Railroad Commission v. Oil Field Haulers Ass'n

Decision Date29 May 1963
Docket NumberNo. 11102,11102
Citation369 S.W.2d 931
PartiesRAILROAD COMMISSION of Texas, Appellant, v. OIL FIELD HAULERS ASSOCIATION, Inc., et al., Appellees.
CourtTexas Court of Appeals

Waggoner Carr, Atty. Gen., Norman V. Suarez, Asst. Atty. Gen., Austin, Ralph W. Currie, Sp. Asst. Atty. Gen., Dallas, for appellant.

Clark, Thomas, Harris, Denius & Winters, James H. Keahey and Wallace McLean, Austin; Joe G. Fender, Houston; Callaway, Reed, Kidwell & Brooks, Dallas, for appellees.

HUGHES, Justice.

This appeal is from an order granting a temporary injunction enjoining enforcement of an order of the Railroad Commission of Texas reducing railroad transportation intrastate rates on carload shipments of wrought iron, cast iron 1 and steel pipe or tubing.

The above order was made by the Commission upon complaint filed with it by Lone Star Steel Company against then existing rates on wrought iron and steel pipe or tubing in carloads by railroad between points in Texas. Lone Star intervened in the Trial Court and aligned itself with the Commission; it, however, did not join the Commission in appealing from the injunctive order.

The suit below was filed by the Oil Field Haulers Association, Inc., the purpose of which was to have the order of the Commission set aside and to enjoin its enforcement. A plea in intervention was filed by Hill and Hill Truck Line, Inc., seeking the same relief. A similar plea in intervention was filed by Chicago Rock Island and Pacific Railroad Company, Gulf Colorado and Santa Fe Railway Company, Missouri Pacific Railroad Company, Panhandle and Santa Fe Railway Company, The Pecos Valley Southern Railway Comapny, St. Louis, San Francisco and Texas Railway Company and The Texas and Pacific Railway Company.

The Oil Field Haulers Association, Inc., in a sworn pleading alleged that it was a trade association composed of many, members of the oil field motor carrier industry, which members hold and operate under specialized motor carrier certificates of convenience and necessity issued to them by the Railroad Commission; that these certificates authorize them to transport for hire by motor vehicle, over irregular routes within Texas, oil field equipment and materials, that they are presently engaged in such activities and have expended huge sums of money, therein. It was particularly alleged that, 'In the conduct of their operations, plaintiff's members are in direct competition with the railroads in this State. Such competition is particularly vigorous in the transportation of pipe or tubing, iron or steel.'

The order of the Commission was attacked by Haulers on these grounds:

1. It purports to amend a tariff, Railroad Commission Tariff No. 322, which is no longer in effect, and hence it is 'illegal and void as a matter of law.'

2. There is no evidence that present rail pipe rates have become 'unreasonable, unfair or excessive,' and that the reductions ordered by the Commission are 'wholly unjustified and it cannot be shown that they are reasonable, fair or compensatory.'

3. There is no evidence that present rail pipe rates are 'unduly prejudicial of certain shippers in localities of the State and unduly preferential to other shippers in localities of the State' as found by the Commission.

4. There is no evidence that the present rail pipe rates discriminate against shipments from Lone Star by not giving that point the advantage of its geographical location.

5. The order of the Commission is arbitrary and invalid because it reduces rates on the transportation of cast iron pipe despite the recitation in the Commission notices for the hearing preceding the issuance of such order that cast iron pipe was not involved in the complaint before it by Lone Star Steel.

6. The Commission based its order on an Interstate Commerce Commission tariff which has no relation to what is fair or compensatory for transportation intrastate rates in Texas.

7. The Order of December 18, 1962, 'would impose rail pipe rates which would be discriminatory against plaintiff [Haulers] and its members. If put into effect, it will cut the rail rates on pipe to such an extent that the oil field carriers will no longer be competitive. As a result, plaintiff [Haulers] and its members will not participate in the transportation of pipe between any two points in Texas which can be served by railroad. And not only will the Order of December 18, 1962, have the effect of diverting intrastate shipments of pipe to the rail carriers, but it will also divert interstate exbarge traffic to intrastate rail routes. The long-haul transportation of pipe is a main source of revenue to plaintiff [Haulers] and its members, and the Railroad Commission erred in irnoring the disastrous effect that its Order of December 18, 1962, will have on the oil field carriers of this State.'

8. The order of the Commission 'totally ignores the basic elements of transportation economics.' The essence of this objection is that the Commission used erroneous data in determining the rate prescribed and that it failed to take into account the principles of 'classification of freight, the theory of volume rates, and the theory of declining costs' in considering the rate it fixed.

We now copy from the concluding paragraph in Haulers' petition:

'The Defendant Commission in prescribing the rates complained of through the issuance of its December 18, 1962, Order has reduced the rates on pipe or tubing, iron or steel, without any testimony or evidence of record upon which to predicate a finding that the rates now in existence are discriminatory, unjust, or unreasonable. All the evidence before the Commission was and is to the contrary. The action of the Commission in its Order of December 18, 1962, was taken without substantial evidence or any evidence to support its action and constitutes an abuse of discretion on its part, and is unlawful. As a result of such arbitrary, unreasonable, and capricious action by the Commission, plaintiff and its members will no longer be able to compete with the intrastate railroads for the long-haul movement of pipe, which traffic now constitutes a main source of income for plaintiff's members. The Commission's Order will result in monetary loss and damages to plaintiff and its members that are incapable of determination.'

Intervenor, Hill and Hill Truck Line, Inc., by sworn pleading, alleged its anticipated loss in revenues as a result of the Commission Order in question and further alleged that the rates therein prescribed for railway transportation were 'below the cost of handling in truck service and, by reason thereof, intervenor cannot lower its intrastate rates to the level prescribed by the Commission,' and that, 'By reason of the foregoing * * * the rates prescribed by the Railroad Commission are unjust, unreasonable and confiscatory * * *'

The railroad intervenors, above named, pleaded, by an unsworn petition, that if the rates set by the Commission remain in force that their revenues on the shipments affected would be reduced by more than 25%. They also allege that they will suffer losses from their interstate business as well. The railroads plead that the rates prescribed by the Commission for pipe are the same as those applying on iron and steel articles, other than pipe, moving interstate which rates, they allege 'were brought about and forced into being by competitive conditions and circumstances that are not applicable in connection with shipments of pipe intrastate in Texas.'

We quote the final paragraph of the railroad's petition:

'The prescribed rates on pipe are so low they will unnecessarily and unwarrantably dissipate the revenues of the Railroads and therefore are unjust and unreasonable, in violation of the statutes of the State of Texas. This is paraticularly so as the Railroads do not now earn an adequate return on their investment in property devoted to public service.'

The response of the Commission to the pleadings of Haulers was that it was not a party at interest under Art. 6453, Vernon's Ann.Civ.St., and, hence, had no right to bring this suit, 2 and that its pleadings failed to show that the order of the Commission was unjust and unreasonable to it.

The Trial Court heard the case upon the sworn pleadings and affidavits only. The Trial Court made no findings of fact other than those contained in its order granting the temporary injunction, which we quote:

'The Court is of the opinion that Plaintiffs are entitled to the temporary injunction as herein granted, same being within their allegations and prayer, for the reason that the Railroad Commission's order of December 18, 1962 purports to amend a tariff, Railroad Commission Tariff No. 322, which is no longer in effect; applies to cast iron pipe or tubing, when no notice or hearing was given as to such commodity; attempts to apply a reduced, volume rate statewide in Texas when, in fact, there is no support for classifying all points in Texas as volume points; attempts to reduce Texas rail pipe rates to the abnormally low level of interstate rail pipe rates which have been reduced to meet barge-truck competition; adopts a scale of rates from an interstate tariff which applies in a forty state area and does not apply to pipe, such being a wholly arbitrary way of fixing a scale of rates to apply in Texas on pipe; totally ignores basic rate making principles without justification for so doing; and ignores the effect that its order will have upon the buying public in Texas and upon the competing oil field carrier industry. If the Defendants Railroad Commission of Texas, et al., proceed to enforce the rates set out in its order of December 18, 1962, such action would deprive the Plaintiffs of the bulk of their pipe tonnage and revenue, resulting in irreparable and inestimable damage to Plaintiffs; it would also probably...

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4 cases
  • Oil Field Haulers Ass'n v. Railroad Commission
    • United States
    • Supreme Court of Texas
    • 3 Junio 1964
    ...appeal. On May 29, 1963, the Court of Civil Appeals reversed the judgment of the trial court and dissolved the temporary injunction. See 369 S.W.2d 931. On June 4, all appellees filed a motion to stay the order of dissolution until they had exhausted their right of review. The motion was gr......
  • Gibson v. Spinks, 13-92-080-CV
    • United States
    • Court of Appeals of Texas
    • 9 Diciembre 1993
  • Railroad Commission v. Oil Field Haulers Ass'n, 11646
    • United States
    • Court of Appeals of Texas. Court of Civil Appeals of Texas
    • 7 Mayo 1969
    ...rates under the order. This judgment was appealed to this Court where the injunction was dissolved. Railroad Commission of Texas v. Oil Field Haulers Association, Inc., 369 S.W.2d 931 (1963). The Supreme Court, on appeal, reversed this Court and reinstated the temporary injunction, Oil Fiel......
  • Missouri Pacific Railroad Co. v. Railroad Commission, 11353
    • United States
    • Court of Appeals of Texas. Court of Civil Appeals of Texas
    • 5 Enero 1966
    ...revenue to pay for the cost of transporting it, and is unreasonable and unjust. Appellant cites Railroad Commission v. Oil Field Haulers Ass'n., Tex.Civ.App., 369 S.W.2d 931 for the statement at p. 941 that 'it the rates here are compensatory * * * then it is not possible for them to be unr......

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