Merchants' & Manufacturers' Traffic Ass'n of Sacramento v. United States

• Decision Date: 15 December 1915
• Docket Number: 191.
• Citation: 231 F. 292
• Court: U.S. District Court — Northern District of California
• Parties: MERCHANTS' & MANUFACTURERS' TRAFFIC ASS'N OF SACRAMENTO et al. v. UNITED STATES et al.

231 F. 292

MERCHANTS' & MANUFACTURERS' TRAFFIC ASS'N OF SACRAMENTO et al. v. UNITED STATES et al.

No. 191.

United States District Court, N.D. California.

December 15, 1915

John E Alexander, of San Francisco, Cal., for petitioners.

Blackburn Esterline, Sp. Asst. Atty. Gen. (John W. Preston, U.S. Atty of San Francisco, Cal., on the brief), for the United States.

Joseph W. Folk, of Washington, D.C., for Interstate Commerce Commission.

C. W Durbrow and Allan P. Matthew, both of San Francisco, Cal and E. W. Camp, of Los Angeles, Cal., for respondents.

Before MORROW, Circuit Judge, and DOOLING and BLEDSOE, District judges.

MORROW Circuit Judge.

The petitioners are applying to this court, upon the bill of complaint and affidavits, for an interlocutory injunction to restrain in part an order of the Interstate Commerce Commission, dated April 30, 1915, and the tariff filed by certain of the transcontinental rail carriers pursuant to said order (Supplement 16 to Transcontinental Freight Bureau West-Bound Tariff No. 1-N), in so far as the said order charges for west-bound transcontinental commodities destined to Sacramento, Stockton, San Jose, and Santa Clara any greater amount than is charged for the transportation of like commodities to San Francisco or Oakland.

A preliminary motion to dismiss the bill has been made by the United States on grounds that appear to be sufficiently stated in the objections that the petitioners do not bring the suit as common carriers or as shippers; that they have no such interest in the orders of the Interstate Commerce Commission sought to be annulled and enjoined as to enable them to maintain the suit; that it does not appear that they will sustain irreparable injury, or any injury, by reason of any orders of the Commission made subject of complaint; and that the petitioners have no standing in a court of equity to maintain the suit.

Three of the petitioners are traffic associations formed for the purpose of representing jobbers and merchants located at Sacramento, Stockton, and San Jose in traffic matters in which all the parties represented are interested. The remaining petitioner, Santa Clara, is a municipal corporation representing the interests of the citizens of that municipality. All of the petitioners are authorized by section 13 of the Act to Regulate Commerce (Act Feb. 4, 1887, 24 Stat. 379) to apply to the Interstate Commerce Commission by petition for relief in certain matters; that is to say, they may become parties to certain proceedings before the Interstate Commerce Commission, thus recognizing their right to represent the interest of others before that body. And it is further provided in the section that:

'No complaint shall at any time be dismissed because of the absence of direct damage to the complainant.'

It is further provided, in section 2 of the Act to Further Regulate Commerce with Foreign Nations and Among the States (Act Feb. 19, 1903, 32 Stat.pt. 1, p. 847):

'That in any proceeding for the enforcement of the provisions of the statutes relating to interstate commerce, whether such proceedings be instituted before the Interstate Commerce Commission or be begun originally in any Circuit Court of the United States, it shall be lawful to include as parties, in addition to the carrier, all persons interested in or affected by the rate, regulation, or practice under consideration, and inquiries, investigations, orders, and decrees may be made with reference to and against such additional parties in the same manner, to the same extent, and subject to the same provisions as are or shall be authorized by law with respect to carriers.'

The purpose of these statutes is plainly to meet a situation and bring in all parties interested in the controversy, to the end that the entire question involved may be settled and determined in the one proceeding. Such being the purpose, we see no objection to classes of persons similarly situated being represented by an association or other organization and coming into the controversy under the common name. This, we think, brings this case within the well-known rule that bills may be filed in the name of an unincorporated association, and by parties on behalf of others similarly situated. In Foster's Federal Practice (5th Ed.) Sec. 114, the rule is stated as follows:

'Class Suits.-- When a number of persons have a common interest in a thing which is the subject of litigation, and in some instances when a number of persons have a common interest in a question which is before the court for decision, one or more may sue or be sued in behalf of the rest. Judge Story divides the first of these divisions into two: '(1) When the question is one of a common and general interest, and one or more sue or defend for the benefit of the whole; and (2) when the parties form a voluntary association for public or private purposes, and those who sue or defend may fairly be presumed to represent the rights and interests of the whole.' But there seems to be no reason for treating the two classes separately. They are called 'class suits,' 'creditors' suits,' or 'stockholders' suits,' as the case may be.'

Moreover, the equity rules seem to contemplate such a suit for the common benefit of all where the parties are numerous and have a common or general interest. Equity rule No. 37 (198 F. xxviii, 115 C.C.A. xxviii) provides:

'All persons having an interest in the subject of the action and in obtaining the relief demanded may join as plaintiffs and persons having a united interest must be joined on the same side as plaintiffs or defendants.'

Equity rule No. 38 (198 F. xxix, 115 C.C.A. xxix) provides that:

'When the question is one of common or general interest to many persons constituting a class so numerous as to make it impracticable to bring them all before the court, one or more may sue or defend for the whole.'

We think under these rules this action may be maintained by the petitioners. The motion to dismiss is therefore denied.

After the passage of the Act of February 4, 1887, to Regulate Commerce (24 Stat. 379), it became unlawful, under section 4 of the act, for a carrier to charge or receive any greater compensation in the aggregate for the transportation of passengers or like kind of property for a shorter than for a longer distance over the same line or route in the same direction, the shorter being included within the longer distance. But there was a qualification provided in the statute that the transportation for the shorter and longer distances must be under substantially similar circumstances and conditions. There was a further provision that upon application to the Interstate Commerce Commission a carrier might in special cases after investigation by the Commission be authorized to charge less for the longer than for the shorter distance.

The controversy in the present case has its origin in proceedings arising out of an application made to the Interstate Commerce Commission by the Railroad Commission of Nevada. Prior to that application, all points in Nevada (which points are designated as intermountain points) had been charged much higher rates on both classes of west-bound freight, viz. freight designated as class freight and freight designated as commodities, than had been charged to Pacific Coast terminals. Sacramento, Stockton, San Jose, and Santa Clara, as well as other points in California, had long prior to such time been designated as 'Pacific Coast terminals' and were such at the time of the application to the Interstate Commerce Commission by the Railroad Commission of Nevada.

'Nevada asks that she be given rates as low as those given to Sacramento.'

Sacramento was the nearest Pacific Coast terminal to Nevada, and the former system of rate-making for points in Nevada was to charge the full rate to the nearest Pacific Coast terminal and then charge in addition thereto the full local back-haul rate to the point of destination. Thus Nevada points were charged for a shorter distance the full terminal rate for a longer distance and, in addition, the local back-haul rate to the point of delivery. The petition was that Nevada might have the full benefit of the long and short haul clause of the fourth section of the Commerce Act. The petition was not granted in full, but the Commission did establish class rates to be charged to certain Nevada points. The rates to points outside of Nevada were not considered. In fixing the class rates, the Commission stated that additional data as to commodity rates would be secured before an order would be made relative to such rates.

The findings and conclusions upon the foregoing application, and the order pursuant thereto, were entered of record on June 6, 1910. On June 18, 1910, Congress amended the fourth section of the Act to Regulate Commerce by striking out the clause, 'under substantially similar circumstances and conditions. ' The provision relating to applications to the Commission by the carriers for authority to depart from the long and short haul clause of the section was amended slightly so as to read:

'Provided, however, that upon application to the Interstate Commerce Commission such common carrier may in special cases, after investigation, be authorized by the Commission to charge less for longer than for shorter distances for the transportation of passengers or property; and the Commission may from time to time prescribe the extent to which such designated common carrier may be relieved from the operation of this section.'

Pacific Coast Terminals.

Prior to this amendment the construction of the fourth section had been that the rail carriers had the primary right to determine as to what constituted 'under substantially similar...