Court Opinion

ID: 9635847
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:07:58.233721+00
Date Added: 2024-06-11T18:09:37.636451
License: Public Domain

HUXMAN, Circuit Judge
(dissenting).
I agree with Commissioner Minor that “this report is subject to the same infirmities which moved the court to remand the case to the Commission for further consideration.” See 128 F.Supp. 646. Nothing is changed. True, the Commission devotes more discussion in general terms to historical background. Historical background is important only if it logically bears upon the problem presented. Talking in general terms of historical background, as discussed by the Commission, does not answer to my satisfaction the question why one trade territory the same distance from a common market and having the same transportation conditions is saddled with a 3.5 cent greater freight rate than that of an adjoining competing territory. Neither does the statement that the relationship of Kansas and Oklahoma must be viewed as a part of the over-all network, and that since the Kansas and other western territory points break over Kansas City the relationship within that area must be preserved, justify this discrimination between two highly competitive areas. The fact remains that the Enid territory and the Wichita territory are highly competitive territories, entitled to equality of treatment as between themselves. If preserving the relationship of the territories breaking on Kansas City requires an unjust discrimination in rates against Wichita, there is maladjustment in that over-all relationship which must be corrected otherwise than by destroying or seriously impairing Wichita’s economic life with respect to the Memphis route.
In its former hearing and consideration, the Commission used the weighted average method of determining the distance from Enid and Wichita to Memphis. By the use of this method, it found the distance from Wichita to be 18.3 miles less than from Enid; notwithstanding, it gave Enid a 3.5 cent lower freight rate. Although the Commission has consistently employed the weighted average method as a yardstick for comparing distances, upon remand it now abandoned that method and for the first time employed the simple average mileage yardstick. By the use of this method, it now finds the distance from Enid to Memphis to be 12 miles less than from Wichita. But whether the distance from Wichita is 18.3 miles less or 12 miles greater, the Commission still finds that Enid should enjoy the benefit of a 3.5 cent less freight rate. No one would seriously contend that the difference in distance, whichever method is used, is a factor justifying a difference of 3.5 cents in freight rates.
The Commission did one other thing apparently to justify adherence to its former rates for Wichita and Enid. It took a look at the Revised Southwest Scale rates on grain and grain products. It may be noted the Revised Southwest Scale rate does not establish rates, it only suggests permissible rates; neither did the Commission adopt the suggested rates established thereby. It merely looked at them, talked about them, and then readopted its former rates penalizing Wichita 3.5 cents over its competing territory; both for all practical purposes being the same distance from Memphis.
It is true that our scope of review of an order of the Commission is a limited one, but it is still a judicial review and not merely a perfunctory one. In Interstate Commerce Commission v. Illinois Central R. Co., 215 U.S. 452, 30 S.Ct. 155, 160, 54 L.Ed. 280, the Supreme Court said that we have power to inquire “whether, even although the order be in form within the delegated power, neverthless it must be treated as not embraced therein, because the exertion of authority which is questioned has been manifested in such an unreasonable manner as to cause it, in truth, to be within the elementary rule that the substance, and not the shadow, determines the validity of the exercise of the power.” It would seem elementary that one of two competing territories for a common mar*701ket cannot successfully compete under a freight rate 3.5 cents greater than its competitor. Such a disparity in rates would, upon its face, seem unreasonably discriminatory unless some justification appeared therefor. I can find none in this record to justify such a discrimination in two territories the same distance from a common market and whose transportation conditions are identical, and must, therefore, conclude that the shadow and not the substance determined the establishment of the challenged rates.
I would enjoin the enforcement of the challenged rates.