Florida East Coast Railway Company v. United States

• Decision Date: 08 June 1914
• Docket Number: No. 383,383
• Citation: 58 L.Ed. 1267,34 S.Ct. 867,234 U.S. 167
• Parties: FLORIDA EAST COAST RAILWAY COMPANY, Appt., v. UNITED STATES, Interstate Commerce Commission, Railroad Commissioners of Florida, et al
• Court: U.S. Supreme Court

234 U.S. 167

34 S.Ct. 867

58 L.Ed. 1267

FLORIDA EAST COAST RAILWAY COMPANY, Appt.,

v UNITED STATES, Interstate Commerce Commission, Railroad Commissioners of Florida, et al.

No. 383.

Argued January 15 and 16, 1913.

Decided June 8, 1914.

Messrs. Fred. C. Bryan and Alexander St. Clair-Abrams for appellant.

Mr. Blackburn Esterline and Solicitor General Bullitt for the United states.

[Argument of Counsel from Pages 168-171 intentionally omitted] Mr. Charles W. Needham for the Interstate Commerce Commission.

Mr. Frederick M. Hudson for the Railroad Commissioners of Florida.

[Argument of Counsel from page 172 intentionally omitted] Mr. A. A. Boggs for intervening appellees.

Mr. Chief Justice White delivered the opinion of the court:

The order of the Interstate Commerce Commission concerning which the appellant, hereafter called the East Coast Line, complained before the court below, and which that court refused to enjoin, was made on a second supplemental petition presented in controversies which had been long pending and twice before decided, such controversies involving many railroads, and being concerned with the rates as to pineapples, citrus fruits, and vegetables from places of production in Florida to exterior points of distribution or consumption. While the report here under consideration, made on the second supplemental petition, deals with only a few of the railroads concerned in the previous inquiries, and with only a part of the controversies involved in the previous cases, yet the reports in the previous cases and the reasons stated by the Commission for its action in those cases are so connected with its action complained of in this case that it is impossible to understand this controversy without recurring to and stating the previous reports of the Commission in the controversies to which we have referred.

We observe before coming to make that statement that none of the testimony taken before the Commission in the cases prior to this one is in the record, it having been stipulated that the facts stated by the Commission in its reports in such previous cases should be taken as the facts of such controversies. For the purpose of the statement which we shall make, the record therefore consists of the reports in such previous cases, of the report in this case, and the testimony taken in this case before the Commission and in the court below. The future application of the facts which we shall state will be facilitated by giving a description of the East Coast Line as stated in the several reports of the Commission to which we shall immediately recur.

The East Coast Line is wholly within the state of Florida, the main line extending from Jacksonville south along the Atlantic coast to Miami, a distance of 366 miles, then to Homestead, 28 miles south, and thence across the Florida Keys to Key West. At the time of the final hearing before the Commission on March 2, 1911, the road was not fully constructed, and was only completed and being operated to Knight's Key, about 83 miles below Homestead. The total mileage of the road was about 583 miles, including 477 miles of main line from Jacksonville to Knight's Key and about 106 miles of branch line above Miami. The cost of the construction from Homestead on was enormous, amounting to nearly $175,000 per mile, and the total cost of the extension from Homestead to Knight's Key, 83 miles, nearly equalled the entire cost of the balance of the road, 500 miles. On July 3, 1907, a petition was filed by the Florida Fruit & Vegetable Shippers' Protective Association against the Atlantic Coast Line, the Seaboard Air Line and Southern Railway Companies and the East Coast Line, complaining of and asking a reduction in interstate rates on pineapples, citrus fruits, and vegetables. The East Coast Line was the only one of the defendant railroads whose traffic was confined to the producing regions in Florida because, while the other lines also undoubtedly penetrated to the area of production, their lines were not confined to Florida, but were trunk lines, carrying not only the product committed to them by producers in Florida, but also the products committed by producers to roads like the East Coast Line, which did not extend beyond Florida, and had therefore to be transshipped if destined to points beyond the state by other roads. In coming to make its report in the case thus referred to, the Commission thus stated the general situation of the railroad traffic of all the roads in Florida concerning the subjects under discussion (No. 1168, 14 Inters. Com. Rep. 483):

'The shape and location of the state of Florida is such that these railroads which handle this traffic from the point of production up to the base point necessarily do but a limited business. They extend south considerable distances through a sparsely settled country which neither originates nor consumes a considerable amount of traffic. Some of them reach the seacoast, but none of them connect or can connect with railroads leading beyond, and the amount of through business handled is extremely light. Their traffic is confined almost entirely to bringing out the products which originate upon their lines, and carrying in the supplies which are consumed in the territory served by them. Fruits and vegetables, lumber, naval stores, and in some cases cotton and phosphate rock are the principal commodities carried, and of these, fruits and vegetables produce the most revenue.'

In the report by which the Commission disposed of this controversy (No. 1168, 14 Inters. Com. Rep. 476) it divided the rates to be considered into two classes: (a) gathering charges from production points in Florida to base points of which Jacksonville was the only one on the East Coast Line, and (b) rates from base points to points of final destination in other states, the sum of the two rates being the joint through rate.

Considering the three products whose traffic charges were under consideration, the Commission said:

(a) Citrus fruits:

'From an examination of the elaborate figures which were introduced upon the trial showing the character of the traffic handled by these Florida roads, the conditions under which it is handled, their earnings, and the cost of operation running through a series of years, it is difficult to see how these railroads can be expected to transport in a suitable way this fruit and vegetable traffic from points of production to these basing points for a less sum than they now receive. It is difficult to see how, even upon the present tariff, those lines can, in the immediate future, expect to pay any considerable return upon their investment. We feel that these local rates, although they are high in comparison with other local rates, are as low as should be established under all the circumstances.'

(b) Vegetables:

'The same observations which have been made upon the orange rates to base points apply with equal pertinency to those upon vegetables. They are named by the railroad commission of Florida. They are made with the understanding that they are really parts of through rates from the point of production to the market of consumption. They are low in comparison with other rates because it is understood that this industry is an important one to the state of Florida, and that a low cost of transportation is essential to its development.

'While these local rates are essentially part of the through charge, and should be dealt with by this Commission as such, it is difficult to see how these Florida railroads can render a proper service upon a lower scale of rates than is now applied. It must be remembered that without the railroad this industry could not exist at all, and that to its satisfactory carrying on the character of the service is fully as important as the rate. It is better that these fruits and vegetables should reach the market on time, and in good condition, than that a few cents per box should be subtracted from the carrying charge. There was very little complaint as to the service; nor did the shippers who testified manifest any desire that these carriers should be required to accept less than reasonable compensation for that service. Our conclusion upon this branch of the case is that the present rates up to the base points, while high in comparison with similar rates in other localities, are as low as they ought to be under the conditions obtaining upon these Florida lines, so that here, as in case of oranges, the real question arises upon the rate from the base point to the northern market.'

(c) Pineapples:

'Pineapples are mainly produced in Florida, upon the line of the Florida East Coast Railway, which extends, as already said, down the east side of Florida. This industry has, within recent years, developed rapidly. Florida pineapples to-day sell in all the markets of the United States in competition with foreign pineapples, usually commanding much higher prices than the foreign article. While the period of production in the United States and in Cuba is not exactly the same, still it may fairly be said that the two products do compete.

'It was said that Jansen might be selected as a typical producing point upon the Florida East Coast Railway. This station is 257 miles south of Jacksonville, and the rate on pineapples is 24 cents per box of 80 pounds. Rates from other points are relatively about the same as from Jansen; somewhat lower, it will be seen, for the same distance, than from most producing points upon oranges.'

Presumably, deeming that the particular situation on the East Coast Line as to the character of its business, its location, its cost, etc., etc., required to be specially pointed out in addition to what was said in the passages quoted, the Commission said:

'The Florida East Coast Railway was built as part of a hotel scheme, and its principal business is the carrying of passengers who frequent these Florida winter resorts. Over 50 per cent of its total...