Illinois Cent. Gulf R. Co. v. Golden Triangle Wholesale Gas Co.

• Decision Date: 21 December 1978
• Docket Number: No. 77-1613,77-1613
• Citation: 586 F.2d 588
• Parties: ILLINOIS CENTRAL GULF RAILROAD COMPANY, Plaintiff-Appellee, v. GOLDEN TRIANGLE WHOLESALE GAS COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 588

586 F.2d 588

ILLINOIS CENTRAL GULF RAILROAD COMPANY, Plaintiff-Appellee, v. GOLDEN TRIANGLE WHOLESALE GAS COMPANY, Defendant-Appellant.

No. 77-1613.

United States Court of Appeals, Fifth Circuit.

Dec. 21, 1978.

Gary L. Geeslin, Columbus, Miss., for defendant-appellant.

Joseph P. Wise, Jackson, Miss., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Mississippi.

Before COLEMAN, CLARK and RUBIN, Circuit Judges.

ALVIN B. RUBIN, Circuit Judge:

Golden Triangle, a shipper on Illinois Central's railroad lines, made a lease with the Railroad under which it had non-exclusive use of trackage within one of the Railroad's yards to store railroad cars containing a hazardous material for a nominal rental. The purpose of this agreement was to avoid the payment of the charges required by a tariff that would otherwise be applicable. The district court held that the tariff was applicable despite the effort to avoid its terms, and that the Railroad was not estopped, indeed was required, to collect the tariff-exacted charges. We affirm this manifestly correct result.

I. FACTS

Golden Triangle (Gas Company) operates a low pressure gas plant at North Columbus, Mississippi, where it receives railroad tank car shipments of liquified petroleum (LP) gas. In 1969, Butane Corp., Golden Triangle's corporate predecessor, did not have enough railroad trackage in its own yard to hold the number of cars necessary for the proper operation of its business. It did not want to pay the usual railroad storage charges, and the Railroad wanted to keep its business. Therefore, in September, 1969, the Gas Company entered into a lease agreement with the Columbus and Greenville Railway, Illinois Central's predecessor. ¹ In return for $36 per month, the Railroad leased to the Gas Company 600 feet of track in its own railroad yard, enabling the Gas Company to store tank cars loaded with LP gas on the Railroad's track until it was ready to receive them in the North Columbus yard. The "leased" track had three switches, one at each end and one that led from the middle into the main line. Although the lease gave the Gas Company the right to use the track for storage purposes, the Railroad reserved the right to use them for the purpose of handling other business. The record contains no evidence concerning whether or not the Railroad used the track for any purpose other than storing the Gas Company's tank cars.

After the agreement had been in effect almost four years, the Director of the Bureau of Operations for the Interstate Commerce Commission wrote the Railroad's Vice President informing him that the Maurer Tariff (Freight Tariff 4-I, B.B. Maurer agent, ICC H-36) applied to the Gas Company's storage of the tank cars containing LP gas on the leased track, and directing the Railroad "to take such action as may be necessary to correct the situation." The Maurer Tariff requires the payment of storage charges for each railroad car containing a hazardous substance, and its application would result in substantial additional expense to the Gas Company. The Railroad subsequently issued corrected freight bills and demanded their payment. When the Gas Company refused to pay, this action was brought seeking approximately $28,000 for charges allegedly owed under the Maurer Tariff, and a lesser amount for charges allegedly owed under the Pace Tariff ² (a tariff that governs stopping cars containing LP gas in transit for track storage).

Both parties stipulated that there were no genuine disputes concerning material issues of fact, and that, if the tariffs were found to be applicable, the amounts sought were proper. The district court agreed with the ICC that the Pace Tariff was not applicable, and no appeal has been taken from that determination. The district court did hold, however, that the Maurer Tariff was applicable, and the Gas Company appeals that determination.

II. APPLICABILITY OF THE MAURER TARIFF

The Maurer Tariff is applicable to hazardous materials held on "railroad premises;" shipments held in railroad cars are deemed to be on "railroad premises" if: (1) such cars are located on track that a railroad "provides for its own use and purposes or for general public use;" or (2) such cars are situated on any other track located inside a railroad's right-of-way, yard or terminals, "except tracks located on, or within the confines of, property owned or leased by an industry." Rule 6, § 2, Freight Tariff 4-I (ICC H-36). The district court held that the Gas Company's cars were located on railroad premises, as defined in the first branch of the above definition, because, by the terms of the lease agreement, the Railroad reserved the right to use the track on which the shipments were stored for its own purposes. The court correctly concluded that the track was held for the Railroad's own uses and purposes, and, therefore, constituted "railroad premises."

Even though there is no evidence that the leased track was actually used by the Railroad for its own purposes, the retention of the right to use it means that the track nevertheless was subject to the Railroad's control; it was not subject to the exclusive use of the Gas Company. The tariff is intended to promote public safety by encouraging the prompt shipment and unloading of dangerous materials whose storage in railroad cars produces a risk of serious accident. Cf. Western Petroleum Refiners Association v. Aberdeen & Rockfish Railroad, 1922, 66 ICC 58, 62 (predecessor tariff); International Agricultural Corp. v. Atlanta & West Point Railroad, 1914, 32 ICC 199, 200-01 (similar tariff). Its purpose could be easily avoided if its application were evaded by permitting private use of railroad tracks in conjunction with their contemporaneous public use. Three cases involving predecessor tariffs with different definitions of railroad premises recognized that private tracks in certain circumstances could be considered railroad premises for purposes of applying tariffs on storage of hazardous materials. See Malloy and Dickenson v. Missouri-Kansas-Texas Railroad, 1928, 140 ICC 576; Skelly Oil Co. v. Missouri-Kansas-Texas Railroad, 1927, 123 ICC 517.

Even if the first part of the definition of railroad premises provided in Rule 6 were not applicable in this case, the arrangement in question involved "railroad premises" under its second portion. That branch of the definition provides an exception for track located on Property owned or leased by an industry, as opposed to Track leased by an industry. This language, viewed in the light of the purpose of the Maurer Tariff, suggests an intention to except from the tariff private sidings located on industry property and private track situated on property not used by a railroad to serve the general public; in either situation serious danger to the public would not be likely in the event of an accident. Cf. Malloy and Dickenson, supra; Skelly Oil Co., supra. The exception does not appear to have been intended to cover property in a railroad yard primarily used for the purpose of serving the general public.

Moreover, we are not here concerned merely with the past operation of the tariff; to adopt the Gas Company's views would permit future avoidance of the safety purposes of the Maurer Tariff. As the district court noted, "(t)he purpose of the Maurer Tariff clearly would be stultified if imposition of fees under the tariff could be avoided by a consignee of hazardous materials through the leasing, for a nominal amount, of storage tracks located in a railroad yard in an urban area." Illinois Central Gulf Railroad v. Golden Triangle Wholesale Gas Co., N.D.Miss.1976, 423 F.Supp. 679, 682-83.

III. ESTOPPEL TO ASSERT THE MAURER TARIFF'S APPLICABILITY

The Gas Company contends, as it did in the district court, that the Railroad should be estopped from collecting the hazardous storage charges because the Railroad induced the Gas Company to enter the lease through assurances that the storage charges for hazardous substances would not be collected. In addition, the Gas Company asserts that the parties contractually agreed that the tariff would not apply, and that the Railroad should not be allowed to assert the invalidity of their agreement. Both of these arguments are without merit.

The Interstate Commerce Act was designed to provide uniformity in charges for services, and, thereby, to prevent rate discrimination. See, e. g., Midstate Horticultural Co. v. Pennsylvania Railroad Co., 1943, 320 U.S. 356, 361, 64 S.Ct. 128, 130, 88 L.Ed. 96, 101; Pittsburgh, Cincinnati, Chicago, & St. Louis Railway v. Fink, 1919, 250 U.S. 577, 581, 40 S.Ct. 27, 27, 63 L.Ed. 1151, 1153; Boston & Maine Railroad v. Hooker, 1914, 233 U.S. 97, 112, 34 S.Ct. 526, 528, 58 L.Ed. 868, 876. If a carrier could modify its tariffs without filing a new tariff, it could engage in rate discrimination. Similarly, to permit a party to invoke estoppel in cases in which a recipient of services...