McLean Lumber Co. v. United States

• Decision Date: 14 October 1916
• Docket Number: 13.
• Citation: 237 F. 460
• Parties: McLEAN LUMBER CO. et al. v. UNITED STATES.
• Court: U.S. District Court — Eastern District of Tennessee

237 F. 460

McLEAN LUMBER CO. et al. v. UNITED STATES.

No. 13.

United States District Court, E.D. Tennessee, Southern Division.

October 14, 1916

[Copyrighted Material Omitted]

Sizer Chambliss & Chambliss, of Chattanooga, Tenn., for plaintiffs.

Blackburn Esterline, of Washington, D.C., and Lewis M. Coleman, of Chattanooga, Tenn., for the United States.

Joseph W. Folk and Charles W. Needham, both of Washington, D.C., for Interstate Commerce Commission.

Before WARRINGTON, Circuit Judge, and McCALL and SANFORD, District judges.

PER CURIAM.

The McLean Lumber Company and three other corporations engaged in business in Chattanooga, Tenn., having filed a petition against the United States to set aside certain orders made by the Interstate Commerce Commission in the matter of the rates on logs in carload shipments from stations in Alabama and Mississippi on the line of the Alabama Great Southern Railroad Company to Chattanooga, Tenn., subsequently entered a motion for an interlocutory injunction restraining the enforcement of these orders pendente lite. This motion has been heard by three judges, as provided by Act Oct. 22, 1913 c. 32, 38 Stat. 220 (Comp. St. 1913, Sec. 998), upon the petition and a transcript of the proceedings before the Commission exhibited therewith. There were also heard at the same time motions to dismiss the petition entered by the United States and by the Commission, which had, of its own motion, appeared as a defendant.

In 1900 the railroad company voluntarily published a schedule of rates on the interstate shipment of logs from stations on its lines into Chattanooga, varying according to distances, which remained in effect, with practically no change, until 1913 when it filed a new schedule for the purpose of canceling the former rates and putting higher ones into effect. The petitioners filed with the Commission a petition protesting against the proposed rates as unreasonably high, and the proposed schedule was thereupon suspended pending a hearing by the Commission as to the reasonableness of the rates. At the hearing the railroad company offered in lieu to establish another schedule, lower than the new rates at first proposed, but higher than those which had been in effect since 1900. After due hearing the Commission filed its report, finding the rates last offered to be reasonable (Chattanooga Log Rates, 30 I.C.C. 36, 39), and entered an order requiring the railroad company to cancel its former rates, and to establish these new rates by due publication, by June 1, 1914, and to maintain them for two years thereafter. In compliance with this order, the railroad company established and put these new rates into effect May 22, 1914.

Subsequently, the petitioners having petitioned for a rehearing and for a restoration of the former rates, the Commission granted a rehearing and reopened the case, but continued the new rates into effect pending a decision upon the rehearing. On July 23, 1915, the Commission filed its report on the rehearing, finding the new rates theretofore established to be unreasonably high as to certain distances, and making certain modifications therein (Chattanooga Log Rates, 35 I.C.C. 163, 171), and entered an order requiring the railroad company to cease, on or before September 15, 1915, from charging the new rates which had gone into effect under the original order as to these distances, and to establish, on or before said date, by proper publication, and maintain for two years thereafter, new rates which should not exceed those set forth in the order-- being the rates which had been last offered by the railroad company and which had already gone into effect, as partially lowered by the Commission on the rehearing. All of the new rates thus ordered to be put into effect were, however, materially higher than those which had been established in 1900 and maintained until May 22, 1914. These new rates were duly published by the railroad company and went into effect September 15, 1915, as ordered. Thereupon, on January 10, 1916, almost four months after the new rates had gone into effect, the shippers filed their petition in this court, alleging that the new rates were unreasonable, and praying that the Commission's orders of March 3, 1914, and July 23, 1915, be annulled and their operation enjoined.

Our conclusions as to the several motions are:

1. There is no want of jurisdiction in the court to hear and determine the petition, upon the alleged ground that the orders sought to be annulled and enjoined are negative, and not affirmative. These orders are not in fact negative, as mere dismissals of the petitioners' complaint against the proposed rates, but affirmatively require the railroad company to establish and maintain the new and higher rates in controversy. Clearly, therefore, the instant case is not within the rule of Procter & Gamble v. United States, 225 U.S. 282, 32 Sup.Ct. 761, 56 L.Ed. 1091, and Hooker v. Knapp, 225 U.S. 302, 32 Sup.Ct. 769, 56 L.Ed. 1099, that a court is without jurisdiction to annul and enjoin orders of the Commission which merely refuse to give petitioners the relief sought by them, but is, on the contrary, ruled by analogy, at least, by the Tap Line Cases, 234 U.S. 1, 22, 34 Sup.Ct. 741, 58 L.Ed. 1185, in which it was held that an order requiring railroad carriers to cease and abstain from certain practices is affirmative in character and reviewable by the court. And see the Intermountain Rate Cases, 234 U.S. 476, 490, 34 Sup.Ct. 986, 58 L.Ed. 1408, in which it was held that there was jurisdiction to review an order of the Commission refusing to grant the request of carriers to be permitted to charge lower rates for long than for short hauls; the court saying that, while such order might be in one sense negative, it was in another and broader sense affirmative, since it refused that which the statute in affirmative terms declared should be granted if the prescribed conditions existed.

2. There is no want of jurisdiction in the court to hear and determine the petition on the ground that it does not appear that the railroad company has its principal operating office in this district. Act Oct. 22, 1913, c. 32, 38 Stat. 219, 221 (Comp. St. 1913, Sec. 994), abolishing the Commerce Court and vesting its jurisdiction in the several District Courts of the United States, superseded the former provision as to venue contained in section 16 of the Interstate Commerce Act (Act Feb. 4, 1887, c. 104, 24 Stat. 379) as amended by section 5 of Act June 29, 1906, c. 3591, 34 Stat. 584, 592 (Comp. St. 1913, Sec. 8584), and provided that: 'The venue of any suit hereafter brought to enforce, suspend, or set aside * * * any order of the * * * Commission shall be in the juridical district wherein is the residence of the party or any of the parties upon whose petition the order was made, except that where the order does not relate to transportation or is not made upon the petition of any party the venue shall be in the district where the matter complained of in the petition, before the Commission arises, and except that where the order does not relate either to transportation or to a matter so complained of before the Commission the matter covered by the order shall be deemed to arise in the district where one of the petitioners in court has either its principal office or its principal operating office.'

Three of the petitioners, upon whose complaint the hearing was had before the Commission resulting in the orders in question, are residents of this district, and the fourth has its principal office herein. Obviously, therefore, whether the orders in question be regarded as made upon their petition, or as not relating to transportation, or as not made on the petition of any party, there is, in either alternative, venue in this district, under the express terms of the act.

Furthermore, both the United States and the Commission, a voluntary defendant, have, by their written motions, moved to dismiss the petition upon grounds based in part upon want of equity on its face and going to the merits, without objection to the venue; this latter objection having been subsequently made orally at the hearing in behalf of the United States alone. And since this objection does not go to a general want of jurisdiction in District Courts of the United States to hear and determine the controversy, but merely to the local jurisdiction of this court, it is clear, by analogy to the rule in cases where there is general federal jurisdiction by reason of diversity of citizenship, but want of local jurisdiction by reason of the residence of the parties (Western Loan Co. v. Mining Co., 210 U.S. 368, 28 Sup.Ct. 720, 52 L.Ed. 1101), that the making of such defense upon the merits is a waiver of the defect, if any there be, in the venue or local jurisdiction.

3. The petitioners have such interest in the rates ordered by the Commission to be put into effect as to entitle them to maintain this proceeding. They are manufacturers of lumber, having mills at Chattanooga, constructed and equipped at large expense, to whose operation, as they allege, logs purchased along the line of the railroad company in Alabama and Mississippi is the chief and indispensable source of supply; and, as they allege, the increased rates on these logs fixed by the orders of the Commission has caused the plant of one of the petitioners to be wholly abandoned, that of another to be shut down, and those of the two others to be greatly limited in their operations. Under the allegations of the petition they are directly affected in the conduct of their business by the orders of the Commission; and, if the rates fixed by these orders are unreasonably high, have suffered and will suffer great pecuniary damage.

We cannot...