Koppers Co. v. United States

• Decision Date: 02 April 1937
• Docket Number: No. 2856.,2856.
• Citation: 114 F. Supp. 741
• Parties: KOPPERS CO. v. UNITED STATES et al.
• Court: U.S. District Court — District of Minnesota

114 F. Supp. 741

KOPPERS CO. v. UNITED STATES et al.

No. 2856.

United States District Court D. Minnesota, Third Division.

April 2, 1937.

John B. Keeler and Albert A. Mattson, Pittsburgh, Pa., and George W. Morgan, St. Paul, Minn., and Kellogg, Morgan, Chase, Carter & Headley, for petitioner.

Elmer B. Collins, Sp. Asst. to Atty. Gen., Washington, D. C., for the United States.

Edward M. Reidy, Washington, D. C., for Interstate Commerce Commission.

M. L. Countryman, Jr., St. Paul, Minn., for Northern Pac. Ry. Co.

R. J. Hagman, St. Paul, Minn., for Great Northern Ry. Co.

Herman Mueller, Jr., Boston, Mass., for National Industrial Traffic League, intervenor.

BELL, District Judge.

This is an action in equity brought by the Koppers Company, petitioner, against the United States of America, Interstate Commerce Commission, Northern Pacific Railway Company and the Great Northern Railway Company, respondents, to enjoin, annul and set aside an order of the Interstate Commerce Commission entered June 24, 1935, in a proceeding designated Ex parte No. 104, Practices of Carriers Affecting Operating Revenues or Expenses, which requires the respondent carriers to cease and desist, on or before August 15, 1935, from paying allowances to the petitioner for certain alleged terminal services. The general report of the Commission in Ex parte No. 104 will be found in 209 I.C. C. 11, the supplemental report pertaining exclusively to the industry of the petitioner will be found in 209 I.C.C. 421 and our opinion in 11 F.Supp. 467, 470.

The petitioner contends (1) that the findings of the Commission are not sufficient to sustain the order, (2) that the findings of the Commission are not supported by substantial evidence, and (3) that the Commission abused its discretion in denying its petition for a rehearing.

The Commission contends that the reports and order were made after a full hearing, that they are based on substantial evidence and in all respects are regular, proper and lawful.

The carriers neither admit nor deny the reports and the order, but allege that in compliance with the order each of them filed a tariff effective August 15, 1935, providing for the withdrawal and cancellation of the allowances. They state that they would have continued in force their tariffs providing for the allowance except for the order of the Commission and that they are willing to reinstate such allowances if the order of the Commission is held unlawful.

The order, in effect, deprives the petitioner of an allowance of one dollar per car by the carriers for services rendered by it in switching and spotting cars within its plant at St. Paul, Minnesota. The Commission found that the services were not for the carriers, but were plant services performed by the petitioner for its own benefit and convenience and that the allowances were in violation of the Interstate Commerce Act, 49 U.S.C.A. § 6(7).

The interlocutory injunction was denied on the ground that the evidence on which the reports and order of the Commission were based was not before us and that we therefore did not have the power to question the findings of fact made by the Commission. We held that the order of the Commission was within the scope of its general powers, that it was made after a full inquiry, and that it is entitled to great respect as it represents the opinion of a body of experts on matters within their special knowledge and experience.

The facts presented by the record are comparatively simple. The petitioner is and continuously since 1918 has been engaged in manufacturing coke at St. Paul, Minnesota. Its plant occupies a space more than 4,000 feet in length, more than 800 feet wide at the east end, and gradually diminishes in width to a narrow strip at the west end. The plant trackage is three and one-half to four miles in length, of standard gauge, has maximum curves of eighteen degrees, and leads to approximately twenty points, scattered throughout the plant, where freight cars are spotted for loading and unloading.

Petitioner's plant is served by the two respondent carriers, both of whom maintain yards on lands adjacent to and north of the west end of the plant. The Great Northern yard consists of three tracks from 1,000 to 1,100 feet in length, and the Northern Pacific yard consists of four tracks of approximately the same length. These tracks converge toward the railway entrance to the plant where one track from each yard connects with a track owned by the petitioner. The carriers deliver ingoing freight cars on their respective tracks immediately outside the entrance to the plant where they are received and moved by the industry with its own power as desired to points within the plant for loading and unloading. Outgoing freight cars are moved as desired by the industry with its own power through the entrance of the plant into the yards of the carriers and there received by them. In other words, the yards or tracks of the carriers are used for interchange purposes and are designated in the record as "interchange tracks." The carriers have never performed the switching service for which an allowance has been made to the petitioner. The locomotives of the carriers do not enter the plant property. The switching between the interchange tracks of the railway companies and the points in the plant for loading and unloading is done by the industry with its own power and switching crews.

The industry receives an average of 25 carloads of freight daily, 95% of which is coal. A portion of the coal is switched to coke ovens and the balance to stock piles. That which goes to the ovens must be placed and unloaded at such times as it can be received in the manufacturing operations. Outbound shipments, mostly coke, fluctuate from 15 to 90 carloads daily.

It requires sixteen or more hours per day under normal conditions for a switch engine to perform the required service and from four to eight hours, depending on the volume of business, in moving cars to and from the interchange tracks. The operation of the carriers' locomotives within the plant for the purpose of spotting cars while the industry engine performs the intraplant service would be impracticable.

The average distance from the interchange tracks at the entrance of the plant to loading and unloading points is 1,200 to 1,400 feet, and to the most distant loading and unloading points is nearly 4,000 feet. Track scales are located at the railway entrance to the plant where the interchange tracks connect with the plant tracks. Both loaded and unloaded cars are weighed by the petitioner primarily for its own benefit, but at times use is made of the weights by the carriers for fixing transportation charges.

From 1918 when the industry commenced operation, until February, 1922, the switching service was performed by the industry and no allowance was made. The payment of an allowance was suspended from March 1, 1927, to June 15, 1929, because there was a question as to the legality thereof due to the fact that there were no published tariffs covering such payments. Tariffs providing for a terminal service allowance of $1 per loaded car were published and were in effect from June 15, 1929, to August 15, 1935, when the allowance was discontinued as a result of the order of the Commission herein involved.

The foregoing are the facts substantially as found by the Commission and there is little or no dispute as to their accuracy or that they are supported by substantial evidence. It is the conclusions of the Commission that meet with objection. The conclusions are as follows:

"Under the governing rules the carriers' duty with respect to delivery terminates at the point of interruption, in this case, the scales. In other words, respondents are prevented from performing the spotting service within this plant in an uninterrupted movement at their ordinary operating convenience, and have therefore, fulfilled their common-carrier obligation under the line-haul rates by the delivery and receipt of cars on reasonably convenient interchange tracks. * * *

"In fact, the spotting service must be co-ordinated with plant operations, and to attain this objective the switching must be performed at such times as will meet the needs of the coke company. No obligation rests upon respondents to perform service beyond the agreed points of interchange solely at the convenience of the industry. * * *

"We find that the respondents have complied with their obligations under the interstate line-haul rates by the delivery and receipt of carload freight on the interchange tracks described of record; that the service beyond the interchange tracks is a plant service; and that by payment of an allowance to the coke company for the service performed by it beyond the interchange tracks on interstate shipments, respondents provide the means by which the coke company enjoys a preferential service not accorded to shippers generally, and refund or remit a portion of the rates or charges collected or received as compensation for the transportation of property in violation of section 6(7) of the act (49 U.S.C.A., § 6(7)."

The conclusions of the Commission contained in the first two paragraphs above quoted very properly may be designated conclusions of fact or of ultimate fact. The scales at the railway entrance or gateway of the plant were found to be the "point of interruption" not merely because cars are weighed at the scales, but because the trackage of the carriers is on one side of that point and the trackage of the plant is on the other side, and because up to that point the carriers can move cars without interruption and beyond that point the movement of the cars must be coordinated with the operations of the plant. After arriving at these conclusions of fact, the Commission found that transportation under the line-haul rates ended with the receipt and delivery of cars on the interchange tracks, that the switching and spotting of cars on the...