United States v. Interstate Commerce Commission
| Decision Date | 17 December 1956 |
| Docket Number | No. 12,12 |
| Citation | 77 S.Ct. 241,1 L.Ed.2d 211,352 U.S. 158 |
| Parties | UNITED STATES of America, Appellant, v. INTERSTATE COMMERCE COMMISSION and United States of America |
| Court | U.S. Supreme Court |
[Syllabus from pages 158-159 intentionally omitted] Mr. Ralph S. Spritzer, Washington, D.C., for appellant.
Mr. Robert W. Ginnane, Washington, D.C., for appellee Interstate Commerce Commission.
Mr. Windsor F. Cousins, Philadelphia, Pa., for railroad appellees.
This appeal requires a determination of whether railroads serving the port of Norfolk, Virginia, must grant the United States an allowance for the Government's performance of certain wharfage and handling services on its own export freight. For shippers who conform to the requirements of the tariff, the railroads assume these charges as a part of the rate. The United States, however, found it impractical to conform to the tariff requirements.
The present litigation was instituted pursuant to 28 U.S.C. § 2325, 28 U.S.C.A. § 2325, in a three-judge District Court of the District of Columbia by the United States, through its Department of the Army, against the Interstate Commerce Commission and the United States, to set aside the Commission's order in United States v. Aberdeen & Rockfish R. Co., 289 I.C.C. 49. That order dismissed a complaint filed by the United States on November 20, 1951, against several named railroads charging them with violations of the Interstate Commerce Act, 49 U.S.C.A. § 1 et seq. The District Court, one judge dissenting, dismissed the complaint. 132 F.Supp. 34. We noted probable jurisdiction. 350 U.S. 930, 76 S.Ct. 302.
Since May 1, 1951, the railroads have refused to pay an allowance to the Army for the wharfage and handling1 services the Army performs on military export traffic passing through Army base piers in Norfolk, Virginia. The railroads have assumed in their tariffs the obligation to furnish these accessorial services for all shippers that comply with their tariffs. And, in accordance with these tariffs, the railroads have furnished the services for commercial shippers at public sections of the same piers without additional charge. These services were performed for the Army and the railroads by the same private company—for the Army under contract to carry out its orders for terminal and storage services; for the railroads by contract to act as the carriers' agent in accordance with their tariffs.
The Army sought a determination that the railroads' refusal to make an allowance to it to the same extent that the railroads paid the private company, Stevenson & Young, for handling of private shipments subjected the Government to unjust discrimination and constituted an unreasonable practice in violation of §§ 1, 2, 3, and 6 of the Interstate Commerce Act.2 The Army also requested an order that the railroads cease and desist from such refusal in the future.3
The transfer of export freight from rail carriers to outbound water carriers is made on piers or wharves that allow the unloading of freight from railroad cars to within reach of ships' tackle. Railroads are under no statutory obligation to furnish such piers or to unload carlot freight, Pennsylvania R. Co. v. Kittaning Iron & Steel Mfg. Co., 253 U.S. 319, 323, 40 S.Ct. 532, 533, 64 L.Ed. 928.4 In general the railroads have taken on the duty of wharfage and handling for freight consigned for overseas shipment.5 In some instances railroads have charged for the use of the piers ('wharfage') and the necessary 'handling' separately from their charge for line-haul transportation. In other cases there has been only a single factor export rate (one inclusive charge) providing for limited shipside delivery with the railroad furnishing these accessorial services pursuant to their tariffs at no extra charge to the shipper. The latter practice has been generally followed by railroads serving North Atlantic ports. Where railroads do not have their own piers, they have provided these services by contracting with commercial terminal operators.
The Norfolk piers, involved in this matter, were managed by such operators. They were built by the United States after World War I and have been leased in part or in whole to a series of commercial operators since then. The leases were cancelled during World War II but they were leased to Stevenson & Young, a private terminal operator, at tne end of that war. The railroads here involved, using the single factor shipside rate described above, contracted with Stevenson & Young, as their agent, to perform the wharfage and handling for 25¢ per ton for wharfage and 75¢ per ton for handling on both commercial and military freight. But with the advent of the Korean hostilities, the Government again cancelled the leases and the Army took entire control of the piers. Apparently the military shipments require special handling and storage. To assure its complete satisfaction, the Army hired Stevenson & Young to perform those services under a general pier-operating contract for the Army. 6 The unused portions of the piers were later released by the Government, by a contract dated December 28, 1951, for the commercial operations of Stevenson & Young. By that contract Stevenson & Young leased the unused parts for 1952 from the United States, for a public commercial maritime terminal. It was over these leased portions of the piers that the lessee carried on its public warehousing activities in accordance with the railroad tariffs.
A typical tariff arrangement appears in the note below. It is the basic exhibit in this case.7 It was bottomed on a contract of April 5, 1947, between the Pennsylvania Railroad and Stevenson & Young. By that contract Stevenson & Young, as a public wharfinger, agreed to act 'as directed by the Railroad' and as its agent for wharfage and handling of 'export, import, coastwise and intercoastal freight' in accordance with the tariff upon the facilities it acquired on the Army base. The agent assumed responsibility for freight charges and care of freight in its charge. It agreed, paragraph 4, that:
'The Terminal (Stevenson & Young) shall provide adequate facilities for the handling and storage of the freight subject to this agreement, shall provide access to the Railroad or its agent, the Norfolk and Portsmouth Belt Line Railroad, for the delivery of cars to and from shipside without interference or interruption, and shall load and unload cars promptly without delay of freight or railroad equipment.'
Paragraph 13 said:
'This agreement shall terminate absolutely and immediately whenever the Terminal ceases to operate the said facilities as a public wharfinger for the handling of freight, and in any event shall be terminable by either party on thirty days notice in writing.'
A large amount of private commercial traffic continued over the released portions of the piers, and the railroads continued to absorb the cost of that wharfage and handling by paying Stevenson & Young $1.00 per ton of freight.
The result of the Army's insistence on operating its own pier facilities is that the Army pays the same export rates without receiving wharfage and handling services as commercial shippers do for whom the railroads provide those services at no additional charge. Because the Army provides these services itself, it claims a right to the $1.00 per ton payment paid by the railroads on behalf of the commercial shippers.
In terms of the Interstate Commerce Act, the Government bases its argument on two grounds:
'The railroads' refusal to absorb wharfage and handling charges on Army freight to the same extent that they absorb such charges on civilian freight moving over the same piers under identical rates is unjustly discriminatory in violation of Section 2 of the Interstate Commerce Act.'
and
'The railroads' refusal to pay for wharfage and handling on Army freight was an unjust and unreasonable practice in violation of Section 1(6) of the Act.'
It should be noted that the United States is not attacking the form of the tariff, which provides for both line-haul service and the accessorial services in the single factor export rate.8 Consequently, this case involves only charged discrimination and injustice. Cf. United States v. Interstate Commerce Commission, 337 U.S. 426, 437—438, 69 S.Ct. 1410, 1416, 1417, 93 L.Ed. 1451. In short, the United States seeks to be excepted from the tariff requirement that calls for the shipper to use a public wharfinger under contract to the railroads for performance of the wharfage and handling.9
This controversy is similar to one that arose out of the Army's cancellation of the Norfolk pier leases during World War II, United States v. Aberdeen & Rockfish R. Co., 269 I.C.C. 141. Interpreting railroad practices much like those now before this Court, the I.C.C. determined that the Army was not being discriminated against. However, on review, the Court of Appeals for the District of Columbia remanded the case to the I.C.C. for further exposition and clarification. 91 U.S.App.D.C. 178, 198 F.2d 958. On remand the I.C.C. reaffirmed its earlier determination and no appeal has been taken from that order. 294 I.C.C. 203. Because the question of whether the Army was discriminated against following the Government's World War II lease cancellation has never been finally passed upon, the District of Columbia ruling is not inconsistent with the Commission's conclusion in this litigation.
The Government asserts that it is charged more on its export shipments through the Norfolk Army Base than commercial shippers under substantially similar circumstances. Such an exaction would be, of course, an unjust and unreasonable practice of discrimination. But it seems apparent that the circumstances of Army shipments are markedly different from those of private shippers that receive wharfage and handling services. Moreover, it seems equally clear that the Army is...
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