Illinois Cent. R. Co. v. United States

• Citation: 3 F. Supp. 1005
• Decision Date: 14 June 1933
• Docket Number: No. 1012.,1012.
• Parties: ILLINOIS CENT. R. CO. et al. v. UNITED STATES et al.
• Court: U.S. District Court — District of Delaware

3 F. Supp. 1005

ILLINOIS CENT. R. CO. et al. v. UNITED STATES et al.

No. 1012.

District Court, D. Delaware.

June 14, 1933.

R. S. Outlaw and Elmer A. Smith, both of Chicago, Ill., H. H. Larimore, of St. Louis, Mo., and E. Ennalls Berl (of Ward & Gray), of Wilmington, Del., for plaintiffs.

Harry L. Underwood, of Washington, D. C., for Interstate Commerce Commission.

Elmer B. Collins, Sp. Asst. to Atty. Gen., and Leonard E. Wales, U. S. Atty., of Wilmington, Del., for the United States.

A. K. Shipe and John J. Esch (of Esch, Kerr, Woolley, Taylor & Shipe), both of Washington, D. C., for American Barge Line Company and others, interveners.

Clark C. Wren, of Washington, D. C., for Inland Waterways Corporation, intervener.

Harry H. Peterson, Atty. Gen. of Minnesota, for Upper Mississippi & St. Croix River Improvement Commission of Minnesota and others.

George C. Lambert, of St. Paul, Minn., A. C. Wiprud, of Minneapolis, Minn., Mortimer H. Boutelle, Sp. Asst. Atty. Gen. of Minnesota, for city of Minneapolis, Minn., and others.

Before THOMPSON, Circuit Judge, and DICKINSON and NIELDS, District Judges.

Findings of Fact.

THOMPSON, Circuit Judge.

1. Plaintiffs herein are common carriers by railroad subject to the Interstate Commerce Act 49 USCA § 1 et seq., and engage in the transportation of cotton from points of origin in the state of Arkansas and from Memphis, Tenn., to destinations in the states of Pennsylvania, New York, New Jersey, Massachusetts, Rhode Island, and Connecticut.

2. On August 29, 1932, plaintiffs and other railroad carriers, because of severe competition from unregulated truck and water carriers, established carload rates upon cotton from points of origin in the state of Arkansas and from Memphis, Tenn., to destinations in the states of Pennsylvania, New York, New Jersey, Massachusetts, Rhode Island, and Connecticut, upon a basis substantially and materially lower than the any-quantity rates theretofore prevailing, and on November 16, 1932, plaintiffs and other railroad carriers further reduced said carload rates in the belief that such further reduction was necessary to meet the competition above referred to.

3. By petitions dated October 31, 1932, and November 5, 1932, the American Barge Line Company applied to the commission to enter an order requiring the railroads participating in the said carload cotton rates to participate with it in joint through rail-barge-rail and barge-rail carload rates from the same origins to the same destinations upon a basis lower than the all-rail carload rates. The natural and normal effect of such participation in through routes and rates with the American Barge Line Company would be to divert cotton, in carloads, from the all-rail routes previously established to the lower rail-barge-rail and barge-rail routes.

4. By petitions dated November 12, 1932, and November 14, 1932, the carriers operating both east and west of the Mississippi river, including plaintiffs in this action, prayed the commission to set down for hearing the said applications of the American Barge Line Company, and represented to the commission in their said petitions that without a full and fair hearing, after reasonable notice, at which hearing carriers by railroad, including plaintiffs, shippers, and other parties in interest, and representatives of the American Barge Line Company, should be permitted to appear and offer testimony and examine and cross-examine witnesses offered by all parties in any respect interested therein, the commission could not properly and justly determine the issues presented by such applications. The carriers by railroad further averred specifically that without such hearing the commission would be without proper evidence to determine:

(a) Whether carriers by railroad, including certain of these plaintiffs, should be required to join with the American Barge Line Company in establishing through rail-barge-rail rates and through barge-rail rates on cotton, in carloads, from Arkansas and Memphis, Tenn., to the destination territory heretofore described;

(b) Whether such through rail-barge-rail rates and barge-rail rates, or either of them, should be lower or the same as the through all-rail rates then in effect;

(c) What through routes, if any, should be required;

(d) What rail-barge-rail routes and barge-rail routes, if any, should be established; and

(e) What differential, if any, should be maintained for the water-rail routes under the all-rail routes.

5. In neither the petitions of the American Barge Line Company, dated October 31, 1932, and November 5, 1932, nor in the petitions or replies of the carriers dated November 12, 1932, and November 14, 1932, are there set forth any facts or evidence necessary to a determination by the commission of the issues presented by the applications of the American Barge Line Company. The petitions of the American Barge Line Company substantially set forth solely the ultimate conclusion that the establishment of rail and water rates there requested was desirable and in the public interest, and the petitions or replies of the carriers set forth in substance only a denial of such ultimate conclusion and a prayer for a hearing.

6. The Interstate Commerce Commission declined to grant to the railroad carriers a hearing as prayed in their petitions of November 12, 1932, and November 14, 1932, and without such hearing, on December 10, 1932, entered its said second supplemental report and order in Ex parte 102, Application of American Barge Line Company, in which plaintiffs and certain other carriers by railroad named therein were required to join with the American Barge Line Company in establishing, on or before January 25, 1933, upon fifteen days' notice, joint rail-barge-rail rates on cotton, in carloads, from the origin territory to the destination territory above described, upon a basis 8, 6, and 4 cents lower than the all-rail rates between the same points, dependent upon the application of varying minimum weights.

7. The said second supplemental order of the commission was made without evidence to support it, and there is no record before the commission which may be examined by a court if called upon to determine the legality or validity of the commission's order.

8. By petitions dated December 30, 1932, and January 7, 1933, the southwestern carriers by railroad, plaintiffs herein, on their own behalf and on behalf of other carriers by railroad similarly situated, requested the commission to vacate and set aside the said second supplemental order of December 10, 1932; to grant a reconsideration of all matters by the entire commission; in connection with such reconsideration to afford said railroads a hearing prior to the effective date of any order; and to extend the effective date of said second supplemental order of December 10, 1932, in order to afford the commission an opportunity to pass upon said petitions. The said petitions above referred to were denied by the commission in its order of January 18, 1933.

9. By appropriate orders of the commission the said second supplemental order of the commission of December 10, 1932, has been extended to become effective June 1, 1933, upon ten days' notice to the public.

10. The said second supplemental order of the commission will require the railroads serving the origin and destination territories involved to participate in joint through rail-barge-rail and barge-rail rates from points of origin in Arkansas and Memphis, Tenn., to destinations in the states of Pennsylvania, New York, New Jersey, Massachusetts, Rhode Island, and Connecticut, upon a basis 4, 6, and 8 cents lower than the corresponding all-rail rates between the same points, and to observe such rail-barge-rail and barge-rail rate so construed as a maximum rate as long as plaintiffs maintain all-rail carload rates on cotton between the same points of origin and destination heretofore referred to.

11. The said second supplemental order of the commission of date December 10, 1932, if made effective, will require carriers by railroad whose lines serve the state of Arkansas to participate in joint rail-barge-rail rates on cotton, in carloads, from Arkansas to the destination territory heretofore described, substantially lower than contemporaneously in effect via the all-rail routes in which such carriers now participate. In addition, such order will require carriers by railroad whose lines extend from Arkansas points to the St. Louis gateway to deliver cotton to the barge line at Memphis, Tenn., for transportation by water to Pittsburgh, Pa., in many instances short-hauling such carriers and depriving them of the full use of their lines of railroad.

12. Such carriers would, in the event the cotton is delivered to the barge line at Memphis, Tenn., receive less revenue than if such cotton were transported over all-rail routes to the St. Louis gateway and there delivered to eastern rail connections.

13. Carriers by railroad, plaintiffs in this action, who operate lines of railroad extending from the St. Louis gateway to the destination territory heretofore described, would, as to cotton moving rail-barge-rail, if the order of the commission referred to becomes effective, take such cotton at Pittsburgh, Pa., instead of at St. Louis, and would thereby be deprived of the use of their lines of railroad extending from the St. Louis gateway to Pittsburgh, Pa., and would receive less revenue than such carriers would receive if they enjoyed an all-rail haul from the St. Louis gateway to the destination territory involved under the all-rail rates now in effect.

14. Carriers by railroad serving Memphis, Tenn., with lines of railroad located west of Pittsburgh, as to cotton moving barge-rail, would be deprived of participation in the transportation of cotton, in carloads, moving from points in Arkansas and from Memphis, Tenn., to the destination territory before set out. Lines of railroad operated by...