Louisville & N.R. Co. v. Kentucky Railroad Commission

• Decision Date: 14 May 1914
• Citation: 214 F. 465
• Parties: LOUISVILLE & N.R. CO. v. KENTUCKY RAILROAD COMMISSION et al.
• Court: U.S. District Court — Eastern District of Kentucky

214 F. 465

LOUISVILLE & N.R. CO. v. KENTUCKY RAILROAD COMMISSION et al.

United States District Court, E.D. Kentucky.

May 14, 1914

[Copyrighted Material Omitted]

Henry L. Stone and Edward S. Jouett, both of Louisville, Ky., for complainant.

Edwin W. Hines and J. V. Norman, both of Louisville, Ky., for defendants.

Before WARRINGTON and DENISON, Circuit Judges, and SANFORD, District judge.

PER CURIAM.

The general situation appears by our former opinion ((C.C.) 186 F. 176, sub nom. L.-N.R.R. v. Siler) and by the opinion of the Supreme Court (231 U.S. 298, 34 Sup.Ct. 48, 58 L.Ed ., sub nom. L.-N.R.R. v. Garrett). On the former hearing plaintiff urged, as one ground of relief, that the order of the Railroad Commission had been made without any evidence whatever that its newly prescribed rate was reasonable, and hence that the order was invalid; and it supported this allegation by affidavits that, upon the hearing before the Commission, no evidence to this effect was offered. We held that these affidavits stated only conclusions of law, so that the allegation of lack of evidence was itself not proved; and this view was also taken by the Supreme Court. As to the desired injunction against the reparation order, it was held both by this court and the Supreme Court, that the question could not be raised on a record to which the reparation claimants were not parties. The case having been remanded, plaintiff now files an amended bill and makes a new motion for interlocutory injunction. As to the future rate, the present motion is based upon the same proposition that the Commission had before it no evidence that the new rate was reasonable; and, upon this motion, the allegation is supported by a transcript of all the proceedings before the Commission, and it is said that, by this transcript, the lack of any evidence to support the Commission's finding sufficiently appears. As to the reparation order, it now appears that the claimants under that order have been made parties.

Counsel for the Commission and the claimants first urge that the matters have been adjudicated, or that, at least, we ought not to hear, for the second time, the same motion in the same case. A decision either way upon a motion for interlocutory injunction is the exercise of discretion, and such exercise is not final. Acme Co. v. Commercial Co. (C.C.A. 6) 192 F. 321, 112 C.C.A. 573. It therefore must continue within the power of the court upon a later application to reach the other conclusion upon more convincing evidence, or, indeed (save for the effect of a mandate from a reviewing court), upon the same evidence. The opinion and mandate of the Supreme Court cannot be considered as controlling, since that court carefully refrained from deciding what the effect would have been if the allegation of lack of evidence had been proved or if the necessary parties had been present; and the mandate takes effect with reference to the then existing record.

On the other hand, the renewal of such a motion upon grounds or upon evidence which should have been presented upon the first application is to be discouraged, and an application once refused will not, at a later stage, be granted, save in a clear case. Chancellor Vrooman, in Buckley v. Corse, 1 N.J.Eq. 504, 510.

The result of such a situation as this is that the court has power to hear the renewed application on its merits; that whether it should do so is a matter of discretion; and that it would sharply refuse to do so, if it appeared that the first application had been with any purpose of experimenting with the court or of getting indirect advantages. We see no reason to think that there was any such purpose here, or to doubt that the imperfect showing upon the first hearing was the result of a good-faith mistake as to the kind of proof necessary to establish what counsel considered a really undisputed fact and as to who were necessary parties. The long delay which has operated to keep the restraining order in force resulted from the unexpected grouping of this case with other railroad cases in the Supreme Court, and can hardly be charged against plaintiff. Upon the whole, we think we ought to consider the merits of the motion.

It is next urged that, even if no evidence on the subject was put before the Commission, that fact does not justify this court in setting aside the order fixing a future rate; in other words, it is said that the cases in which the Supreme Court has, for this reason, vacated an order of the Interstate Commerce Commission do not apply where a federal court is dealing with the order of a state commission, and this for the reason that the Interstate Commerce Act expressly gives to the courts a power to review, while the Kentucky act contains no such general provision. It is an interesting question whether the power of this kind which the Supreme Court has exercised depends in any degree upon this clause of the Interstate Commerce Act (I.C.C. v. U.P.R.R., 222 U.S. 541, 547, 32 Sup.Ct. 108, 56 L.Ed. 308; I.C.C. v. L. & N.R.R., 227 U.S. 88, 92, 33 Sup.Ct. 185, 57 L.Ed. 431), or whether, since legislative power cannot be given to the courts, this exercise depends on the inherent right to forbid prejudicial action under color of an order invalid because made without jurisdiction (Procter v. U.S., 225 U.S. 282, 298, 32 Sup.Ct. 761, 56 L.Ed. 1091). However this may be, we think the question is not now controlling, and we pass it by without decision, assuming, but only for the purposes of this case, that, if in truth there was no supporting evidence, the order cannot stand.

The meritorious question so developed should be approached in the light of these rules which we may take as now established: First, proof that a railroad company has for a considerable time voluntarily maintained a given rate is evidence of the reasonableness of that rate and will support an order fixing that rate as a lawful one; and, second, by way of modification or exception, if the rate so maintained was due, not to normal and ordinary causes, but was special and to meet some special situation (like water competition), its making and maintenance then cease to be any evidence that, in the absence of those special conditions, it would be reasonable. I.C.C. v. L. & N.R.R., 227 U.S. 88, 33 Sup.Ct. 185, 57 L.Ed. 431.

In the instant case, it is conceded that the new rates fixed by the Commission for all grain inward bound to all persons for all purposes were the same as the rates which the railroad had voluntarily maintained for many years for grain shipped inward bound to distillers for distilling purposes. Under the first rule just stated, this fact becomes, prima facie, an admission, and therefore evidence that the rate were reasonable for grain. The railroad seeks to bring the case within the above-stated second rule or exception, by showing that the rates upon all grain outbound and to all persons except distillers upon all grain inbound had always been much higher, and that the distillers' rate was an abnormal one induced and justified by two considerations: First, that a very low and (directly) nonremunerative rate for distillers was established for the sake of building up and encouraging an industry which otherwise could not have existed in the interior of the state at a distance from the Ohio river gateways where grain could be more cheaply obtained; second that these grain shipments to distillers resulted in return outbound shipments of the finished product carrying a high rate and counterbalancing the unprofitable rate on the raw material. Based upon these premises, the railroad propounds a case of irreparable injury by reason of the reduction in its rates on all grain not for distillers and as to which the special conditions never have existed and do not exist. The claim that the newly ordered rate has never been voluntarily maintained, except for distillers, is conceded to be true; the two recited special conditions, encouragement of a new industry and a high-class return traffic, seem to have rested, at the hearing before the Commission, partly upon...