Price-Watson Company v. ICC
| Decision Date | 18 July 1968 |
| Docket Number | No. 67 C 834.,67 C 834. |
| Court | U.S. District Court — Northern District of Illinois |
| Parties | PRICE-WATSON COMPANY, an Illinois corporation, Plaintiff, v. INTERSTATE COMMERCE COMMISSION and United States of America, Defendants. Elgin, Joliet & Eastern Railway Company, Gulf, Mobile and Ohio Railroad Company, Chicago, Burlington & Quincy Railroad Company and The New York Central Railroad Company, Intervening Defendants. |
Gould & Reichert, Cincinnati, Ohio, Irwin S. Baskes, Chicago, Ill., for plaintiff.
Thomas A. Foran, Robert W. Ginnane, Gen. Counsel, Washington, D. C., Henry F. Rush, Jr., Atty., Interstate Commerce Commission, Washington, D. C., for defendants.
W. Gerald Thursby, Chicago, Ill., W. A. Kimbrough, Jr., Mobile, Ala., for intervening railroads.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
This action to set aside and annul orders of the Interstate Commerce Commission (hereinafter referred to as "the Commission") having come on for hearing on April 5, 1968, before this court upon the plaintiff's complaint and the defendants' Answer thereto, and the court having received in evidence a certified copy of the record of the proceedings before the Commission, now, after reviewing said record in its entirety, and after hearing the oral arguments of counsel for the respective parties and after consideration of said arguments and of the written briefs of counsel, the court makes and enters the following Findings of Fact and Conclusions of Law:
Findings of Fact.
1. Plaintiff is Price-Watson Corporation, a Chicago scrap broker. Defendants are the United States of America and the Commission. Intervening defendants are the Elgin, Joliet & Eastern Railway Company; Gulf, Mobile and Ohio Railroad Company; Chicago, Burlington & Quincy Railroad Company; and the New York Central Railroad Company, hereinafter called the intervening railroads.
This action was brought by the plaintiff under 28 U.S.C. § 1336, 49 U.S.C. §§ 9 and 17(9), and 5 U.S.C. § 706, to set aside the orders of the Commission, Division 2, Acting as an Appellate Division, entered March 27, 1967, in its docket No. 34620, Price-Watson Company v. Elgin, Joliet and Eastern Railway Company, et al., 329 I.C.C. 736. In its order the Commission dismissed plaintiff's complaint seeking to recover alleged overcharges from the intervening railroad defendants for the transportation of "cast iron buttons" from Chicago, Illinois, to the plant of Laclede Steel Company at Alton, Illinois. The Commission determined that the buttons were iron bearing slag, properly classifiable as "iron or steel scrap, having value for remelting purposes only" (hereinafter "scrap iron") under the intervening railroads' tariffs, and not slag bearing recoverable iron classifiable as "slag" as contended by plaintiff. The effect of this determination is to deny plaintiff recovery for the alleged transportation overcharges. The Commission also found that the transportation charges collected by the intervening railroads were not shown to be unjust or unreasonable.
The proceeding before the Commission was initiated on August 2, 1965, by a complaint wherein plaintiff alleged that "the collection by the defendant carriers of charges in excess of the rates set forth in the tariffs for the movement of slag was illegal and in violation of Sections 1(6) and 6(7) of the Interstate Commerce Act 49 U.S.C. §§ 1(6) and 6(7)."
The proceeding was handled under modified procedure pursuant to Rules 1.45 and 1.54, inclusive, of the Commission's General Rules of Practice pursuant to an order of the Commission, Commissioner Freas, dated August 4, 1965 (served August 10, 1965). Following submission of evidence in the form of verified statements and a deposition and written arguments by all parties in support of their respective positions, the proceeding was assigned to a Commission hearing examiner for recommendation of an appropriate order accompanied by the reasons therefor.
The examiner's report and order, served August 5, 1966, recommended that the complaint be dismissed for the following reasons:
After considering plaintiff's exceptions to the examiner's report and the replies thereto, the Commission's Rates and Practices Review Board found that the statement of facts, conclusions and findings of the examiner were correct in all material respects. By Decision and Order dated January 5, 1967 (329 I.C.C. 736), the Review Board affirmed and adopted the same as the findings and conclusions of the Commission and dismissed plaintiff's complaint. A subsequent petition for reconsideration was denied by Division 2 of the Commission, Acting as an Appellate Division, by its order of March 27, 1967 (served April 4, 1967). Plaintiff filed its complaint in this Court proceeding on May 18, 1967, and the defendants' joint answer was filed on July 22, 1967.
2. Plaintiff's argument in brief before this Court is that the Commission erred in its determination primarily because the cast iron buttons are removed from a slag dump; they do not look like other types of scrap metal; they are contaminated by other materials; they require preliminary processing; their use is different from that of scrap iron in that, unlike scrap iron, they are not useable by direct charging into an open hearth furnace; and that the existing specifications of scrap metal does not contain specifications for cast iron buttons. At oral argument plaintiff asserted, for the first time either before the Commission or the Court, that it had been denied a fair hearing in that certain underlying documents had not been supplied to it by the witness for Laclede.
3. The basic issue before this Court for determination is whether the Commission reasonably determined that "cast iron buttons" was properly classified as "scrap iron" rather than "slag".
4. The Commission found that:
a. slag is a non-metallic dross of the steel making process having a commercial value, if at all saleable, of from $1.00 to $2.50 per net ton.
b. Cast iron buttons are formed when iron particles, which are either trapped in the slag or skimmed off with the slag from the molten iron in a blast furnace, precipitate into a solid mass in the bottom portion of skimming ladles or rail cars designed to transport slag from the furnace to the slag dumps. They are recovered from the slag dumps of various steel manufacturers by use of bulldozers and electro-magnets. The cast iron buttons recovered and shipped by plaintiff had an overall iron content of not less than 82%.
c. Cast iron buttons were used by the purchasing steel mill in two ways: either as a charge for a cupola furnace or by charging them directly into an open hearth furnace (about 10% of the total amount purchased). Cast iron buttons make up to 2% of the charge in an open hearth furnace at a given heat and are used in lieu of other cold scrap iron. Up to 40% of the charge of a cupola furnace could be cast iron buttons. When used at the cupola furnace roughly 50% of the buttons, some of which weigh up to 10 tons, require reduction in size so that they could more easily fit into the mouth of the cupola furnace. The slag is not separated from the scrap iron but the entire mass is charged into the furnaces.
d. Cast iron buttons were sold during the period of time involved to the purchasing steel mills for about $26.75 a gross ton. Other scrap metal prices varied from about $12 to $62 a gross ton.
e. In 1951, during the Korean Emergency, the Office of Price Stabilization, under a definition of iron and steel scrap (defined as "all ferrous materials, either alloyed or unalloyed and which iron or steel is a principal component, which are the waste or industrial fabrication, or objects that have been discarded on account of obsolescence, failure or any other reason, when sold to a consumer"), established prices for cast iron buttons as scrap metal.
f. Lastly, the purchasing steel mill in the instant proceeding required that the descriptions on the bill of lading should be as "iron or steel scrap for remelting purposes" and its purchasing order referred to the fact that cast iron scrap not meeting certain specifications...
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