Source: http://www.chanrobles.com/usa/us_supremecourt/379/343/case.php
Timestamp: 2018-06-21 04:54:05
Document Index: 766507854

Matched Legal Cases: ['§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1']

This is an appeal from the judgment of a three-judge district court setting aside an order of the Interstate Commerce Commission which had disallowed certain freight rates filed by the New York, New Haven & Hartford Railroad Company (hereafter "the New Haven") and other rail carriers. The issue presented is whether chanroblesvirtualawlibrary
A general word as to the basic distinction between class rates and commodity rates may be appropriate before proceeding to the specifics of the present case. Class chanroblesvirtualawlibrary
rates were at the foundation of the railroad rate structure at the time of the enactment of the Interstate Commerce Act in 1887. Such rates are applied to traffic through two separate tariffs. One tariff, the "classification," assigns each of the many thousand commodities carried by rail to one of presently some 30 categories or classes, based upon the commodity's particular characteristics. [Footnote 2] A companion tariff specifies the rate at which each class of freight will be carried. By contrast, commodity rates, which were also in existence at the time of the original passage of the Interstate Commerce Act, are rates made specifically applicable for the carriage of a particular commodity or group of commodities from one designated point to another. The original function of commodity rates, which are generally lower than class rates, was to encourage the movement of bulk commodities, such as coal and grain. With the onset and rapid growth of chanroblesvirtualawlibrary
In order to compete with the "trailer on flatcar" rates, and in an effort to cope with a significant imbalance between eastbound and westbound traffic over its lines, [Footnote 3] the New Haven filed with the Commission the all-commodity chanroblesvirtualawlibrary
The Commission initially suspended the rates, but allowed them to become effective on July 6, 1959, and they have remained in effect since that date. Various motor carrier associations and some of their individual members protested the rates, but, in February, 1961, Division 2 of the Commission filed a report approving them. 313 I.C.C. 275. On reconsideration later that year, the full Commission held by a divided vote that the rates violated § 1(6) of the Act. 315 I.C.C. 419. [Footnote 5] The District Court set aside the Commission's order and enjoined its enforcement, holding that the order rested on an erroneous interpretation of § 1(6) of the Act. The intervening protestants brought this appeal here, and we noted probable jurisdiction. 376 U.S. 961. [Footnote 6] chanroblesvirtualawlibrary
At the time of the enactment of the Interstate Commerce Act, the vast preponderance of rail freight traffic moved on class rates. These classes, as well as the rates applicable to them, varied greatly among different railroads and different sections of the country. When the Interstate Commerce Act was formulated, consideration was given to empowering the Commission to prescribe classifications, but it was finally concluded that the provisions of the bill which required publication of rates and classifications, together with the provisions regulating unreasonable rates, would ultimately prove adequate to achieve the desired uniformity of classifications. [Footnote 7] Beginning with its First Annual Report, however, the Commission chanroblesvirtualawlibrary
The Senate Report alluded only to the doubt which had been recently cast upon the Commission's power to deal with classifications. [Footnote 18] chanroblesvirtualawlibrary
This conclusion is amply confirmed by the pattern of the Commission's decisions since § 1(6) was enacted. The course of those decisions makes clear that the Commission has given full consideration to the question of whether § 1(6) applies to all-commodity rates, and has squarely decided that the section is inapplicable. All-commodity rates first came under scrutiny of the Commission more than 25 years ago. In 1937 and 1938, the Commission approved all-commodity rates on four different occasions without the slightest suggestion that the rates were subject to the provisions of § 1(6). The principal concern of the Commission's inquiry in these cases was to ascertain whether the rates were prejudicial to any person, locality, or description of traffic. [Footnote 19] In a similar chanroblesvirtualawlibrary
248 I.C.C. at 88. Thereafter, the Commission rejected other challenges to all-commodity rates based on § 1(6) upon the authority of the Pacific Freight decision, [Footnote 22] and the two-to-one decision based on § 1(6) which Division 3 had previously rendered was recalled and decided upon another ground. [Footnote 23] In the years that followed, the Pacific Freight case was regarded as controlling, and all-commodity rate cases chanroblesvirtualawlibrary
Thus, both the legislative history and the course of the Commission's decisions clearly impel the conclusion that § 1(6) does not apply to all-commodity rates. In reaching this conclusion, we hardly need add that, as the Act is structured, these rates are subject to full policing by the Commission under other provisions. If a commodity rate is too high, the Commission may reduce it. [Footnote 26] If a commodity rate unjustly discriminates against a shipper, the Commission may order the discrimination removed. [Footnote 27] If a commodity rate results in an undue preference in favor of or an unreasonable prejudice against any person, locality, or description of traffic, the Commission may require that appropriate adjustments be made. [Footnote 28] If a commodity rate is unreasonably low, the Commission may order that it be increased. [Footnote 29] chanroblesvirtualawlibrary
Interstate Commerce Commission v. Lake Shore & M.S. R. Co., 134 F.9d 2, aff'd by an equally divided Court, 202 U.S. 613. In this case, the court struck down a Commission order commanding the reclassification of hay and straw to a lower-rated class.
Section 1(6) imposes upon carriers the "duty . . . to establish, observe, and enforce just and reasonable classifications of property for transportation." The Court seems to accept the act of excluding commodity rates from this broad imperative, as well within the mainstream of Commission functions. I have great difficulty coming to any different answer concerning the Commission's task with respect to § 1(6) now that the Commission has changed its mind, or modified its views, and believes it best serves transportation policy and the goal of just and reasonable rates to subject at least some commodity rates to scrutiny under § 1(6). chanroblesvirtualawlibrary