Standard Oil Co. v. United States

• Decision Date: 05 March 1930
• Docket Number: No. 171.,171.
• Citation: 41 F.2d 836
• Parties: STANDARD OIL CO. v. UNITED STATES et al. (INTERSTATE COMMERCE COMMISSION, Intervener).
• Court: U.S. District Court — Panama Canal Zone

41 F.2d 836 (1930)

STANDARD OIL CO. v. UNITED STATES et al. (INTERSTATE COMMERCE COMMISSION, Intervener).

No. 171.

District Court, N. D. Indiana, Hammond Division.

March 5, 1930.

Knapp & Campbell, Harry I. Allen, John R. Cochran, L. L. Stephens, and Harry A. Daugherty, all of Chicago, Ill., for petitioner.

Elmer B. Collins, Sp. Asst. to Atty. Gen., John Lord O'Brian, Asst. to Atty. Gen., and Oliver M. Loomis, U. S. Atty., of South Bend, Ind.

J. Stanley Payne, Asst. Chief Counsel, of Washington, D. C. (Daniel W. Knowlton, Chief Counsel, Interstate Commerce Commission, of Washington, D. C., of counsel), for Interstate Commerce Commission.

J. L. Aber, of Pittsburgh, Pa., D. P. Connell and J. N. Davis, both of Chicago, Ill., E. J. Halberg, of Cleveland, Ohio, Herbert S. Harr, of Cincinnati, Ohio, Walter McFarland, of Chicago, Ill., G. D. Peters, of Hammond, Ind., M. B. Pierce, of New York City, K. L. Richmond and E. A. Smith, both of Chicago, Ill., L. H. Strasser, of St. Louis, Mo., and F. H. Towner, of Chicago, Ill., for defendant carriers.

Before SPARKS, Circuit Judge, and BALTZELL and SLICK, District Judges.

SPARKS, Circuit Judge.

This suit is brought by Standard Oil Company (Indiana), petitioner, against the respondents, United States of America and fifty railway companies, who will be hereinafter referred to as the respondent carriers.

Prior to filing this suit the petitioner had filed two complaints with the Interstate Commerce Commission, hereinafter referred to as the Commission, alleging that the respondent carriers had collected from petitioner, between November 27, 1920, and November 1, 1923, freight charges on certain shipments of petroleum and petroleum products based upon rates contained in freight tariffs which were not applicable, and, therefore, were in violation of section 6 of the Interstate Commerce Act as amended (49 USCA § 6). In those complaints petitioner contended that if proper freight tariffs had been applied, lesser charges would have accrued, and that it was entitled to a refund of the difference between the charges collected under the tariffs which the respondent carriers applied, and which the petitioner claimed were not applicable, and the charges provided for under the tariffs which the petitioner claims were applicable.

Upon the complaints and answers thereto division No. 1 of the Commission held hearings, at which voluminous oral and documentary evidence was submitted on all the merits. As bearing on the question of interpretation and application of rates, the Commission heard and considered evidence on the reasonableness and practicability of routes, and the prior usage and custom of the carriers, shippers, and the Commission with relation thereto. Division No. 1 of the Commission issued its report finding that the rates collected by the respondent carriers were the legally applicable rates under the established tariffs, and accordingly entered an order dismissing the complaints in the following language: "These cases being at issue upon complaints and answers on file, and having been duly heard and submitted by the parties, and full investigation of the matters and things involved having been had, and said division having, on the date hereof, made and filed a report containing its findings of fact and conclusions thereon, which said report is hereby referred to and made a part hereof: It is ordered, That the complaints in these proceedings be, and they are hereby, dismissed." Standard Oil Company (Indiana) v. Atchison, Topeka & Santa Fé Railway Company, 113 I. C. C. 597.

Afterwards petitioner filed a petition for reargument and reconsideration, which was granted, and further oral argument was heard by the Commission, ten of the eleven Commissioners sitting. Later the Commission issued its report on reargument, in which it affirmed the findings of division 1 and entered an order dismissing the complaints. Standard Oil Company (Indiana) v. Atchison, Topeka & Santa Fé Railway Company et al., 139 I. C. C. 297.

The instant suit prays that a decree be entered adjudging the orders of the Commission, heretofore referred to, to be null and void in all respects, and ordering the same to be abrogated, canceled, and set aside, and that the Commission be directed by this court to enter an order in the causes referred to granting the prayer of said complaints, and finding that petitioner has been overcharged as prayed; and that the Commission have a further hearing, if necessary, for the purpose of determining petitioner's damage.

We are first met with the objection on the part of respondents that the orders of the Commission dismissing the complaints referred to are orders denying affirmative relief sought by petitioner, and are not subject to review by the courts.

The pertinent provisions of the Commerce Court Act creating the jurisdiction which this court may exercise over orders of the Commission, are as follows:

"First. All cases for the enforcement, otherwise than by adjudication and collection of a forfeiture or penalty or by infliction of criminal punishment, of any order of the Interstate Commerce Commission other than for the payment of money.

"Second. Cases brought to enjoin, set aside, annul, or suspend in whole or in part any order of the Interstate Commerce Commission." Act June 18, 1910, 36 Stat. 539.

The Urgent Deficiencies Act of October 22, 1913, 38 Stat. 219, abolished the commerce court and transferred its jurisdiction to courts called "District Courts," which are specially constituted, consisting of three judges, at least one of which must be a circuit judge. This court has the same jurisdiction that was vested in the commerce court, and it has no greater jurisdiction. Manufacturers' Ry. Co. v. United States, 246 U. S. 457, 38 S. Ct. 383, 62 L. Ed. 831.

It will be observed that the statute includes "any order" of the Commission, but in construing these words it was said that the statute confers no jurisdiction to annul or enjoin purely negative orders of the Commission. Procter & Gamble Co. v. United States, 225 U. S. 282, 32 S. Ct. 761, 56 L. Ed. 1091. The court's reasoning in that case is that only such orders may be enjoined under the statutes as require the doing, or abstaining from doing, acts embraced by previous affirmative command of the Commission, and that since an order dismissing a complaint makes no command, and requires no one to do anything, nor to refrain from doing anything, there is nothing in such order to which the court's injunction could attach, and that therefore such mere negative orders are not orders within the meaning of the statutes.

The petitioner, however, contends:

First. That the complaints which it originally filed with the Commission involved only the construction or interpretation of certain tariffs which were conceded to have been in effect at the time the shipments moved; that all shipments were routed by the shipper in accordance with the tariffs in effect; that the questions presented were therefore purely matters of law and did not require the exercise by the Commission of any of its administrative functions, and are therefore reviewable by this court.

Second. That this court can review an order of the Commission holding a given rate or regulation just, reasonable, or not discriminatory, if the holding is wrong as a matter of law, which it claims is true in the instant case.

Third. That the orders of dismissal were a determination of a right on the one hand and of an obligation on the other, and that this court may review such orders even though negative in form.

Fourth. That the orders of the Commission, though negative in form, are affirmative in effect, and therefore reviewable.

It may be conceded that an order of the Commission which involves solely matters of law, and which does not involve the Commission's administrative functions, may be reviewed by the courts; and though the order be negative in form yet affirmative in effect, it is still subject to review, but such review must be had in the manner provided by law. In order to have a proper conception of the issues submitted to and decided by the Commission with relation to the complaints referred to, it will be helpful to consider not only the allegations of the complaints, but also the scope of the evidence heard and the findings of the Commission upon which the order of dismissal was based. The first complaint dealt with the application at intermediate points, on continuous routes, of specific rates to more distant named points under open routing in the tariffs in connection with intermediate rules. The second complaint dealt principally with the use of a so-called combination rule in local tariffs of short line intermediate carriers in constructing combination rates on traffic specifically routed over indirect routes, when the tariffs of the originating and delivering carriers specifically provided that such rule would not apply. Each shipment was fully routed by the shipper, more than 400 different routings having been used, many of which are covered by slightly different tariff provisions. Both complaints were heard together and were disposed of in one report. The Commission did not dismiss petitioner's complaints for want of jurisdiction, but granted it a plenary hearing and decided the complaints upon the merits. Much evidence was heard and on every issue raised by the pleadings.

With relation to the first complaint, the Commission found "that the rates charged by the defendant carriers were those found in Kelly's exceptions to the official classification; that prior to July 11, 1918, these rates were 90% of the fifth class rates, but that on that date in accordance with instructions from the Director General of Railroads the percentage basis was cancelled and the method of stating oil rates in specific amounts was adopted, and continued in effect during the shipments in question. That during the period of shipments there were in...