Saginaw Transfer Co. v. United States

• Decision Date: 08 November 1967
• Docket Number: Civ. A. No. 2748.
• Parties: SAGINAW TRANSFER CO., Saginaw, Michigan, Great Lakes Express, Saginaw, Michigan, Kramer-Consolidated Freight Lines, Inc., Detroit, Michigan, Interstate Motor Freight System, Grand Rapids, Michigan, Bender & Loudon Motor Freight, Inc., West Richfield, Ohio, Norwalk Freight Lines, Inc., Norwalk, Ohio, Eastern Central Motor Carriers Association, Inc., Akron, Ohio, Central States Motor Freight Bureau, Inc., Chicago, Illinois, Central and Southern Motor Freight Tariff Association, Inc., Louisville, Kentucky, and Middlewest Motor Freight Bureau, Kansas City, Missouri, Plaintiffs, v. The UNITED STATES of America and Interstate Commerce Commission, Defendants, and Railway Express Agency, Inc., and Dow Chemical Company, Intervenors.
• Court: U.S. District Court — Western District of Michigan

275 F. Supp. 585

SAGINAW TRANSFER CO., Saginaw, Michigan, Great Lakes Express, Saginaw, Michigan, Kramer-Consolidated Freight Lines, Inc., Detroit, Michigan, Interstate Motor Freight System, Grand Rapids, Michigan, Bender & Loudon Motor Freight, Inc., West Richfield, Ohio, Norwalk Freight Lines, Inc., Norwalk, Ohio, Eastern Central Motor Carriers Association, Inc., Akron, Ohio, Central States Motor Freight Bureau, Inc., Chicago, Illinois, Central and Southern Motor Freight Tariff Association, Inc., Louisville, Kentucky, and Middlewest Motor Freight Bureau, Kansas City, Missouri, Plaintiffs, v. The UNITED STATES of America and Interstate Commerce Commission, Defendants and Railway Express Agency, Inc., and Dow Chemical Company, Intervenors.

Civ. A. No. 2748.

United States District Court E. D. Michigan, N. D.

November 8, 1967.

Rex Eames, Eames, Petrillo, Wilcox & Nelson, Detroit, Mich., Homer S. Carpenter, Richard R. Sigmon, Rice, Carpenter & Carraway, Washington, D. C., for plaintiffs.

John H. D. Wigger, Atty., Dept. of Justice, Washington, D. C., Donald F. Turner, Asst. Atty. Gen., Lawrence Gubow, U. S. Atty., Detroit, Mich., for the United States.

Leonard S. Goodman, Asst. Gen. Counsel, Interstate Commerce Commission, Washington, D. C., Robert W. Ginnane, Gen. Counsel, for Interstate Commerce Commission.

William Q. Keenan, New York City, Ralph J. Isackson, Isackson & Neering, Bay City, Mich., for intervenors Railway Express Agency and Dow Chemical Co.

OPINION

Before O'SULLIVAN, Circuit Judge, ROTH, District Judge, and THORNTON, Senior District Judge.

ROTH, District Judge:

This is an action to set aside and annul an order of the Interstate Commerce Commission approving certain rates in connection with a so-called "delayed-tender" service by the Railway Express Agency. The action was brought pursuant to Title 28, Sections 1336, 1398, 2321 through 2325, U.S.C. and Title 5, Section 1009, U.S.C. The United States of America was made a party as required by Title 28, Section 2322, U.S.C. A Three-Judge Court was convened pursuant to Title 28, Section 2284, U.S.C.; and the Railway Express Agency and a shipper, Dow Chemical Company, have intervened. The case was submitted on the pleadings and a certified copy of the record of proceedings before the Commission. Briefs were filed, and the Court has had the benefit of oral arguments of counsel.

The Commission found the examiner's report correct in all material respects; that the rates under investigation were just and reasonable and otherwise lawful; that the evidence considered in the light of the exceptions and the replies thereto did not warrant a result different from that reached by the examiner. And finding the statement of facts, the conclusions, and the findings of the examiner proper and correct, the Commission affirmed and adopted them as its own.

By schedules filed December 11, 1961, the Railway Express Agency proposed commodity rates on specified commodities listed under a heading of "chemicals," in shipments the aggregate weights of which total 20,000 and 30,000 pounds or more, from Midland, Michigan, to points in Delaware, Maryland, New Jersey, New York, Pennsylvania, Virginia, New England, and the District of Columbia. The schedules were not suspended and became effective January 15, 1962, but were made the subject of investigation by order of January 10, 1962. The rates were protested by the Eastern Central Motor Carriers' Association, Inc., Norwalk Truck Lines, Inc., Great Lakes Express Company, and Interstate System, Inc.; the last three being motor common carriers of general commodities. The tariff rules require prepayment and aggregation, with tender from one shipper at one address at one time, and allow consignment to any number of consignees at any points in the destination area, individual shipment being subject to charges, including minimum charges, varying with the destinations. The subject rates are available to all shippers situated at Midland, but as a practical matter lend themselves only to the traffic of the Dow Chemical Company which, the examiner found, cooperated in working out the rates and the attendant handling.¹

Railway Express Agency made the rate of $2.89 per hundredweight applicable to all sizes of shipments when tendered in aggregates of 20,000 pounds and $2.63 cwt., when tendered in aggregates of 30,000 pounds. Motor carrier rates from Midland to New York City were: 1000 pounds $3.61 cwt.;

between 1000 to 1999 pounds, $3.33 cwt.;

between 2000 to 4999 pounds, $3.13 cwt.; and

for 5000 pounds or more, $2.89 cwt.

Railway Express Agency's mode of operation under the rates is outlined in the hearing examiner's report (326 I.C.C. 660) as follows:

"Under the rates, respondent spots a trailer for loading at Dow's less-than truckload dock at 4:00 p. m. of a tender day (a straight truck serving the plant every day is used for any overflow), and Dow and REA personnel complete loading by 8:30 p. m.; an REA tractor pulls the load to the Saginaw, Mich., REA office (approximately 31 miles), whence the New York Central Transport Company, a motor carrier subsidiary of the New York Central Railroad Company, moves it over the road 95 miles to Detroit, arriving about 12:30 a. m. the next day.

"At Detroit the (rear-loaded) traffic, except explosives, destined to New England and up-State New York is loaded into rail cars for eastern movement on the Central at 3:15 a. m., in "regular" REA service. The explosives, including those destined to New York City, are moved by truck to Toledo, thence by train to destination. The Midland trailer, with its remaining traffic and any additional Pittsburgh traffic waiting at Detroit is dispatched to Pittsburgh, 286 miles. From Pittsburgh the Midland traffic moves to destination in REA's "regular" service, rail or motor."

In discharging our duty to review the Commission action, we recognize that if the conclusions of the Commission are in accordance with law, not arbitrary, or an abuse of discretion, and supported with adequate findings revealing a rational basis, and is not against public policy, its decision may not be disturbed by us on review. Eastern Express, Inc. v. United States, D.C., 198 F.Supp. 256 (1961).

Ordinarily, we bow to Commission expertise; but expertise is not sufficient in itself to sustain a decision. The order must be supported by substantial evidence and must be within the statutory limits placed on the Commission's powers by Congress. It is our duty to test the order by measuring it against the requirements of the Administrative Procedure Act, Section 10, the statutory limits and authority expressed by Congress, and the National Transportation Policy, 49 U.S.C., preceding Section 1. Eastern Central Motor Carriers Association, Inc., v. United States, D.C., 239 F. Supp. 591 (1965). As pointed out in Florida East Coast Railway Co. v. United States, D.C., 259 F.Supp. 993, page 999 (1966):

"This Court must not shirk its duty by providing only a perfunctory review. But we are equally bound to keep our review within the limits intended by the statutory scheme of this particular agency. We would be no friend of the administrative process if we were to leave the Commission at large, free to roam from one arbitrary or capricious act to another. If judicial review is to have a basis for functioning, the ICC must do more than announce its ultimate conclusions by way of unrationalized fiat. The Commission must explain its reasoning in clear and precise terms. It must support its application of that reasoning to the instant case by substantial evidence in the record on which we must base our review. It is for us to determine whether the ICC has correctly applied the proper standards, and thus exhibited that familiarity with the problems in the transportation industry which Congress anticipated the ICC would achieve from its particularized experience."

With these accepted guidelines in mind, we have scrutinized the adopted statement of facts, the conclusions and findings of the examiner. We agree with the examiner that "it is elementary that under the Interstate Commerce Act, Part II, there can be no lawful rate in the absence of authority to perform the service for which the rate is published." We encounter difficulty immediately, however, when we join the examiner in his noble excursion in an endeavor to first define the term "express service" and then to apply such definition to the question: Is the service to which the rates apply an "express service?" The report concludes a long dissertation on the difficulties of defining "express service" by holding that: (326 I.C.C. 665)

"Thus, respondent is something more than a part-I `express company' for it holds over-the-road operating authority under part II; however, it is not the same in all respects as any other part-II express carrier, such as Mistletoe, or even Arrowhead, for it retains, under part II, some semblance of its part-I status, and its operating rights reflect that fact. In its part-II operations, therefore, it actually assumes a third status; as with the subject of a once popular song, being a combination thereof, it is neither swan nor goose, but truly, `swoose.' The examiner concludes that respondent's hybridity is more help than hindrance to its apparent purpose of being all things to all shippers, and that even if the traffic on which the considered rates apply did not consist primarily of relatively small shipments requiring expedited handling and saturation coverage (and they are not so confined), the considered rates and service would not be beyond the pale of respondent's peculiar and unique status and authority. * * In the circumstances, the applicability or not of section 15a(3) and its interpretation in Interstate Commerce Commission v. New York, N. H. & H. R. Co., 372 U.S. 744, 83 S.Ct. 1038, 10 L.E. 2d 108, appears to be academic."

We are unable to understand the reasoning and rationale behind the...