Source: https://supreme.justia.com/cases/federal/us/262/318/
Timestamp: 2019-04-22 08:31:42+00:00

Document:
in unjust discrimination or in undue prejudice to interstate commerce. P. 262 U. S. 320.
2. The object of this section was to settle beyond doubt that the preferential treatment of certain classes of shippers and travelers in matters therein recited is not necessarily prohibited; it limits or defines the requirement of equality imposed in other sections of the act, and so preserves the right theretofore enjoyed by the carrier of granting preferential treatment to particular classes, in certain cases, and in this sense only is permissive, but it confers no right upon any shipper or traveler, nor any new right upon the carrier. P. 262 U. S. 323.
3. The State of Tennessee authorized increases of intrastate freight rates to correspond with a level of interstate rates authorized by the Interstate Commerce Commission, but excluded rates on stone and gravel when for use in building public highways and consigned to federal, state, county, and municipal authorities. The Interstate Commerce Commission, on complaint of a carrier, found that the exception produced illegal discrimination against interstate commerce and undue prejudice to persons and localities engaged in such commerce and ordered increase of the rates.
Held: (a) That the findings are conclusive, the evidence on which the Commission acted not having been introduced in this suit. P. 262 U. S. 324. (b) That the order was valid. Id.
Appeals from a decree of the district court declaring void and enjoining the enforcement of an order of the Interstate Commerce Commission. The State of Tennessee and its Railroad and Public Utilities Commission brought the suit against the United States to have the order set aside. The Interstate Commerce Commission and three carriers affected intervened as defendants.
"That nothing in this act shall prevent the carriage, storage, or handling of property free or at reduced rates for the United States, state, or municipal governments, or for charitable purposes, or to or from fairs and expositions for exhibition thereat. . . . [Footnote 1]"
Whether this section should be construed as denying to the Interstate Commerce Commission power to prohibit such reduced rates, even where they result in unjust discrimination or in undue prejudice to interstate commerce is the main question for decision.
to persons and localities engaged in such commerce. The Commission found such discrimination, and ordered that the intrastate rates on these commodities also be increased to the level of the interstate rates. Tennessee Rates and Charges, 63 I.C.C. 160, 172. On October 21, 1921, the State of Tennessee and its commission brought, in the Federal Court for the Middle District of Tennessee this suit against the United States to have the order set aside. The Interstate Commerce Commission, the Nashville, Chattanooga St. Louis Railway, and two other interstate carriers intervened as defendants. The case was heard by three judges under the Act of October 22, 1913, c. 32, 38 Stat. 220. A final decree was entered declaring the order void and enjoining its enforcement. 284 F. 371. The case is here on two appeals. No. 396 is that of the carriers; No. 429, that of the United States and the Interstate Commerce Commission.
"without jurisdiction to forbid the railroads from carrying freight for the public at a less price than it charges individuals for the same carriage of the same freight;"
"excludes this particular traffic from the rate structure which the Commission is authorized to erect and control; in still other words, there is freedom of discrimination."
unreasonable under §§ 2 and 3. There was no finding that these lower intrastate rates resulted in failure of the intrastate traffic to yield its proper share of the earnings of the carriers. Consequently the order of the Commission is void. [Footnote 2] The argument is, in our opinion, unsound.
Every rate which gives preference or advantage to certain persons, commodities, localities or traffic is discriminatory, for such preference prevents absolute equality of treatment among all shippers or all travelers. But discrimination is not necessarily unlawful. The Act to Regulate Commerce prohibits (by §§ 2 and 3) only that discrimination which is unreasonable, undue, or unjust. Texas & Pacific Ry. Co. v. Interstate Commerce Commission, 162 U. S. 197, 162 U. S. 219-220; Manufacturers Railroad Co. v. United States, 246 U. S. 457, 246 U. S. 481. Whether a preference or discrimination is undue, unreasonable, or unjust is ordinarily left to the Commission for decision, and the determination is to be made, as a question of fact, on the matters proved in the particular case. Interstate Commerce Commission v. Alabama Midland Ry. Co., 168 U. S. 144, 168 U. S. 170. The Commission may conclude that the preference given is not unreasonable, undue, or unjust since it does not, in fact result in any prejudice or disadvantage to any other person, locality, commodity, or class of traffic. On the other hand, preferential treatment of a class, ordinarily harmless, may become undue because, under the special circumstances, it results in prejudice or disadvantage to some other person, commodity, or locality, or to interstate commerce.
Section 22 must, in this matter, as in others, be read in connection with the rest of the act, and be interpreted with due regard to its manifest purpose. Robinson v. Baltimore & Ohio R. Co., 222 U. S. 506, 222 U. S. 511. [Footnote 3] Congress did not intend, by this provision concerning reduced rates and free transportation, to create an instrument by which the carrier was authorized, in its discretion, to subject interstate commerce to undue prejudice or by which the state was empowered to compel the carriers so to do. The object of the section was to settle beyond doubt that the preferential treatment of certain classes of shippers and travelers in the matters therein recited is not necessarily prohibited. And, in this respect, its provisions are illustrative, not exclusive. It limits or defines the requirement of equality in treatment which is imposed in other sections of the act. By so doing, it preserves the right of the carrier theretofore enjoyed of granting, in its discretion, preferential treatment to particular classes in certain cases. Only in this sense can it be said that the section is permissive. It confers no right upon any shipper or traveler. Nor does it confer any new right upon the carrier.
Commission. Its findings are necessarily conclusive, since the evidence on which it acted was not introduced in this suit. Louisiana & Pine Bluff Railway Co. v. United States, 257 U. S. 114.
MR. JUSTICE SANFORD took no part in the consideration or decision of these cases.
The first line of § 22, as originally enacted, 24 Stat. 379, 387, read "That nothing in this act shall apply to the carriage," etc.
"to the extent that the rates therein ordered to be established . . . apply to such transportation, for the United States, state, or municipal governments of stone and gravel, the title to which has passed to the government or is vested in it at the point of the origin of its transportation."
See also Texas & Pacific Ry. Co. v. Abilene Cotton Oil Co., 204 U. S. 426, 204 U. S. 446; Pennsylvania R. Co. v. Puritan Coal Mining Co., 237 U. S. 121, 237 U. S. 129-130; Illinois Central R. Co. v. Mulberry Hill Co., 238 U. S. 275, 238 U. S. 282.
Section 22 has been construed by the Commission as conferring upon carriers such permission to furnish transportation at reduced rates or free, in certain cases; as not conferring upon any shipper or traveler a right to such transportation; and, ordinarily, as not conferring upon the Commission power to establish such exceptions to the normal rates and fares. Sprigg v. B. & O. R. Co., 8 I.C.C. 443; Field v. Southern Ry. Co., 13 I.C.C. 298; Metropolitan Paving Brick Co. v. Ann Arbor R. Co., 17 I.C.C. 197, 204; Eschner v. Pennsylvania R. Co., 18 I.C.C. 60, 63; Dairymen's Supply Co. v. Pennsylvania R. Co., 28 I.C.C. 406; United States v. Union Pacific R. Co., 28 I.C.C. 518, 524. See also C. B. Havens & Co. v. Chicago & Northwestern Ry. Co., 20 I.C.C. 156. Compare Cator v. Southern Pacific Co., 6 I.C.C. 113; Commutation Rate Case, 21 I.C.C. 428, 437; United States v. Alabama & Vicksburg Ry. Co., 40 I.C.C. 405. Conference rulings provide, as to some reduced rates under § 22, that they must be filed and posted with the Commission, and as to others that they need not be. See Conference Rulings, Issued Nov. 1, 1917, Nos. 33, 36, 208e, 218, 244, 311, 452.

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