INTERSTATE COMMERCE COM'N v. Martin Brothers Box Co.

• Decision Date: 01 March 1955
• Docket Number: No. 14077.,14077.
• Citation: 219 F.2d 811
• Parties: INTERSTATE COMMERCE COMMISSION and Southern Pacific Company, a Corporation, Appellants, v. The MARTIN BROTHERS BOX COMPANY, a Corporation, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

219 F.2d 811 (1955)

INTERSTATE COMMERCE COMMISSION and Southern Pacific Company, a Corporation, Appellants, v. The MARTIN BROTHERS BOX COMPANY, a Corporation, Appellee.

No. 14077.

United States Court of Appeals, Ninth Circuit.

January 10, 1955.

Rehearing Denied March 1, 1955.

Edward M. Reidy, Chief Counsel, Samuel R. Howell, Asst. Chief Counsel, I.C.C., Washington, D. C., William L. Harrison, Atty., I.C.C., San Francisco, Cal., for appellant Interstate Commerce Commission.

James C. Dezendorf, George B. Campbell, Portland, Or., James E. Lyons, Charles W. Burkett, Jr., San Francisco, Cal., Stanfield Johnson, Washington, D. C., for appellant Southern Pac. Co.

George L. Quinn, Jr., Washington, D. C., Irving Rand, Donald A. Schafer, Portland, Or., for appellee.

Before HEALY, POPE and CHAMBERS, Circuit Judges.

HEALY, Circuit Judge.

In October of 1947 appellee, hereafter generally called Martin, filed a complaint with the Interstate Commerce Commission alleging that during the period January 1 to September 30, 1947, the Southern Pacific Company failed in its duty to provide and furnish complainant with an adequate supply of box cars for the transportation of its manufactured products from its Oakland, Oregon plant to interstate destinations, in violation of § 1(4) and (11) and § 3(1) of the Interstate Commerce Act, 49 U.S.C.A. § 1(4) and (11) and § 3(1).¹ The relief asked was that the Commission enter an order commanding Southern Pacific to provide Martin with adequate and equal car service from Oakland, Oregon, to various destinations, and to pay Martin a sum in excess of two million dollars by way of damages. Southern Pacific intervened and in its answer denied the material allegations of the complaint.

The matter was assigned for formal hearings before an examiner for the Commission. Following such hearings the examiner made a proposed report recommending that the Commission find that Southern Pacific failed in its duty to furnish adequate car service to Martin and that damages be awarded the latter in the amount of approximately $135,000 for such failure.² Exceptions to the examiner's report were taken by Martin and Southern Pacific, and after argument Division 3 of the Commission made the report and order here under attack. In its report the Commission, under the heading "Conclusions," made, among others, the following ultimate finding: "We find that complainant has failed to establish that Southern Pacific during the complaint period engaged in any unreasonable or otherwise unlawful practice, as alleged, in violation of section 1 of the act in furnishing or not furnishing cars to complainant, * * * or that Southern Pacific subjected complainant to any undue prejudice in violation of section 3." The complaint was ordered dismissed.³ Martin petitioned for reconsideration and its petition was denied by the entire Commission by unanimous vote of its membership.

Martin then filed a complaint in the court below naming the Commission and the United States as defendants. The complaint asked that the Commission's order be set aside as invalid for a variety of reasons. One of these was that the order lacks a rational basis because the findings do not support the Commission's conclusions. Another was that the Commission's findings of fact show that Martin was damaged and is entitled to reparation, and that such findings support no other conclusion. Other reasons assigned were that the Commission misapplied the law and that its action was arbitrary and capricious. The court was asked to enjoin and set aside the order and to remand the case to the Commission with directions to award such damages as the court shall find Martin to be entitled to. Southern Pacific again intervened. On the basis of the record before the Commission the court made findings of fact and conclusions of law to the effect that the Commission's report and order are not supported by substantial evidence. Judgment was entered vacating the order and remanding the cause to the Commission with directions to take further action not inconsistent with the court's decision. The matter is before us on appeal from the judgment.

Preliminary to discussion of the case it is well to notice the narrow scope of judicial review of the Commission's orders. It is a long-established principle that such orders are not to be set aside by a court if they are within the Commission's statutory power and are supported by substantial evidence. Interstate Commerce Commission v. Union Pacific R. R. Co., 222 U.S. 541, 547, 32 S.Ct. 108, 56 L.Ed. 308. To consider the weight of the evidence before the Commission, or the soundness of the reasoning by which its conclusions were reached, is beyond the province of the courts. Virginian Ry. Co. v. United States, 272 U.S. 658, 663, 47 S.Ct. 222, 71 L.Ed. 463. The courts have historically ascribed to the findings of the Commission "the strength due to the judgments of a tribunal appointed by law and informed by experience." Illinois Central R. R. Co. v. Interstate Commerce Commission, 206 U.S. 441, 454, 27 S.Ct. 700, 704, 51 L.Ed. 1128. It must not be forgotten that the reviewing court was here confronted with transportation problems involving many factors and calling for the exercise of informed administrative judgment. As was observed by the Supreme Court in a case involving rates, "The stuff of the process is fluid and changing — the resultant of factors that must be valued as well as weighed. Congress has therefore delegated the enforcement of transportation policy to a permanent expert body and has charged it with the duty of being responsive to the dynamic character of transportation problems." Board of Trade of Kansas City, Mo. v. United States, 314 U.S. 534, 546, 62 S.Ct. 366, 372, 86 L.Ed. 432.

It appears from the trial court's decision that it regarded the conclusions of the Commission, quoted above, as conclusions of law rather than as findings of ultimate fact.⁴ Such approach is erroneous. The courts have repeatedly pointed out that whether given rates or practices are "reasonable" or "unduly prejudicial" are factual determinations confided by Congress to the judgment and discretion of the Commission. That this must be so is manifest since the sections of the Act involved contain no definition of what is reasonable or unreasonable or what constitutes undue prejudice. We quote from or summarize a few of the decisions. In Virginian Ry. Co. v. United States, supra, 272 U.S. at page 665, 47 S.Ct. at page 225, it was held: "The finding of reasonableness, like that of undue prejudice, is a determination of a fact by a tribunal `informed by experience.'" In Nashville C. & St. L. Ry. v. Tennessee, 262 U.S. 318, 322, 43 S.Ct. 583, 585, 67 L.Ed. 999, it was said: "Whether a preference or discrimination is undue, unreasonable or unjust is ordinarily left to the Commission for decision; and the determination is to be made, as a question of fact, on the matters proved in the particular case." And in Swayne & Hoyt v. United States, 300 U.S. 297, 304, 57 S.Ct. 478, 81 L.Ed. 659, the Court said that whether a discrimination in rates or services is undue or unreasonable has always been regarded as peculiarly a question committed to the administrative body, based upon an appreciation of all the facts and circumstances affecting the traffic. Cf. also Johnston Seed Co. v. United States, 10 Cir., 191 F.2d 228.

In its report the Commission took notice of background conditions prevailing during the complaint period, saying:

"After the close of World War II, the Nation as a whole experienced a great industrial development, and during 1947 the Nation\'s railroads experienced for the first time since 1920, except in the war period, an average daily shortage of cars. * * * During 1947 the national daily shortage was 18,672 cars, and the defendant was individually faced with an average daily shortage of 583 cars of the types used for the transportation of forest products. Because of the sizeable surplus experienced prior to World War II, the Nation\'s railroads, including the defendant, did not anticipate the unusual demand for cars that arose in 1947.

"In addition to the increases in general traffic on the defendant\'s lines during and after World War II, it also experienced a tremendous increase in forest products traffic. * * * The defendant is the principal carrier in Oregon, and the number of cars loaded with forest products on its Portland division increased from 80,675 in 1939 to 162,418 in 1947.

"Another factor affecting the defendant\'s car supply in 1947 was a reversal of the main traffic flow over its lines after the war. During the war the main flow was westward, but with the close of hostilities in the Pacific theater, the main flow became eastward. During 1947 the defendant originated and delivered to its connecting carriers many more loaded cars than it received from such connections. During the war and postwar periods it exerted extensive efforts to conserve and increase its facilities. On these facts the defendant cannot be held accountable for general car shortages on its lines within the period covered by this complaint."

This resume of conditions has support in the record, and indeed, in many of its aspects, in common knowledge. In such circumstances it was inevitable that carriers would be faced with complaints by shippers, and the record shows that during the period in question Southern Pacific received thousands of such complaints.

The Commission impartially and at great length summarized the evidence adduced both by the complaining party and by the carrier. In no particular do we discover in the summary a distortion of the record made before the examiner.⁵ While much of the summary recites evidence on Martin's part which would support a ruling in its favor, the resume of the carrier's showing points substantially in the opposite direction. For example, we quote a portion of the report:

"In support of its...