State v. United States, Civ. A. No. 2174.

• Decision Date: 18 July 1956
• Docket Number: Civ. A. No. 2174.
• Citation: 144 F. Supp. 361
• Court: U.S. District Court — Middle District of Tennessee
• Parties: STATE OF TENNESSEE et al., v. UNITED STATES of America et al.

144 F. Supp. 361

STATE OF TENNESSEE et al., v. UNITED STATES of America et al.

Civ. A. No. 2174.

United States District Court M. D. Tennessee, Nashville Division.

July 18, 1956.

Harold Seligman, Gen. Counsel, Tennessee Public Service Comm., Nashville, Tenn., William Waller, Atty., Nashville, Tenn., and James I. Vance Berry, Atty., Nashvile, Tenn., for plaintiffs.

Fred Elledge, Jr., U. S. Atty., Nashville, Tenn., Arthur J. Dixon, Atty., Washington, D. C.; Prime F. Osborn, Atty., Louisville, Ky., Chas. P. Reynolds, Atty., Washington, D. C.; W. A. Miller, Asst. Gen. Counsel, Nashville, Chattanooga & St. Louis Railway, Nashville, Tenn.; Alfred T. MacFarland, Atty., Lebanon, Tenn., and Ferriss C. Bailey, Atty., Nashville, Tenn., for defendants.

Before MARTIN, Circuit Judge, and DAVIES and MILLER, District Judges.

PER CURIAM.

The cause was submitted upon the pleadings, evidence, exhibits, and argument of counsel for plaintiffs and defendants, and, after due consideration thereof, the Court enters its findings of fact and conclusions of law, as follows:

Findings of Fact

1. This suit was instituted under Sections 1336 and 2321-2325 of Title 28 of the United States Code, and Section 1009 of Title 5 of said Code, to enjoin and set aside the order of the Interstate Commerce Commission, dated February 24, 1956, in a proceeding entitled "No. 31307, Tennessee Intrastate Freight Rates and Charges," 294 I.C.C. 633. The order was entered by the Commission purportedly under the power conferred upon it by Sections 13(4) and 15a(2) of the Interstate Commerce Act, 49 U.S.C.A. §§ 13(4), 15a(2), and required the railroads operating in Tennessee to increase their Tennessee intrastate rates on the commodities named therein to the extent necessary to remove the unjust discrimination against interstate commerce found to exist. (See Findings, and Order of February 24, 1956.)

2. In a proceeding known as Ex Parte No. 175, Increased Freight Rates, 1951, the Interstate Commerce Commission authorized the railroads of the United States to increase their interstate freight rates and charges. The Commission found that the wages of railroad employees had increased substantially, that there had been substantial increases in the taxes paid by the railroads and in the cost of materials and supplies used by them, and that increased freight rates were needed in order to provide the adequate and efficient national railway system contemplated by Section 15a(2) of the Interstate Commerce Act and the National Transportation Policy (280 I. C.C. 179; 284 I.C.C. 589).

3. The Interstate Commerce Commission in the aforesaid Ex Parte 175 proceeding having authorized, with certain exceptions not herein pertinent, an interim increase of 15% in the form of a surcharge expiring February 28, 1954, later extended to December 31, 1955 (289 I.C.C. 395), the railroads operating in Tennessee petitioned the Tennessee Public Service Commission to allow a similar increase in intrastate rates and charges. The Tennessee Commission, after extended hearings, issued orders authorizing the petitioning carriers to increase the Tennessee intrastate rates and charges in the same percentages and amounts, and subject to the same limitations, as were authorized by the Interstate Commerce Commission in Ex Parte 175, for Southern territory interstate rates, except in the case of certain commodities, including brick and related articles, road aggregates, agricultural limestone, fertilizer and fertilizer materials. No increase in intrastate rates and charges was allowed by the Tennessee Commission for brick and related articles, agricultural limestone, road aggregates and certain other commodities not here involved. A 6% increase was allowed in the case of fertilizer and fertilizer materials.

4. Thereafter, on June 9, 1953, the railroads operating in Tennessee petitioned the Interstate Commerce Commission under the provisions of Section 13(3) and (4) and Section 15a(2) of the Interstate Commerce Act, 49 U.S.C.A., for an order requiring, in substance, that Tennessee intrastate freight rates and charges with respect to the excepted commodities be increased by the amounts necessary to reflect the same percentage increase as the Interstate Commerce Commission had authorized in Ex Parte 175 for interstate application in Southern Territory.

5. The proceeding involving Tennessee intrastate rates and charges was docketed as No. 31307, and this was a separate and distinct proceeding from Ex Parte 175, involving interstate rates and charges on a nationwide basis. Hearings were held in No. 31307 during the week of January 7, 1954, in Nashville, Tennessee, before Interstate Commerce Commission Examiner C. W. Griffin. Thereafter, the Examiner issued a proposed report in which he found that all of the increases in intrastate freight rates and charges as requested by the railroads operating in Tennessee should be authorized.

6. On April 20, 1955, following exceptions to the Examiner's Report and oral argument, the Interstate Commerce Commission issued a report in No. 31307 finding that the present intrastate freight rates and charges in Tennessee on brick and related articles, agricultural limestone, road aggregates, except sand and gravel into Nashville, and fertilizer materials to destinations at which fertilizers are manufactured, as well as certain other commodities, are generally lower than the interstate rates and charges on the same commodities between Tennessee and points in adjoining states. The Interstate Commerce Commission further found that traffic thereunder failed to produce its fair share of the revenue required by the railroads to enable them to justify adequate and efficient transportation service. The Interstate Commerce Commission thereupon concluded that an undue burden had been cast upon interstate commerce and that the intrastate rates and charges caused an undue, unreasonable and unjust discrimination against interstate commerce. The Interstate Commerce Commission further found that the establishment of the increases for intrastate traffic would not result in unreasonable rates or charges and that said increase "will substantially increase" the revenues of the railroads operating in Tennessee. The report stated that an order would be entered carrying the aforesaid findings and conclusions into effect unless the Tennessee Commission permitted said increases (294 I.C.C. 633).

7. The Tennessee Commission accepted the recommendations in the Interstate Commerce Commission report of April 20, 1955, in Docket No. 31307, and ordered, on July 22, 1955, that the increase in freight rates and charges as set out in said report of the Interstate Commerce Commission be applied to Tennessee intrastate traffic, subject to the expiration date then applicable to the interim increases in interstate rates and charges under Ex Parte 175.

8. On April 15, 1955, in Ex Parte 175, the railroads petitioned the Interstate Commerce Commission to make permanent the interim increases then in effect in the form of surcharges expiring December 31, 1955. Hearings were held by...