Court Opinion

ID: 9646632
Source: CourtListenerOpinion
Date Created: 2023-08-23 13:05:41.726842+00
Date Added: 2024-06-11T18:11:40.167735
License: Public Domain

Mr. Justice Culver
dissenting.
I do not agree with the result reached in this decision. I would reverse because it appears to me that the action of the Railroad Commission in reducing the intrastate rate on sugar is arbitrary, unreasonable and not based on any evidence of a probative force.
The railroad carriers are here caught in a vise between large sugar refineries, domestic and out-of-state, contending for the Texas market and particularly that of the Dallas-Fort Worth area. The appellee (Imperial of Texas) applied to the Railroad Commission for a reduction of the intrastate rate. Imperial was not complaining of the intrastate rate. It was complaining of the relationship between the interstate and intrastate rates. It claimed that a slight reduction in the interstate rates applying to sugar moving into Texas gave the out-of-state refiners undue advantage.
As far back as 1946 the advantage enjoyed by Imperial to the Dallas market in the way of railroad rates over out-of-state shippers was forty cents per hundred. On account of certain adjustments in rates this advantage had been increased to forty-two cents. In 1953 the Interstate Commerce Commission approved a rate structure which reduced this advantage back to the forty cents which prevailed in 1946. Upon this application by Imperial the Railroad Commission not only reduced the intrastate rate so as to restore the two cents, but gave to Imperial a total of forty-nine cents advantage over the California shipper and a corresponding adjustment in the advantage held by Imperial over the Colorado refiners. For example, the distance from Sugar Land to Amarillo is 172 miles greater than from Denver to Amarillo. Under the present rates the difference is six cents in favor of the Colorado shipment. Under the interstate rate now established by the Railroad Commission that is *345reversed so as to give a six cents differential in favor of Sugar Land. Dalhart is 312 miles nearer Denver than it is to Sugar Land. The present rate is eleven cents in favor of Denver. The rate established by the Railroad Commission is two cents in favor of Sugar Land. Lubbock is only 36 miles nearer Sugar Land. The present rate gives Sugar Land an advantage of 10.4 cents, but the proposed rate more than doubles Sugar Land’s advantage.
Seemingly appropriate here are the words of Circuit Judge Huxman in State Corporation Commission of Kansas v. U.S., 128 Fel. Supp. 746, (D.C.P. Kans. 1954) :
“While relative distances from a common market is not the only factor to be considered in determining fair rates between competitors for a share of a common market, they are of major importance where the distances are approximately the same and general conditions are likewise comparable, and they may well be controlling in determining the reasonableness or unreasonableness of rates between competitors in the absence of other persuasive factors.”
The basic question, it seems to me, before this court is: Can the Railroad Commission lawfully fix and relate intrastate rates to interstate rates? Certainly the Railroad Commission has the right to consider all applicable factors in fixing intrastate rates, including the level of interstate rates, but I think it does not have the power to lower intrastate rates solely on the ground of a reduction in interstate rates that has been approved by the Interstate Commerce Commission. Louisville & N. R. Co. v. Eubank, 184 U.S. 27, 22 Sup. Ct. 277, 46 L. Ed. 416; Houston, E. & W. T. R. Co. v. U.S. 234 U.S. 342, 34 Sup. Ct. 833„ 58 L. Ed. 1341; Swift & Co. v. Philadelphia & R. R. Co., 58 Fed. 858. If the Commission does have that power then it can be said to regulate, somewhat, interstate freight rates and hamper the movement of goods in interstate commerce.
The proof that the rate relationship was the sole factor considered by the Railroad Commission in entering the rate reduction, is best shown by the language of the Commission’s order as set forth in the majority opinion and particularly as follows:
“We further find from the evidence before us that the action of defendants, individually or in connection with their interstate connecting lines, involuntarily reducing the rates from the interstate origins to Texas, makes necessary the revision of the Texas intrastate rates to be made herein. * *
*346Some stress seems to be laid by the Commission and by the respondents on the fact, as they say, that this was a voluntary reduction by the railroads in the interstate rate. Whether it be voluntary or not would not seem to be immaterial as the railroad pursued the only method appropriate and the reduction was approved by the Interstate Commerce Commission. On the other hand the carriers point out that the interstate rate reduction, the basis of Imperial’s complaint, was made to comply with the criticism by the Interstate Commerce Commission that rate relationship as of June 30, 1946, should be restored. The Commission said:
“ ‘We have the assurance of the petitioners of their intention to proceed by voluntary discussion and cooperation with the shippers and representatives of markets to endeavor to put into effect such measures as will restore former competitive relationships as completely as possible. We expect full and prompt compliance with these representations, in the spirit of the proceeding. Restoration of rate relationships should not be made the excuse for further increasing revenue or of bettering the competitive position of the carriers.’ ”
This must have had the effect of making the interstate reduction by the railroad carriers something less than voluntary.
In a case heavily relied upon by appellees, Atchison, T. & S. F. Ry. v. Illinois Commerce Commission, 1929, 335 Ill. 70, 166 N.E. 466, the general rule is said to be:
“It is of course true that the Illinois Commission has no power to regulate interstate commerce or to change and fix the relation between interstate and intrastate commerce rates. * * *”
In view of this reduction of intrastate rates by the Railroad Commission, the out-of-state shippers, in order to preserve the relationship which had existed for many years, are demanding further interstate reductions. Emphasizing again the only factor, namely, rate relationship, which, I think, caused the intrastate rate reduction the Commission pointedly said in its order:
“* * * If such further demands are made by interveners, and defendants in connection With their connecting lines accede thereto by further reducing the interstate fates to Texas, seemingly the time will have arrived for a general investigation into the rates on sugar, carloads. "Such an investigation would properly embrace the matter of rates on sugar ■ in carloads from *347Texas to California and the territory intermediate Texas to California, and from Texas to Louisiana, to which the evidence shows that the rates from Texas are on a much higher level than from California to the territory west of Texas, including California, and than from the New Orleans refining group to points in Louisiana. A mileage scale of rates might be the solution.”
In other words, if from pressure brought by the out-of-state shippers or by the I.C.C. any further reduction is made of the interstate rates to Texas the Railroad Commission will really make a reduction, and it is implied that further reduction in the intrastate rates will be in order unless something is done about the rate from Texas to California.
Bearing further on this point the railroads show that under the new intrastate rates fixed by the Railroad Commission the ■charges for transporting sugar from Sugar Land, Texas, (Imperial Refinery) will be lower to many points in Texas than the rates were in 1928, and this in spite of the greatly increased cost of carrier operation during these more than twenty-five •years and no change in economic conditions which would warrant that situation.
Appellees contend that even if the Commission did fix and relate the intrastate rate to the interstate rate, nevertheless the only relief for the railroad carriers would be an application to the Interstate Commerce Commission under Section 13 of the Interstate Commerce Act for a finding that the intrastate •rates are too low and constitute a burden upon interstate commerce. While admittedly this action is available to the carriers, I think it is not exclusive for the reason that the statutory authority under which the Railroad Commission acts does not empower it to revise rates upward or downward depending solely upon the level or unreasonableness of interstate rights.
It may be said that the same avenue was open to appellee, Imperial, to correct any discrimination exerted by the interstate rate. Indeed Imperial first took that course. It applied to ■ the I.C.C. to suspend the interstate reductions on the ground of unfair discrimination. Upon a denial of that relief Imperial did not pursue this protest further, although it could have had its • domplaint examined after formal application filed in accordance •with the Commission’s general rules of practice.
*348I think the Railroad Commission used the wrong measuring stick and therefore its order should not stand.
Rehearing overruled February 15, 1956.