United States v. American Sheet Tin Plate Co 8212 12, 1937

• Decision Date: 17 May 1937
• Docket Number: No. 734,734
• Citation: 81 L.Ed. 1186,301 U.S. 402,57 S.Ct. 804
• Parties: UNITED STATES et al. v. AMERICAN SHEET & TIN PLATE CO. et al. * Argued April 9—12, 1937
• Court: U.S. Supreme Court

301 U.S. 402

57 S.Ct. 804

81 L.Ed. 1186

UNITED STATES et al.

v AMERICAN SHEET & TIN PLATE CO. et al.^*

No. 734.

Argued April 9—12, 1937.

Decided May 17, 1937.

Appeal from the District Court of the United Sates for the Western District of Pennsylvania.

Messrs. Homer S. Cummings, Atty. Gen., and

Daniel W. Knowlton, of Washington, D.C., for appellants.

Mr. David A. Reed, of Pittsburgh, Pa., for appellee American Sheet and Tin Plate Co.

Mr. John S. Burchmore, of Chicago, Ill., for appellees Allegheny Steel Co. et al.

Mr. Justice ROBERTS delivered the opinion of the Court.

This is an appeal from decrees of a specially constituted District Court¹ of three judges enjoining and setting aside orders of the Interstate Commerce Commission which required certain carriers to cease and desist from spotting cars on industrial plant tracks as part of the service rendered under interstate line-haul rates and from granting allowances out o the line-haul rates to industries doing such spotting. The appellees are five industrial concerns affected by the orders. They contend that the spotting service in question is transportation within the meaning of the Interstate Commerce Act (49 U.S.C.A. § 1 et seq.); that the performance of the service, or the payment of an allowance to an industry which itself performs it, is sanctioned by custom and practice and by previous adjudications of the Commission; and that line-haul rates were fixed in contemplation of the rendition of such service. They further charge the orders are void because not supported by the Commission's findings or the evidence.

Upon its own motion the Commission instituted an investigation known as Ex parte No. 104, Practices of Carriers affecting Operating Revenues or Expenses. Part II of that proceeding had to do with terminal services.² Voluminous evidence was adduced largely consisting of testimony by operating officials of carriers and traffic representatives of shippers touching the service of spotting cars at points upon the systems of plant trackage maintained by large industries. The Commission's report summarized its conclusions based on the evidence as to conditions at approximately two hundred industrial plants where spotting allowance were paid by the carriers and numerous plants where such services were performed by the carrier. The Commission found that line-haul rates had not been fixed to compensate the carriers for the performance of the service in question and that the railroads, after fixing their rates, had assumed a burden not previously borne by them. It found that section 15(13) of the act (49 U.S.C.A. § 15(13) permitting allowances by carriers to those performing a portion of the service of transportation had been made the instrument of abuse by the pay- ment of unwarranted allowances and added: 'When a carrier is prevented at its ordinary operating convenience from reaching points of loading or unloading within a plant, without interruption or interference by the desires of an industry or the disabilities of its plant, such as the manner in which the industrial operations are conducted, the arrangement or condition of its tracks, weighing service, or similar circumstances, * * * the service beyond the point of interruption or interference is in excess of that performed in simple switching or team-track delivery.' In conclusion, the report states that payment for or exemption of the cost of service performed beyond such points of interruption or interference is in violation of section 6 (49 U.S.C.A. § 6), provides the means by which the industry enjoys a preferential service not accorded to shippers generally, dissipates the carrier's funds and revenues, is not in conformity with the efficient or economical management contemplated by the Interstate Commerce Act, and is not in the public interest. No orders were made upon the footing of the main report, but thereafter, Division 6 promulgated supplemental reports recapitulating the testimony touching particular plants and making findings with respct to each and the service rendered thereat. Upon the basis of these supplementary proceedings orders to cease and desist were entered.³ The carriers thereupon gave notice of a revision of the applicable tariffs canceling allowances or withdrawing the spotting service. Each appellee filed a bill praying that the order affecting it be set aside and enforcement be restrained. The causes were consolidated for hearing and were disposed of upon a single record in one opinion. Separate decrees were entered in the respective causes granting the requested relief. The appellants took a single appeal from all the decrees. We hold the Commission's orders were lawful and should not have been set aside.

First. The appellees urge that the orders are fatally defective because the Commission failed to make the necessary quasi judicial findings. They point out that the Commission held that an allowance furnished a means whereby an industry enjoyed a preferential service not accorded to shippers generally, and constituted a refund or remission of a portion of the rates for transportation in violation of section 6(7) of the Interstate Commerce Act (49 U.S.C.A. § 6(7). They assert these conclusions are insufficient to support a cease and desist order because the Commission has not found, as it must to bottom an order on sections 2, 3(1), and 15(1) of the Act,⁴ that the pracitce was unreasonable, unjustly preferential, unduly discriminatory, or otherwise unlawful. Respecting section 6(7)⁵ they say that as, by that section and section 15(13),⁶ allowances to shippers who perform a part of the service of transportation are permissible if tariffs setting forth the nature and amount of the allowance are duly filed, as they were in the present instance, it cannot be an unlawful refund or rebate for the carriers to make the allowances which the tariffs specify. If the findings were limited to the practices specified in the sections mentioned the position of the appellees would no doubt be sound, but the Commission has, in each case, found that the interchange tracks of the respective industries are reasonably convenient points for the receipt and delivery of interstate shipments and that the industry performs no service beyond those points of interchange for with the carrier is compensated under its interstate line-haul rates. These findings are an adjudication by the Commission that the spotting service within the appellees' plants is not transportation service which the carriers are bound to render in respect of receipt and delivery of freight. The statute contains this definition: 'The term 'transportation' * * * shall include * * * all services in connection with the receipt, delivery, elevation, and transfer in transit * * * of property transported.'⁷ The Interstate Commerce Commission is authorized and required to enforce the provisions of the act⁸ and, after hearing, if it be of opinion that any regulation or practice of a carrier be unjust or unreasonable, or unjustly discriminatory, 'or otherwise in violation of any of the provisions of this act (chapter),' to determine what practice is or will be just, fair and reasonable to be thereafter followed and to make an order that the carrier cease and desist from violation to the extent that the Commission finds violation does or will exist.⁹

Second. The Commission, so it is said, has approved allowances in instances such as those under review and by a long course of decision has sanctioned the practice; and the claim is that the carriers have relied upon the Commission's action in doing plant spotting or making allowance for the performance of that service by industries. We cannot agree either that the Commission has so decided or that, if it had, it would be concluded from re-examining the question in the light of existing conditions. The Commission has repeatedly dealt with the matter.¹⁰ In numerous instances, upon application of an industry for the performance of spotting service on its plant track system, or for an allowance from the carrier for itself performing the service, the Commission, in the view that like service was performed or an allowance paid for it at other similar plants, has ordered the removal of discrimination as between shippers. On the other hand, in some cases the Commission has held that the service demanded was not a service of transportation and has refused to order the carrier to perform it.¹¹ But, whatever may have been decided in the past, it is evident that the growth of the practice of making allowances for plant switching and the lack of uniformity in the practice of the carriers with respect to this service properly called for an investigation of the entire situation and the promulgation of appropriate orders to regulate the practice and prevent performance of a service not within the carrier's transportation obligation. The investigation and the consequent orders of the Commission were not foreclosed by its earlier decisions. The Commission is clearly empowered to determine what is embraced within the service of transportation and what lies outside that service.¹² Since the Commission finds that the carriers' service of transportation is complete upon delivery to the industries' interchange...