United States v. Chicago St Co

• Decision Date: 04 March 1935
• Docket Number: No. 379,379
• Citation: 294 U.S. 499,79 L.Ed. 1023,55 S.Ct. 462
• Parties: UNITED STATES et al. v. CHICAGO, M., ST. P. & P.R. CO. et al
• Court: U.S. Supreme Court

294 U.S. 499

55 S.Ct. 462

79 L.Ed. 1023

UNITED STATES et al.

v CHICAGO, M., ST. P. & P.R. CO. et al.

No. 379.

Argued Feb. 6, 1935.

Decided March 4, 1935.

Appeal from the District Court of the United States for the Northern District of Illinois.

The Attorney General and Mr. Harold M. Stephens, Asst. Atty. Gen., for appellants the United States and the Interstate Commerce Commission.

Mr. John T. Quisenberry, of Chicago, Ill., for appellants Illinois Cent. R. Co. et al.

Mr. C. L. Taylor, of Chicago, Ill., for appellee Chicago, M., St. P. & P.R. Co.

Mr. Earl B. Wilkinson, of Chicago, Ill., for appellees Binkley Coal Mining Co. et al.

Mr. Justice CARDOZO delivered the opinion of the Court.

On November 22, 1932, the Chicago, Milwaukee, St. Paul & Pacific Railroad Company (referred to in this opinion as the Milwaukee) filed with the Interstate Commerce Commission a schedule of rates for the transportation of bituminous coal from mines in Indiana to destinations in Northern Illinois. Upon complaint by competing railroads and producers in Illinois, the Interstate Commerce Commission suspended the proposed tariffs and afterwards annulled them. 197 I.C.C. 245; 200 I.C.C. 609. A District Court of three judges has perpetually enjoined the enforcement of the order of the commission, thereby reinstating the tariffs established by the carrier. Chicago, M., St. P. & P.R. Co. v. U.S., 8 F.Supp. 970. The case is here upon appeal. Judicial Code, § 210, 28 U.S.C. § 47a (28 USCA § 47a).

The rates in controversy affect the transportation of coal from groups of mines in Indiana known as the Brazil-Clinton and the Linton-Sullivan origin groups to Rockford and Freeport, Ill., and certain intermediate points. Up to the effective date of the new schedule the rate to Rockford and Freeport from the Brazil-Clinton group had been $1.87 per ton, and from the Linton-Sullivan group $1.92. The proposed change called for a reduction of 17 cents, with the result that the rates between the points mentioned became $1.70 and $1.75, respectively. Reductions ranging from 4 to 10 cents were proposed for other destinations nearer to the point of origin.

In its transportation of bituminous coal the Milwaukee is in competition with lines in Illinois, Indiana, and Western Kentucky. We direct our attention first to the situation in Illinois, confining ourselves to facts that have been found by the commission. For many years there was a parity of rates between the Springfield group in Illinois and the Brazil-Clinton group in Indiana. There was also a customary differential for Illinois groups farther south than Springfield as well as for other groups in Western Kentucky. For example, the rate from Springfield to Rockford was 30 cents less than from mines in Southern Illinois. On August 20, 1930, these relations were broken by an order of the Illinois Commerce Commission reducing intrastate rates in Illinois 17 cents a ton. Rates from Springfield to Rockford which had been $1.87 became $1.70; those from Southern Illinois, previously $2.17, be came $2. Upon the publication of these reductions, Milwaukee complained of them to the Interstate Commerce Commission, and asked that they be canceled, 49 U.S.C. § 13 (49 USCA § 13). It insisted that the lower schedule would result in undue and unreasonable advantage to persons and localities in intrastate commerce and in undue and unreasonable discrimination against those in interstate commerce. The commission rendered its decision in March, 1932. It allowed the contested rates to stand in so far as the points of destination were Rockford and Freeport, though it found discrimination, and ordered an increase of 5 cents a ton, upon shipments to Chicago. Intrastate Rates on Bituminous Coal in Illinois, 182 I.C.C. 537. In respect of the Rockford-Freeport traffic, it held that the intrastate rates might reasonably be higher, but that the like was true of the rates to the same points from the groups in Indiana. Id., 182 I.C.C. 537, at page 549, 550: 'The principal competition of the Illinois producers at these destinations comes from Indiana, and we find no sufficient justification for requiring any of the Illinois rates to these points to be increased until the low rates from Indiana referred to have been placed upon a level more nearly commensurate with the general level of rates in this territory.' In brief, the ruling was that the Interstate Commerce Commission would keep its hands off until the rates of interstate competitors had been placed upon a sounder basis. It would not stabilize rates at the then prevailing levels when the rate structure as a whole was in need of readjustment and revision. A refusal to interfere with one of the terms of a proportion is very different from an approval of the proportion as a continuing condition. Restraints were not imposed upon the lines in Illinois, but equally they were not imposed upon those in Indiana. The decision was not a mandate to the carriers to preserve undisturbed an existing relation between rates; the decision was a refusal by the commission to compel an increase of the rates on one side of the relation. Those on the other side were subject to change at the instance of the carriers affected to the same extent as they had been before. The forces of competition were left to do their work.

From the situation in Illinois we turn to that in Indiana and Kentucky. Again we confine ourselves to the report unless testimony is mentioned. Six carriers in addition to Milwaukee are in competition for the carriage of coal from groups in Indiana to points in Northern Illinois. These lines are the means of transportation for the product of the coal mines at Princeton and Booneville. They compete also to a slight extent for the carriage of coal from the Brazil and Linton groups, though the testimony is that their traffic from those points is only 1 per cent. or less, as compared with 99 per cent. belonging to Milwaukee. For all these Indiana routes, group rates have been maintained for many years as the outcome of agreement among the carriers concerned. Rates from Linton-Sullivan were 5 cents higher than from Brazil-Clinton, those from Princeton 7 cents higher than from Linton-Sullivan, and those from Booneville 10 cents higher than from Princeton. If Milwaukee is upheld in the reduction of its own schedule from Brazil and Linton northward, there is likely to be an attempt by other Indiana carriers to make proportionate reductions from points along their lines.

The change of rates in Illinois had repercussions also upon tariffs in Kentucky. As far back as 1927, the commission fixed a differential of 35 cents in favor of the roads from the Western Kentucky mines as compared with those from the mines in Southern illinois. Illinois-Indiana Coal Cases, 128 I.C.C. 265; West Kentucky Coal Bureau v. Illinois Central R. Co., 172 I.C.C. 279. Upon the lowering of intrastate rates for Illinois carriers, the Western Kentucky carriers restored the pre-existing relation between themselves and their Illinois competitors by reducing their own rates to the extent of the established differ- ential. The commission made an order approving the reduction.

With these changes in the rates in Illinois and Kentucky, there remained only the rates from the groups in Indiana that were out of line with the proportion maintained for many years. To restore that proportion Milwaukee filed a new schedule whereby the rates from Brazil-Clinton to Rockford and Free-port were again placed at a parity with those from Springfield to the same places, the rates from Linton-Sullivan being correspondingly adjusted. This is the schedule that has been disapproved by the commission. Two reports were filed, one in November, 1933, the other in April, 1934. The first, which came from a division of the commission, was confirmed by the entire body upon denying a petition for rehearing. Suit for an injunction was promptly started by the carrier. Two days before the day appointed for the hearing, the commission of its own motion reopened the proceeding, and thereafter filed a second report, amplifying the first one. Following that report the suit was brought to trial upon supplemental pleadings. The carrier took the position (1) that the order of the commission was not supported by the finding; and (2) that irrespective of the findings it was not supported by the evidence. The District Court gave a decree for the complainant upon the second ground, without passing upon the first. Upon appeal to this court by the commission and by intervening railroads, the appellees (the Milwaukee and intervening coal producers) renew the grounds of challenge put forward at the trial.

This court has held that an order of the Interstate Commerce Commission is void unless supported by findings of the basic or quasi jurisdictional facts conditioning its power. Florida v. United States, 282 U.S. 194, 215, 51 S.Ct. 119, 125, 75 L.Ed. 291; United States v. Baltimore & Ohio R. Co. (January 7, 1935) 293 U.S. 454, 55 S.Ct. 268, 79 L.Ed. 587. 'In the absence of such findings, we are not called upon to examine the evidence in order to resolve opposing contentions as to what it shows or to spell out and state such conclusions of fact as it may permit.' Florida v. United States, supra. Orderly review requires that this objection being basic and jurisdictional be disposed of at the beginning.

The jurisdiction of the commission to cancel the proposed schedule was invoked by the protesting carriers and producers under two sections of the statute, subdivisions 1 and 7 of section 15 and subdivision 2 of section 15a (49 USCA §§ 15(1, 7), 15a(2). Section 15 (subdivisions 1 and 7) is to the effect that the commission shall have power to determine the just and reasonable rate when a rate in force or proposed is found to be unjust or unreasonable or unduly discriminatory or otherwise unlawful. Section 15a(2) is to the effect that in the exercise of this...