Wichita Board of Trade v. United States

• Decision Date: 26 May 1972
• Docket Number: Civ. A. No. W-4730.
• Citation: 352 F. Supp. 365
• Parties: The WICHITA BOARD OF TRADE et al., Plaintiffs, v. The UNITED STATES of America and Interstate Commerce Commission, Defendants.
• Court: U.S. District Court — District of Kansas

352 F. Supp. 365

The WICHITA BOARD OF TRADE et al., Plaintiffs, v. The UNITED STATES of America and Interstate Commerce Commission, Defendants.

Civ. A. No. W-4730.

United States District Court, D. Kansas.

May 26, 1972.

Glaves & Weil, Jack Glaves, Wichita, Kan., Belnap, McCarthy, Spencer, Sweeney & Harkaway, Harold E. Spencer, Daniel J. Sweeney, Chicago, Ill., for plaintiffs.

Robert J. Roth, U. S. Atty., Richard Oxandale, Asst. U. S. Atty., Wichita, Kan., for the United States and I.C.C.

Charles W. Bucy, Asst. Gen. Counsel, Kenneth H. Vail, Atty., U. S. Dept. of Agriculture, Washington, D. C., for defendants.

Fritz R. Kahn, Gen. Counsel, Hanford O'Hara, Atty., Washington, D. C., for I.C.C.

Richard W. McLaren, Asst. Atty. Gen., John H. D. Wigger, Atty., Dept. of Justice, Washington, D. C., for the United States.

Charles W. Harris, of Weigand, Curfman, Brainerd, Harris & Kaufman, Wichita, Kan., for intervenors Atchison, Topeka & Santa Fe Railway Co. and others.

William F. Cottrell and Christopher A. Mills, Chicago, Ill., for intervenor railroads.

BARRETT, Circuit Judge, and THEIS and O'CONNOR, District Judges.

OPINION OF THE COURT

PER CURIAM.

This is an action to enjoin, annul, set aside, and suspend orders of the Interstate Commerce Commission entered by the Commission, Division 2, on April 16, 1971, and by the Commission en banc on September 21, 1971, in proceedings entitled Investigation and Suspension Docket No. 8548, Inspection in Transit, Grain and Grain Products, reported at 339 I. C.C. 364 and 340 I.C.C. 69 respectively. A three-judge court was convened to hear the case. The suit is brought pursuant to the provisions of Sections 1336, 1398, 2284 and 2321-2325 of Title 28 U. S.C.

By the reports and orders here assailed, the Commission has found just and reasonable the establishment of tariff provisions applicable throughout the West at the rate of $13.36 per car for the first in-transit inspection services historically provided by the rail carriers under the line-haul rates. The Commission did not require a reduction in the line-haul rates in relation to the reduced service.

The in-transit inspection service with which we are here concerned has reference to the practice of stopping railroad cars loaded with grain and grain products and placing them on railroad track facilities for the purpose of permitting inspection of the contents of the car, awaiting disposition orders from shippers after inspection, and the subsequent movement of the railroad car. The sample or samples tested determine the official grade of the contents of the car for the purpose of establishing its value at market.

This transit service has been historically provided by the rail carriers in the West as part of the line-haul rates. Until 1968, federal law required official federal inspection and sampling. That function was performed by federal officials. That requirement was eliminated by Congress in 1968. 82 Stat. 761, 7 U.S.C. § 71 et seq. The primary purpose of Congress was to effect an increased utilization of rail cars. In its brief the Commission noted that car shortages on a nation-wide basis was a grave problem and that "the Commission's action here represents a determination to employ all rational and lawful means to attempt to alleviate the difficulty."

After extensive hearings the Commission found that: (1) the proposed charges do not apply in any instance where applicable line-haul rates plus the charge would exceed the maximum reasonable rates set forth in Grain and Grain Products, 205 I.C.C. 301 (1934), 215 I.C.C. 83 (1936), (2) inspection of grain is no longer a mandatory requirement of federal law, (3) there is a need for inspection at some point in the grain marketing process, but inspection in-transit is not essential, and (4) grain inspection in-transit is an "accessorial" service for which a charge separate from the basic line-haul charges may be properly assessed. The Commission then found that the proposed charges were just and reasonable in that the railroads established by substantial evidence that the costs associated with in-transit inspection correspond to the level of the proposed charges and that delays resulting from in-transit inspection amount to more than three days per car. There is substantial evidence in support thereof.

The Commission recognized that the Western railroads were not presently assessing a charge in their line-haul rates for the first stop for inspection. The protestants here contend that under these circumstances the railroads could not segregate the inspection service and assign to it a separate charge without presenting substantial evidence that the new aggregate rate, composed of the line-haul plus inspection-transit rates, represent a just and reasonable rate for all of the services.

In its discussion and conclusions, the Commission found that: "A requirement that the reasonableness of the proposed charges cannot be determined without `reference to the line-haul rates, the services furnished thereunder, and the cost thereof' effectively precludes respondents from ever establishing a separate charge for the accessorial first stop for inspection regardless of the need for such a charge. This inability was not present in the cited proceeding (Transit Charges, Southern Territory, 332 I.C.C. 664 1968)—However, there is a more significant distinguishing feature that persuades us that the prior decision is not controlling here. That difference is that the line-haul rate applicable to any movement of grain within the West when coupled with the proposed charge is less than the maximum reasonable level determined by this Commission." In its brief the Commission refers to the "extreme difficulty" involved in putting together thousands of such rates for the purpose of determining the reasonableness of a charge for a separate accessorial service. The Commission ultimately justified its rationale predicated upon the maximum level of rates which it established some 35 years ago in its Docket No. 17000 proceedings, Grain and Grain Products, supra.

While purporting to "distinguish" the instant decision from its prior decisions, the Commission discovered that which had been known for years: the maximum reasonable rates established in its Docket No. 17000 cases. This discovery suddenly became a "significant distinguishing feature" in its decision here.

There may be facts and circumstances justifying a Commission reversal of its well established rule that whenever a proposal is made for the establishment...