Sun-Maid Raisin Growers Ass'n v. United States

• Decision Date: 03 July 1940
• Docket Number: No. 21459 S.,21459 S.
• Citation: 33 F. Supp. 959
• Parties: SUN-MAID RAISIN GROWERS ASS'N et al. v. UNITED STATES.
• Court: U.S. District Court — Northern District of California

33 F. Supp. 959

SUN-MAID RAISIN GROWERS ASS'N et al. v. UNITED STATES.

No. 21459 S.

District Court, N. D. California, S. D.

July 3, 1940.

J. Richard Townsend, of San Francisco, Cal., for plaintiffs.

Frank J. Hennessy, U. S. Atty., of San Francisco, Cal., for defendant.

Lillick, Olson, Levy & Geary, of San Francisco, Cal., for intervener.

Before WILBUR, Circuit Judge, and ST. SURE and ROCHE, District Judges.

WILBUR, Circuit Judge.

The Raisin Growers initiated a proceeding before the Maritime Commission charging numerous steamship companies engaged in foreign trade with an "unjust and unreasonable practice" in violation of § 17 of the Shipping Act, 39 Stat. 734, 46 U.S. C.A. § 816.¹ The practice alleged to violate § 17, supra, related to the fixing of a separate handling charge for the handling of freight after delivery on the dock from the point of delivery to the ship's tackle. For this service a "handling charge" of 40 cents per ton was made. It is not contended that this rate is excessive. On the contrary, the intervening steamship companies claim that the 40 cent charge will not cover the increases in cost due to a rise in the cost of labor since the establishment of the freight rate which the handling charge supplements. Neither is it contended that the freight rate is excessive. The contention of the shippers is that the cost of handling freight between the point of delivery to the carrier on the dock and the ship's tackle should be included in the freight rate and should not be made as a separate and distinct charge. It is claimed that the practice of making a separate charge for this service is unlawful and that it injures the shippers because of their inability to pass it on to the purchasers of their product as would be the case if incorporated in the freight rate. The shippers claim that the method of fixing a separate handling charge puts an unreasonable burden upon them without corresponding benefit to the steamship companies and that it is therefore unreasonable and unjust.

The Maritime Commission upheld the practice of the steamship companies as just and reasonable and the plaintiffs have invoked the jurisdiction of this court under § 31 of the Shipping Act of 1916, supra, as amended, 46 U.S.C.A. § 830, 39 Stat. 738; and 28 U.S.C.A. §§ 41, sub. 28, and 45 to 48, inclusive.

The plaintiffs do not complain that the freight charge, plus the handling charge, is excessive or unreasonable or unjust. In support of their contention that the setting up of a separate handling charge is unlawful the plaintiffs rely upon a number of decisions of the Supreme Court relating to the handling of livestock and other freight. Under varying circumstances the propriety of making a separate charge for unloading livestock has been considered by that court. One of these cases (Covington Stock-Yards Co. v. Keith, 139 U.S. 128, 11 S.Ct. 461, 35 L.Ed. 73) dealt with the common carrier's duty to deliver freight under the common law. It was held that the freight rate covered the cost of unloading the livestock transported and that a separate charge for that service was an exaction of double payment for the unloading and, hence, an unlawful exaction. The reasoning of this opinion is not applicable to the case at bar where the tariff merely separates the freight charge into two items. As to decisions based upon the "act to regulate commerce" (passed February 4, 1887, 24 Stat. 379, 49 U.S.C.A. § 1 et seq.) and its amendments, cited by the plaintiffs, it should be noted that the act is not applicable to the traffic here involved. Nevertheless, as the plaintiffs so strongly rely upon such decisions they will be further considered.

The "act to regulate commerce", supra, expressly provided for publication of schedules by the common carrier which "shall also state separately the terminal charges and any other rules or regulations which in any wise change, affect, or determine any part or the aggregate of such aforesaid rates and fares and charges". 24 Stat. 379, 380, § 6. This provision has been carried in subsequent amendments and reenactments of statutes regulating interstate commerce and is now incorporated in the transportation acts of 1920, 49 U.S. C.A. § 6(1).

In another case cited by the plaintiffs, (Interstate Commerce Comm. v. Chicago, B. & Q. R. Co., 186 U.S. 320, 22 S.Ct. 824, 46 L.Ed. 1182) arising under the Act to Regulate Commerce, supra, a separate terminal charge was made by the Railroad Company and was sustained by the court, but the court, in that case, expressly reserved the question as to whether or not such separate charge would be appropriate where the Railroad Company owned the terminal facilities. A similar conclusion was reached in Interstate Commerce Commission v. Stickney, 215 U.S. 98, 30 S.Ct. 66, 54 L.Ed. 112, cited by the plaintiffs, in which the separate terminal charge went to a connecting carrier and was upheld by the court.

In Adams v. Mills, 286 U.S. 397, 52 S.Ct. 589, 76 L.Ed. 1184, cited by plaintiffs, the unlawful practice denounced was not the making of a separate terminal charge or a separate unloading charge, but was the imposition of an additional charge by the initial carrier of 25 cents per car for unloading, without amending its tariff, which already included the cost of unloading as theretofore charged by the terminal company and paid to it by the initial carrier.

There is nothing in any of these Supreme Court decisions cited by the plaintiffs which justifies the conclusion that the railroads were prohibited by law from making a separate charge for items involved in transportation which might otherwise be included in the general freight rate if...