Feinstein v. New York Central Railroad Co.

• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)
• Writing for the Court: Edward F. Butler, New York City, for defendant
• Citation: 159 F. Supp. 460
• Parties: William N. FEINSTEIN and Bernard Fatell, co-partners doing business under the firm name and style of Wm. N. Feinstein & Co., Plaintiffs, v. The NEW YORK CENTRAL RAILROAD CO., Defendant.
• Decision Date: 12 March 1958

159 F. Supp. 460

William N. FEINSTEIN and Bernard Fatell, co-partners doing business under the firm name and style of Wm. N. Feinstein & Co., Plaintiffs,
v.
The NEW YORK CENTRAL RAILROAD CO., Defendant.

United States District Court S. D. New York.

February 10, 1958.

On Submission of Conflicting Forms of Judgment March 12, 1958.

159 F. Supp. 461

Norman Coplan, New York City, for plaintiffs.

Edward F. Butler, New York City, for defendant

HAND, Circuit Judge.

The plaintiffs are produce merchants in New York City. One of the chief products in which they deal is onions, which are shipped to the plaintiffs from various states, and which the defendant delivers at Pier 17 in New York City. The cars in which they come are moved by various

159 F. Supp. 462

carriers from the point of origin to the point of destination under a line-haul rate, and the onions are either the property of the plaintiffs, or are shipped to them as agents to be handled on consignment. When fresh fruits and vegetables come to New York from the south and west, the cars are put on car floats at Jersey City, ferried across the Hudson River, and unloaded by the rail carriers at "pier stations" in New York. The delivering carriers, including not only the defendant, but the Pennsylvania Railroad Co., the Erie Railroad Co., and the Baltimore & Ohio Railroad Co., do not have sufficient "team tracks" in the lower part of the City upon which to place the cars until the consignees can unload them. To avoid the expense of furnishing enough "team tracks" for that purpose the carriers do not let the consignees unload the cars as is ordinarily the practice, but ferry them across the Hudson River in car floats which they make fast to "pier stations" in the lower part of the City. It is not possible for the consignees to put their trucks alongside the floats and unload the fruits and vegetables themselves, so the carriers unload the goods and place them where they are accessible to the consignees. The action at bar is to recover charges collected by the carriers for this service. Various shippers and others protested against the charge in 1947 on the ground that delivery was part of the defendant's transportation service and should be included in the line-haul rate. These protests the Commission considered under Investigation and Suspension Docket No. 5500, and on October 4, 1948, ruled that the proposed charge was "just and reasonable," (272 I.C.C. 648). It became effective on November 1, 1948; but on petition for rehearing the Commission re-opened the proceeding, and after additional hearings found on May 7, 1952 (286 I.C.C. 119) that the charges were not shown to be "just and reasonable," cancelled the "schedules" and discontinued the proceeding, but "without prejudice to the establishment of charges in conformity with" certain rates lower than those in force at the time. Acting upon the permission so given, the defendant filed a schedule, publishing rates at the authorized amounts; and after an unsuccessful petition for a rehearing, the plaintiffs in September, 1952, filed a complaint with the Commission under § 13 (1) of the Interstate Commerce Act, 49 U.S.C.A. § 13(1); against the reduced charges, which the Commission dismissed saying that "the circumstances and conditions with respect to the approved unloading charges have not materially changed since the same issues were decided by the Commission" in the original proceeding

Thereupon an action was started in Florida in a "three-judge" district court to annul the orders of 1948 and 1952, which that court dismissed on August 31, 1953 (Florida Citrus Commission v. United States, D.C., 114 F.Supp. 420). The plaintiffs appealed from this judgment to the Supreme Court which vacated the judgment and remanded the several proceedings involved to the Commission for further proceedings on July 7, 1954. (Secretary of Agriculture v. United States, 347 U.S. 645, 74 S.Ct. 826, 98 L. Ed. 1015.) On August 23, 1954, the Commission re-opened the proceedings and the complaints, and concluded its proceedings on June 28, 1956, by finding "that the charges in issue are not shown to be just and reasonable. The prior findings are modified accordingly." The schedules establishing the charges were cancelled on October 16, 1956, and the action at bar to recover those paid in the past was begun on December 3, 1956.

The first point to decide is whether the plaintiffs' claim for reparations requires an express finding by the Commission that the unloading charges collected by the defendant were unlawful, during the period not barred by the Statute of Limitations (§16(3) of the Act, 49 U.S. C.A. § 16(3)), or whether that result necessarily follows from the Commission's order of July 28, 1956, cancelling the charges for the future. The plaintiffs' argument is that no such finding was necessary because the charges were for a service that was part of the delivery

159 F. Supp. 463

and that delivery: i. e., making the goods accessible to the consignee, is included in the line-haul rate. The charges being therefore in excess of an established rate, were unlawful per se and recoverable under § 9 of the Act, 49 U.S. C.A. § 9 like any other charge in excess of a published rate. That was the position of the minority of the Supreme Court in Secretary of Agriculture v. United States, supra, 347 U.S. at page 655, 74 S.Ct. at page 832; but it was at variance with the decision of the majority. Not only did the majority refuse to grant judgment for the plaintiffs which, so far as I can see, would have been inevitable, if such charges were necessarily attributable to services covered by a line-haul rate, but the Court's reasoning pre-supposed that the Commission might validly have supported the charges, if the carriers had shown them to be "just and reasonable." It is true that Frankfurter, J., said on page 652 of 347 U.S., on page 831 of 74 S.Ct. that "the normal course * * * would have been to reexamine the sufficiency of the line-haul rate, or to initiate a new division of the existing line-haul rate," nevertheless "the Commission was not precluded from following a procedure fairly adopted to the unique circumstances of this case. The Commission may not unnaturally have felt that it would be undesirable to revise the line-haul rate with its inevitable effect on the entire tariff structure, in order to deal appropriately with the special localized situation presented at the New York piers. Or the Commission might well have thought that a redivision of the line-haul rate would not be appropriate for the substantial additional cost here involved." Again on page 653 of 347 U.S., on page 831 of 74 S.Ct.: "We do not know whether the Commission has disregarded its own findings that the unloading here is a pre-requisite to delivery of the goods; or whether, in order to meet an unusual situation, the Commission has modified the normal doctrine that delivery is the responsibility of the carrier * * * or whether * * * a service necessarily encompassed by the line-haul rate" may be "separately restated without examining the sufficiency of the line-haul rate to cover it."

I can only conclude that the Court refused to hold that the charges were necessarily unlawful, and implied that the Commission might allow them as an addition to the line-haul rate if it found that, all things considered they, plus the line-haul rate, were no more than "just and reasonable" for the services rendered. This is confirmed by what it said on page 647 of 347 U.S., on page 828, of 74 S.Ct.: "The general rule is that it is the responsibility of the carrier, as part of the transportation service covered by the line-haul rate, to `deliver' the goods by placing them in such a position as to make them accessible to the consignee, * * * but these are not inflexible rules. The law recognizes and reflects the practicalities of transportation by rail and the diversities to which they give rise."

However, although the Commission's order of 1956 put an end to the charges for the future, it does not follow that it also decided that they had been unlawful during the period left open by § 16(3). Even in a suit in equity a decree for an injunction speaks from the date of its entry, and before there can be an accounting for past profits or damages the court must find that the defendant had been guilty in the past of the same wrong. It is true that...