204 Pa. Super. 102 | Pa. Super. Ct. | 1964
Opinion by
On February 9, 1962, The Deitch Company and the Essex Steel Corporation joined in filing a complaint against the Pennsylvania Eailroad Company averring that freight rates charged on shipments of scrap iron between Sharpsburg and Brackenridge were unreasonable, discriminatory and in violation of the Public Utility Law. Act of May 28, 1937, P. L. 1053, 66 P.S. 1101 et seq. • The complainants, shippers of iron and steel scrap from their plants at Sharpsburg to the Allegheny-Ludlum Steel Corporation at Brackenridge, sought reparations for excessive rates already paid, and requested the Commission to establish reasonable future rates. After taking testimony at four hearings, the Commission, on May 27, 1963, entered an order dismissing the complaint. This appeal followed.
The amended complaint alleged that the Sharps-burg-Brackenridge rate on scrap iron was unreasonable and discriminatory in comparison with seven tariffs between other points of comparable mileage, and because the rate on scrap iron from Butler to Brackenridge, a distance of 27 miles, was the same as that between Sharpsburg and Brackenridge, a distance of only 17
The record shows that rates for scrap iron are fixed on the basis of a minimum weight of 44,800 pounds, with larger quantities of a minimum weight of 80,000 pounds having a lower rate. Shippers from Butler compete with complainants at Sharpsburg and presently have the same rate of $1.90 per gross ton, minimum weight of 80,000 pounds. Under their own formula, calculated on a cost per car mile basis as applied to the Butler-Brackenridge rate, complainants seek a rate of $1.24 per gross ton (80,000 pounds minimum weight), and also request the establishment of a new rate of $1.11 based on a minimum weight of 100,000 pounds. The Commission found that there was no need for the new 100,000 pound minimum rate, and its finding in this regard is not seriously questioned. The 44,800 pound minimum weight rate is of little moment from a practical standpoint, since most shippers now use the 80,000 pound minimum weight rate.
It is not disputed that Sharpsburg has been grouped for many years with various stations within a radius of Brackenridge extending as far as Corliss, 28 miles distant, the group being known as the Pittsburgh switching district. Within this group rates are the same to a given destination regardless of mileage. Prior to November 24, 1951, both Sharpsburg and Butler had the same rate to Brackenridge. As of that
Complainants presented extensive evidence tending to show that the Sharpshurg-Brackenridge rate was unreasonable and discriminatory in comparison with rates calculated on a mileage basis between other points in the Pittsburgh area, ranging from 14 to 34 miles and including Butler-Brackenridge. For instance, complainants’ witness Bussell alleged that the carrier earned an average of 10.5 cents per mile per gross ton on shipments from Sharpsburg to Bracken-ridge and only 6.6 cents per mile on Butler to Bracken-
The carrier introduced extensive countervailing evidence, specifically answering complainants’ witness Russell, and tending to show that the Sharpsburg-Brackenridge rate under attack was reasonable and below the average for scrap iron rates in the Pittsburgh area. According to the carrier’s witness Seip, the average rate for scrap iron per gross ton in the Pittsburgh area was $2.0232. This witness testified that terminal costs are constant, and constitute the main cost factor in determining rates. “Prom the standpoint of costs, there is little difference whether a car is hauled one mile or thirty”. The evidence offered by the carrier was to the effect that the selected comparisons and exhibits referred to by witness Russell did not reflect a true picture of the operations and rates under attack. Complainants had the burden of proof to show that the Sharpsburg-Brackenridge rate under attack was unreasonable: Allegheny Ludlum Steel Corp. v. Pa. P.U.C., 166 Pa. Superior Ct. 173, 70 A. 2d 475; Pa. R.R. Co. v. Pa. P.U.C., 135 Pa. Superior Ct. 5, 4 A. 2d 622. It was the duty of the Commission to harmonize the conflicting testimony: Pittsburgh Rwys. Co. v. Pa. P.U.C., 198 Pa. Superior Ct. 415, 182 A. 2d 80.
Complainants’ chief point of attack was their attempt to show that the Sharpsburg-Brackenridge rate is unreasonable and discriminatory because it is the same as the Butler-Brackenridge rate, which' involves a longer haul. Complainants point to the fact that the
The carrier introduced evidence showing that unless Sharpsburg, Butler, and points in the Pittsburgh switching district were given group rates, it would lose traffic. The Commission pointed out that the June 18, 1961, reduction in the Butler-Brackenridge rate was occasioned by a threat of truck competition. As already indicated, this was the reason for the carrier’s voluntary reduction in the Sharpsburg rate on February 1, 1959. It was proper for the Commission to consider the effect of competition in determining whether the rate attacked was unreasonable or discriminatory. Competing carriers may, within the zone of reasonableness, adjust their rates to meet competition: Texas & Pacific Rwy. Co. v. U. S., 289 U. S. 627, 53 S. Ct. 768,
The establishment of group rates on a reasonable basis, in order to equalize competitive opportunities, has long been recognized and approved: U. S. v. Illinois Central R.R., 263 U. S. 515, 44 S. Ct. 189, 68 L. Ed. 417; Ayshire Corp. v. U. S., 335 U. S. 573, 69 S. Ct. 278, 93 L. Ed. 243. Section 304 of the Public Utility Law (66 P.S. 1144), which proscribes discrimination in rates, expressly sets forth that it does not prohibit “the establishment of reasonable zone or group systems, or classification of rates”. See Pa. R.R. Co. v. Pa. P.U.C., supra, 135 Pa. Superior Ct. 5, 4 A. 2d 622; B. & O. R.R. Co. v. Pa. P.U.C., 135 Pa. Superior Ct. 20, 4 A. 2d 628; Pa. R.R. v. Pa. P.U.C., 135 Pa. Superior Ct. 154, 4 A. 2d 815. This section of the statute, like its predecessor, does not forbid reasonable classification of service or rates, and what is reasonable under the circumstances is primarily an administrative question for the Commission to decide: Alpha Portland Cement Co. v. P. S. C., 84 Pa. Superior Ct. 255.
The application within an area of a uniform blanket or group rate on the issue of discrimination is essentially a problem in transportation economics upon which the Commission, as an administrative body is peculiarly fitted to pass: Illinois Commerce Commission v. U. S., 292 U. S. 474, 54 S. Ct. 783, 78 L. Ed. 1371; New York v. U. S., 331 U. S. 284, 67 S. Ct. 1207, 91 L. Ed. 1492; American Lime & Stone Co. v. P. S. C., 100 Pa. Superior Ct. 158. The question of the reasonableness of rates and the difference between rates in their respective classes is an administrative or factual question wherein the findings of the Commission, if supported by competent evidence, will not be disturbed: B. & O. R.R. v. P. S. C., 66 Pa. Superior Ct. 403; Reading Coach Co. v. P. S. C., 125 Pa. Superior Ct. 493, 190 A. 172; Carpenter v. Pa. P.U.C.,
The function of this court on appeal is to determine whether there is error of law or lack of evidence to support the finding, determination, or order of the Commission: N. Y. Central R.R. Co. v. Pa. P.U.C., 193 Pa. Superior Ct. 636, 166 A. 2d 55; Pittsburgh Rwys. Co. v. Pa. P.U.C., supra, 198 Pa. Superior Ct. 415, 182 A. 2d 80. On this record the Commission could properly find that complainants had not sustained their burden of proof to show that the rates attacked were unreasonable or discriminatory. We may not substitute our judgment for that of the Commission on the reasonableness of the rate prescribed. It does not appear that the Commission’s dismissal of the complaint was arbitrary, unsupported by evidence, or an abuse of discretion. We perceive no error of law or violation of constitutional rights.
Order affirmed.
The Deitch Company unsuccessfully attacked this rate: Deitch Co. v. P. R. R., 34 Pa. P.U.C. 182.