Court Opinion

ID: 8909984
Source: CourtListenerOpinion
Date Created: 2022-11-27 02:33:43.634626+00
Date Added: 2024-06-11T17:08:26.598969
License: Public Domain

TIMBERS, Circuit Judge,
dissenting:
More than two years ago, this Court remanded this case to the ICC “for the limited purpose of determining whether the proposed rates discriminate against the lake carriers as connecting lines.” State of New York v. United States, 568 F.2d 887, 897 (2 Cir. 1977).1 Our remand was a narrow one which called for a specific determination on a precise issue. As the author of our earlier opinion remanding the case to the ICC, it is crystal clear to me that the Commission on remand either has misconstrued our mandate or has ignored it. 356 I.C.C. 82 (1978). I therefore dissent from today’s majority opinion which denies the petition to review and affirms the Commission’s order of January 18, 1978.
The crux of the Commission’s error is that, rather than making a determination of the discrimination issue on the basis of existing actual conditions on the Buffalo-Martins Creek run (which was the clear import of our remand), it has come up with a decision based on a hypothetical new unit-train service (which is totally beyond the scope of our mandate). In short, the Commission simply has not made the determination required by our mandate.
It is undisputed on the record before us that a rate differential, unjustified by cost differences, has been shown. The Commission so found. 356 I.C.C. at 92. The precise issue therefore is whether the railroads can justify charging twice as much to transport wheat over a rail route that connects with a *354water carrier than over the competing rail route that connects with another railroad, despite the fact that the rail revenue yield on the water-rail route is substantially higher than the yield on the competing rail route.
Under these circumstances, the rule of Western Pacific Railroad Co. v. United States, 382 U.S. 237 (1965), becomes applicable, namely, that relief to eliminate discriminatory rate treatment which is prohibited by § 3(4) of the Interstate Commerce Act, 49 U.S.C. § 3(4) (1976), is warranted if “that differential treatment is not justified by differences in operating conditions that substantially affect the allegedly discriminating carrier.” Id. at 246. In short, the burden is on the railroads here to justify the differential on the basis of different operating conditions on the two routes referred to above, see Seatrain Lines, Inc. v. United States, 233 F.Supp. 199, 209 (D.N.J. 1964) (three-judge court), by showing that it would be unfair or unjust to require equal treatment by the allegedly discriminating carrier. Western Pacific Railroad Company v. United States, 263 F.Supp. 140, 145 (N.D.Cal.1966) (three-judge court, on remand from Supreme Court). See I.C.C. v. Mechling, 330 U.S. 567, 581 (1947).2
While the Commission on remand purported to give lip-service to the Supreme Court’s holding in Western Pacific Railroad Co., supra, 356 I.C.C. at 92, its decision to permit the railroads to maintain a rail rate structure which discriminates against water carriers at Buffalo is grounded upon the following one-sentence finding:
“In our view the evidence is convincing that the establishment of a new unit-train service over Buffalo would be inefficient, uneconomical, and counterproductive and that the existence of such operating deficiencies justify the disparity in rates or divisions as between the connecting lines.” 356 I.C.C. at 92. (emphasis added).
Such a finding, based not on existing actual conditions, but on a hypothetical new unit-train service, most assuredly does not comply with our mandate. And I fail to see any support for it in the Supreme Court’s test set forth in Western Pacific Railroad Co., supra.
The railroads, in my view, have totally failed to justify the undisputed rate discrimination which has been found, permitting ConRail to earn roughly twice as much, after expenses, from its Buffalo-Martins Creek route as from its Chicago-Martins Creek route. See Majority Opinion at 351 n. 3.
In many respects the instant case is analogous to Seatrain Lines, Inc. v. United States, supra. There it was claimed that operating disadvantages on the water-linked rail route justified clearly discriminatory rates. The three-judge district court, after holding that the Commission’s finding of no discrimination under § 3(4) was in error, remanded the case to the ICC. The ICC here has failed even to make a finding pursuant to our remand, relying instead on a hypothetical proposed new unit-train service.
I can appreciate the desire of my colleagues to draw down the curtain on this prolonged litigation. It has involved three Commission decisions and two petitions to review in this Court. Our prior decision of two years ago reversed and remanded the two prior Commission decisions. Nevertheless, I do not believe that we can let the Commission’s latest decision stand without unleashing endless mischief from a precedent standpoint.
Since the Commission’s findings demonstrate that the discriminatory rail rates are not justified and are unlawful under § 3(4) of the Act, I believe that a further remand to the Commission would be an exercise in futility. I therefore would direct the Corn-*355mission to enter an order (within a reasonable period of time to allow any aggrieved party to seek Supreme.Court review) can-celling the rates under investigation in this docket which have created the unlawful discriminatory rate structure. This may seem like strong medicine. But strong medicine is precisely what should be prescribed to remedy the flagrant violation of § 3(4) of the Interstate Commerce Act disclosed by the undisputed record before us.3

. Our prior opinion was rendered by Judges Anderson and Timbers. The third member of the panel, Judge Hays, who heard the arguments, was not able to participate further because of temporary illness. Judge Anderson died after our remand and prior to the instant appeal.
Our order remanding the case to the ICC to determine whether the proposed rates discriminate against the lake carriers as connecting lines followed our holding (1) that the Commission had erred in its interpretation of § 3(4) of the Interstate Commerce Act in finding that the lake carriers were not entitled to protection under § 3(4), and (2) that the lake carriers were not “connecting lines” within the meaning of the statute. 568 F.2d at 894 — 97.

. Perhaps some clue to the error into which I think the majority has fallen in the instant case is its failure to consider the controlling Supreme Court cases of Western Pacific Railroad Co., supra, and Mechling, supra; nor does the majority refer in any way to the closely analogous three-judge court cases of Seatrain Lines, supra, and Western Pacific Railroad Co., supra (on remand).

. Despite my disagreement with the majority’s essential holding which denies the petition to review and affirms the Commission’s order of January 18, 1978,1 do agree with the majority’s holding in the following respects:
(1) It was proper for the ICC to make part of the record on remand the supplemental statements of the parties. Rush v. Gardner, 273 F.Supp. 753, 755 (N.D.Ga.1967) (three-judge court). As a practical matter, agency efforts on remand to keep the factual record fresh should not be discouraged.
(2) There was no error in the ICC’s determination to include a Chicago rate in its decision after remand. That rate, however, does not cure whatever discrimination may exist at Buffalo. The purpose of § 3(4) was to prevent railroads from exercising discretion in serving connecting carriers. That is exactly what offering the equivalent rate to grain carried by lake shippers but at Chicago only would allow ConRail to do.
(3) That intervenor S & E Shipping falls within the protective umbrella of § 3(4), even though we differ over how much protection the umbrella affords in the instant case.