Pacific Fruit Exp. Co. v. Akron, Canton & Youngstown R. Co.
| Decision Date | 02 March 1973 |
| Docket Number | No. 44601.,44601. |
| Citation | 355 F. Supp. 700 |
| Court | U.S. District Court — Northern District of California |
| Parties | PACIFIC FRUIT EXPRESS COMPANY, a corporation, Plaintiff, v. AKRON, CANTON & YOUNGSTOWN RAILROAD COMPANY, et al., Defendants. |
COPYRIGHT MATERIAL OMITTED
Herbert A. Waterman, Charles W. Burkett, Michael A. Smith, San Francisco, Cal., and Byron D. Strattan, Howard E. Roos, Omaha, Neb., for plaintiff Pacific Fruit Express Co., a corporation.
Bernard A. Gould, Daniel M. O'Donoghue, Daniel S. Linhardt, Bureau of Enforcement, I. C. C., Washington, D. C., for intervening plaintiff I. C. C.
James L. Browning, Jr., U. S. Atty., William B. Spohn, Asst. U. S. Atty., San Francisco, Cal., for U. S. realigned as plaintiff.
Gordon Johnson, Thelen, Marrin, Johnson & Bridges, San Francisco, Cal., for defendant Akron, Canton & Youngstown R. Co., etc.
This is a civil action for damages brought by Pacific Fruit Express (PFE) seeking to recover from 90 mideastern, eastern and southern railroad common carriers, an amount alleged to be in excess of 12.5 million dollars, representing compensation claimed to be due PFE for the use by defendant railroads of plaintiffs' mechanical protective services supplied them through PFE refrigeration cars moving over the lines of defendants in the transportation of perishable commodities; PFE also seeks an injunction to compel defendants to comply with a certain order of the Interstate Commerce Commission (I.C.C.) hereafter referred to.
The case is now before the court on plaintiffs' motion and defendants' counter motion for summary judgment on the issue of liability as related to both damages and injunction. With respect to injunctive relief the United States, realigned as a party plaintiff herein, and I.C.C., itnervenor as a party plaintiff, join in the PFE motion.
PFE is a car-line company, wholly owned by the Union Pacific Railroad Company (UP) and Southern Pacific Transportation Company (SP) engaged in the business of furnishing to railroads refrigerated cars containing mechanical refrigeration units and supplying mechanical protective service for perishable commodities against heat and cold.
The use of PFE cars on defendants' lines is occasioned by the fact the UP and SP, as originating carriers on eastbound shipments, select these PFE cars to transport perishables to the East. Defendant railroads as common carriers are required by law (§§ 1(3)a and 1(4) ICA) to accept and do accept such cars at interchange points to transport perishables over their lines to ultimate destinations and the units in the cars are used by them to supply mechanical protective service.
The complaint charges in substance and effect that PFE has provided defendants with this protective service but that defendants have failed and refused to enter into certain contracts to pay amounts sufficient to cover PFE's costs of providing such service despite the fact that such contracts were ordered on August 27, 1962, by the Interstate Commerce Commission in its order entitled "Contracts for Protective Services," (Ex Parte 137, 318 I.C.C. III, 49 C.F.R. 105.2 (1962)) issued pursuant to the Interstate Commerce Act, 49 U.S.C. § 1(14)(b), (that order is attached as an exhibit to and incorporated into the complaint).
Alleging that its receipts from defendant railroads in the past and up to the present time for said protective service, under a so-called Division Sheet 7 arrangement1 among the defendant railroads, have been insufficient to cover the costs thereof, PFE seeks to recover from each of the defendant railroads its share of the costs of said service — essentially the difference between the payments made to PFE under that Division Sheet 7 arrangement and the amount PFE would have received if defendants had entered into the contracts as required by the I.C.C. order of August 27, 1962.
So far as damages are concerned the action is brought pursuant to 49 U.S.C. § 8 (§ 8 of the I.C.C. Act), 49 U.S.C. § 9 (§ 9 of the Act).
Section 8 provides that in case any common carrier does anything prohibited by the Act or omits to do anything required by the Act, the carrier shall be liable to the person injured for the full amount of damages sustained in consequences thereof, together with reasonable counsel fees; Section 9 provides that any person claiming to have been so damaged may make complaint either to the I.C.C. or may bring suit in District Court.2 PFE also seeks recovery of its reasonable costs upon a quantum meruit theory to be hereafter considered.
So far as injunctive relief is concerned the action is brought pursuant to 49 U.S.C. § 16(12) which provides that, if any carrier fails or neglects to obey any order of the I.C.C. any party injured thereby may apply to the District Court for the enforcement of the order and the court may enforce obedience by injunction or other proper process.3
In its Order of August 27, 1962, Ex Parte 137 (1962), Contracts for Protective Services, 318 I.C.C. III, above mentioned, I.C.C. sought to determine, pursuant to 49 U.S.C. § 1(14)(b), the justness and reasonableness of charges for the use of mechanical refrigeration units and protective services as contained in various contracts and arrangements between railroads.
The Commission found that under the Division Sheet 7 arrangement, PFE and other car-lines furnishing mechanical protective service assume all of the operational costs of the mechanical units such as fuel, inspection and repairs — and that the 80% of tariff revenue received by the car owner bore no relation to these costs, (318 I.C.C. at 114-115) and that PFE expense of furnishing mechanical protective service exceeded by a substantial amount its revenue received for such service under Division Sheet 7.
The Commission ordered (Par. (a)(b) (c)) that all railroads then receiving protective services under any contracts, agreements or arrangements should submit for approval to I.C.C. on or before 120 days from the effective date of the order new or superseding contracts covering protective services performed under contracts then on file with I.C.C. as well as those performed under Division Sheet 7 — said new contracts to supersede all prior contracts, including Division Sheet 7, and to conform with other provisions of the order i. e., subsections (b)(c)(d)(e)(f) and (g); the charge for each protective service to yield to the person performing such service no less than the cost (to which might be added a reasonable profit not in excess of 6% Par. c) for performing the service, cost to be determined as set forth in subsection (d) (i) and (ii) of the order.
The order also provided (Par. (e)) that in the event the person rendering the protective service shall not recover costs, such person should bill the railroads on a proportionate basis for the loss.
The order also provided that those contracts then on file with the Commission, which had not been approved theretofore be, and they were thereby approved upon the condition that they shall be superseded by new contracts filed in accordance with the above regulations.4
PFE alleges that since 1962 it has repeatedly sought such contracts but that defendants have failed and refused to so contract or to pay PFE its costs incurred in the supplying of mechanical protective service.4(a)
PFE contends that defendants' failure and refusal to enter into such contracts for the supplying of mechanical protective service, and to obtain I.C.C. approval thereof, is a violation of Section 16(7) and Section 1(14)(b).
Section 16(7) provides that it shall be the duty of every common carrier to observe and comply with orders of the Commission; Section 1(14) (b) makes it unlawful for any common carrier to make any arrangement for the furnishing of protective service against heat or cold unless and until such arrangement has been submitted to and approved by the Commission as just, reasonable and in the public interest.5
It is upon this statutory basis that PFE seeks damages from 1964, together with interest thereon, attorneys' fees and costs.
PFE also contends that under the circumstances appearing from the record herein, defendants are liable to it on a quantum meruit theory for the reasonable value of the mechanical protective service it has furnished to defendants — measured by the same standard of damages it asserts in connection with liability premised upon violations of the Interstate Commerce Act.6
Defendants have contended in this suit (1) that the activities of PFE do not constitute the furnishing of mechanical protective service to defendants as that term was used in law and in the I.C.C. order of August 27, 1962; (2) that, since the I.C.C. temporarily approved the already mentioned Division Sheet 7, along with other then existing contractual arrangements, Division Sheet 7 is still the only contractual arrangement between PFE and the railroads and remains so until I.C.C. makes an explicit order disapproving that arrangement as not fulfilling the requirements of Section 1(14)(b); (3) that in any event the order of August 27, 1962 is not self-executing and did not give to PFE any substantive right to directly recover its alleged losses from the defendant railroads since such right would arise only from such contracts as might be actually entered into between PFE and the respective railroads; (4) that the order of August 17, 1962 is vague and ambiguous.
After having considered the record herein, and after having held hearings on the evidentiary material presented by the parties in support of or in opposition to the respective motions for summary judgment, and having received oral argument and briefs thereon, this court concluded that the issues raised questions concerning the I.C.C. order of August 27, 1962 and that, therefore, no rulings or further proceedings in this suit should be made or taken pending a referral of certain questions to the I.C.C., the agency...
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