State of Florida v. United States Corporation v. Same Wilson Lumber Co of Florida v. Same

• Citation: 51 S.Ct. 119,75 L.Ed. 291,282 U.S. 194
• Decision Date: 05 January 1931
• Docket Number: Nos. 16-18,BROOKS-SCANLON,s. 16-18
• Parties: STATE OF FLORIDA et al. v. UNITED STATES et al.CORPORATION et al. v. SAME. WILSON LUMBER CO. OF FLORIDA v. SAME
• Court: U.S. Supreme Court

282 U.S. 194

51 S.Ct. 119

75 L.Ed. 291

STATE OF FLORIDA et al.

v UNITED STATES et al.

BROOKS-SCANLON CORPORATION et al.

v. SAME.

WILSON LUMBER CO. OF FLORIDA

v. SAME.

Nos. 16-18.

Argued Oct. 30, 31, 1930.

Decided Jan. 5, 1931.

[Syllabus from pages 194-196 intentionally omitted] Messrs. Fred H. Davis and T. T. Turnbull, both of Tallahassee, Fla., for appellants State of Florida et al.

[Argument of Counsel from pages 196-198 intentionally omitted] Messrs. H. P. Adair, of Jacksonville, Fla., and August G. Gutheim, of Washington, D. C., for appellants Brooks-Scanlon Corporation et al.

Mr. J. V. Norman, of Louisville, Ky., for appellant Wilson Lumber Co. of Florida.

The Attorney General and Messrs. John Lord O'Brian Asst. to Atty. Gen., Robert C. Alston, of Atlanta, Ga., F. B. Grier, of Wilmington, N. C., and W. E. Kay, of Jacksonville, Fla., for the United States and Interstate Commerce Commission.

[Argument of Counsel from pages 199-200 intentionally omitted] Mr. Robert C. Alston, of Atlanta, Ga., for Atlantic Coast Line R. Co.

Mr. Chief Justice HUGHES delivered the opinion of the Court.

The state of Florida and the members of its Railroad Commission (appellants in No. 16) brought suit in the District Court to restrain the enforcement of that part of an order of the Interstate Commerce Commission which dealt with certain intrastate rates of the Atlantic Coast Line Railroad Company in Florida. The order, made August 2, 1928, required the railroad company to establish carload rates for logs (except walnut, cherry, and cedar) in intrastate commerce 'within the State of Florida' which should be the same as the rates prescribed by the Interstate Commerce Commission as reasonable for transportation in interstate commerce from points in the northern portion of Florida to destinations in Georgia. The order in that respect was assailed as being outside the scope of the issues raised in the proceeding in which the order was entered and without substantial evidence to support it, and as extending beyond the statutory authority of the Commission and the limits of federal power under the Constitution.

Suits for similar relief were brought by the Brooks-Scanlon Corporation and other corporations (appellants in No. 17) and by the Wilson Lumber Company (appellant in No. 18), manufacturers and shippers of lumber in Florida. The Public Service Commission of Georgia was permitted to intervene, and the three suits were consoli- dated and heard before a court of three judges as required by the applicable statute.

The court was of the opinion that the order of the Commission touching intrastate rates could be construed as being limited to points of origin on the Atlantic Coast Line Railroad in the northern part of Florida, as the Commission had confined its order to these points of origin in fixing interstate rates. Taking the view that, if construed so as to apply to intrastate rates throughout the state, the order would probably be invalid, the court sustained it upon the narrower construction. Decrees were entered accordingly in January, 1929, dismissing the bills. 30 F.(2d) 116.

Thereupon the Interstate Commerce Commission amended its order by inserting additional exceptions of logs, and also with respect to intrastate rates, 'for the purpose of clarification,' by substituting for the phrase 'within the State of Florida' the words 'within and throughout the entire State of Florida, without exception.' Petitions for rehearing and for leave to file supplemental bills were then presented to the District Court and were granted. The Atlantic Coast Line Railroad Company was allowed to intervene. On the rehearing, both the original and supplemental bills were dismissed. 31 F.(2d) 580. The court upheld the amended order of the Commission as to intrastate rates, in its state-wide operation, not 'because of undue prejudice to shippers and localities, or because of undue discrimination against the particular interstate commerce' in the described logs, but solely upon the ground that the order was aimed at a discrimination 'against general interstate commerce,' caused by intrastate rates which were so low as to throw an undue burden upon the interstate revenues of the carrier.

From the decrees entered accordingly the present appeals are brought.

The proceeding before the Interstate Commerce Commission was begun by the filing of a complaint by the Georgia Public Service Commission against the Atlantic Coast Line Railroad Company. The complaint stated that its object was to secure reasonable rates on logs from points on the railroad company's line within Florida to all destinations on its line in Georgia, and to remove any unjust discrimination found to exist as provided in the Interstate Commerce Act (49 USCA § 1 et seq.). The complaint alleged that there was competition between mills and consumers in Georgia and those in Florida in the purchase and transportation of logs from points in Florida to destinations in Georgia. The intrastate log rates of that railroad in Florida, and its interstate log rates between Florida and Georgia, for distances up to 170 miles, were set forth, and it was alleged that the interstate rates greatly exceeded the intrastate rates for like distances upon traffic moving under substantially similar conditions. The complaint charged that the interstate rates were unjust and unreasonable in violation of section 1, were unjustly discriminatory in violation of section 2, and were unduly prejudicial to the interstate shipper and preferential in favor of the intrastate shipper in violation of section 3, of the Interstate Commerce Act. It was also charged that the carrier's intrastte rates in Florida gave unreasonable preference to intrastate shippers in that state and were unduly prejudicial to interstate shippers in Georgia, causing an unjust discrimination against interstate commerce in violation of section 13 of the act. The complaints asked for an order requiring the Atlantic Coast Line Railroad Company to desist from the described violations of the act, and prescribing just, reasonable, and nondiscriminatory interstate rates to be charged by the defendant carrier for the transportation of carload shipments of logs from all Florida points to all destinations in Georgia, and that the measure of such rates should be no higher than those concurrently in effect for the same kind of property moving in intrastate commerce in Florida.

The state of Florida was notified of the proceeding, and the Florida Railroad Commission appeared in defense of the Florida intrastate rates. There were a number of interveners, including shippers of logs in intrastate commerce in Florida, Georgia lumber companies, and railroad companies operating in Florida and between Florida and Georgia, and all parties were fully heard.

In its report, the Interstate Commerce Commission stated that, while the complainant assailed the rates from all Florida points, the record showed that, so far as interstate rates were concerned, relief was desired only with respect to the rates on logs 'from that portion of Florida lying north of and including Jacksonville, Gainesville, Burnett's Lake, and High Springs,' described as North Florida, 'to destinations in Georgia for distances not exceeding 170 miles.' The Commission pointed out that the Florida intrastate rates under attack were published for carload lots for 170 miles and less. The history of these rates was reviewed. With certain modifications and extensions, they were what was generally known as the 'Cummer scale,' which had originally been established by contract between a predecessor railroad company and a lumber company. This contract, the obligations of which were assumed by the Atlantic Coast Line Railroad Company, expired in 1918 and was not renewed. Meanwhile, in 1914, the railroad company had entered into a similar contract with the predecessor in interest of the intervener Brooks-Scanlon Corporation, and this contract was to continue in effect until certain timber, tributary to the line of the railroad, had been transported. Accordingly, the railroad company filed schedules with the Florida Railroad Commission extending the Cummer Scale for described distances. The State Commission refused to permit the proposed rates to become effective because they were applicable only on trainloads and were not available to all shippers. That Commission further advised the railroad company that the rates were too low and such as might be deemed confiscatory. The rates were republished to apply on carloads over all of the company's lines in Florida. These rates, extended with respect to distances and modified by certain increases and reductions, have been continued by the railroad company for the purpose of complying with its contractual obligations and not because it has considered the scale to be a proper one for general application on intrastate traffic within Florida.

While not admitting that the interstate rates were unreasonable, the railroad company submitted to the Interstate Commerce Commission a proposal for their revision. The Commission made a tabular comparison of the existing interstate and intrastate rates and the proposed interstate rates from North Florida, and after a further statement of the evidence concluded that the interstate rates thus proposed were reasonable.

The Commission then made the following findings as to interstate and intrastate rates:

'We find that the interstate rates on logs, except walnut, cherry, and cedar, in carloads, from points on defendant's lines in Florida north of and including Jacksonville, Gainesville, Burnett's Lake, and High Springs, to destinations on its lines in Georgia for distanes not exceeding 170 miles are, and for the future will be, unreasonable to the extent that they exceed, or may exceed, the following distance scale of rates in cents per 100 pounds, minimum weight 40,000 pounds, which rates we find are and will be...