Public Utilities Com'r of Or., In re

• Decision Date: 31 March 1954
• Parties: In re PUBLIC UTILITIES COMMISSIONER OF OREGON. Appeal of SOUTHERN PAC. CO. et al.
• Court: Oregon Supreme Court

Page 605

268 P.2d 605

201 Or. 1

In re PUBLIC UTILITIES COMMISSIONER OF OREGON Appeal of SOUTHERN PAC. CO. et al.

Supreme Court of Oregon, En Banc.

March 31, 1954.

Frank C. McColloch, Portland, argued the cause for appellants. With him on the briefs were Koerner, Young, McColloch & Dezendorf, Edwin L. Graham and Joseph Larkin, Portland.

Robert R. Hollis, Asst. Atty. Gen., argued the cause for respondent Charles H. Heltzel, Public Utilities Commissioner of Oregon. With him on the brief were George Neuner, Atty. Gen., John R. McCullough and Wallace G. Mills, Asst. Attys. Gen.

William B. Adams and Arlus C. Morris, Portland, filed a brief for respondent Pacific Inland Tariff Bureau, Inc.

ROSSMAN, Justice.

This is an appeal from an order of the Circuit Court for Marion County which dismissed a petition for a writ of prohibition. The petition prayed that a writ issue directed to the Public Utilities Commissioner of Oregon, ORS 756.020, prohibiting him from conducting a hearing into the reasonableness of some tariffs which two of the petitioners had filed lowering the rates for the transportation of petroleum products by rail to points in Southern Oregon, from Portland on the one hand and from Coos Bay-North Bend upon the other. The petitioners (now appellants) are the Oregon, California & Eastern Railway, the Southern Pacific Company and their general agent. Since the general agent is immaterial to any issue before us, we need mention him no further. For the purposes of convenience we will refer to the petitioners as the railroads.

The complaint which instituted the proceeding before the Commissioner was filed by the respondent-intervenor Pacific Inland Tariff Bureau, Inc., an association composed of more than 400 motor carriers which are engaged in both intrastate and interstate commerce. We will refer to that organization as the Bureau. Thirty-four of its members are engaged in the transportation of petroleum products, and 21 of that group have destination points in Southern Oregon. Those carriers serve some of the persons and localities which are also supplied by the railroads. But, in addition to serving customers and points reached by the railroads, they supply others in Southern Oregon that have no rail connections. The complaint, in referring to the oil depots from which the motor carriers that transport petroleum products receive these shipments, says: 'Many of the bulk plants in Southern Oregon either are in cities off-rail or are off-rail in cities which themselves are on rail.' We include that excerpt in this opinion because it shows that many of the shippers and receivers of oil products in Southern Oregon do not use the railroads' facilities, but depend exclusively upon motor carriers.

Neither the Bureau nor any of its members ships or receives petroleum by rail. The motor carriers and the railroads receive in Portland and North Bend some of the oil which they distribute to consignees in Southern Oregon. But the motor carriers also receive in some cities which are not reached by any railroad, such as Crescent City, California, petroleum products which they transport into Southern Oregon. Crescent City is 50 miles or so from any railroad. Oil is transported by ocean-going barges from San Francisco Bay points to storage tanks which are located in that city, and later the motor carriers transport it from the tanks to consumers in the southern part of this state.

The foregoing shows that the routes pursued by the motor trucks and the railroads do not always parallel one another. It also shows that the persons and localities served by the railroads and the motor carriers are, in many instances, different. In fact, the arguments made by the parties indicate that, in most instances, they are different. Evidently few buyers of petroleum produces patronize both the railroads and the motor trucks. But the Bureau contends that, notwithstanding the differences of which we have taken notice, the persons and places served by the motor carriers and those served by the railroads are in competition with each other. It urges that a rate unduly low granted by the railroads to petroleum users is prejudicial even to persons served only by the motor carriers. It does not confine that argument to places and persons which are actually competitive, but extends it to all places and persons equidistant from the place of origin of the shipments.

In making its attack upon the aforementioned tariffs, the complaint presented by the Bureau to the Commissioner alleged that the new rates 'constitute substantial reductions below the previously existing rates. * * * Such reduced rates are unjust and unreasonably low and they are not compensatory; have caused and will continue to cause substantial and undue loss of revenue to complainant's members and to other rail carriers * * *; and do not contribute a fair share towards the revenue of the defendants.' The following is the detailed information which the complaint submits:

'That the subject rates result in extremely low revenues considering the character of the commodities, for example, typical examples reflect the following car-mile earnings and ton-mile earnings:

                                                    Car-Mile Earnings      Ton-Mile Earnings
                                                   --------------------  ----------------------
                Origin     Destination    Mileage    Subject  Previous   Subject     Previous
                                                       Rates               Rates
                -------------------------------------------------------------------------------
                                                       Cents    Cents    Mills       Mills
                                                   --------------------------------------------
                Portland   Klamath Falls    636         34.0     43      .00125      .00165
                Portland   Medford          650         27.6    37.4     .0010       .0014
                Coos Bay   Klamath Falls    632         34.7    41.8     .0013       .00155
                Coos Bay   Medford          654         27.5    37.2     .00105      .0014
                Note: The above mileages reflect an empty movement in the reverse direction as
                  there is no return haul.  Previous rates from Portland-Coos Bay were: 52 cents
                  to Klamath Falls, 46 cents to Medford, subject rates are 41 cents and 34
                  cents respectively.  The above are predicated upon 8,000 gallons at 6.6 lbs
                  per gallon
                

'That the subject commodities are relatively high grade among the multitude of commodities transported by defendant railroads; that average system ton mile earnings of the Southern Pacific Company as reported in its annual report for 1950 was 14 mills and the average system car mile earnings for the same year, as shown in the same report was 35.87 cents; hence, the earnings on the subject rates as shown above are below the average system earnings and the rates are less than minimum reasonable rates.'

Further, according to the complaint filed with the Commissioner,

'the subject rates if met by the motor carriers would result in revenues averaging approximately 28 cents per mile as against operating costs of from 33 cents per mile to 37 cents per mile, depending upon the carrier and its volume of business; that, hence, it is apparent that shippers and receivers at off-rail bulk plants even though adjacent to or near on-rail plants are presently penalized and discriminated against by virtue of the rates herein complained of.'

On behalf of a concern entitled Oil Terminals Company, which constructed the oil storage tanks in Crescent City which we mentioned, a statement was presented which alleged:

'From the bulk storage facilities at Crescent City, motor common carriers transport the refined petroleum products to points in Southern Oregon. Bulk storage facilities are maintained by oil companies in the Portland, Oregon area. The cost to the oil companies of transporting petroleum products by tank steamers to Portland and thence distributing to Southern Oregon by rail or truck is compared by said oil company shippers with the cost via the combined barge-truck operation between San Francisco Bay points and points in Southern Oregon via Crescent City. The reduced rail rates, therefore, threaten to cause a diversion from the barge-truck service via Crescent City to the rail service from Portland to Southern Oregon. Any such diversion will impair the operation of petitioners, particularly of petitioner Oil Terminals Co., since the cost of maintaining the bulk storage facilities at Crescent City is practically constant regardless of volume and, should the volume be reduced by reason of reduced rail rates, the cost will so exceed revenue as will ultimately make continuation of such facilities impractical or impossible.'

The Acme Transportation, Inc., a motor carrier which distributes oil from the Crescent City storage tanks to points in California and Southern Oregon, alleged:

'That if the rates which are the subject of this proceeding are permitted to remain in effect, they will materially affect the rate structure between California and Oregon and will seriously and adversely affect petitioner's business. That the rates under attack are unjust, unreasonable and unlawful, and that they are unduly low.'

The respondents (the Commissioner and the Bureau) contend that § 113-140, O.C.L.A., which is now ORS 760.510, 760.515 and 763.170, authorized the Bureau to present, and the Commissioner to consider, the complaint which we just reviewed. In their efforts to show that the lowered rates are unjust and unreasonable, the respondents depend upon § 113-103, O.C.L.A., ORS 760.015. They base their claim that the rates are discriminatory to a particular description of traffic (petroleum products) upon § 113-125, O.C.L.A., ORS 760.175.

When the complaint was set for a hearing by the Commissioner, the railroads objected that he lacked jurisdiction to hear the cause. They argued that the Commissioner has no jurisdiction to revise rates upwards over the protests of the carrier that...