Koppel, Inc. v. U.S., C-G-FG
| Decision Date | 26 December 1979 |
| Docket Number | No. 78-1463,C-G-FG |
| Citation | 612 F.2d 1264 |
| Parties | KOPPEL, INC., Petitioner, and Atchison, Topeka and Santa Fe Railway Company, Bunge Corporation andrain Company, Inc., Intervening Petitioners, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, and Southern Pacific Transportation Company, Intervening Respondent. |
| Court | U.S. Court of Appeals — Tenth Circuit |
L. John Osborn, Washington, D. C. (Fritz R. Kahn, Andrew P. Goldstein, Washington, D. C., John Jordan, Wichita, Kan., Landon H. Rowland, Kansas City, Mo., Verner, Liipfert, Bernhard & McPherson, Washington, D. C., with him on the brief), for petitioner Koppel, Inc., and intervening petitioners Bunge Corp. and C-G-F Grain Co., Inc.
Leland E. Butler, San Francisco, Cal. (Frederick G. Pfrommer, San Francisco, Cal., with him on the brief), for intervening petitioner Atchison, T. & S. F. Ry. Co.
John MacDonald Smith, San Francisco, Cal. (Theodore Epstein, Jr. of Epstein, Lozow & Preblud, Denver, Colo., with him on the brief), for intervening respondent Southern Pac. Transp. Co.
H. Glenn Scammel, Atty., I. C. C., Washington, D. C. (Mark L. Evans, Gen. Counsel and Frederick W. Read, III, Associate Gen. Counsel, I. C. C., Washington, D. C., and John H. Shenefield, Asst. Atty. Gen., John J. Powers, III, Asst. Chief App. Section, Peter De La Cruz, Atty., Antitrust Division, Dept. of Justice, Washington, D. C., with him on the brief), for respondents United States of America and I. C. C.
Before HOLLOWAY, BARRETT and DOYLE, Circuit Judges.
Koppel, Inc., Bunge Corporation, and C-G-F Grain Company, Inc., petitioners-appellants, hereinafter collectively referred to as Shippers, appeal from a declaratory order of the Interstate Commerce Commission (ICC) finding and concluding that certain provisions of rate two tariffs are not applicable to transcontinental shipments of corn and grain sorghum from Nebraska origin points to destinations in California's Imperial Valley.
Shippers are merchandisers of grain and market grain, who transport their goods from points in Nebraska on the Burlington Northern (BN) railroad lines to the Imperial Valley on the Southern Pacific's (SP) railroad lines. Although the feedlots in the Imperial Valley require grains year round on a regular basis, they are not equipped with adequate storage facilities. Shippers, therefore, maintain grain elevators in Kansas on the lines of the Atchison, Topeka, and Santa Fe Railway Company (ATSF) whereby they can ship stored grain as needed. Shipment via ATSF not only affords Shippers the opportunity to utilize their storage facilities but also affords them "transit privileges", i. e., a break in the transportation between origin and ultimate destination for processing or storage of the commodity without sacrificing the joint through rate.
Under Part 5 of Item 3295, Trans-Continental Freight Bureau Freight Tariff 45-N, favorable rates were allowed for grains moving from Nebraska to California. Under Tariff 45-N, Item 4500, a general routing provision, provided that the gateway routing restrictions published in the General Routing Guide, TCFB Tariff 5 controlled, unless otherwise specifically provided in individual items of Tariff 45-N. Under Tariff 5, SP agreed to accept Imperial Valley bound traffic from ATSF at Deming, New Mexico, and El Paso, Texas, but would not generally interchange such traffic with ATSF at points known as California junctions. Shippers believed that these provisions notwithstanding, Note 33(d)(2) of Item 3295, Tariff 45-N provided an exemption to the general routing provisions and allowed for shipment via ATSF through the California junctions at the lower (Part 5) rates.
From 1972 to 1975 Shippers regularly moved feed grains from Nebraska origins to California destinations via BN-ATSF-California junctions-SP-Imperial Valley at the lower, more favorable Part 5 rates. Questions did arise, however, during this period concerning the applicability of the lower rates over this route. On April 24, 1972, SP wrote one Shipper stating that this route would not apply. Shippers thereafter requested an informal ICC opinion. On July 23, 1973 John R. Kuehn, Chief of the ICC's Section of Rates and Informal Cases, concurred with the Shippers that Note 33(d)(2) did publish an exception to the general routing provisions and permitted the use of a California junction routing to Imperial Valley destinations. Kuehn stated, however, that "It is understood, of course, that the view expressed is informal and not binding upon either the shipper or the carrier . . .". On April 11, 1974, in a letter written on a three party letterhead, ATSF, BN and SP notified Garvey, a Shipper involved herein, that the three carriers did not agree with Kuehn's informal opinion and that they "will not be bound by it". It is uncontested that during this period bills of lading were submitted which claimed the disputed rate and route. 1
On May 3, 1976, SP notified Shippers that it would no longer accept bills of lading for grain shipments routed BN-ATSF-California junctions-SP to Imperial Valley destinations at the lower Part 5 through rate. On June 14, 1976 Shippers filed a petition for declaratory order for tariff interpretation with the ICC seeking a ruling as to whether the lower Part 5 rates were applicable to shipments routed via BN-ATSF-California junctions-SP to Imperial Valley destinations. SP replied, contending that the lower Part 5 rates applied only to shipments via the available gateways in New Mexico or Texas, i. e., Deming or El Paso. On January 4, 1977, the ICC, in a brief order, found in favor of SP.
Upon further petition by ATSF and Shippers to submit additional evidence, the ICC reopened the proceedings on a De novo basis. Thereafter, Shippers filed further evidence with the ICC supported by ATSF, seeking an interpretation permitting routing via California junctions. BN and SP submitted statements in opposition. On October 13, 1977, an ICC Administrative Law Judge (ALJ) entered a decision that the lower rate would not apply over the routing sought by Shippers. On appeal, the ICC affirmed this determination, concluding that Note 33(d)(2) did not establish an exception to the general routing provisions of Tariff 5.
A petition for review was filed with this Court on June 9, 1978, but held in abeyance pending an additional appeal to the ICC. On March 26, 1979, the ICC, by a full Commission vote, entered a decision affirming its prior decision and that of the ALJ that Shippers were not entitled to the lower rate over the ATSF-California junctions route. The ICC noted, Inter alia:
The issue in this proceeding is whether TCFB Tariff 45-N, I.C.C. 1850, Part 5 of Item 3295 series applies on westbound movements of corn and grain sorghum from Nebraska origins to destinations in Imperial Valley, CA. By decision served October 13, 1977, the Administrative Law Judge found that the rates were inapplicable to the movements in question. That decision was affirmed by Division 1 by decision served May 2, 1978 . . .
Tariff 45-N contains a general routing provision, Item 4500, which requires use of gateways listed in TCFB Tariff 5-B, I.C.C. 1674, unless specifically provided otherwise in individual items. Since the routing preferred by petitioners does not pass through gateways specified in Tariff 5-B, the proposed routing is unavailable unless an exception can be found in another item of that tariff.
Petitioners contend that the prior decisions were in error for failing to recognize that Item 3295, Note 33(d) 2 of Tariff 45-N contains such an exception. Note 33(d) 2 provides as follows:
From points on or via the BN when to points taking Rate Basis 4, 5 or 6, rates only apply via Denver, CO., Cheyenne, WY., or Sidney, NE., thence via gateways opposite destinations in TCFB Tariff 5 (See Item 115) except that in connection with the ATSF, rates will not apply to points in California taking Rate Basis 4 or 6 when traffic is interchanged between the ATSF and SP at El Paso, TX., or Deming, NM. Rates will also apply via BN, Superior, NE, ATSF . . . thence via California junctions with destination carriers from points for which routing via Superior, NE, is provided in Item 4905.
The first sentence of this note clearly precludes application at the interchange points designated because the gateway restrictions of Tariff 5 are listed, and also because interchange is prohibited at El Paso and Deming, the only other interchange points between SP and Atchison, Topeka and Santa Fe Railway (ATSF) which allow access to Imperial Valley.
The second sentence of Note 33(d) 2 provides an additional routing via Superior, NE if the routing is named in Item 4905. The routing involved in this proceeding is named in Item 4905. The heart of the controversy, therefore, is whether the reference to this route in Item 4905 provides an exception to the routing restrictions of Tariff 45-N.
Both the ALJ and Division 1 concluded that Note 33(d) 2 does not allow for application of the rates in Tariff 45-N for movements over the route in question. It is our opinion that these decisions are correct. Accordingly, the petition for administrative review will be denied.
The words "rates only apply" in the first sentence of Note 33(d) 2 indicates that all traffic from BN origins in Nebraska to Rate Basis 6 destinations in California must move via gateways in Tariff 5. Also the first sentence specifically precludes application of the rates to movements interchanged by ATSF and SP at El Paso and Deming. When read in conjunction with the first sentence, it is apparent that these routing restrictions were intended to apply at Superior, as well as Denver, Cheyenne and Sidney. The second sentence was intended to establish an additional interchange point at Superior and not to operate as an exception to the routing restrictions of the preceding sentence. Each...
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