Court Opinion

ID: 9304877
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:15:57.528611+00
Date Added: 2024-06-11T17:13:51.486006
License: Public Domain

MACK. Judge
(dissenting). The salient facts briefly stated are that prior to August, 1907, the through rates on certain classes from New (Orleans to Montgomery exceeded the combination of rates in force from New Orleans to Mobile and Pensacola, respectively, and from these places to Montgomery. All of the rates had been in force for many years. No change has been made in the rates on that part of the road between Mobile and Pensacola, respectively, and Montgomery, but in August, 1907, the rates from New Orleans to Mobile and to Pensacola were advanced exactly enough to make the combination on these points equal to the through rale from New Orleans to Montgomery. While the railroad attempts to justify this advance by the assertion that the former rate was unreasonably low, having been put into effect many years before in order to cut out water competition, nevertheless it is admitted that the immediate cause of the advance was the announcement by the Commission of the rule that a through rate must not exceed the combination of the locals. To comply with the rule, it was necessary either to reduce the through rate from New Orleans to Montgomery to the sum of the locals or to raise one or both of the latter. The railroad chose the latter alternative. The Commission, by its order, endeavored to compel it to adopt the former.
The Commission could do this only if it found that the new rates from New Orleans to Mobile and Pensacola, respectively, and the unchanged rate from New Orleans to Montgomery were unreasonably high. If, on a review of the record before the Commission, this court finds that there was no substantial evidence on which to base such a conclusion, it would be our duty to annul the order, inasmuch as the power of the Commission to reduce rates to a reasonable figure is con*566ditioned on the opinion of the Commission, formed after a full hearing, that the tariff rate is unreasonably high, not its arbitrary and uncontrolled opinion, but its deliberate judgment based on substantial evidence produced at the hearing prescribed by the act.
While this principle is that adopted in the opinion of the court, I differ with my Brethren in the application of it to the facts of this case. Whatever view I might have taken as to the reasonableness of the tariff rates had I been a member of the Commission, I cannot find that there is no substantial evidence to support the conclusions reached by it that they are unreasonably high.
Let us first consider the raised rates from New Orleans to Mobile and Pensacola. While, as the majority of the court state, there is no presumption that they are unreasonable merely because the old rates have been raised, yet there is likewise no presumption that they are reasonable merely because the carriers have put them- into effect. When a rate is attacked, immediately after it is made, there is no presumption either for or against its reasonableness. If it has been in force for some time and traffic has moved freely under it, a presumption does arise that it is reasonable. That presumption would be. sufficient to make out a prima facie case in favor of the reasonableness of the rate to which it applied and therefore to shift the burden of going forward with some evidence that it is unreasonable.
Apply these fundamental principles to this case. There is no presumption' one way or the other as to the new rates. The ultimate burden of proof, at the time of this hearing and until the amendment of 1910, was on the shippers to show their unreasonableness. The absencé of any presumption that they are reasonable was demonstrated when it was shown that they were put into effect just prior to this complaint; and a prima facie case that the old rates are reasonable and the raised rates therefore unreasonable was made out when it was proved that the former had been in force for many years.
The burden of going forward with evidence that will meet this prima facie case, or, in other words, the obligation to give some valid explanation of the increase, now devolves on the carrier. This may be satisfied by showing that the old rates were compelled by water competition, and that they are unreasonably low by at least the amount of the increase. But if the shippers prove that these water competitive rates had continued for many years after actual water competition in any real sense had ceased, and under conditions clearly negativing any danger of a recurrence thereof, the presumption of their inherent reasonableness again arises, and may, in the discretion of the Commission, be deemed sufficient proof thereof.
The testimony before the Commission tended strongly to show that no renewal of water competition was feasible after it had once ceased to be a factor in the transportation situation, because of labor conditions, wharf control by the railroads, and the justifiable fear that an investment in steamers by the shippers or others would be rendered worthless, inasmuch as the railroads would cut their rates to any extent necessary to secure the business. It must be remembered in this *567connection that at that time and until the amendment of 1910 railroads could cut their rates without restraint in order to destroy competition, and after accomplishing that purpose raise them again without the consent of the Commission.
On these considerations alone, and disregarding any other evidence the action of the Commission in finding the new rates unreasonably high to the extent of the increase over the old rates from New Orleans to Mobile and Pensacola, respectively, ought, in my judgment, to he sustained as against the charge of arbitrary or unjustified action.
We come next to the consideration of the New Orleans-Montgomery rate. A presumption of its reasonableness arises from the fact that it had been long in force. To overcome this presumption, the shippers showed, first, that it was customary both on this and other roads not to charge more for the through rate than the combination of locals, although admittedly this custom had not been enforced for this particular through traffic; secondly, that the Commission had now adopted a rule in accordance with the custom.
Whatever the concession of the counsel for the government may mean—and in my opinion it does not go so far as the majority of the court believe—the fact alone that the through rate exceeds the combination of locals is in my judgment an all-sufficient reason for a reduction to the extent of the excess. There may be peculiar and extraordinary circumstances which will cause the Commission to refrain from compelling such a reduction, but ordinarily, and in the present case the increased cost to the carrier of handling two local shipments and the economic waste involved therein as against a single through shipment, if the shipper should exercise his legal right of shipping from New Orleans to Mobile, and then from Mobile to Montgomery on the local rates, amply justified the Commission in promulgating its rule and in enforcing it by the reduction of the New Orleans-Montgomery through rate. Congress, moreover, has now, by the amendment of 1910 to section 4 of the act to regulate commerce, given this rule the force of law.
That the. reduction ordered by the Commission in the New Orleans-Montgomery rate was exactly enough to make the through rate equal the combination of locals as reduced is no more peculiar than that the increase by the carrier in the local New Orleans-Mobile and New Orleans-Pensacola rates was exactly enough to make the combination of locals as increased equal the former through rate. And when the principal witness of the carrier testifies (p. 323 of the testimony before the Commission) that in his judgment the raised rates “from New Orleans to -Mobile are not too low, and I do not think they are too high,” in other words, that they are exactly right, and he so testifies notwithstanding his frank admission that the cause of the raise was to check the application of the new rule to the old rates, the Commission cannot, in my judgment, be said to have acted arbitrarily in not accepting this view of the result effectuated by the raise.
While I differ with my Brethren in their criticism of a number of statements made in the report of the Commission, it is unnecessary to discuss them here. For example, the view taken by the Commis*568sion of the Cooley adjustment is fully justified, in my judgment, by the fact that the relation of rates thereby established in 1886, was departed from not as to some, but as to a great many commodity rates and that, too, at many times. Even as to class rates, there were departures not only in 1896, but also in 1905.
Even though some errors of fact may be found in the.report, these are clearly not the real basis of the order. Moreover, if any inequalities or undue preferences as against other localities result from the order of the Commission, they may be remedied on proper complaint, by the proper parties, to the Commission. The majority opinion is confined to a single question, and I have for that reason limited this dissent to a consideration of it. Without, therefore, discussing the many interesting questions of confiscation and jurisdiction presented in the briefs and oral arguments, it suffices at this time to state that in my opinion the other grounds urged against the order of the Commission are equally unavailing and that the petition should.be dismissed.