Document: 372 U.S. 744 83 S.Ct. 1038 10 L.Ed.2d 108 INTERSTATE COMMERCE COMMISSION, Appellant,v.The NEW YORK, HAVEN AND HARTFORD RAILROAD CO. et al. SEA-LAND SERVICE, INC., Appellant, v. The SEATRAIN LINES, UNITED STATES, Nos. 108, 109, 110 and 125. Argued Feb. 28, 1963. Decided April 22, [Syllabus from pages 744-745 intentionally omitted] Robert W. Ginnane, Warren Price, Jr., Ralph S. Spritzer, Washington, D.C., for appellants. Carl Helmetag, Philadelphia, Pa., appellees. [Amicus Curiae Mr. Justice HARLAN delivered the opinion of Court. 1 This case, involving four consolidated appeals a three-judge District Court judgment setting aside an order Interstate Commerce Commission to extent that it rejected certain proposed railroad rate decreases, brings before us important questions relating role in its task overseeing competition among different modes transportation. case is first which this has considered interpretation application § 15a(3) Act, added by Congress Transportation Act 1958.1 I. 2 two corporate appellants here, SeaLand Service, Inc. (formerly Pan-Atlantic Steamship Corporation), Seatrain Lines, Inc., are common carriers water engaged Atlantic-Gulf coastwise trade; they only companies now performing service. Sea-Land, had operated as 'break-bulk'2 carrier many years, 1957 suspended service converted ships into crane-equipped trailerships, each capable holding 226 demountable truck trailers. With these ships, freight could be moved highway trailers port origin, lifted onto process reversed at destination. As result, Sea-Land was able provide motor-water-motor afforded door-to-door delivery goods all shippers consignees, even if not situated on siding, containers would have opened transit. Traditionally rates, including water-rail water-motor been lower than corresponding all-rail when inaugurated new trailership 1957, published reduced rates were generally 5% 7 1/2% allrail boxcar rates. Some 700 placed under investigation Commission. 3 In Seatrain's service, transported company's dock cars, cars their contents then vessels, destination unloaded rail consignee. rail-water-rail similar permits carriage shipper consignee without breaking bulk both located sidings. 4 Railroad 'piggy-back,' or trailer-on-flatcar (TOFC), like provided Sea-Land. A motor trailer hauled road railhead, loaded flatcar, demounted 5 Before TOFC higher boxcar, water, land-water But primarily answer improved offered appellee railroads establish, experimental basis, 66 commodity movements between eastern points one hand Fort Worth Dallas, Texas, other,3 These substantially parity with same traffic, December 1960 disposed 43 docket proceedings issuing report embracing involved here well number us. 313 I.C.C. 23. 6 found compensatory, is, equaled exceeded out-of-pocket costs, listed railroad-leased flatcars carrying (TTX cars), but six railroad-owned single cars.4 further fully distributed costs5 TTX 14 cars. Having made findings, addressed itself what 'most important' question—'whether (TOFC) constitute destructive competition.' I.C.C., 44. It noted outset that, apart question most prefer attract latter must therefore establish somewhat below those railroads. relative stated distributed, costs using explicitly refrained relying findings. Instead concluded because factors: 8 '(W)e cannot determine records where inherent advantages may lie any issue. We recognize, also, cost elements appropriately passing upon lawfulness exceptional circumstances presented, other considerations, herein discussed, appear determinative issues.' 46. (Emphasis added.) 9 adknowledged recently enacted prohibited up particular level merely protect traffic another mode emphasized prohibition qualified phrase 'giving due consideration objectives national transportation policy declared Act.'6 stated, initial step program reductions 'fairly said threaten continued operation, thus existence, water-carrier industry generally.' 47. Since Commission's view shipping so threatened defense, public, economy ports coastal areas,7 National Policy required establishment maintenance differential enable continue decided appropriate accomplish purpose 6% over less Accordingly, ordered canceled, prejudice filing schedules conformity views.8 brought action seeking set cancellation November 1961, court handed down opinion, part enjoining canceling return least except basis specified 199 F.Supp. 635. held 'at record,' imposition carriers. reference 15a(3), said, intended qualify mandatory differentials 11 '* * factors normal incidents fair intervened, such practice destroy competing low hurtful proponent his competitor deprive 'inherent advantage' being low-cost carrier.' F.Supp., 642. 12 went discuss some detail understanding way determined, possible reasons why reluctant accept critical, precise properly require Finally, rejecting argument interests defense 'hoped-for 'end," operative policy, event conclusion respect supported adequate evidence. 13 probable jurisdiction, 371 808, 20, 52, importance presented effectuating congressional design embodied Act.9 II. significance determination can best understood after legislative history provision. 15 Section result several years problems whole particular. Concerned declining share expanding market, regarded improper administrative interference efforts compete, vigorously legislation introduced 1955 proposal Secretary Commerce. H.R. 6141, 84th Cong., 1st Sess. bill, became known 'the three shall-nots,' amended 15a(1) determining whether reasonable minimum, 16 shall consider effect charge transportation; relation necessary meet *.' 17 bill strongly opposed carriers, died committee. however, next Congress, 5523, 85th Sess., renewed opposition. When, hearings, Senate subcommittee recommended parent committee, 'shall-nots.' time expressed concern 'over-regulation' own add designed encourage difference permit assert advantages. S.Rep.No. 1647, 2d 10, 18—19, U.S.Code Congressional Administrative News 1958, p. 3456. stage proceeding 18 minimum rate, facts attending movement mode.' Id., 18. 19 At hearings full Committee, drafted, disagreed principles out feared language used, particularly italicized portion, inconsistent equivalent 'shallnots.' Hearings 3778 Committee Foreign Commerce, 165—185. Commissioner (then Chairman) Freas foreclosed considering mode, powerless reject covered railroad's destroying lower-cost carrier. He stated: 20 'Whenever conditions permit, given should instances, form exceeds another. If, then, we high exceed see no preserving 168. 21 clear believed permitted too, id., 172, suggested specifically authorize give 'due respective carriers,' 169. discussion, indicated destruction transportation, 170—171, 177, Senator Potter deletion 'and mode' addition Policy, Chairman answered: 'We will buy Potter's suggestion.' 177—178. suggestion adopted final version bill. 22 Other testimony interest John L. Weller, President Seatrain, who testified behalf (now Sea-Land). opposing subcommittee, Weller he did seek more make preserve represented: 23 'As I explained, our kind operation exist rates; No. 1. entitled differential, nor do urge one, cost. right ask anything that.' 30. 24 reported ultimately contained key provision 'shall giving Act.' quoting approval subcommittee's report, advantages, cost.' 3. subsection, reaffirm intent 1940 correctly construed 1945 New Automobiles 259 475, which, Committee's view, consistently followed.10 passage decision endorsed statement: 25 '(T)here appears warrant believing example, help motor-rate structure, vice versa.' 538. 26 theme—that firmly maintained artificially modes—was repeated House H.R.Rep. 1922, debates floor Houses. 104 Cong.Rec. 10822, 10841—10843, 10858—10859, 12524, 12531, 15528. Representative Harris, 'fully compensatory,' force 'just keep business.' 12531. mood perhaps summarized Smathers said: 27 going eliminate paternalism heretofore existed minds think breathe system competition, course needed, public consumer benefit therefrom.' 28 revealing fills contours 15a(3). There doubt respond asserting whatever possessed. Commission, proponents thwarted effective insisting subject jurisdiction remain viable receive significant traffic. had, words Congressman, become 'giant handicapper.'11 29 Moreover, consciously inadvertently defeat included Policy. principal reason reference, show, emphasize power prevent impairing modes. And example led adopted, railroads, establishing operations compensatory cost, forced smaller go business. III. 30 agree rejection issue requirement consistent mandate light findings conclusions underlying decision, putting advantages,' insistence 'be traffic' justified relied principally aspects policy—(i) 'unfair competitive practices,' (ii) objective 'adequate needs commerce United States defense' (note 6, supra)—we separately. 31 Unfair Destructive Competitive Practices.—If there fact stands bold relief regard constituting unfair simply divert mode. neither representative witness appellant (supra, pp. 754—756) took position, since too recognized 'preserve each' If detrimental revenue requirements others, Nor selective character reduction, response situation, permitted, more, furnish rate. words, something hard shown deemed destructive. seen, impair carrier, advantage unprofitable 32 true present virtually involved, Sea-Land's 'we issue.' stage, decide advance precisely how either carrier's measured protected.12 be, comparison 'out-of-pocket' distributed' terms defined method deciding movement.13 determined allowed stand unduly advantage.14 left resolution informed judgment. 33 length methods arriving analysis 'value-of-service' concepts making, views lawfully disallow find unnecessary discussion instance, hold record, disallowance adequately supported. Cf. Securities & Exchange Comm. Chenery Corp., 318 80, 87, 63 454, 459, 87 L.Ed. 626. 34 2. Needs Defense.—The gave considerable weight factor 'national 'commerce' decision. discounted factors, concluding (and presumably well) represented policy. disagree conclusion, reliance substantial 35 primary confirm competition. conclude reason, especially choice proposal, qualification element alone. See 755, supra. statutory references virtal considerations mere window dressing, practical function. 'Congress unequivocally reserved regulate reasonableness interstate defense.' Capital Transit Co., 325 357, 362, 65 1176, 1178, 89 1663. 36 On hand, recognizing relevance imply broad applied freely nullify particularized mandates Normally, specific govern intermodal Only extraordinary them outweighed. To justify believe demonstrated themselves genuinely existence uniquely filling transcendent need. 37 Measured against standard, sustained. state 'initial step' 'can fairly threaten' referred supporting evidence, drive profitable otherwise endanger carriers' survival. Burlington Truck States, 156, 167—168, 239, 245—246, 207; Gilbertville Trucking Co. 115, 130—131, 217, 226—227, 177. enough rely issue, situation ample deal occasion arises. 38 segment country's depends Seatrain.15 need additional sources might sufficient,16 parties opportunity adduce relevant evidence tending indicate adversely affect country. Once raised, (like advantage) solely protesting 39 conclusion: order, insofar related aside. disagree, court's deem inappropriate approve disapprove opinion. vacated, described herein, cause remanded 40 ordered. 41 Judgment aside, 72 Stat. 572, 49 U.S.C. provides: 'In applicable. Rates break-bulk physical unloading car loading cargo leave intermediate shorter hauls, violating long- short-haul provisions 4(1) 4(1), also grant. fourth-section denied because, text just reasonable. itself, '(n)o receivers oppose granting relief.' 33. Indeed, individual came forward discriminated them, Industrial Traffic League, nationwide organization shippers, filed brief amicus curiae urging affirmance below. withdrawn (The knowing percentages move percentage compensatory.) discussing that: 'Fully based plus revenue-ton ton-mile distribution constant deficits, disregarding ability pay.' 513 (1945). 54 899, preceding 1, 1940. 'It hereby impartial regulation administered recognize each; promote safe, adequate, economical, efficient foster sound economic carriers; charges services, unjust discriminations, undue preferences practices; cooperate duly authorized officials thereof; wages equitable working conditions;—all end developing, coordinating, rail, means, Postal defense. All enforced above declaration policy.' support conclusions, quoted passages Maritime Administration, 'A Review Coastwise Intercoastal Shipping Trades,' ships; 1950 S.Rep.No.2494, 81st 17, having domestic tonnage readily available'; War Admin. T A. Application, 260 589, 591, spoke 'dependency areas transportation.' Five Commissioners office joined entire report. sixth, Hutchinson, concurred, stating 'in general agreement majority report,' 50, adding ultimate allow high-cost gravitate whereby (sea-land) participate traffic.' 51. warranted. McPherson, concurring part, approved imposed differential. Three (Commissioner Freas, Winchell Webb) dissented ground 'blanket protection' 51 52. disposition whether, Hutchinson's concurrence, 'majority report' and, not, sustained absence rationale commanding agency. here; suggest relate equal enjoin level. read below, canceled court, entered future judicial review. narrow position limited carriage. During decisions, e.g., Petroleum Products Ill. Territory, 280 681, 691 (1951); Los Angeles Arizona Mexico, 509 (1951), departed laid Automobiles. 174—175. Hearings, supra, note 82. argued intimated failed sustain burden proving advantage. shows standpoint requirements, relies claim bear persuading Of course, bring data Various Commodities Ark. Tex., 314 215. utility area traditionally used—that requirements. so, measure preferred comparing Even though B, overall rest very slight B superior out-weigh marginal difference. established lawful diverting A's Conversely, great reduce compete effectively still B's materials 7, nature, recent dated back 1955. Further, sufficiently rendered counsel oral argument, combined total eight currently operation. cited Vice Admiral Wilson Mayor Savannah, Georgia, Decline Industry, Merchant Marine Fisheries Subcommittee 86th 83—86, 105—106, 1961 letter Sylvester Butler, reproduced 107 7299—7302.

Category: 7