United States v. Wabash Co

• Decision Date: 27 March 1944
• Docket Number: No. 453,453
• Citation: 321 U.S. 403,88 L.Ed. 827,64 S.Ct. 752
• Parties: UNITED STATES et al. v. WABASH R. CO. et al
• Court: U.S. Supreme Court

321 U.S. 403

64 S.Ct. 752

88 L.Ed. 827

UNITED STATES et al.

v WABASH R. CO. et al.

No. 453.

Argued March 8, 1944.

Decided March 27, 1944.

[Syllabus from pages 403-405 intentionally omitted] Appeal from the District Court of the United States for the Southern District of Illinois.

Mr. Allen Crenshaw, of Birmingham, Ala., for appellants.

Mr. Elmer A. Smith, of Chicago, Ill., for appellees, Wabash R. Co., and others.

Mr. John S. Burchmore, of Chicago, Ill., for intervener-appellee, A. E. Staley Mfg. Co.

Mr. Chief Justice STONE delivered the opinion of the Court.

The Interstate Commerce Commission, in a report and order supplemental to its main report in Ex parte 104, Practices of Carriers Affecting Operating Revenues or Expenses, Part II, Terminal Services, 209 I.C.C. 11, has directed appellee railroads to cancel certain tariff supplements by which they propose to eliminate charges for spotting freight cars at the doors of factories in the industrial plant of appellee Staley Manufacturing Co., at Decatur, Illinois. The Commission based its order upon a finding that the performance without charge of the spotting service would be an unlawful preference because a departure from filed tariffs, in violation of § 6(7) of the Interstate Commerce Act, 49 U.S.C. § 6(7), 49 U.S.C.A. § 6(7). On appellees' petition the District Court for Southern Illinois, three judges sitting, 28 U.S.C. § 47, 28 U.S.C.A. § 47, set aside the Commission's order, 51 F.Supp. 141. It held that the Commission's conclusion that the free spotting service rendered at the Staley plant is an unlawful preference, was not supported by evidence, and that the Commission's order must be set aside because it results in discrimination contrary to §§ 2 and 3(1) of the Act, 49 U.S.C.A. §§ 2, 3(1), since it appears that similar free spotting serivice was being rendered to Staley's competitors against which the Commission had issued no order. The case comes here on appeal under 28 U.S.C. §§ 47a, 345, 28 U.S.C.A. §§ 47a, 345. The principal question for our decision is whether, as the District Court thought, the order is invalid because it results in a prohibited discrimination.

In Ex parte 104, the Commission initiated an extensive investigation of the service rendered by interstate railroads in spotting cars at points upon the systems of plant trackage maintained by large industries. After a study of the conditions at some two hundred industrial plants to which the rail carriers made allowances for spotting service performed by the industries, and at numerous other plants where the spotting service was rendered without charge by the carriers, the Commission found that the freight rates had not been so fixed as to compensate the carriers for such service and that the railroads by assuming to perform it, or pay for its performance by the industries, had assumed a burden not included in the transportation service compensated by the filed tariffs. And it concluded that the performance by the railroads of such service, free, or the payment to the industries of allowances for its performance by them, is in violation of § 6(7) of the Act.

The Commission, in its main report in Ex parte 104, recognized that by railway tariff practice in this country the rates on carload traffic moving to or from any city or town apply to so-called 'switching' or 'terminal' districts and entitle each industry within such a district to have the traffic delivered directly to and taken from its site. By this method of delivery and by use of private tracks of the industry the railroads are saved the expense of maintaining more extensive terminal facilities, the service and cost of delivery within the switching district being comparable to that of delivery on team tracks or sidings or at way stations. But in the case of large industries having extensive plant trackage the Commission found that cars hauled to the industry usually come to rest at nearby interchange tracks, after which the intraplant distribution of the cars is made at times and in a manner to serve the convenience of the industry rather than that of the carrier in completing its transportation service.

In determining in such circumstances the point at which the carrier service ends and the service in placing the cars so as to meet the convenience of the industry begins, the Commission stated that the line of demarcation 'should be drawn at the point where the carrier is prevented from performing at its ordinary operating convenience any further service, by the nature, desires, or disabilities of a plant', 209 I.C.C. at page 34. It added, 'When a carrier is prevented at its ordinary operating convenience from reaching points of loading or unloading within a plant, without interruption or interference by the desires of an industry or the disabilities of its plant, such as the manner in which the industrial operations are conducted, the arrangement or condition of its tracks, weighing service, or similar circumstances, * * * the service beyond the point of interruption or interference is in excess of that performed in simple switching or team-track delivery. * * *' 209 I.C.C. at pages 44, 45.

The application of such a test obviously requires an intensive study of traffic conditions prevailing at the particular plant at which the spotting service is rendered. It is for this reason that the Commission, in carrying into effect the principles announced in Ex parte 104, has found it necessary to proceed to a series of supplemental investigations of the spotting service rendered at particular plants. Accordingly the Commission made no order on the foot of its main report, but following a series of sup- plemental reports, including the present one, each detailing the facts found as to the spotting service rendered at the particular plant investigated, the Commission has made cease and desist orders, applicable to that service, a number of which this Court has upheld on review. See United States v. American Sheet & Tin Plate Co., 301 U.S. 402, 57 S.Ct. 804, 81 L.Ed. 1186; Goodman Lumber Co. v. United States, 301 U.S. 669, 57 S.Ct. 936, 81 L.Ed. 1333; A. O. Smith Corp. v. United States, 301 U.S. 669, 57 S.Ct. 936, 81 L.Ed. 1333; United States v. Pan American Petroleum Corp., 304 U.S. 156, 58 S.Ct. 771, 82 L.Ed. 1262. 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. United States v. American Sheet & Tin Plate Co., supra, 301 U.S. 408, 57 S.Ct. 807, 81 L.Ed. 1186; United States v. Pan American Petroleum Corp., supra, 304 U.S. 158, 58 S.Ct. 773, 82 L.Ed. 1262; Interstate Commerce Commission v. Hoboken Mfrs. R. Co., 320 U.S. 368, 378, 64 S.Ct. 159, 164, and cases cited.

In this, as in its earlier supplemental reports, the Commission has examined the actual conditions of operation at the industrial plant in question, here the Staley plant, and has found these conditions to be similar in type to those held sufficient to support its orders in United States v. American Sheet & Tin Plate Co., supra, and United States v. Pan American Petroleum Corp., supra. ¹ It made an extended examination of car movements within the plant area of the Staley Company, which extends for a distance of about two and a quarter miles, includes some forty buildings used in the manufacture of various products, principally from corn and soy beans, and contains approximately 20 miles of track, having 18 points at which freight is loaded or unloaded. It found that inbound cars are in the first instance placed upon interchange tracks from which they are later spotted at the points of loading and unloading, a service requiring in numerous instances two or more car movements performed by engines and crews regularly and exclusively assigned to it; that the interchange tracks are reasonably convenient points for the delivery and receipt of cars; that the movements between the interchange tracks and the points of loading and unloading are not performed at the carrier's convenience but are 'coordinated with the industrial operations of the Staley Company and conform to its convenience'; that the service beyond the interchange points is in excess of that involved in switching cars to a team track or ordinary industrial siding or spur, and is consequently not a part of the transportation service which ends at the interchange tracks.

Contentions of appellees based on a formal change of control of the interchange tracks by lease from the Staley Company to appellee Wabash Railroad executed subsequent to the Commission's report in Ex parte 104, are irrelevant to our present inquiry. After the lease, as before, they continued to be used as interchange tracks and the controlling question is whether the movement from the interchange tracks to points of loading and unloading is a plant service for the convenience of the industry, or a part of the carrier service comparable to the usual car delivery at a team track or siding. The Commission's finding that it is a plant service is supported by evidence and must be accepted as conclusive here.

Appellees make no other serious contention of want of evidentiary support for the Commission's conclusion that the carrier service ended at the interchange tracks and the District Court found no such lack. Their contention, upheld by the court below, is that the...