Public Service Commission of Utah v. United States, Civ. A. No. C-8-56.

• Decision Date: 25 May 1956
• Docket Number: Civ. A. No. C-8-56.
• Citation: 146 F. Supp. 803
• Parties: PUBLIC SERVICE COMMISSION OF UTAH and Utah Citizens Rate Association, Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants; and Union Pacific Railroad Company, The Denver and Rio Grande Western Railroad Company, Southern Pacific Company, The Western Pacific Railroad Company, Bamberger Railroad Company, The Ogden Union Railway and Depot Company, Salt Lake-Garfield and Western Railroad Company, Tooele Valley Railway Company, and Utah Railway Company, Intervenors.
• Court: U.S. District Court — District of Utah

146 F. Supp. 803

PUBLIC SERVICE COMMISSION OF UTAH and Utah Citizens Rate Association, Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants and Union Pacific Railroad Company, The Denver and Rio Grande Western Railroad Company, Southern Pacific Company, The Western Pacific Railroad Company, Bamberger Railroad Company, The Ogden Union Railway and Depot Company, Salt Lake-Garfield and Western Railroad Company, Tooele Valley Railway Company, and Utah Railway Company, Intervenors.

Civ. A. No. C-8-56.

United States District Court D. Utah, Central Division.

May 25, 1956.

E. R. Collister, Atty. Gen., Raymond W. Gee, Deputy Atty. Gen., Keith E. Sohm, Commerce Atty., Salt Lake City, Utah, for plaintiff Public Service Commission.

Calvin L. Rampton, Salt Lake City, Utah, for plaintiff Utah Citizens Rate Ass'n.

Stanley N. Barnes, Asst. Atty. Gen., James E. Kilday, E. Riggs McConnell, Attys. Dept. of Justice, Washington, D. C., and A. Pratt Kesler, U. S. Atty., Salt Lake City, Utah, for defendant United States.

Robert W. Ginnane, Gen. Counsel, Charlie H. Johns, Asst. Counsel, I. C. C., Washington, D. C., and George W. Howard, Salt Lake City, Utah, for defendant Interstate Commerce Commission.

Bryan P. Leverich, S. N. Cornwall, A. H. Nebeker, Peter W. Billings, John H. Snow, A. S. Frederickson, and J. E. Morgan, Salt Lake City, Utah, for intervening defendants.

Before PICKETT Circuit Judge, RITTER, Chief Judge, and CHRISTENSON, District Judge.

PICKETT, Circuit Judge.

The Public Service Commission of the State of Utah and the Utah Citizens Rate Association brought this action to set aside and enjoin the enforcement of an order of the Interstate Commerce Commission granting an increase of intrastate freight rates in Utah in a proceeding under § 13(3) and (4) of the Interstate Commerce Act. 49 U.S.C.A. § 13(3), (4).¹ The Class I railroads operating in Utah intervened. A statutory three-judge court was constituted and an interlocutory injunction granted pending a hearing on the merits of the case.

The underlying proceedings which give rise to this action originated in 1951 before the Interstate Commerce Commission, entitled "Increased Freight Rates 1951", herein referred to as "Ex Parte 175", wherein Class I railroads of the United States sought an overall increase in interstate freight rates. After some percentage increases had been authorized, the Commission, on April 11, 1952, granted increases totaling 15% to all railroads on interstate rates. 284 I.C.C. 589. This increase was subject to certain exceptions and hold-downs. The railroads operating in Utah made application to the Public Service Commission of Utah for increases in intrastate rates in the same percentage as those granted in Ex Parte 175.

The Utah Commission refused to grant the increases and Section 13 proceedings were instituted before the Interstate Commerce Commission, which entered into an investigation of the Utah intrastate rates. A full and complete hearing was had, at which evidence was offered by the railroads and by protestants, including these plaintiffs. The Interstate Commerce Commission, with exceptions, found that the Utah intrastate rates and charges were abnormally low; that conditions incident to intrastate transportation in Utah were not more favorable than those incident to interstate transportation in that state; that traffic thereunder failed to produce its fair share of earnings required to yield the railroads sufficient revenue to provide adequate and efficient railway transportation service to accomplish the purposes of the Interstate Commerce Act, and that Utah intrastate rates cast an undue burden upon interstate commerce. 297 I.C.C. 87.² It was also found that the undue burden and unjust discrimination should be removed by applying to the Utah intrastate rates and charges the interstate increase authorized in Ex Parte 175 on like intrastate traffic. The increases, however, were limited by the provision "that increases may not be made in intrastate rates to levels higher than the interstate rates on like traffic to or from Utah for like or greater short-line distances over the same lines of railroad, except in instances where the interstate rates, and not the intrastate rates, are designated as published to meet motor-carrier competition." It is conceded that the findings meet the requirements of King v. United States, 344 U.S. 254, 73 S.Ct. 259, 97 L.Ed. 301, but it is urged that the evidence does not sustain them.

The Utah Commission did not authorize the increases within the time provided in the order and the railroads were then directed by the Interstate Commerce Commission to make the 15% increase effective on Utah intrastate rates as of March 13, 1956. This action followed.

The matter is before us on the record of the Interstate Commerce Commission proceedings under Section 13. At the opening of the trial the plaintiffs introduced in evidence the Interstate Commerce Commission records and, in addition, offered the record of proceedings made before the Public Service Commission of Utah. The court reserved ruling on the admissibility of the latter record, which had not been introduced in the proceedings before the Commission. It is well settled that when an order of the Interstate Commerce Commission is questioned in an action of this nature, the court shall consider only such matters as were before the Commission prior to the issuance of its order. Tagg Bros. & Moorehead v. United States, 280 U.S. 420, 443, 50 S.Ct. 220, 74 L.Ed. 524; Louisville & Nashville R. Co. v. United States, 245 U.S. 463, 466, 38 S. Ct. 141, 62 L.Ed. 400; State of New York v. United States, 331 U.S. 284, 335, 67 S.Ct. 1207, 91 L.Ed. 1492; Sakis v. United States, D.C., 103 F.Supp. 292, appeal dismissed 344 U.S. 801, 73 S.Ct. 4, 97 L.Ed. 625. The record in the State proceeding is irrelevant and the objection to its admission in evidence is sustained.

The power of Congress to authorize the Interstate Commerce Commission to establish intrastate rates in order to remove unjust discrimination against interstate commerce is not open to dispute. The plaintiffs here do not question that power, although they do question the reasonableness of the increases in Ex Parte 175. See King v. United States, 344 U.S. 254, 274, 73 S.Ct. 259, 97 L.Ed. 301; Florida v. United States, 282 U.S. 194, 211, 51 S.Ct. 119, 75 L.Ed. 291. It appears quite clear that Congress intended that the railway system of the country shall have a reasonable return to carry out the purposes of the Interstate Commerce Act, which would include compensation for intrastate business reasonably proportionate with the interstate business. Railroad Commission of State of Wisconsin v. Chicago, B. & Q. R. Co., 257 U.S. 563, 588, 42 S.Ct. 232, 66 L.Ed. 371; Illinois Commerce Commission v. United States, 292 U.S. 474, 483, 54 S.Ct. 783, 78 L.Ed. 1371. "The fundamental purpose of the Congress in enacting section 13, subdivisions (3) and (4), was to reach intrastate rates that were found to result in unjust discrimination against interstate commerce." State of Florida v. United States, 282 U.S. 194, 210, 51 S.Ct. 119, 123, 75 L.Ed. 291. The purpose of § 13 (4) is not limited to the removal of unjust and unreasonable discriminations against interstate commerce as it relates to persons and localities, but it imposes on the commission the affirmative duty "to take other important steps to maintain an adequate railway service for the people of the United States." Railroad Commission of State of Wisconsin v. Chicago, B. & Q. R. Co., 257 U.S. 563, 585, 42 S.Ct. 232, 236; State of Florida v. United States, 282 U.S. 194, 51 S.Ct. 119.

In determining the validity of an order of this nature, a reviewing court may not weigh the evidence; it may not negative the action of the Commission, being "one of those agencies presumably equipped or informed by experience to deal with the specialized field of knowledge, whose findings within that field carry the authority of an expertness which courts do not possess and therefore must respect," if from a consideration of the entire record there is a rational basis for the action. Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 488, 71 S.Ct. 456, 465, 95 L.Ed. 456. The court may set aside the order, "when it cannot conscientiously find that the evidence supporting that decision is substantial, when viewed in the light that the record in its entirety furnishes, including the body of evidence opposed to the Board's view." Universal Camera Corp. v. National Labor Relations Board, supra.

In Interstate Commerce Commission v. Jersey City, 322 U.S. 503, 513, 64 S.Ct. 1129, 1134, 88 L.Ed. 1420, it was said: "* * * `So long as there is warrant in the record for the judgment of the expert body it must stand. * * * "The judicial function is exhausted when there is found to be a rational basis for the conclusions approved by the administrative body."' Rochester Telephone Corp. v. United States, 307 U.S. 125, 145, 146, 59 S.Ct. 754, 764, 765, 83 L.Ed. 1147; Mississippi Valley Barge Line Co. v. United States, 292 U.S. 282, 286, 287, 54 S.Ct. 692, 693, 694, 78 L. Ed. 1260."

The principal contention of the plaintiffs is that the evidence does not sustain the finding that the existing intrastate rates cause undue, unreasonable and unjust discrimination against interstate commerce. It is said that the evidence fails because there has been no separation of interstate and intrastate costs and revenues. The evidence is to the effect that there is no distinction in the handling of interstate and intrastate freight shipments. They are both handled on the same trains, by the same crews; the same accounting department, the same traffic department, and the same facilities are used in the dispatch of both shipments. Under such conditions, the contention of the plaintiffs has been rejected by the courts. King v. United States, supra...