Court Opinion

ID: 9444496
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:02:40.765549+00
Date Added: 2024-06-11T17:29:53.575620
License: Public Domain

HEALY, Circuit Judge.
In October of 1947 appellee, hereafter generally called Martin, filed a complaint with the Interstate Commerce Commission alleging that during the period January 1 to September 30, 1947, the Southern Pacific Company failed in its duty to provide and furnish complainant with an adequate supply of box cars for the transportation of its manufactured products from its Oakland, Oregon plant to interstate destinations, in violation of § 1(4) and (11) and § 3(1) of the Interstate Commerce Act, 49 U.S.C.A. § 1(4) and *812(11) and § S(l).1 The relief asked was that the Commission enter an order commanding Southern Pacific to provide Martin with adequate and equal car service from Oakland, Oregon, to various1 destinations, and to pay Martin a sum in excess of two million dollars by way of damages. Southern Pacific intervened and in its answer denied the material allegations of the complaint.
The matter was assigned for formal hearings before an examiner for the Commission. Following such hearings the examiner made a proposed report recommending that the Commission find that Southern Pacific failed in its duty to furnish adequate car service to Martin and that damages be awarded the latter in the amount of approximately $135,000 for such failure.2 Exceptions to the examiner’s report were taken by Martin and Southern Pacific, and after argument Division 3 of the Commission made the report and order here under attack. In its report the Commission, under the heading “Conclusions,” made, among others, the following ultimate finding: “We find that complainant has failed to establish that [Southern Pacific] during the complaint period engaged in any unreasonable or otherwise unlawful practice, as alleged, in violation of section 1 of the act in furnishing or not furnishing cars to complainant, * * * or that [Southern Pacific] subjected complainant to any undue prejudice in violation of section 3.” The complaint was ordered dismissed.3 Martin petitioned for reconsideration and its petition was denied by the entire Commission by unanimous vote of its membership.
Martin then filed a complaint in the court below naming the Commission and the United States as defendants. The complaint asked that the Commission’s order be set aside as invalid for a variety of reasons. One of these was that the order lacks a rational basis because the findings do not support the Commission’s conclusions. Another was that the Commission’s findings of fact show that Martin was damaged and is entitled to reparation, and that such findings support no other conclusion. Other reasons assigned were that the Commission misapplied the law and that its action was arbitrary and capricious. The court was asked to enjoin and set aside the order and to re*813mand the case to the Commission with directions to award such damages as the court shall find Martin to be entitled to. Southern Pacific again intervened. On the basis of the record before the Commission the court made findings of fact and conclusions of law to the effect that the Commission’s report and order are not supported by substantial evidence. Judgment was entered vacating the order and remanding the cause to the Commission with directions to take further action not inconsistent with the court’s decision. The matter is before us on appeal from the judgment.
Preliminary to discussion of the case it is well to notice the narrow scope of judicial review of the Commission’s orders. It is a long-established principle that such orders are not to be set aside by a court if they are within the Commission’s statutory power and are supported by substantial evidence. Interstate Commerce Commission v. Union Pacific R. R. Co., 222 U.S. 541, 547, 32 S.Ct. 108, 56 L.Ed. 308. To consider the weight of the evidence before the Commission, or the soundness of the reasoning by which its conclusions were reached, is beyond the province of the courts. Virginian Ry. Co. v. United States, 272 U.S. 658, 663, 47 S.Ct. 222, 71 L.Ed. 463. The courts have historically ascribed to the findings of the Commission “the strength due to the judgments of a tribunal appointed by law and informed by experience.” Illinois Central R. R. Co. v. Interstate Commerce Commission, 206 U.S. 441, 454, 27 S.Ct. 700, 704, 51 L.Ed. 1128. It must not be forgotten that the reviewing court was here confronted with transportation problems involving many factors and calling for the exercise of informed administrative judgment. As was observed by the Supreme Court in a case involving rates, “The stuff of the process is fluid and changing — the resultant of factors that must be valued as well as weighed. Congress has therefore delegated the enforcement of transportation policy to a permanent expert body and has charged it with the duty of being responsive to the dynamic character of transportation problems.” Board of Trade of Kansas City, Mo. v. United States, 314 U.S. 534, 546, 62 S.Ct. 366, 372, 86 L.Ed. 432.
It appears from the trial court’s decision that it regarded the conclusions of the Commission, quoted above, as conclusions of law rather than as findings of ultimate fact.4 Such approach is erroneous. The courts have repeatedly pointed out that whether given rates or practices are “reasonable” or “unduly prejudicial” are factual determinations confided by Congress to the judgment and discretion of the Commission. That this must be so is manifest since the sections of the Act involved contain no definition of what is reasonable or unreasonable or what constitutes undue prejudice. We quote from or summarize a few of the decisions. In Virginian Ry. Co. v. United States, supra, 272 U.S. at page 665, 47 S.Ct. at page 225, it was held: “The finding of reasonableness, like that of undue prejudice, is a determination of a fact by a tribunal ‘informed by experience.’ ” In Nashville C. & St. L. Ry. v. Tennessee, 262 U.S. 318, 322, 43 S.Ct. 583, 585, 67 L.Ed. 999, it was said: “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.” And in Swayne & Hoyt v. United States, 300 U.S. 297, 304, 57 S.Ct. 478, 81 L.Ed. 659, the Court said that whether a discrimination in rates or services is undue or un*814reasonable has always been regarded as peculiarly a question committed to the administrative body, based upon an appreciation of all the facts and circumstances affecting the traffic. Cf. also Johnston Seed Co. v. United States, 10 Cir., 191 F.2d 228.
In its report the Commission took notice of background conditions prevailing during the complaint period, saying:
“After the close of World War II, the Nation as a whole experienced a great industrial development, and during 1947 the Nation’s railroads experienced for the first time since 1920, except in the war period, an average daily shortage of cars. * * * During 1947 the national daily shortage was 18,672 cars, and the defendant was individually faced with an average daily shortage of 583 cars of the types used for the transportation of forest products. Because of the sizeable surplus experienced prior to World War II, the Nation’s railroads, including the defendant, did not anticipate the unusual demand for cars that arose in 1947.
“In addition to the increases in general traffic on the defendant’s lines during and after World War II, it also experienced a tremendous increase in forest products traffic. * * * qijjg defendant is the principal carrier in Oregcn, and the number of cars loaded with forest products on its Portland division increased from 80,675 in 1939 to 162,418 in 1947.
“Another factor affecting the defendant’s car supply in 1947 was a reversal of the main traffic flow over its lines after the war. During the war the main flow was westward, but with the close of hostilities in the Pacific theater, the main flow became eastward. During 1947 the defendant originated and delivered to its connecting carriers many more loaded cars than it received from such connections. During the war and postwar periods it exerted extensive efforts to conserve and increase its facilities. On these facts the defendant cannot be held accountable for general car shortages on its lines within the period covered by this complaint.”
This resume of conditions has support in the record, and indeed, in many of its aspects, in common knowledge. In such circumstances it was inevitable that carriers would be faced with complaints by shippers, and the record shows that during the period in question Southern Pacific received thousands of such complaints.
The Commission impartially and at great length summarized the evidence adduced both by the complaining party and by the carrier. In no particular do we discover in the summary a distortion of the record made before the examiner.5 While much of the summary recites evidence on Martin’s part which would sup*815port a ruling in its favor, the resume of the carrier’s showing points substantially in the opposite direction. For example, we quote a portion of the report:
“In support of its contention that cars were distributed to the complainant on a reasonable basis, the defendant showed that during the period concerned the complainant received more cars than it requested by written car orders,6 whereas other shippers on its lines, including the Portland division, were furnished on the average only 80 per cent of the cars ordered by them. From January 1 to June 30, 1947, cars were furnished to the complainant in practically complete compliance with written car orders, and in the remainder of the period more cars then ordered were furnished, but some delay was encountered. In the latter period, the distribution of cars to shippers on the Portland division, including the complainant, was made on a percentage-of-quota basis; that is, if the available car supply on a particular day was only 50 per cent of the aggregate capacity of the district, each shipper was assigned only 50 per cent of its quota, except that no cars would be assigned to a shipper which had no orders on file. During the first 6 months of the complaint period, the car shortage was not as severe as during the later period; but some shortage did exist, and cars were allegedly distributed to each shipper in proportion to the number of empty cars available.”
Later in the summary attention was called to evidence in the record that a number of cars were kept on hand upon the complainant’s siding for several days during much of the complaint period. One car was on hand 7 days, two were on hand 6 days, eleven were on hand on 5 days, twenty-two on hand on 4 days, and fifty-six on hand on 3 days. The Commission thought that these facts were relevant in consideration of the complainant’s ability to load cars in addition to those which were furnished.
In its conclusions the Commission stated: “The evidence establishes that from January 1 to June 30, 1947, complainant received practically all of the cars for which specific written car orders were placed; that thereafter in the complaint period more cars were furnished than were requested by written orders, though some delays were experienced; that complainant desired, required, and attempted to secure additional cars from defendant; that defendant and its employees made reasonable, and sometimes successful, efforts to furnish additional cars to complainant; that by reason of its inability to secure cars at all times when needed complainant was unable to fill some orders placed with it; that during 1947 defendant suffered a daily shortage of 583 freight cars; that such shortage was a general one for which no direct responsibility can be placed upon defendant; and that it is not shown that defendant unduly favored shippers other than complainant.” [Emphasis ours.]
In disposing of the shipper’s complaint the Commission said: “Complainant alleges violations of section 1(4), section 1(11) and section 3(1) of the Interstate Commerce Act. Under those sections defendant is required, in part, to provide and furnish transportation upon reasonable request; to furnish safe and adequate car service and to establish, observe, and enforce just and reasonable rules, regulations, and practices with respect to car service; and not to make, give, or cause any undue or unreasonable preference or advantage to any particular person, company, locality, or territory. The right of a shipper to cars, however, is not an absolute right and the carrier is not liable if its failure to furnish cars was the result of sudden and great demands which it had no reason to apprehend would be made and which it could not reasonably have been expected to meet in full. The law exacts only what is reasonable from such carriers, but at the same time requires that they should be equally reasonable in the *816treatment of their patrons. In case of car shortage occasioned by unexpected demands, they are bound to treat shippers fairly, if not identically. [Citing authorities.] Considering the above, in the light of the facts of this record, we conclude that complainant has failed to establish any violation of sections 1 and 3 as alleged.” 7
The Commission analyzed in detail the shipper’s showing with respect to damages claimed to have been sustained by reason of a shortage of cars at shipper’s Oakland, Oregon, plant. It observed that the shipper’s computations were made for the entire year, and that “no method is indicated for arriving at a reasonable estimate for the complaint period. They are based to a great extent upon the operation of the complainant’s corrugated-box plant at Aurora, which was in no way affected during the complaint period by the situation at Oakland.” Further, the Commission held inapposite certain comparisons made by the shipper with prior years. In its conclusions on this point the Commission found that “the evidence presented falls far short of the requirements in a proceeding of this character to support an award of reparation. Where special damages are sought, the proof thereof must be as definite and certain as would be necessary under established principles of law to support a judgment in court.” [Citing previous decisions.]
A majority of the court are of opinion that the shipper’s proof of damages was sufficiently specific to have supported an award in some amount had the Commission held in favor of the shipper on the issue of statutory violation. Accordingly our decision is predicated on grounds other than that developed in the preceding paragraph.
The judgment of the district court is reversed.

. Section 1(4) in material part provides:
“It shall be the duty of every common carrier subject to this part to provide and furnish transportation upon reasonable request therefor, * *
Section 1(11) provides: “It shall be the duty of every carrier by railroad subject to this part to furnish safe and adequate car service and to establish, observe, and enforce just and reasonable rules, regulations, and practices with respect to car service; and every unjust and unreasonable rule, regulation, and practice with respect to car service is prohibited and declared to be unlawful.”
Section 3(1) makes it unlawful for any carrier to make or give any undue or unreasonable preference or advantage to any particular person, firm, locality, region, district, or territory; or to subject any of such concerns or territories, or any particular description of trafile to any undue or unreasonable prejudice or disadvantage in any respect whatsoever.

. The finding proposed by the examiner was in response to the claim of violation of the statute requiring rail carriers to furnish cars “on reasonable request.” No finding was recommended that the railroad had subjected the complainant to undue prejudice in contravention of Section 3 of the Act.
We may note here that the examiner’s recommendations were not binding on the Commission. See Radio Commission v. Nelson Bros. Co., 289 U.S. 266, 285-286, 53 S.Ct. 627, 636, 77 L.Ed. 1166, where the Court said: “Complaint is also made that the commission did not adopt the recommendations of its examiner. But the commission had the responsibility of decision and was not only at liberty but was required to reach its own conclusions upon the evidence.” While this holding had to do with action of the Radio Commission, we have found in the authorities no indication that the same principle is not applicable to holdings of the Interstate Commerce Commission. See Inter-City Transp. Co. v. United States, D.C., 89 F.Supp. 441, 445, where the same principle was applied to a decision of the Interstate Commerce Commission, the court citing Nelson Bros. Co., supra.

. Martin Bros. Box Co. v. Southern Pacific, 280 I.C.C. 395.

. In its opinion the court said: “I previously indicated that the court is charged with the duty of determining whether there is a rational basis for the Gommission’s conclusions. Or, stated differently, whether the Commission’s conclusions are supported by substantial evidence, considering the whole record, * *
While it is true that under the heading denominated “Conclusions” in its report the Commission stated conclusions of law, it also made factual conclusions and ultimate findings under the same heading,

. There is substantial testimony in the record to the effect that during the complaint period information given to Southern Pacific by Martin’s employees as to the need for cars was conflicting, and that the road’s representative told Martin’s sales representative that it was essential for the shipper to place definite car orders so as to remove the confusion as to its needs. The testimony is in conflict as to the number of cars required by Martin from day to day. It was shown to be the practice of Southern Pacific to furnish cars to the shippers of lumber in Oregon, including Martin, when clear and definite orders for placing were received. It appears from the testimony of the carrier’s witnesses that the road did not require that written orders for cars be placed, and that oral orders were honored when clear and definite as to Martin’s daily need. Evidence for the carrier discloses that when shippers submitted oral orders, by telephone or otherwise, it was the practice of the carrier’s agents to reduce them to writing on printed order forms. Pads of these forms were supplied all shippers. Also, there was a substantial showing that during the emergency the carrier endeavored to pro rate cars between shippers of lumber so that there might be an equitable distribution of the available supply.

. See footnote 5.

. An argument is advanced that the Commission misinterpreted the requirements of section 3(1) of the Interstate Commerce Act, in that it is said to have believed there could be no violation of the section unless undue preference was extended to competitors of the complaining shipper. The Commission’s report • and findings afford no basis for the argument.
In this connection it is significant to recall that even the much relied upon report of the examiner did not recommend a finding that the carrier had subjected the complainant to undue prejudice in contravention of section 3 of the Act. See footnote 2 above.