Court Opinion

ID: 8758448
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:56:17.463356+00
Date Added: 2024-06-11T17:01:24.449699
License: Public Domain

FRIENDLY, Circuit Judge
(dissenting) :
My brothers’ able opinion does not convince me that the language of the Interstate Commerce Act is so clear as to require us to overturn the administrative construction of the long and short haul clause made in Motor-Rail Motor Traffic in East and Midwest, 219 I.C.C. 245 (1936), consistently followed by the Commission,1 and relied on by the transportation industry, users of its services and Congress over three decades, even though five members of the agency have now been persuaded that their predecessors were in error.
The basic command of § 4(1) of the Interstate Commerce Act is:
“It shall be unlawful for any common carrier subject to this part or part III to charge or receive any greater compensation in the aggregate for the transportation of passengers, or of like kind of property, for a shorter than for a longer distance over the same line or route in the same direction, the shorter being included within the longer distance, or to charge any greater compensation as a through rate than the aggregate of the intermediate rates subject to the provisions of this part or part III, but this shall not be construed as authorizing any common carrier within the terms of this part or part III to charge or receive as great compensation for a shorter as for a longer distance”.
Even if we were to approach the issue in the literal manner of the majority, I fail to see why this language would not cover the cases here before us. Section 1(1) says, so far as here material,, that the provisions of Part I shall apply to common carriers engaged in the transportation of passengers or property “wholly by railroad, or partly by railroad and partly by water when both are used under a common control, management, or arrangement for a continuous carriage or shipment” from one state to another, or from any place in the United States to another through a foreign country, or from or to any place in the United States to or from a foreign country. No argument is needed to show that the New York Central and the Pennsylvania are such carriers. The higher rates for the shorter hauls held by the Commission to violate § 4(1), the Central’s rate between Louisville, Ky. and New York, N. Y., and the Pennsylvania’s between Kearney, N. J. and Indianapolis, Ind., are all-rail Plan II rates. The basis for the railroads’ claim of inapplicability of the fourth section is that the lower rates for the longer hauls in which they participate are joint rail-motor rates, and thus not for transportation “wholly by railroad.” But the statute does not say they have to be. Section 4(1) reads on carriers subject to Part I or Part III, not on transportation subject to these parts. To be sure, the statute could not reasonably be construed to cover the relationship of two intrastate rates or, as the Commission has held, even to ban an intrastate rate higher than an interstate rate to a farther point. See Producers Refining Co. v. Missouri, K. & T. Ry., 80 I.C.C. 339 (1923); Tuffli Bros. Pig Iron & Coke Co. v. Southern Pac. Co., 200 I.C.C. 151 (1934). The Act is concerned only with protecting interstate commerce. But, however the case might stand if the rate to the prejudiced point was a joint rail-motor rate and the lower rate to the farther point was all rail or, more pertinently, if both were joint rail-motor rates, I fail to see why the language is not broad enough to *633■cover any arrangement whereby a railroad participates in a lower interstate rate to a more than to a less distant point “over the same line or route in the same ■direction.” 2
If application of § 4(1) had to rest on § 1(2) which makes Part 1 also applicable “to such transportation,” namely, the transportation defined in § 1(1), a different result might indeed follow. But it does not. A provision of the Act may apply either because a carrier is engaged in a defined type of transportation or because particular transportation comes within the coverage.3 Examination of Part I shows that some provisions apply to carriers subject to that part, some to transportation subject to it, and some only when both the carrier and the transportation are within it. For example, § 2 applies only when “any common carrier subject to the provisions of this part” engages in the forbidden conduct “in the transportation of passengers or property, subject to the provisions of this part,” and the prohibitions of § 6(7) are directed at “the transportation of passengers or property, as defined in this part.” In contrast § 3(1), like § 4(1), is directed to “any *634common carrier subject to the provisions of this part,” and a decision not unknown to fame held it immaterial that prejudice worked by such a carrier on interstate traffic was caused by transportation not subject to the Act because of its intrastate character — and this despite the proviso as to intrastate traffic in the first section, see note 3, supra. Houston, E. & W. Texas Ry. Co. v. United States, 234 U.S. 342, 355-360, 34 S.Ct. 833, 58 L.Ed. 1341 (1914). Other provisions directed to the carrier rather than the transportation are § 3(2), providing that “No carrier by railroad and no express company subject to the provisions of this part shall deliver or relinquish possession at destination of any freight or express shipment transported by it until all tariff rates and charges thereon have been paid,” and § 7, prohibiting “any common carrier subject to the provisions of this part” from entering into combinations to prevent the carriage of freight being continuous.
My brothers’ assumption that we must either allow rail carriers freedom from §4(1) when the lower rate to the more distant point is rail-motor or bring motor carriers within a variety of provisions of Part I plainly not intended for them poses an unreal dilemma in which I decline to be pinioned. The escape is by holding that § 4(1) does just what it says; it prohibits rail carriers from charging less for a longer haul than for a shorter rail haul regardless of how they perform the longer haul. While the Commission may have been wrong in claiming that a motor carrier by entering into a joint motor-rail rate “assumes obligations similar to those of the participating rail carriers in the observance of the provision of section 4,” 219 I.C.C. at 272, it does not follow that by permitting such a joint rate Congress meant to enable rail carriers to offer in that manner a lower rate for the longer than the shorter haul.
Our duty does not stop with the language but requires an endeavor to ascertain what Congress probably intended. “Emphasis should be laid, too, upon the necessity for appraisal of the purposes as a whole of Congress in analyzing the meaning of clauses or sections of general acts.” United States v. American Trucking Ass’n, 310 U.S. 534, 542-544, 60 S.Ct. 1059, 1064, 84 L.Ed. 1345 (1940). Such an approach is peculiarly necessary in the case of our most venerable regulatory statute which, far from being tightly drafted as my brothers suggest, contains the encrustations of eighty years and slight variations in language the reasons for which, if any there were, are veiled in the mists of history. While the fourth section may be “a detailed, specific, prophylactic regulation,” as the court states, it has always ranked high in the esteem of Congress. As the Commission said many years ago, the practice of charging more for the shorter than the longer haul “had become so general and was felt to be such a gross abuse that there was a very general sentiment in favor of putting a stop to it, which found expression in the enactment of the fourth section.” I.C.C. Ann.Rep. 38-39 (1897).
Carriage of freight partly by rail and partly by motor existed long before 1935, and although joint rail-motor rates were not allowed, rail carriers were permitted to publish the truck rates beyond their railheads as a matter of information. See Tariffs Embracing Motor-Truck or Wagon Transfer Service, 91 I.C.C. 539, 548-49 (1924). But that alone would have been far from enabling them to do what they claim the right to do here. Taking the Pennsylvania’s case as an example, to be able to charge $1.00 per hundredweight for Plan V traffic from Sewaren, N. J. to Zionsville, Ind. while permitting the truckers operating between Sewaren and Kearney, N. J., and Indianapolis and Zionsville, Ind. to earn a profit, the Pennsylvania would have had to publish a tariff substantially less than its regular rate for hauls between Kearney and Indianapolis. But this would have created a problem under § 2, which made it unlawful for any railroad “by any special rate, rebate, drawback, or other device” to “charge, demand, col*635lect, or receive from any person or persons a greater or less compensation for any service rendered or to be rendered, in the transportation of passengers or property, subject to the provisions of this Act, than it charges, demands, collects, or receives from any other person or persons for doing for him or them a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and conditions”. Cf. ICC v. Delaware, L. & W. R. R., 220 U.S. 235, 31 S.Ct. 392, 55 L.Ed. 448 (1911); Seaboard Air Line Ry. Co. v. United States, 254 U.S. 57, 41 S.Ct. 24, 65 L.Ed. 129 (1920). It is true that in Tariffs Embracing Motor-Truck or Wagon Transfer Service, supra, 91 I.C.C. at 549-550, the Commission, over a well-reasoned dissent by Commissioner Aitchison, did authorize a water carrier between New York and New Haven having joint rates with rail carriers from New York to the south to publish a proportional rate from interior Connecticut points lower than the local rate from New Haven in order to meet the all rail rates, contingent, however, on this proportional rate being offered for all truck operators. But we have been cited nothing to show that rail carriers sought to publish proportional rail rates lower than the local rates for use in conjunction with trucks, and there is no reason to believe the Commission would have sanctioned any large scale program of this sort when the obvious effect would have been to permit what in practical effect was a circumvention of the fourth section. In any event there could have been no such arrangements with a single trucker as are here presented. It squares ill with Congress’ devotion to the long and short haul principle to suppose that by authorizing joint rail-motor rates, it meant to give rail carriers a franchise thus to charge a lower rate to a more distant point they had not effectively possessed before; as said by Commissioner Freas, “there is no suggestion” in § 216(c), “or in its legislative history, that such a provision was intended to afford a railroad a device by which, merely by joining with a motor carrier for the performance of a short portion of its haul under a joint-rate arrangement, the former could escape the regulatory provisions of the act otherwise applicable to rates maintained by railroads,” 326 I.C.C. at 459. The facts in these two cases afford no basis for the majority’s expectation that evasion will be largely confined to eases where the motor haul is within the railroad’s terminal area.
While it is doubtless true that Plan V TOFC rates must often be set to compete with all-motor rather than other rail services, I fail to follow the conclusion the majority derives from this. Competition with another form of transportation has been the historic reason for charging less for the longer than the shorter haul but ever since the Mann-Elkins Act, 36 Stat. 547 (1910), this has not been a basis for exemption from the fourth section but rather for relief from it. See Intermountain Rate Cases United States v. Atchison, Topeka & Santa Fe R. Co., 234 U.S. 476, 34 S.Ct. 986, 58 L.Ed. 1408 (1914). Neither can I agree that a Plan V service is more like an all-motor service than an all rail service; certainly it is not in cases like these where the bulk of the haul is by rail.
If the proper construction of the statute were more doubtful than I think it to be, the case would be one where the long-established administrative construction would tip the scale. Although my brothers dutifully recite that “a construction made by the body charged with the enforcement of a statute, which construction has long obtained in practical execution, and has been impliedly sanctioned by the reenactment of the statute without alteration in the particulars construed, when not plainly erroneous, must be treated as read into the statute,” New York, N. H. & H. R. R. v. ICC, 200 U.S. 361, 401-402, 26 S.Ct. 272, 281, 50 L.Ed. 515 (1906), they give this principle only lip service. Yet the circumstances here are of the sort that make it peculiarly applicable. The controlling *636decision, Motor-Rail-Motor Traffic in East and Midwest, 219 I.C.C. 245, 270-272 (1936), was rendered the year after the Motor Carrier Act was passed by a Commission many of whose members had taken an active part in securing the enactment of that legislation and which included three of the ablest and most knowledgeable men ever to have sat on that body,4 and the decision has been consistently followed, see cases cited supra note 1. If, as the plaintiffs now suggest, the ruling was a patent power-grab, taking by administrative fiat what Congress had deliberately withheld, it is surprising that the railroads did not make their views known then or later. The argument that their long acquiescence lacks customary weight because the Commission generally granted fourth section relief is unimpressive; if the rail carriers had seen in § 216 a convenient way for escaping the fourth section altogether, they would hardly have let the matter pass. In fact they were divided; the claim that rail-motor rates were within the fourth section was advanced by railroads themselves, 219 I.C.C. at 271.
Moreover, while the bearing of silence or even of reenactment can be exaggerated, these considerations are especially appealing here. Congress has frequently modified the fourth section either to approve or to disapprove rulings of the Commission, on two occasions since the Motor Carrier Act was enacted. See 54 Stat. 904 (1940); 71 Stat. 292 (1957). The 1957 amendment, providing that no application for fourth section relief was required when a carrier operating over a circuitous route wished to meet the charges of a carrier operating over a more direct route, is particularly significant; it was based on a desire to avoid paper work that was generally superfluous since almost all such applications were granted, H.R.Rep. No. 577, 85th Cong. 1st Sess., in 2 U.S. Code Cong. & Adm.News, pp. 1301-1303 (1957) — the very point urged by the railroads against having to seek fourth section relief when the motor-rail rate to the farther point is lower than the all-rail rate to the nearer one. On the other hand Congress declined to accept the broader recommendation of the Secretary of Commerce and the President’s Advisory Committee on Transport Policy and Organization that the railroads need not seek prior approval whenever the lower rates for the longer haul “were necessary to meet actual competition and did not result in less than just and reasonable minimum charges,” id. at 1306, a proposal that very likely would have covered the cases here before us.
In the light of these considerations I would dismiss the Pennsylvania’s complaint.5 The Central’s raises a further point — whether its $1.48 rate on air coolers from Louisville to Trenton via New York does not come within the proviso enacted in 1957:
“That any such carrier or carriers operating over a circuitous line or route may, subject only to the standards of lawfulness set forth in other provisions of this part or part III and without further authorization, meet the charges of such carrier or carriers of the same type operating over a more direct line or route, to cr from the competitive points, provided that rates so established over circuitous routes shall not be evidence on the issue of the compensatory character of rates involved in other proceedings.”
*637The issue arose in a curious way. The Central had not raised it before the Commission, evidently desiring to prevail on a broader ground, and it was the Commission that found in its files the Pennsylvania’s $1.48 tariff on the direct line. The Commission then proceeded to rule out an argument the Central had not made, on the basis that the Central’s Plan V rail-motor rate from Louisville to Trenton via New York is not “of the same type” as the Pennsylvania’s Plan II direct all rail rate. 326 I.C.C. at 467. While this is literally so, it would seem quite arguable that Congress could not have meant its words to be taken so strictly, at least where the only factor rendering the Plan V service a “different type” from that of the competing direct all-rail service is that 60 miles of a 1007 mile haul is by truck instead of by rail. Since this issue was not developed of record, I would remand the Central’s case for further consideration on that point.

. See Joint Motor-Rail Rates on Lumber from Savannah, Tenn., 220 I.C.C. 275 (1937); Motor-Rail Rates of Chicago G. W. R.R., 231 I.C.C. 273 (1938); Texas & Pac. Motor-Rail Rates, 279 I.C.C. 135 (1950); and Autos, Barge Proportional from Evansville to Guntersville, 297 I.C.C. 251 (1955).

. It should be emphasized that the instant case presents two examples of classical long and short haul rate discrimination. For instance, the New York Central does essentially the same work under Plan II (all rail) when it transports goods from Louisville to Now York City -as it does under Plan V (rail-motor). But under Plan V the goods are then hauled an additional distance while the total charge to the shipper is less than for the shorter haul under Plan II. This is the obvious kind of discrimination, seemingly “entirely indefensible and contrary to common sense,” Locklin, Economics of Transportation 468-69 (5th ed. 1960), in the absence of competition or other justification, at which § 4 is clearly directed. It is unnecessary here to consider whether that section would also apply in the event the shorter all-rail haul, for which more was charged than for the longer motor-rail haul, involved different and perhaps more expensive operations on the part of the railroad than the motor-rail routing. Such a ease might arise, for example, if the route from A to B were from A to A' on a main line with the necessity of rerouting cars destined for B at A' and thence along a branch line; the motor-rail route from A to C were from A to A' by rail and thence by truck through B and on to C: and, because of efficiencies in trucking goods from A' through B to C as compared to rerouting the goods by rail from A' to B and thence by truck to C, the motor-rail rate from A to C was less than the all-rail rate from A to B. In such a case the shorter haul might arguably not be “over the same line or route in the same direction” within the meaning of § 4.

. Section 1 of the Act of 1887 made the statute applicable to
“carriers engaged in tile transportation of passengers or property wholly by railroad, or partly by railroad and partly by water when both are used, under a common control, management, or arrangement, for a continuous carriage or shipment, from one State or Territory of the United States, or the District of Columbia, to any other State or Territory of the United States, or the District of Columbia, or from any place in the United States to an adjacent foreign country, or from any place in the United States through a foreign country to any other place in the United States, and also to the transportation in like manner of property shipped from any place in the United States to a foreign country and carried from such place to a port of transshipment, or shipped from a foreign country to any place in the United States and carried to such place from a port of entry either in the United States or an adjacent foreign country: Provided, however, That the provisions of this act shall not apply to the transportation of passengers or property * * * wholly within one State, and not shipped to or from a foreign country from or to any State or Territory as aforesaid.” 24 Stat. 379.
Only minor changes in this definition were made by the Hepburn Act, 34 Stat. 584 (1906), and the Mann-Elkins Act, 36 Stat. 544 (1910). Transportation Act, 1920, 41 Stat. 474, altered the scheme. It provided that the Act should apply both, § 1(1), to carriers engaged in defined types of transportation and, § 1(2), to “such transportation.” The clause beginning “and also” was omitted; the limiting phrase “but only insofar as such transportation * * * takes place within the United States” was inserted in both § 1(1) and § 1(2), and the old proviso was moved into § 1(2) (a).

. Commissioners Meyer, Aitcliison and Eastman, whose total service was to aggregate 90 years.

. I find no merit in the argument that even though under both Plan II and Plan Y here under consideration the shipper is provided door-to-door service and the rail segments of the hauls are identical, the fact that under Plan V the trucker rather than the railroad is responsible for part of tlie line haul renders § 4(1) inapplicable. I agree with the Commission that efficiencies realized from the motor carrier’s performing certain tasks under Plan V which the railroad is responsible for under Plan II are relevant only in determining whether relief from § 4 shall be granted. See 326 I.C.C. at 466-467.