Macleay (Macleay & Lynch), Washington, D. C.; for plaintiffs Dixie Carriers, Inc., and Coyle Lines, Inc.

Richard J. Hardy and Nuel D. Belnap (Belnap & McAuliffe), Chicago, Ill., for plaintiffs American Barge Line Co. and Federal Barge Lines, Inc.

E. V. Greenwood and Fulbright, Crooker, Freeman, Bates & Jaworski, Houston, Tex., for all plaintiffs.

Stanley N. Barnes, Asst. Atty. Gen., and Malcolm R. Wilkey, U. S. Atty., Houston, Tex., and Edward M. Reidy, Chief Counsel, Washington, D. C., and Samuel R. Howell, Asst. Chief Counsel and Leo H. Pou, Washington, D. C., for defendants the United States of America and the Interstate Commerce Comm.

John A. Daily, Chicago, Ill., and Palmer Hutcheson, Jr., (Hutcheson, Taliaferro & Hutcheson) Houston, Tex., for intervenors New York Central Railroad Co., Chicago and Eastern Illinois Railroad Co., Illinois Terminal Railroad Co., and Wabash Railroad Co.

E. V. Greenwood and Fulbright, Crooker, Freeman, Bates & Jaworski, Houston, Tex., John H. Eisenhart, Jr., Washington, D. C., for intervening plaintiff American Waterways Operators, Inc.

Before HUTCHESON, Chief Circuit Judge, and CONNALLY and KENNERLY, District Judges.

KENNERLY, District Judge.

This is a suit by Plaintiffs, Dixie Carriers, Inc., Coyle Lines Incorporated, American Barge Line Company and Federal Barge Lines, Inc., against the Interstate Commerce Commission (for brevity called Commission) and the United States of America, Defendants. The New York Central Railroad Company, the Chicago and Eastern Illinois Railroad Company, the Illinois Terminal Railroad Company and the Wabash Railroad Company have intervened on the side of Defendants and are referred to as Intervening Defendants. The American Waterways Operators, Inc., have also intervened on the side of Plaintiffs and are referred to as Intervening Plaintiffs. The trial was before a three-judge-court convened under Sections 2284 and 2325 of Title 28, U.S.C.A.

Plaintiffs moving under the Interstate Commerce Act, as amended by the Transportation Act of 1940 respecting water carriers, 49 U.S.C.A. § 901 et seq., complain of and seek to enjoin, set aside and annul an order of the Commission with respect to rail rates, barge rates and railbarge rates on sulphur from sulphur mines in Texas and approximately 60 miles from Galveston, Texas, but described as being in the Galveston area, through East St. Louis, Illinois, to Danville, Illinois. Specifically, Plaintiffs sought in their application before the Commission to have established a through barge-rail route and a joint through barge-rail rate for sulphur from Galveston, Texas, to Danville, Illinois, via East St. Louis, i. e. by barge from Galveston to East St. Louis, and by rail from East St. Louis to Danville. Plaintiffs claimed that the establishment of such route and rate was necessary and desirable in the public interest and that the failure and refusal to establish same discriminated against them as connecting carriers. The order complained of which denied Plaintiffs' application to the Commission was entered in a proceeding before the Commission entitled American Barge Line Company v. Chicago & Eastern Railroad Company, I.C.C. Docket No. 30731, reported in 287 I.C.C. 403 and 291 I.C.C. 422.

Among the several persons who were parties to, intervened in or took part in the hearings before the Commission there were no shippers nor consumers of sulphur. There was one intervenor, the American Waterways Operators, Inc., who appeared on behalf of the "inland water carriers generally throughout the United States", and the Galveston Chamber of Commerce intervened, was represented at the hearings, but did not otherwise participate in the proceedings. But no one purported to participate in the proceedings on behalf of or in the interest of the public generally.

The facts are not greatly if at all in dispute, and are fully shown by the Record. They may be briefly summarized substantially as follows:

(a) Plaintiffs here, who were the complainants in the proceeding before the Commission, are common carriers by water, operating under certificates of public convenience and necessity issued by the Commission. The American Barge Line Company and the Inland Waterways Corporation, operating Federal Barge Lines, render common carrier barge service on the Mississippi River between (among others) Port Sulphur (near New Orleans, Louisiana) and New Orleans, Louisiana on the one hand, and East St. Louis, Illinois, on the other hand, a distance of approximately 1,049 miles. The Coyle Lines, Incorporated, and Dixie Carriers, Inc., render common carrier barge service from Galveston, Texas, to New Orleans, Louisiana, a distance of approximately 357 miles. Each of the Intervening Defendants operate rail lines from East St. Louis, Illinois, to Danville, Illinois, a distance of approximately 184 miles. The Intervening Plaintiff, the American Waterways Operators, Inc., is here because of its interest in the legal questions involved.

(b) The volume of sulphur movement from the mines in Texas to Danville, Illinois, is approximately 20,000 tons a year. During the last six months of 1950, the preponderance of the sulphur traffic from Galveston to Danville moved by rail to Galveston, by barge to East St. Louis, and by rail beyond. That movement, however, was by a contract water carrier which has since discontinued operation. Thereafter the sulphur moved from the mines, not through Galveston nor over Plaintiffs' lines, but on a joint through rate over an all-rail route, i. e. from the mines over the lines of the Texas and New Orleans Railroad Company directly to Shreveport, Louisiana, the Texas and Pacific Railway Company to Texarkana, Arkansas, the Missouri-Pacific Railroad Company (Guy A. Thompson, trustee) to East St. Louis, and the Wabash Railroad Company to Danville. The distance over that route from the sulphur mines is approximately 850 miles to East St. Louis, and is approximately 184 miles from East St. Louis to Danville, making a total distance of 1,034 miles from the sulphur mines to Danville. As stated, the sulphur mines are in the Galveston area, but the distance from them to the port of Galveston is approximately 60 miles.

(c) The all rail joint through rates on sulphur (Galveston rate) from the sulphur mines to Danville is $9.184 per ton. The Commission found these rates to be on a "depressed basis" in that the combination local rates which would apply in the absence of such joint through rates is $11.686 or $2.502 higher than such joint rates. Such combination local rates are made up of rates of $8.736 from the mines to East St. Louis, and a local rate of $2.95 from East St. Louis to Danville.

(d) There are no joint barge-rail rates in effect either from the sulphur mines or from Galveston to Danville or any other point.¹ The combination barge-rail rate on sulphur from Galveston to Danville is $8.27, composed of Plaintiffs' joint barge rate of $5.32 from Galveston to East St. Louis and Intervening Defendants' rail rate of $2.95 from East St. Louis to Danville. The combination rate of $8.27 does not include unloading and loading and switching charges, etc., at East St. Louis. However, barge lines absorb, or are willing to absorb such charges at East St. Louis. Such charges are for unloading the barges 44 cents a ton, the switching charges are approximately 30 cents a ton, and other charges are approximately 15 cents a ton.

The price of sulphur at Galveston is $1.50 a ton higher when loaded in barges than when loaded in rail cars 60 miles away at the mines. The higher price reflects in part the rail rate of $1.10 per ton from the mines to Galveston, 11 cents for wharfage, 37 cents for unloading from cars to storage bins, 22 cents for transfer from bins to barges, 4.55 cents for stevedoring, and 1.41 cents for pier rental. Such combination rate does not include and the barge lines do not absorb this Galveston item of $1.50 per ton.

(e) Complainants proposed and were refused the establishment of a joint through route and a joint through barge-rail rate of $7.57 for sulphur, not from the sulphur mines but from Galveston to Danville, to be divided $5.41 for the barges lines from Galveston to East St. Louis, and $2.26 for the rail lines from East St. Louis to Danville. The rate was arrived at by adding $1.01 to the Port Sulphur to Danville rate of $6.66. This proposal contemplated that the barge lines would absorb the charges mentioned at East St. Louis but there was no such commitment respecting the $1.50 charge mentioned at Galveston.

1 — The case involves a construction of the Interstate Commerce Act as amended by the Act of 1940 respecting water carriers, 49 U.S.C.A. § 901 et seq. Plaintiffs claimed before the Commission and claim here that under such Act the combination rates and charges on sulphur over barge-rail route from Galveston, Texas, through East St. Louis, Illinois to Danville, Illinois, were unreasonable, that they discriminated against Plaintiffs, and that the public interest required that a through barge-rail route and joint through barge-rail rates be established with reasonable differentials, etc.

The Commission, after a full hearing (Reports of December 22, 1952, and January 19, 1954) dismissed Plaintiffs' complaint.

Defendants' first contention here is that the findings and conclusions of the Commission are fully supported by the evidence, that its findings are adequate and in full accord with the Act and that its Order...