United States v. Interstate Commerce Commission

• Decision Date: 18 July 1952
• Docket Number: No. 10879.,10879.
• Citation: 91 US App. DC 178,198 F.2d 958
• Parties: UNITED STATES v. INTERSTATE COMMERCE COMMISSION et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

91 US App. DC 178, 198 F.2d 958 (1952)

UNITED STATES v. INTERSTATE COMMERCE COMMISSION et al.

No. 10879.

United States Court of Appeals District of Columbia Circuit.

Argued December 12, 1951.

Decided July 18, 1952.

COPYRIGHT MATERIAL OMITTED

Ralph S. Spritzer, Atty., Department of Justice, Washington, D. C., of the Bar of the Court of Appeals of New York, pro hac vice, by special leave of Court, with whom Asst. Atty. Gen. Morison, and Joe F. Nowlin, Sp. Asst. to the Atty. Gen., were on the brief, for appellant. George Morris Fay, U. S. Atty. at the time the brief was filed, Washington, D. C., Joseph M. Howard, Asst. U. S. Atty., Charles H. Weston, Atty. Department of Justice, Washington, D. C., and Charles L. Beckler, Attorney, Department of Justice, Bethesda, Md., also entered appearances on behalf of appellant.

Daniel W. Knowlton, Chief Counsel, Interstate Commerce Commission, Washington, D. C., for appellee Interstate Commerce Commission. J. Stanley Payne, Atty., Interstate Commerce Commission, Washington, D. C., also entered an appearance on behalf of appellee Interstate Commerce Commission.

Windsor F. Cousins, Philadelphia, Pa., of the Bar of the Supreme Court of Pennsylvania, pro hac vice, by special leave of Court, with whom Hugh B. Cox, Charles P. Reynolds, Martin A. Meyer, Jr., and Arthur J. Dixon, Washington, D. C., were on the brief, for appellees Pennsylvania R. Co. and others. Fred N. Oliver, New York City, also entered an appearance on behalf of the Virginian Ry. Co. and Charles Clark, Washington, D. C., entered an appearance on behalf of the Southern Ry. Co.

Before WILBUR K. MILLER, BAZELON and WASHINGTON, Circuit Judges.

WASHINGTON, Circuit Judge.

This is a controversy between the Government and certain railroads relative to allegedly unlawful charges made by the carriers in connection with export freight handled for the Government during World War II. The litigation has had a lengthy history. It was before the Supreme Court in 1949, and at that time Mr. Justice Black, speaking for the Court, thus described its background:

"During the war, existing tariffs of many railroads embodied wharfage charges to compensate the railroads for moving goods from railroad cars to piers and from piers to railroad cars. When the United States took over certain piers at Norfolk, Virginia, it began to perform these wharfage services for itself and requested the railroads to make the United States an allowance for the expenses incurred in performing the services. The railroads refused to make an allowance. Upon this refusal the Government requested the railroads to perform the services themselves. The railroads refused to perform the services.

"The United States filed with the Interstate Commerce Commission a complaint against the railroads charging that exaction of pay for unperformed services was unjust, unreasonable, discriminatory, excessive, and in violation of certain sections of the Interstate Commerce Act. The complaint asked the Commission to find the charges unlawful. Further relief asked, under the Interstate Commerce Act, was that the Government be awarded damages (reparations) on account of the alleged unlawful exactions. The Commission found that the charges were not unjustly discriminatory, unreasonable, or otherwise in violation of the Act. Accordingly, the Commission denied reparations and ordered the complaint dismissed. United States v. Aberdeen & Rockfish R. Co., 269 I.C.C. 141 (1947).

"The United States brought this action in a United States District Court to set aside the Commission order. The complaint charged that the Commission\'s conclusions were not supported by its findings, that the findings were not supported by any substantial evidence, that the order was based on a misapplication of law and was `otherwise arbitrary, capricious and without support in and contrary to law and the evidence.\' The Interstate Commerce Commission was made a defendant. The United States was also made a defendant because of a statutory requirement that any action to set aside an order of the Interstate Commerce Commission `shall be brought * * * against the United States.\' 28 U.S.C. (1946 ed.) § 46 now § 2322. Railroads that collected the wharfage charges intervened as defendants under authority of 28 U.S.C. (1946 ed.) § 45a now § 2323. The Attorney General appeared for the Government as both plaintiff and defendant. * * *" United States v. Interstate Commerce Commission, 337 U.S. 426, 428-429, 69 S.Ct. 1410, 1412, 93 L.Ed. 1451.

The case was initially heard by a three-judge district court. Without reaching the merits of the controversy, that court dismissed on the ground that the Government could not maintain a suit against itself. On appeal, the Supreme Court reversed this ruling, held that the Government was entitled to judicial review, and remanded the case to the United States District Court for the District of Columbia for consideration of the merits by a single district judge. 337 U.S. at page 444, 69 S.Ct. 1410.

On remand, the District Court (Judge Morris) reviewed the record of the proceedings before the Interstate Commerce Commission. In an able opinion, the court discussed the contentions of the parties, and concluded that the action of the Interstate Commerce Commission was "founded upon ample evidence, and is in accordance with law." United States v. Interstate Commerce Commission, D.C.D.C., 92 F.Supp. 998, 1002. An order was thereupon entered dismissing the Government's complaint. This appeal followed.

I.

The salient facts are these: Shortly after the end of World War I the Government completed construction of two large wharves at the port of Norfolk, Virginia, known as Army Base Piers Nos. 1 and 2. These piers, which were the largest at the port, were then leased successively to various terminal operating companies for operation as public wharves. In July of 1940, the facilities were leased to the Transport Trading & Terminal Corporation which, like its predecessor, operated them as agent for the appellee railroads.

The terminal services rendered by the Terminal Corporation included what is known as wharfage and handling. Wharfage refers to the provision of space on the docks for storage of freight pending transfer between freight cars and cargo vessels; handling refers to the unloading of goods from freight cars and placing them on the docks within reach of ship's tackle (or, in the case of imports, loading of goods into cars from the wharf). For most classes of freight, the Terminal Corporation was compensated for these services at the rate of 1¢ per 100 lbs. for wharfage and 3¢ per 100 lbs. for handling. The appellee railroads undertook in their filed tariffs to absorb these charges as part of their "shipside" line-haul export rates, and they paid the Terminal Corporation for its services in connection with shipments covered by this tariff undertaking. For many years this had been the common practice among railroads at Atlantic Coast piers operated as public terminals — that is, piers open to shippers generally and not owned or operated by the owners or shippers of the freight passing over them.

With the outbreak of World War II traffic moving through the port of Norfolk greatly increased. Within a few months after our entry into the war, shipments over Army Base Piers Nos. 1 and 2, which even in pre-war days had constituted half the Norfolk traffic, increased to the point where they vastly exceeded the capacity of all other facilities controlled by the railroads. On June 15, 1942, the Army decided to assume direct control of its two piers and canceled the lease to the Transport Trading & Terminal Corporation. It continued, however, to operate the piers with the personnel and organization used by the ousted lessee. As traffic continued to increase, it supplemented this civilian force with military personnel and prisoners of war. From the time the Army took over direct operation until the end of the period involved in this litigation, the vast bulk of the traffic over the Army Base piers was Government traffic. But other freight was not excluded, and during this period the Army handled some 700 carloads of regular commercial freight, in connection with which it furnished wharfage and handling.

When the Transport Trading & Terminal Corporation was dispossessed, the railroads, of course, ceased paying it for terminal services. These services were now performed by the Army; but the railroads made no payments to the Army for them, nor did they provide any reduction in line-haul rates. One week after the Army took over the piers it requested that the payments formerly made to the Terminal Corporation now be allowed to the Government and that the railroads' tariffs be appropriately amended. App. 331, et seq. The carriers — with the exception of one line not involved in this litigation — refused the request. Upon continued refusal by the railroads to comply, the Government in May of 1943 requested the defendant railroads to resume performance of the terminal services. This demand was likewise rejected by the railroads. The sole reason offered by the railroads for refusal was that Army Base Piers Nos. 1 and 2 were now, in effect, "private" piers — that is, they were owned and operated by the shipper and owner of the freight, the United States Government — and that wharfage and handling were not customarily furnished at such piers. App. 341, et seq.

On April 15, 1944, the Government petitioned the Interstate Commerce Commission for a ruling that the railroads' actions violated the Interstate Commerce Act, in that they resulted in charges which were unreasonable, discriminatory and excessive, and constituted a denial of compensation for services rendered in connection with transportation. As relief, the Government asked for reparation in the amount of 1¢ per 100 lbs. for wharfage and 3¢ per 100 lbs. for handling on freight handled by the Army over its piers during its period of...