Tex-O-Kan Flour Mills v. United States

• Decision Date: 15 March 1943
• Docket Number: Civ. A. No. 801.
• Citation: 49 F. Supp. 516
• Parties: TEX-O-KAN FLOUR MILLS v. UNITED STATES.
• Court: U.S. District Court — Northern District of Texas

49 F. Supp. 516

TEX-O-KAN FLOUR MILLS v. UNITED STATES.

Civ. A. No. 801.

District Court, N. D. Texas, Dallas Division.

March 15, 1943.

Callaway & Reed, of Dallas, Tex., for plaintiff.

Robert L. Pierce, Asst. to Atty. Gen., Daniel W. Knowlton, Nelson Thomas, Jack Garrett Scott, and Hallan Huffman, General Counsel, I. C. C., all of Washington, D. C., for defendant.

Before HUTCHESON, Circuit Judge, and ATWELL and KENNERLY, District Judges.

ATWELL, District Judge.

The plaintiff, a Delaware corporation, has its general office and place of business in Dallas, Texas. It is engaged in the business of buying and selling grain and operating mills for the conversion of grain. In the selling of American, Argentina and Canadian grain, it is in competition with similar business institutions throughout the United States, but particularly with those located in Buffalo, Chicago, Minneapolis, Kansas City, New Orleans, and the gulf ports.

It alleges that wheat and barley grown in Canada has always moved and now moves in bond in railroad transportation from Canada across the United States to consuming centers in the West Indies, Central America, South America, and the Republic of Mexico. There has been a movement of rice from Mexico into Canada and it is now so moving. Cotton and peanuts move in all rail transportation from Mexico to Canada, across the United States.

That the normal movement of wheat into Mexico is from five to eight million bushels per annum, equalling three thousand to five thousand loaded box cars. Due to unusual conditions, this demand has increased to ten million bushels, equalling sixty-five hundred loaded box cars.

That the normal movement of grain and its products in such producing sections of the United States and Canada to the West Indies, Central America and South America, is from fifteen to twenty million bushels per annum, equalling approximately ten to fourteen thousand loaded box cars.

The normal route from Canada has been via water to Buffalo, Chicago, and Minneapolis, thence via rail to Atlantic gulf ports, and thence via steamship to destination. Also, a normal movement of grain and its products from Canada by way of railroads across the United States to gulf ports.

Due to the shortage of boats and of coastwise service, as a result of the World War, the normal route for grain produced in the United States and in Canada to the Latin American countries has been materially disrupted and the movement has been diverted to all rail routes.

That on or about February 15, 1943, there was in storage at Buffalo 2,404,000 bushels of Canadian wheat for the purpose of moving across the United States to the said countries. That the movement to Mexico has been increased due to the policy of the American government. That this is well known to the Department of Agriculture, the I. C. C., and the office of Defense Transportation.

Early in August, 1942, the Department of Agriculture was informed of the increased needs of Mexico for wheat, and plaintiff and many of its competitors sought to supply such need, sealed bids being made early in December. Such bids covered Canadian grain and American grain. The plaintiff's bid for 2,600,000 bushels was accepted by the Republic of Mexico on December 17, 1942, it having on hand at that time 600,000 bushels at the port of Galveston, which left 2,000,000 bushels to move from Canada.

That it consulted the railways with reference to such movement from Canada without involving in any way the transportation of war materials for the United States. That the railways advised it that they had available surplus box cars and motive power and that no shortage would be created by this movement, and the contract was entered into for the sale of such grain.

That the sale price of American grain is controlled by the loan policy of the C.C.C., an agency of the Department of Agriculture.

It then pleads the prevailing price for Canadian grain, and for American grain, showing how that resulted in the sale of the Canadian wheat to Mexico, and that plaintiff really preferred to buy and sell American wheat and had repeatedly called the attention of the Department of Agriculture and government officials to the situation.

That upon completion of the deal, the plaintiff notified the railroads and they begun the movement of empty box cars into Canada for the transportation thereof. On January 12, 1943, the defendant, I. C. C., issued service order No. 103 in the following words to-wit:

"At a session of the Interstate Commerce Commission, Division 3, held at its office in Washington, D. C., on the 12th day of January, A. D. 1943.

"It appearing, That an unusual movement by railroad of grain, in carloads, from points in a foreign country through the United States to points in another foreign country may result in shortage of railroad equipment and congestion of traffic, and that the office of Defense Transportation has requested this Commission to take action in the matter; and that an emergency exists requiring immediate action;

"It is ordered, That:

Title 49 — Transportation and Railroads

Chapter 1 — Interstate Commerce Commission

Subchapter A — General Rules and Regulations

Part 95 — Car Service

"§ 95.4 Grain from a foreign country. (a) All common carriers by railroad are hereby ordered not to accept or move grain, in carloads, originating in a foreign country and moving by railroad through the United States, all-rail, to points in another foreign country; and all common carriers by railroad are hereby ordered not to furnish cars for such a movement.

"(b) Special and general permits. The provisions of this order shall be subject to any special or general permit issued by the Director of the Bureau of Service, Interstate Commerce Commission, Washington, D. C., to meet specific needs or exceptional circumstances (40 Stat. 101, sec. 402, 41 Stat. 476, sec. 4, 54 Stat. 901; 49 U.S.C. § 1(10)-(17).

"It is further ordered, That this order shall become effective immediately and shall remain in force until further order of the Commission; that copies of this order and direction shall be served upon all common carriers by railroad subject to the Interstate Commerce Act and upon the Association of American Railroads, Car Service Division; and that notice of this order be given to the general public by depositing a copy in the office of the Secretary of the Commission at Washington, D. C., and by filing it with the Director, Division of the Federal Register, the National Archives,

"By the Commission, division 3 "W. P. Bartel, Secretary." (SEAL)

That this particular order was directed at its transactions. The I. C. C. immediately thereafter issued certain exceptions for the benefit of others. That it applied for general and special permission to go forward but it was allowed to move only ninety-five cars. Thereupon, it petitioned for a hearing, which was denied.

That plaintiff is unable to ship by water, because of the winter season. That by reason of its inability to obtain transportation not covered by Order No. 103, plaintiff's competitors have sold more than five million bushels of American grain to Mexico and plaintiff will lose its profit, unless it can obtain transportation.

That thereafter, on January 30, 1943, another order was issued by the I. C. C. which requires American railroads to issue embargoes so that Mexican railroads will be required to return an equivalent number of cars to the movement of American cars into Mexico.

That the result of these two orders, and of the subsidy granted by the Department of Agriculture, is that transportation is available for its competitor's movement of five million bushels of wheat sold to Mexico but such service is not available to the plaintiff.

That such orders were not issued for the purposes and reasons defined in paragraphs 15, 16 and 17 of the Interstate Commerce Commission Act, but that they were issued at the request of the Department of Agriculture, and the office of Defense Transportation, and in the interest of the C. C. C. which the Department of Agriculture owns and controls, and so that its wheat might be furnished instead of the plaintiff's.

That such orders are arbitrary, capricious, discriminatory, and, therefore, void.

That at the time Order No. 103 was issued, there was a great surplus of cars and freight motive power. That such orders will do the plaintiff irreparable injury and damage to the extent of $100,000, and both temporary and permanent restraints are prayed.

We recognize the suit as one pursuant to the provisions of 28 U.S.C.A. § 41(28), 38 Stat. 219. Sections 43 to 48, inclusive, of such Title, which control the same.

Service was had upon the United States and upon the I. C. C. The Director of the Office of Defense Transportation is Joseph B. Eastman, a resident of the city of Washington.

The twelfth paragraph of the complaint shows that Order No. 103 was issued at the request and on the petition of the Department of Agriculture, which is located in the same city, with Honorable Claude R. Wickard as Secretary of Agriculture.

We have not reviewed the position of the defendant. What the plaintiff says indicates a state of facts, which, if it is correct, appeals very strongly to a court. We can hardly approve of a proceeding such as has been described in the complaint. It would be wrong, of course, however, to condemn without hearing the other side, but a recital of the position of the other side is unnecessary because the I. C. C., the Department of Agriculture, and the office of Defense Transportation all move to dismiss.

28 U.S.C.A. § 43 treats of the venue of such suits. It provides that, "The venue of any suit brought to enforce, suspend, or set aside, in whole or in part, any order of the Interstate Commerce Commission shall be in the judicial district wherein is the residence of the party or any of the parties upon whose petition the order was made, except that where the order does...