Court Opinion

ID: 8721233
Source: CourtListenerOpinion
Date Created: 2022-11-26 08:32:01.689983+00
Date Added: 2024-06-11T16:59:03.968586
License: Public Domain

JOHNSEN, Circuit Judge (dissenting).
The Commission has here used standards and criteria for the exercise of its power to compel through routes and joint rates, which I think are beyond the warrant of the statute. The majority opinion upholds in part the result which the Commission has so reached.
What the Commission purports to make the primary basis for its establishing of through routes and joint rates over the Rio Grande is “perishable food articles”. Here, as taken from its Report, are the manner and perspective of its approach to the question.
“Growers [of perishable food articles in Idaho, located on the Union Pacific] * * * market such products throughout the United States. In order to get as wide a distribution as possible, those growers and other growers in the northwestern area [that part of Utah lying north of Ogden, and the States of Idaho, Montana, Oregon and Washington] need as many markets and outlets as possible.”1 287 I.C.C. at page 642. To comprehend or evaluate that need, says the Commission, “it is necessary to consider the nature, extent and functioning of our intricate and far-flung commodity marketing system.” P. 655. The importance, in our condition of growing population and national development, of having “a constantly expanding flow of diverse commodities” and “particularly articles of food” is emphasized. The comment is made that “A complex but efficient marketing system has been evolved to provide as orderly a distribution of food commodities as possible,” and the truism is expressed that “Adequate transportation facilities and services are required for the proper functioning of the system.” P. 656.
Then follows what seems to me to represent the crux of the Commission’s concept and standard in what it did.
1. “Because of their generally perishable nature, food articles, such as fresh fruits and vegetables, frozen poultry, frozen foods, butter, eggs, ordinary livestock, and dried beans, must be moved to market with expedition and care, and over as many routes as possible. This requires that many routes be open in order that unnecessary interruptions of the free flow of such commodities may be avoided and that as much flexibility as possible in the distribution process be permitted.” (Emphasis mine.) P. 656.
2. “A number of services, not only at origin and destination, but enroute, which are not usually required in the movement of ordinary traffic, must be provided for these perishable and semi-perishable commodities.” In-transit privileges, “such as stopoff for partial unloading, storing, or processing in transit, or for feeding or grazing livestock in transit,” are available at various points on the Union Pacific to through-shippers, on the basis of the joint rates applicable over that route, and similar privileges exercisable on the Rio Grande could be made available to such shippers, at a lower cost than under the present combination rates, by establishing competitive through routes and joint rates over that road, so that those desiring to have the benefit of these additional facilities would be able to enjoy them on the same basis as those on the Union Pacific. Because the use of such transit facilities on the Rio Grande is not available in the same manner as those on the Union Pacific, “The shippers in the originating area involved in this complaint'with respect to these commodities are debarred from effective participation in the wide*84spread system developed for the marketing of such commodities.” P. 656.
3. The Commission does not attempt to explain how the failure of such through-shippers as a general class to have access to the transit privileges on the Rio Grande on the same rate basis as on the Union Pacific, can thus broadly and absolutely be declared to debar them “from effective participation in the widespread system developed for the marketing of such commodities.” In the absence of such an explanation, and on the implication of what the Commission has precedingly said in its Report, as set out above, the only deduction that I am able to make is that the Commission regards all shippers of perishable commodities as having a right generally or abstractly, upon an expressed desire by any of them in a particular situation, to be given “as many routes as possible” and “as much flexibility as possible in the distribution process”, because otherwise they will be “debarred from effective participation in * * * the marketing of such commodities.”
In other words, whenever it is possible physically and practicably to open up a new or an additional through route for such commodities, the Commission apparently feels entitled to exercise its power to do so, in order to make available any increase in the amount of transit privileges en route which can be provided for such through-traffic, on the basis of simply declaring, as it in effect did here, that the previous through routes are inadequate, since they lack the additional transit privileges of the new carrier’s route, which some shipper may desire or can solicitedly be persuaded to use, and on the basis of further holding that the other prerequisite of section 15(4) of the Act, 49 U.S.C.A. § 15(4), where the element of short-hauling another carrier is involved, as it is here, that such an added through-route must also provide “more efficient or more economic transportation” than that existing on the present through routes, can sufficiently be satisfied by merely resorting to the Commission’s power under section 15(3) to prescribe joint rates and pointing out that joint rates necessarily in the situation will provide “more economic transportation”, since they obviously are lower than the previous combination rates.
I have grave legal doubt whether the Commission’s power to establish joint rates under section 15(3) has any relationship to the term “more economic transportation” in section 15(4), dealing with the Commission’s right to open up through routes. Rather, it seems to me that the term “more economic transportation” in section 15(4) is intended to have reference to the elements of distance, time, equipment, cost of operation, territorial reach, and all those other quantitative and qualitative factors which are inherent in a transportational comparison from the standpoint of the interests of both the public and the carriers — and that the Commission’s power to establish joint rates under section 15 (3) is one which has application only after through routes exist or are established, without the right to use it as a factor under section 15(4) for satisfying the requirements of opening up a long-haul-depriving, additional through route.
But however this may be, I am at least convinced that, where the question is one, as here, of opening up, not an initial through route, but an additional one for the same through-traffic to the same ultimate destinations, the Commission’s power to establish joint rates cannot be made to constitute the sole ingredient or content of the term “more economic transportation” under section 15(4), in the addition of another carrier’s route as a mere “bridge” line for such traffic. If that be not so, then there is not any situation in which the Commission can not make a finding of “more economic transportation” for whatever additional through route it may undertake to open up, since in all cases joint rates necessarily, from their very nature, are lower than combination rates otherwise applying.
Let me add in summary that, if it can properly be held, as the Commission has *85done here, that perishable commodities are entitled to “as many routes as possible” and “as much flexibility as possible in the distribution process,” so that on this basis, and without regard to any other factor, any existing through route can be called inadequate, because it is possible to create additional transit privileges or facilities for such traffic by opening up another through route over another railroad, serving as a bridge line, and further such new route can be declared to provide “more economic transportation”, because by placing joint • rates in effect the cost of using such new through route for its transit facilities will be less than under the general combination rates previously existing, then the railroads of the country may as well forget section 15(4) entirely, as affording them any protection whatsoever against deprivation of their long hauls.
Here the opening up of a through route over the Rio Grande as a bridge carrier for the transcontinental freight involved will deprive the Union Pacific of a long haul of 975 miles upon such traffic as the Rio Grande is able to solicit away from it. But this is not the sole purport or effect of the Commission’s order. If the order is upheld either in whole or in part, on the basis on which the Commission’s result has been reached, the Commission can hereafter exercise its power to require through routes and joint rates from every connecting point in the country against every existing carrier, since every new through route necessarily will afford additional transit privileges and every joint rate necessarily will reduce the cost of using the new through route as against the combination rate previously applicable.
Nor should one allow oneself to be blinded to what the real scope and significance of the Commission’s reach here is. What it has purported to paint the picture of, in relation to its standard of “as many routes as possible” and “as much flexibility as possible in the distribution process” is, as previously indicated, “perishable food articles”. But, it has, by means of some artificial classification, included ordinary livestock as a perishable food article (P. 656), saying merely, before doing so, that “We think, however, that the situation here as to livestock is no different from that portrayed as to certain other commodities with respect to the need for competitive routes over the Rio Grande via the Ogden gateway.” And it has further held that a little monument dealer, located on the Union Pacific in Utah, is entitled to have established for him a through route and joint rates on the Rio Grande, in order to have the transit privilege available to him of unloading locally, here and there in Colorado, on a through rate basis, some individual monuments out of an estimated four-carload lot of monuments per year.2
All of this to me is but another attempt by the Commission to gain a new foothold, under another disguise, for the philosophy and position that it should have the right to put into effect as many new through routes as it deems advisable, without being required to give consideration to the question of short hauling another carrier. It has repeatedly asserted that viewpoint and sought to gain that *86end. But Congress has never been willing to accede to that philosphy and position, and the courts have on a number of occasions had to strike down the Commission’s efforts in that direction. All this is familiar history in the railroad world, and I shall not bother to go into it further here.
It is on the basis of the unqualified use of that standard here in relation to perishable commodities,- and the attempt to get the camel’s nose under the tent as to one or two other commodities also, in a smothered, beginning approach to an apparently wider future reach, that I would strike down the Commission’s order. I think that anyone who reads the Commission’s Report, in the light of what I have said, and stripped of all the confusion in which the Report has been wrapped, will have no convictional difficulty as to the implications which I have pointed out.
I do not mean to make any implication, nor do I here assume to pass judgment, on whether the Ogden gateway is in other manner or to other extent subject to being opened up. All I say is that the philosophy and standard of “as many routes as possible” and “as much flexibility as possible in the distribution process” can not be made the basis for overriding the short-hauling provisions of section 15(4), through the merry-go-round device of calling all transportation inadequate without the availability of every bit of transit privilege that exists on any connecting carriers aggregately, and of construing the term “more economic transportation” to mean nothing more than the difference between joint rates placed in effect and the combination rates previously existing.
The philosophy and standard which the Commission has used are unquestionably sound as a marketing principle, but the railroad transportation system of the country has never yet been relegated by Congress to the full impact of marketing principles alone. There is not a distributor of any commodity — including perishable foods — who, up to the time at least of the Commission’s present order, has had, or has been regarded as being entitled to have, as a matter of sound transportational concept, every avenue and facility that it is possible to open up for him, with a simple brushing aside of transportational conditions, realities and consequences, such as I think the Commission here did.
I have previously referred to the fact that most of the traffic that is here involved originates on the branch lines of the Union Pacific, and that on such of this traffic as the Rio Grande is able to solicit to use its route, the. Union Pacific will lose a line haul of 975 miles. The Report of the Commission admits that “the extent to which the Union Pacific route is shorter than the route sought by the Rio Grande to and from points between which most of the traffic here concerned moves” is about 200 miles. Page 654. It also recognizes that the Rio Grande is a mountainous route, of higher grades, more circuity, and greater operational costs than the Union Pacific. “The total rise and fall in feet on the Rio Grande is 66.3 per cent greater than that of the Union Pacific. Other data as to physical characteristics of the two lines show that the Rio Grande line is less favorably situated than that of the Union Pacific. Traffic routed over the Rio Grande as a bridge line would require at least 24 hours additional time in transit than when routed over the Union Pacific, and would require one or two more terminal-yard services.” Page 648.
All of these matters, however, the Commission lightly brushes aside, as not having relationship to the question of “more economic transportation” in the situation, and so leaving it free to hold, as above indicated, that the new through route provides “more economic transportation”, because its joint rates necessarily are lower than the previously applicable combination rates. All that the Commission says, in brushing aside the transportational differences which I have set out, as not requiring consideration on the question of “more economic transportation” in the situation, is that, when they are spread over hauls of such great *87lengths as are here involved, “they become relatively insignificant.” Page 658.
The Report does not undertake to show what amount of traffic goes where. It merely says that “About 90 per cent of the traffic upon which joint rates are sought via Ogden and the Rio Grande moves to (Missouri River crossings and points east and southeast) and about 10 per cent to the Southwest.” Page 626. How much terminates at the Missouri River crossing-points or at other mid-western destinations, the Report does not state. As to livestock, however, it certainly is a matter of common knowledge that the primary markets are Chicago, Omaha, Kansas City and some other Missouri River points. To each of these points, as well as to the Minneapolis and St. Louis markets, the record shows that a haul of 200 miles more, and a transportation time of at least 24 hours longer, as well as at least one or two more terminal-yard services, are involved over the Rio Grande route. I do not believe that without rational demonstration the Commission can say, except arbitrarily, that in relation to hauling distances of 1036 miles (Omaha) or 1153 miles (Kansas City) or 1524 miles (Chicago), the elements of difference which I have set out are so “relatively insignificant” as to be entitled to be ignored on the question of whether “more economic transportation” is being provided. And in the absence also of some demonstration or analysis of quantities and destinations as to the various other commodities involved, I do not believe that the Commission can be said to have any less arbitrarily brushed off the facts of the transportational and service differences existing, as related to the question of “more economic transportation” under the statute, than in the case of livestock, when it merely attempts to push all of the facts abstractly to a far-distant horizon, without establishment of the reality of that horizon for lumping purposes.
Incidentally, I also may add that what the Commission has here done as to livestock is a departure or exception from the long-established general livestock scheme, practice and policy which the Commission has previously recognized and accepted. In Livestock, Western District Rates, 176 I.C.C. 1, 190 I.C.C. 175, 190 I.C.C. 611, 200 I.C.C. 535, the Commission prescribed rates on livestock in western territory, predicated generally on the shortest routes over which carload traffic could be moved without transfer of lading, but the carriers were not required to maintain the rates over such routes where it would result in short hauling within the meaning of section 15(4) of the statute. In establishing the prescribed rates, the carriers limited their application, as the Commission itself has recognized, over routes which did not result in short hauling, and over other and longer routes provided higher rates, either by the addition of arbitraries or the application of the mileage scales over the longer routes, giving consideration to the distance involved. This the Union Pacific was willing to do in relation to the Rio Grande’s route. It would seem to me that the upsetting of this general, established scheme, practice and policy as to livestock rates, in the present situation, apart from the other aspects of the question here involved as to the livestock, is entitled to some explanation on the part of the Commission, if it is to escape the implication of an arbitrary departure as against the Union Pacific in its long-hauling of livestock from the northwest territory, as related to the differential permitted to be created by other carriers generally in such situations.
This dissent is being written hastily, in order not to delay the filing of the majority opinion, and I shall accordingly not take the time to go into detail on other matters. I agree with the majority that the Commission had no right here to find a violation of section 3(1) of the Act against the Union Pacific and its connecting through-route carriers, but the basis for my view is not that adopted by the majority, that a discrimination under this section cannot at all exist, unless the complaining person or entity is located *88upon the lines of the carrier or combination of carriers claimed to have committed the discrimination. I do not believe that this viewpoint is tenable on the language of section 3(1), nor on the expressions contained in St. Louis Southwestern Ry. Co. v. United States, 245 U.S. 136, 144, 38 S.Ct. 49, 62 L.Ed. 199, as well as on the plain, contrary assumptions made in Texas & Pacific Ry. Co, v. United States, 289 U.S. 627, 53 S.Ct. 768, 77 L.Ed. 1410. But on the factual elements that are involved in the present situation I do however not think that there exists any basis on which to declare the Union Pacific and its connecting through-route carriers guilty of unreasonable preference or unreasonable prejudice under section 3(1), in having refused to join with the Rio Grande to make the latter available as a bridge line for hauling through traffic at the same rate, over a 200-mile longer route, with a 66.3 per cent greater variation in grade, involving a 24-hour additional hauling time, and necessitating the furnishing of several more terminal-yard services. I do not believe that these facial railroad realities would permit of a finding of such a discrimination as was intended to be reached by section 3 (1). If the Commission had attempted to predicate the relief which it here granted upon the existence of a violation of section 3(1), I am certain that its action resting on this basis alone could not on these facial realities be upheld. Only an escape from these facial realities, through a dissolution of them under the considérations open to the Commission in section 15(4), such as the Commission here attempted, could at all, in my opinion, on the facts of the situation, have furnished a basis for the prescribing of through routes and joint rates in relation to the existing conditions.
In the pattern of the Commission’s apparent attempt to strike at as much in the present situation as possible, the Commission further, as noted in the majority opinion, required the Union Pacific to establish joint rates with the Rio Grande to and from the same points where it maintained joint rates with the Bamberger Railroad. The Report says: “The Bamberger operates, for about 36 miles, between Ogden and Salt Lake City, and it appears that there is no important dissimilarity between the transportation conditions in connection with the Bamberger and those in connection with the Rio Grande.” P. 659. The brief of the Union Pacific argues pointedly that “No evidence was submitted concerning or comparing transportation conditions on the Bamberger’s electric line between Ogden and Salt Lake City with conditions on the Rio Grande.” The brief of the Commission makes no denial of the fact that no such evidence is contained in the record. The most that the Commission could properly have said, I think, was that it had not been made to appear by the evidence that there was any important dissimilarity in the conditions on the two roads. But the lack of any such evidence of dissimilarity could hardly afford a basis for a finding of similarity on the part of the Commission. This segment of the Commission’s order is perhaps of relatively small importance in the present controversy. I refer to it simply as being characteristic or in the pattern of the loose and improper basis and manner in which it seems to me that the Commission has dealt with the entire situation.
I would strike down the Commission’s order generally, on the basis and manner in which its result has been reached. In taking that position, however, I would again emphasize that I intend no implication that there may not exist some proper basis and some proper manner of reach as to some parts of the Ogden gateway situation. I have not allowed my mind to look at that avenue, in either one direction or the other. The pervading infirmities on which the Commission’s present order seems to me to rest make it sufficient and compel me to halt my judicial consideration right there.

. It should be noted that the situation covered by the Commission’s order does not involve the matter of joint rates to intermediate points on the Rio Grande as final destinations. Joint rates already apply to such traffic. The question is one of through routes and joint rates for traffic having a billing origin and destination outside of Rio Grande territory, and for which the Rio Grande therefore would merely be serving as a “bridge” line only, while the Union Pacific, on whose branch lines most of the traffic originates, would be caused to lose a line-haul thereon of 975 miles.

. I shall not take the time to go into the details of this trivial monument situation, which the Commission characterized as one of “urgent need” (Page 638), except to comment that it is typical of the Commission’s approach, result and intended reach. Why a little dealer, who wants to make local peddlings of 4 carloads of tombstones is . entitled to have the Union Pacific join in giving him the opportunity to do so on a through rate basis is a bit beyond me. But more than this, if tombstones constitute a cornmodity that is entitled to this extreme transit privilege, on the same basis as perishable foods, then the Commission’s purported basis of “as many routes as possible” and “as much flexibility as possible in the distribution process” for perishable foods is meaningless, and it seems rather apparent what this initial action of the Commission here portends for the transportation system generally of the country.