United States v. Interstate Commerce Commission

• Decision Date: 29 September 1950
• Docket Number: Civ. A. No. 4729-47.
• Citation: 92 F. Supp. 998
• Parties: UNITED STATES v. INTERSTATE COMMERCE COMMISSION et al.
• Court: U.S. District Court — District of Columbia

92 F. Supp. 998

UNITED STATES v. INTERSTATE COMMERCE COMMISSION et al.

Civ. A. No. 4729-47.

United States District Court District of Columbia.

September 29, 1950.

Herbert A. Bergson, Assistant Attorney General, George Morris Fay, United States Attorney, Washington, D. C., James E. Kilday, David O. Matthews, Special Assistants to the Attorney General, Frank F. Vesper, James C. Moore, Washington, D. C., Special Attorneys, Department of Justice, for the United States.

A. J. Dixon, Washington, D. C., for Southern Ry. Co.

Martin A. Meyer, Jr., Washington, D. C., for Virginian Ry. Co.

Charles P. Reynolds, Washington, D. C., for Atlantic Coast Line R. Co., Seaboard Air Line R. Co., and Norfolk Southern Ry. Co.

Hugh B. Cox, Washington, D. C., Windsor F. Cousins, Philadelphia, Pa., for Pennsylvania R. Co.

Daniel W. Knowlton, Chief Counsel, Interstate Commerce Commission, Washington, D. C., for Interstate Commerce Commission.

Benjamin J. Brooks, Falls Church, Va., amicus curiae.

MORRIS, District Judge.

This is a proceeding in which the petitioner seeks a determination that a certain order of the Interstate Commerce Commission, dated July 25, 1947, is unlawful, arbitrary, capricious, and without support in and contrary to the law and evidence. The petition further asks that a perpetual injunction setting aside and annulling said order be granted, and that the cause be remanded to the Interstate Commerce Commission for further action. Subsequent to the filing of these proceedings in this Court, a three-judge court was convened, which, upon motion of the defendants, dismissed the petition, D.C., 78 F.Supp. 580, upon the ground that the United States of America could not maintain the proceedings as petitioner, as it was required by law to be a defendant in such proceedings, and to defend the action of the Interstate Commerce Commission. Upon appeal, the order of such three-judge court was reversed by the Supreme Court, 337 U.S. 426, 69 S.Ct. 1410, 93 L.Ed. 1451, which held that the United States could maintain a proceeding in a District Court to be heard in due course, not by a three-judge court. Upon remand, the cause came on for hearing upon the record of the proceedings in the Interstate Commerce Commission, oral arguments of counsel for all parties, and upon briefs submitted.

The controversy before the Interstate Commerce Commission and in this Court resulted from the failure of the defendant railroads serving the Port of Norfolk, Virginia, to make an allowance for wharfage and handling charges on freight shipped by the Government to Army Base Piers 1 and 2, Norfolk, Virginia, for export, subsequent to June 15, 1942, when the United States Army took over the operation of such piers, and during the period said piers were being operated by the Army. These piers were constructed by the United States Army in the latter part of World War I and completed shortly after the prosecution of that war. The piers were then leased by the Government to the city authorities of Norfolk, Virginia, for operation as public piers, which lessee was succeeded by a corporation, also operating the piers as public facilities, which in turn was succeeded by the Transport Trading and Terminal Corporation, which corporation was operating the said piers at the time the Army determined, on account of the war conditions, to take over their operation. At the time of the cancellation of the lease of the piers to the Transport Trading and Terminal Corporation, that company acted as a public wharfinger and as agent and servant of the defendant railroads serving the Port of Norfolk, and had custody of all freight shipments moving to such piers for export or coastwise shipment. Carload freight was switched from the adjacent yards to the piers and unloaded for shipside delivery. The Norfolk and Portsmouth Belt Line Railroad Company handled the movement of cars consigned to the piers for a number of the defendant railroads for unloading. By contract, the defendant railroads agreed to pay the Transport Trading and Terminal Corporation a wharfage charge of 1 cent per hundred pounds and a handling charge for unloading from cars to the pier floor of 3 cents per hundred pounds on all traffic shipped for export, with exceptions as to certain types of freight and freight moving in open cars. The Belt Line published in its tariff a rate for shipside delivery on freight moving to the piers operated by the Transport Trading and Terminal Corporation which included these wharfage and handling charges. Many of the defendant railroads, by reference to the Belt Line tariff, agreed to absorb such handling charges in their line haul rate. Others of the defendant railroads, by their own tariffs, made the same absorption. After the Government took over the operation of the piers and assumed exclusive direction for the movement of cars from the storage tracks adjacent to the piers and the unloading of all freight, it demanded that the 1 cent per hundred pounds wharfage and the 3 cents per hundred pounds handling charges be allowed or paid by the defendant railroads in lieu of that service which had previously been performed by the Transport Trading and Terminal Corporation. This the defendant railroads declined to do. Demand was thereupon made upon the defendant railroads to perform the services for which such charges had theretofore been allowed, it being stated that such demand was made for the purposes of the proceedings then contemplated before the Interstate Commerce Commission. The defendant railroads insist that, in the situation existing, with traffic, due to war conditions, ten times greater than normal being handled in unusual manner to meet such conditions, and the piers being operated under the exclusive direction of the Army, and not by their agent, such services could not be performed. The position of the defendant railroads was and is that the export rate has no application to the movement of freight, where delivery is made to the owner of freight instead of to agents of the carriers for export handling. At the asking of the Government, however, and under the provisions of Section 22 of the Interstate Commerce Act, 49 U.S.C.A. § 22, the defendant railroads did allow the export rate on freight moving to Army Piers 1 and 2, Norfolk, Virginia, which rate is lower than the domestic rate which would ordinarily apply to freight delivered to the owner of such freight for handling, even though it was ultimately to be exported. The railroads, however, declined, in addition to the allowance of this more favorable rate, to perform the accessorial services covered by the 4 cents per hundred pounds here in controversy.

Such was substantially the status of...