Court Opinion

ID: 8746209
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:08:22.331424+00
Date Added: 2024-06-11T17:00:40.440694
License: Public Domain

MacBRIDE, District Judge
(dissenting).
For the reasons stated below, I feel compelled to dissent from the conclusion reached in the majority opinion, though if this were a matter of first impression, or if we were free to substitute our judgment for that of the Commission, my disposition might be different.
This is an action to set aside a negative order of the Interstate Commerce Commission in a case brought by plaintiffs under 49 U.S.C. § 3(1) to remove a rate disparity between two areas.
The Commission stated the ultimate statutory finding on which its order is based as follows: “On further consideration, we find that the rates assailed are not shown to be unduly prejudicial or preferential-as alleged.” 315 I.C.C. at p. 467.
The ultimate statutory finding is itself based on the Commission’s subsidiary basic finding that: “[Plaintiffs] failed to sustain their burden of proving that the rate disparities complained of are a determining factor in their inability to meet market competition of the allegedly preferred area in the sale of products or in the attraction of new industries.” 315 I.C.C. at pp. 464-465. This, in effect, is a negative finding that plaintiffs did not establish by direct evidence that they have been injured by the rate disparity and that they did not establish sufficient competition between the allegedly preferred and prejudiced areas to warrant an inference ' of injury from the fact of the rate disparity.
If the subsidiary basic finding set forth above has adequate support in the record, the ultimate statutory finding and order based thereon may not be set aside. For in order to bring a rate disparity within §3(1) the complaining party must establish that it results in injury to the allegedly prejudiced area. New York v. United States, 331 U.S. 284, 67 S.Ct. 1207, 91 L.Ed. 1492 (1946); Atchison, Topeka & Santa Fe Ry. Co. v. United States, 218 F.Supp. 359 (D.C.Ill. 1963).
(a) The scope of judicial review of a finding of fact such as the one presently being discussed is “extremely limited.” I.C.C. v. Mechling, 330 U.S. 567, 574, 67 S.Ct. 894, 91 L.Ed. 1102 (1946).
In the first place, the general question of undue preference or prejudice under § 3(1) is “a question not of law, but of fact.” Pennsylvania Co. v. United States, 236 U.S. 351, 361, 35 S.Ct. 370, 373, 59 L.Ed. 616 (1914). L. T. Barringer & Co. v. United States, 319 U.S. 1, 6, 63 S.Ct. 967, 87 L.Ed. 1171 (1942). It is “a question committed to the judgment of the administrative body, based on'an appreciation of all the facts and circumstances affecting the traffic.” Swayne & Hoyt v. United States, 300 U.S. 297, 304, 57 S.Ct. 478, 481, 81 L.Ed. 659 (1936). Therefore, a reviewing court may not set aside the findings of the Commission in a case under § 3(1) “except lipón' á showing that they are' unsupported- by evidence, were made without a hearing, exceed constitutional limits, or for some other reason amount to an abuse of power.” Manufacturers Ry. Co. v. United States, 246 U.S. 457, 481, 38 S.Ct. 383, 389, 62 L.Ed. 831 (1917). “The judicial function is exhausted when there is found to be a rational basis for the conclusions approved by the administrative body.” Rochester Telephone Corp. v. United States, 307 U.S. 125, 146, 59 S.Ct. 754, 765, 83 L.Ed. 1147 (1938).
Moreover, the specific question of territorial injury, with which we are particularly concerned, is one which cannot always be conclusively determined with mathematical exactness and which consequently is a “matter of inference.” See New York v. United States, supra, 331 U.S. 310, 67 S.Ct. 1207. See also 315 I.C.C. at p. 464, and Davis, Administrative Law Treatise, § 16.11 (1958). As such, it is peculiarly within the discretion and expert judgment óf thé Commission; for “[t]he weight to be attributed to the *153facts proven or stipulated, and the inferences to be drawn from them, are for the Commission to determine, not the courts.” Corn Products Refining Co. v. F. T. C., 324 U.S. 726, 739, 65 S.Ct. 961, 967, 89 L.Ed. 1320 (1945). Virginian Ry. Co. v. United States, 272 U.S. 658, 47 S.Ct. 222, 71 L.Ed. 463 (1926). “[C]onsideration of the weight and value of the evidence and the inferences to be drawn therefrom are matters for the Commission alone.” Koppers Co., Inc. v. United States, 166 F.Supp. 96, 104 (D.C.Pa. 1958). See, generally, 4 Davis, Administrative Law Treatise, § 29.05 (1958).
(b) Applying the above principles concerning the scope of judicial review to the record before the Commission, I conclude that it cannot properly be said that the finding of the Commission with respect to the question of injury has no adequate support therein. On the contrary, the Commission had before it, and it discussed in its report, detailed testimony and evidence on the questions of competition and injury; and its appraisal of such testimony and evidence provides a rational basis for that finding.
I note, first, that the record does contain substantial evidence from which the Commission could have concluded that Stanislaus County has been injured by the rate disparity. But this is not enough to warrant our setting aside the conclusion the Commission reached, as long as that conclusion itself has substantial support in the record. For the evidence in question does not create an irresistible inference of injury. Instead it is evidence which is capable of alternative interpretations. And, as has been noted above, this Court may not reweigh the evidence or choose between alternative inferences therefrom.
Plaintiffs presented evidence that industries known to be contemplating the establishment of plants in California have been actively solicited by Stanislaus County, but have frequently selected locations in the allegedly preferred area.
The Commission carefully considered such evidence. 315 I.C.C. at pp. 461-462. One inference which it might have drawn from it is that the rate disparity was a substantial factor causing such industries to locate in the allegedly preferred area and thus that Stanislaus County, the allegedly prejudiced area, has been injured by the disparity. See Proposed Report of Examiner John A. Russell, p. 31.
But, on the basis of certain other evidence in the record, the Commission chose the alternative inference. It noted that “[t]he specific reasons for not locating in Stanislaus County rarely, if ever, are disclosed * * * ”. 315 I.C.C. at p. 462. See also Proposed Report of Examiner John A. Russell, p. 31. Moreover, “[tjhere are many factors which enter into the selection of sites for production facilities, including the availability and cost of raw materials, labor, fuel, and the proximity of markets for products.” 315 I.C.C. at p. 466. Furthermore, the record discloses that during the existence of the rate disparity, and apparently in spite of it, many new industries chose locations in Stanislaus County, and there was a considerable expansion of existing industries in the county; and the Commission attached great importance to these facts. 315 I.C.C. at pp. 462 and 466. In view of the foregoing, and in view of the broad discretion of the Commission with respect to technical questions of economic causation, I believe that we should not set aside the Commission’s interpretation of plaintiffs’ evidence. Otherwise, we defeat one of the primary purposes underlying the creation of agencies such as the Commission, which is “to have decisions based upon evidential facts under the particular statute made by experienced officials with an adequate appreciation of the complexities of the subject which is entrusted to their administration”. Radio Officers’ Union etc. v. N. L. R. B., 347 U.S. 17, 48, 74 S.Ct. 323, 340, 98 L.Ed. 455 (1954).
With respect to the evidence, mentioned above, that Stanislaus County has grown at a faster rate than some parts of the allegedly preferred area, apparently *154in spite of the rate disparity, plaintiffs argue that such evidence does not support the Commission’s conclusion concerning the question of injury. They argue that the county might have grown even faster but for the rate disparity and that, therefore, the evidence of growth does not negate injury.
But there is nothing in the record to compel this conclusion; and, at any rate, I believe that it must be assumed that in appraising the evidence of growth the Commission considered and rejected the possibility that the county might have grown even faster but for the rate disparity. I believe that we may not assume that the Commission ignored that possibility as a factor in reaching its decision; for in other cases, which presumably involved evidence of injury stronger than that presented here, the Commission based its decision on that very factor. Washington Potato & Onion Shippers Ass’n. v. Union Pac. R. R., 300 I.C.C. 537 (1957); and Consolidated Mining & Smelting Co. of Canada, Ltd. v. New York Cent. R. R., 299 I.C.C. 231 (1956), aff’d sub nom. Ores From United States and Canada Origins to Eastern United States, 303 I.C.C. 87 (1958).
Moreover, the evidence in the record relating to the nature of the competition between the allegedly preferred and prejudiced areas is not such that an inference of injury from the mere fact of the rate disparity is necessarily required. See the Commission’s appraisal of such evidence at 315 I.C.C. at p. 465. The fact that two areas are paying different rates cannot, by itself, logically give rise to an inference of injury to the area paying the higher rates unless there is, between the two areas, competition of such a nature that it is necessarily substantially affected by the rate disparity. Consolidated Mining & Smelting Co. of Canada, Ltd. v. New York Cent. R. R., supra. See Atchison, Topeka and Santa Fe Ry. Co. v. United States, 218 F.Supp. 359, 371-372, supra. See also concurring opinion of Commissioner Freas, 315 I.C.C. at p. 467, and cases cited therein.
The Commission concluded that “[Plaintiffs’] evidence regarding individual shippers, intended to supplement that offered on behalf of the county to show competition between the county and the allegedly preferred area and to establish the existence of unlawful preference and prejudice, falls short of its purpose. A survey of this evidence does not create an inference of prejudice but more reasonably leads to a conclusion opposite from that intended.” 315 I.C.C. at p. 465. Although if I were free to reweigh the evidence referred to, I might have placed a different interpretation thereon, still I believe that the foregoing constitutes one reasonable appraisal of such evidence and, therefore, that it provides a rational basis for the Commission’s findings. See concurring opinion of Commissioner Freas, 315 I.C.C. at p. 467, in which he states, “I think it clear, however, and the record and report so demonstrate, that a showing of competition so keen as to warrant the presumption of injury is lacking herein.” Compare Chesapeake & O. Ry. Co. v. United States, 11 F.Supp. 588 (D.C.W.Va.1935).
Finally, although it would have been preferable for the Commission to have more explicitly stated the logical progression by which it arrived at its basic and ultimate findings, still under the cases the fact that it did not do so is not fatal to such findings. It is true that the Commission is required to state its findings, conclusions, and reasons. 5 U. S.C. § 1007(b). 49 U.S.C. § 14(1). But “[t]here is no requirement that the Commission * * * disclose mental operations by which its decisions are reached.” Baltimore & O. Ry. Co. v. United States, 298 U.S. 349, 359, 56 S.Ct. 797, 803, 80 L.Ed. 1209 (1935). And “[t]he courts are not concerned with the correctness of the Commission’s reasoning * * * Burlington Truck Lines, Inc. v. I. C. C., 194 F.Supp. 31, 37 (D.C.Ill. 1961). “To consider the weight of the evidence before the Commission, the soundness of the reasoning by which its conclusions were reached, * * * is beyond our province.” Virginian Ry. Co. *155v. United States, 272 U.S. 658, 663, 47 S.Ct. 222, 224, supra. See, generally, Davis, Administrative Law Text, § 16.11 (1958).
To summarize: The Commission has adequately stated its subsidiary basic finding that plaintiffs did not establish the requisite injury. That finding depends on questions of fact which necessarily are almost exclusively within the province of the Commission, and it has a rational basis in the record and in the discretion of the Commission. Consequently, the ultimate statutory finding and order based thereon should, I believe, be upheld.