Court Opinion

ID: 9725009
Source: CourtListenerOpinion
Date Created: 2023-08-26 11:24:39.831102+00
Date Added: 2024-06-11T18:25:08.893007
License: Public Domain

MeCARTHY, District Judge
(dissenting).
This action stems from a basic dispute between the short-line, freight terminating railroads and the car-owning freight originating railroads as to the per diem charges for each freight car while it is on the tracks of any railroad but the owner. The problem before the three-judge court concerns the question of the power of the Interstate Commerce Commission to enter the order in ICC Docket No. 31358, and which is presented for review by this court together with the further question of whether or not the order entered was supported by evidence adduced before the Commission.
It is my conclusion that the Commission was without jurisdiction to enter *299the order in question; hence, this separate opinion in addition to the learned discussion written by Judge Woodbury.
As has been stated by Judge Woodbury the Interstate Commerce Commission entered an order which in itself clearly indicated that it was not acting under Section 1(14) (a) of the Interstate Commerce Act. He proceeds, however, and determines that the Commission derives authority elsewhere to enter a declaratory order as to rates. With this determination I cannot agree.
Section 5(d) of the Administrative Procedure Act authorizes declaratory orders of the sort entered here by the Commission, but this section does not confer jurisdiction. Jurisdiction to enter this order must arise elsewhere. Section 9, Administrative Procedure Act, 5 U.S.C.A. § 1008; Olesen v. Stanard, 9 Cir., 227 F.2d 785. Out of deference to the rights of the parties it is the duty of the court to search the Interstate Commerce Act to determine if jurisdiction to enter an order establishing compensation for so-called per diem charges is granted under the Act separate and apart from Section 1(14) (a).
Section 1(4) of the Interstate Commerce Act grants compensation setting power, but this section is limited to through route cases and it is apparent from an examination of the record that the case currently before the three-judge court involves more than “through route” usage and compensation.
Section 1(11) grants rule-making power, but it does not refer to compensation as such. This section is analogous to Section 1(12) which has been interpreted by the Supreme Court in Chicago, Rock Island and Pacific Railway Co. v. United States, 284 U.S. 80, 52 S.Ct. 87, 76 L.Ed. 177, as not including compensation. The language used in that case, 284 U.S. at page 99, 52 S.Ct. at page 93, is conclusive of the entire situation: “That subject (compensation for use of cars), as already appears, is covered by Section 1(14) (a).” This language also negatively answers the suggestion that power to set compensation is impliedly in Section 1(10) or 1(11). Cf. also Palmer v. United States, D.C., 75 F.Supp. 63.
It is my considered judgment that, if the Commission has the power to enter an order such as this, without compliance with the requirements of Section 1(14) (a) the will of Congress has been thwarted. The obvious result of this order of the Commission is to grant to the credit balance roads unlimited power to boost per diem rates. Because of the organization of the Association of American Railroads and the voting procedures used in setting per diem rates, the debit balance railroads, under the order entered by the Commission, are the captives of the credit-balance roads and, because of the “car service” rules and the economic facts of railroad life, they cannot buy enough freight cars to obtain enough votes to control per diem rate setting within the General Committee of the Association of American Railroads.
It may also be noted that the eastern railroads described in this petition have approximately 16,000 freight cars and these roads are all debit car railroads while the large shipping credit ear railroads have cars which run into the hundreds of thousands. This becomes important in view of the fact that there is an obligation devolving upon the debit car railroads to use cars owned by the credit car railroads for shipping purposes before they can utilize their own. This is only one view point of the many angles that were thoroughly disregarded by the Interstate Commerce Commission when they disregarded the recommendations of the examiner and accepted “in toto” the rates set by the American Association of Railroads.
Section 1(14) (a) is intended to negative the possibility of the issuance of any order such as we have here — an order which is, in truth, merely a rubber stamp of a decision already made by the stronger of two economic groups. Here, we have an instance of an abandonment of its functions by the Commission altogether in favor of the long-haul trunk line railroads. The Commission in the exercise of its duties has taken the simple way out. Substance has given way to mere form.
Decision that jurisdiction may be found only within the confines of Section 1(14) (a) would obviate the possibility of the Commission surrendering its powers and duties by seeking the easy way.
Congress has spoken only twice as to per diem rates. The first was in Section *3001(14) (a) which carries with it the requirement that the Commission conduct an investigation through its impartial experts. The second was in the Bul-winkle Act which authorized the organization of a private association with the approval of the Commission and which excepted rates set by this private association from the sway of the Sherman AntiTrust Law, but only so long as non-as-senters were free to refuse to follow the rates set by the association and to bargain independently. The order before the Court does not set rates in accord with Section 1(14) (a) and the order before the Court does not come within the purview of the Bulwinkle Act, since the effect of the order is to require compliance with the established rates by all railroads, assenters and non-assenters alike.
It should be noted that the Congress has provided for adequate safeguards in each situation. Under Section 1(14) (a) rates may be set only after an impartial investigation conducted by a corps of experts available at all times in the personnel of the Interstate Commerce Commission; under the Bulwinkle Act the non-assenters are free to bargain independently. If the order of the Commission here should be rubber-stamped these safeguards would be lost and the clearest of anti-trust violations by illegal price fixing would be endorsed.
' That part of the declaratory order here under review which states that the per diem charges were charges which could have been established under Section 1 (14) (a) and that lower charges would not be compensatory is not an escape hatch which this Court can use for the following reasons.
1. The fact that the charges could have been established under Section 1 (14) (a) is not enough for the Commission to endorse them. Under that section the Commission could not establish rates retroactively.
2. The fact that the Commission finds that lower rates would not be compensatory is not enough, because this finding, if it is such, is not based on the impartial investigation which would have been held had. the Commission acted under the said section.
I would therefore vacate the order of the Interstate Commerce Commission because it is without jurisdiction. To arrive at any other conclusion is tantamount to saying that the Commission can close one legislative gap after another. The history of the Act leads only to one conclusion and that is that these gaps cannot be closed except by the Congress of the United States.