United States v. United States Smelting Refining Mining Co

• Decision Date: 27 March 1950
• Docket Number: No. 173,173
• Citation: 94 L.Ed. 750,70 S.Ct. 537,339 U.S. 186
• Parties: UNITED STATES et al. v. UNITED STATES SMELTING REFINING & MINING CO. et al
• Court: U.S. Supreme Court

339 U.S. 186

70 S.Ct. 537

94 L.Ed. 750

UNITED STATES et al.

v UNITED STATES SMELTING REFINING & MINING CO. et al.

No. 173.

Argued and Submitted Feb. 13, 14, 1950.

Decided March 27, 1950.

Rehearing Denied May 29, 1950.

See 339 U.S. 972, 70 S.Ct. 994.

Mr. Allen Crenshaw, Washington, D.C., for appellant Interstate Commerce Commission.

Mr. Joseph W. Bishop, Jr., Washington, D.C., for appellant The United States.

Mr. John F. Finerty, Pittsburgh, Pa., for appellees American Smelting Co. et al.

Mr. Otis J. Gibson, Denver, Colo., for appellee Denver and Rio Grande Western Railroad Co.

Mr. Elmer B. Collins, Omaha, Neb., for appellee Union Pacific Railroad Co.

Mr. Charles A. Horsky, Washington, D.C., for appellee United States Smelting, Refining & Mining Co.

Mr. Stanley T. Wallbank, Denver, Colo., for Intervenor Colorado Mining Association.

Mr. S. J. Quinney, Salt Lake City, Utah, for Intervenor Utah Mining Association.

Mr. Clinton D. Vernon, Salt Lake City, Utah, for Intervenor Public Service Commission of Utah and State of Utah.

[Argument of Counsel from page 187 intentionally omitted] Mr. Justice MINTON delivered the opinion of the Court.

The Interstate Commerce Commission instituted the proceedings leading to the orders here involved as its Seventy-fifth and Seventy-sixth Supplemental Reports to Ex part 104, Practices of Carriers Affecting Operating Revenues or Expenses, Part II, Terminal Services, 209 I.C.C. 11. The proceedings concerned the switching and spotting services rendered by appellee-carriers at the Garfield and Murray, Utah, and Leadville, Colorado, plants of the American Smelting Company, and the Midvale, Utah, plant of the United States Smelting Company. Extensive hearings were held in these supplemental proceeding for the purpose of determining the respective points at which the carriers' line-haul transportation service ended and the extent of the service the carriers might render in the discharge of their obligation to deliver the freight at these four plants.

It will not be necessary to detail the physical characteristics of each of the plants involved here. Each has a receiving yard or interchange tracks upon which incoming and outgoing freight is switched. Beyond the interchange tracks switching services are numerous and extensive within the plants. The Garfield plant may be described as indicative of the situation at all the plants.¹ There, frozen ore is handled in six distinct movements. A large amount of intraplant switching is done by the carriers. To perform these switching services at Garfield requires three traincrew shifts daily. In one twelve-month period at this plant, 22,982 carloads of inbound and 6,960 carloads of outbound freight were handled.

On October 14, 1946, the Commission entered its first orders in these proceedings, enjoining appellee-carriers from performing switching and spotting service in violation of the Interstate Commerce Act, 49 U.S.C.A. § 1 et seq. On petition to the District Court, a statutory three-judge court sitting, the orders were held unlawful. The court was of the opinion that each of the Commission's orders was based on the premise that the line-haul rates did not cover the intraplant services, and held that such a finding was not supported by the evidence. In addition, the court found that the Commission had not 'presumed to exercise the authority which is intended to be conferred under Ex Parte 104 in that the order made is not specifically based upon that authority.' The matter was remanded to the Commission 'for such action as it might find justifiable in the premises,' and the Commission was 'temporarily enjoined from requiring its formal order to be carried into force and effect * * *.' The Commission on remand reopened the case but took no more evidence. It restated the ground for its action and entered cease and desist orders against the carriers. On petition of the appellees, the District Court again held the orders unlawful and permanently enjoined their enforcement. It is from this judgment that the Commission and the United States have appealed.

The Commission undertook its general investigation, Ex parte 104, in the interest of establishing a uniform and equal service for shippers. The Commission concluded that carrier obligation for transportation service ends customarily when delivery is made at a convenient point on the siding inside or outside a consignee's plant. This delivery is such as may be accomplished in one continuous movement without 'interruption' occasioned for the convenience of the industry, and is only the equivalent of team track or simple placement switching. In the Commission's view as developed in Ex parte 104, such a con- venient delivery point marks the beginning and end of what is termed 'line-haul' transportation, and is the extent of the service which may be performed under the line-haul rate. The Commission's authority to determine the point where transportation duty ends and industry convenience begins was upheld by this Court in United States v. American Sheet & Tin Plate Co., 301 U.S. 402, 57 S.Ct. 804, 81 L.Ed. 1186. We have repeatedly sustained the Commission in its application of Ex parte 104 principles to particular plants where it has prohibited the performance of services beyond the point fixed under a line-haul rate.² In issuing cease and desist orders in these cases the Commission has acted pursuant to its duty to enforce § 6(7) of the Interstate Commerce Act, which section prohibits departure from filed tariffs and the rendering of preferential services.³

As stated, the purpose of these proceedings before the Commission was to determine the beinning and end of line-haul service at appellee-smelters' plants. The next question was whether the service rendered by the carriers conformed to the services delimited by the Commission. Thus the Commission, it its proceedings after remand, was not concerned with the question of whether reasonable rates were in force, as it explained in its second report in the American Smelting Company case:

'The question of the reasonableness of published rates or of charges that are or may be fixed for performing industrial services can be decided only in a proceeding brought, or investigation instituted, under different provisions of the act. It is our purpose to make it entirely clear here that our order herein is based solely upon our findings herein, which in turn are based solely upon the principles and authority established with the approval of the Supreme Court in our original and supplemental reports in Ex Parte No. 104, Part II, and that said order is not based in whole or in part upon any conclusions or findings in connection with tariff provisions or testimony as to whether the published rates are reasonable and do or do not include compensation for switching within the plant areas. We hereby repudiate any reference or conclusion to the contrary conveyed by our discussion or evidence relative to such questions and the conclusions based thereon in our prior supplemental report herein.' 270 I.C.C. 362.

With that clear and distinct statement of what it was doing and what it was not doing, the Commission made its findings of fact which appear in the margin. ⁴ The essen- tial part of the findings is that line-haul began and ended at the interchange tracks, known as 'assembly yard' at Midvale, the plant of United States Smelting, and the 'plant yuard' at Garfield, 'hold tracks' at Murray, and 'flat yard' at Leadville, the plants of American Smelting; that all services beyond these points were excess services not required of the carrier as part of its line-haul carriage; and that the performance of services beyond these points without compensatory charges results in preferential service in violation of § 6(7).

That the Commission is authorized to establish the point where line-haul service begins and ends is not to be doubted. The question, in reviewing the Commission's determination of the convenient points at which line-haul or carrier transportation service begins and ends, is whether such determination is supported by substantial evidence,⁵ as this Court said in United States v. Wabash R. Co., 321 U.S. 403, 408, 64 S.Ct. 752, 754:

'In sustaining the Commission's findings in these proceedings, as in related cases, this Court has held that the point in time and space at which the carrier's transportation service ends is a question of fact to be determined by the Commission and not the courts, and that its findings on that question will not be disturbed by the courts if supported by evidence.'

In the instant case there is substantial evidence to support the Commission's findings that the convenient points for the beginning and end of line-haul were at the interchange tracks, more specifically characterized above. The Commission had before it the extensive record of the basic proceeding, which the District Court did not have, together with the instant supplemental proceedings. The Commission's findings were based in part on the testimony of its experts who had made personal surveys and observations of switching and car movements at these plants. It is apparent from the record that extensive intraplant services were performed on instructions of and for the convenience of the appellee-smelters. When a car is followed through its intraplant movements on a map it is demonstrated that extensive services were performed in excess of those which were established as the permissible limit of line-haul in Ex parte 104. The Commission's designation of the convenient delivery points at each of these plants must be sustained.

The contention of appellees is that there are now in effect tariffs that compensate for line-haul and plant services. These tariffs will be separately discussed below. Appellees urge that the carriers cannot be guilty of violating § 6(7) when they are fully compensated for carrier services in line-haul and plant services beyond that,...