67 F. Supp. 230 | D.N.J. | 1946
In this suit, various carriers ask to have set aside an order of the Interstate Commerce Commission which will result in a decrease of 25 cents per gross ton in the rates presently charged for hauling anthracite coal from the area of origin to the consuming area in and around New York City.
We are urged to set aside the order on various grounds, but only two are sufficiently impressive as to merit extended discussion.
I.
Commission’s Denial of Petition for Further Rehearing.
Plaintiff carriers concede that a petition for rehearing is addressed to the discretion of the Commission and not to that of the reviewing court. Interstate Commerce Commission v. Jersey City, 1944, 322 U.S. 503, 64 S.Ct. 1129, 88 L.Ed. 1420. But, they contend, by January 14, 1946, conditions had so far changed from those existing in April 1944, date of the last hearing, that it was incumbent on the Commission to stay the effective date of its order and thus afford to the plaintiffs an opportunity of showing the new situation. The carriers maintain that the termination of hostilities caused a decline in traffic volume whereas railroad operating expenses were continuing to increase. Further, they argue that anthracite prices have increased since the date of the last hearing and the date of the Commission’s order. In view of these factors, the carriers maintain that the denial of the petition for rehearing constituted an abuse of discretion within the doctrine of Atchison, Topeka & Santa Fe Railway Co. v. United States, 1932, 284 U.S. 248, 52 S.Ct. 146, 76 L.Ed. 273.
At the hearing before us, we admitted evidence de novo by the carriers for the purpose of showing that a drastic change had thus occurred. But, we find nothing in the evidence presented, nor within the confines of the record itself, to warrant the conclusion that the change in conditions is so great as to bring about a new economic era. That the Atchison case, which dealt with the effect of the late great depression, is not loosely to be applied is apparent from United States v. Pierce Auto Freight Lines, 66 S.Ct. 687, 697, where Mr. Justice Rutledge, speaking for the Supreme Court, stated:
“The court rendered its decision on September 20, 1944, suggesting that the Commission had improperly denied the petition for rehearing. Its view was that the record was so stale, particularly in view of the influence of the war upon transportation facilities, that application of the doctrine of Atchison, Topeka & Santa Fe Ry. Co. v. United States, 284 U.S. 248, 52 S.Ct. 146, 76 L.Ed. 273, was proper.
“That case, as has been indicated more than once, was ‘promptly restricted * * * to its special facts, United States v. Northern Pac. R. Co., 288 U.S. 490, 53 S.Ct. 406, 77 L.Ed. 914, and it stands virtually alone.’ Interstate Commerce Commission v. Jersey City, 322 U.S. 503, 515, 64 S.Ct. 1129, 1135,
What Mr. Justice Rutledge there stated is here pertinent. In our opinion, the post-war period has not brought about such a drastic change in conditions as to warrant the application of the Atchison, Topeka and Santa Fe doctrine. Accordingly, we find no abuse of discretion in the Commission’s denial of the petition for further rehearing.
II.
Constitutionality of the Commission’s Order.
It is argued on behalf of the carriers that the Commission’s order is violative of the due process clause. U.S.Constitution, Fifth Amendment.
Argument for the carriers maintains that the Commission’s order was made without basic findings or upon findings made without evidence to support it and that its effect is confiscatory.
Before we turn to a consideration of these questions, we refer to certain applicable general principles as recently restated by the Supreme Court. In reviewing an order of the Interstate Commerce Commission, we must accord to it a presumption of validity. “Moreover, the Commission’s order does not become suspect by reason of the fact that it is challenged. It it the product of expert judgment which carries a presumption of validity. And he who would upset the rate order under the Act carries the heavy burden of making a convincing showing that it is invalid because it is unjust and unreasonable in its consequences.” Federal Power Commission v. Hope Natural Gas Co., 1944, 320 U.S. 591, 602, 64 S.Ct. 281, 288, 88 L.Ed. 333; see also, Interstate Commerce Commission v. Jersey City, supra, 322 U.S. at page 513, 64 S.Ct. at page 1134, 88 L.Ed. 1420: “ ‘So long as there is warrant in the record for the judgment of the expert body it must stand. * * * “The judicial function is exhausted when there is found to be a rational basis for the conclusions approved by the administrative body.” ’ Rochester Telephone Corporation v. United States, 307 U.S. 125, 145, 146, 59 S.Ct. 754, 764, 765, 83 L.Ed. 1147.”
First. There was sufficient statement of basic findings to support the order.
The gist of the carriers’ objection in this regard appears to be formal rather than substantive. We are urged to condemn the Commission’s order on the assertion that the Commission failed to set forth certain basic findings as required by Section 15a.
It seems to us that this was a sufficient setting out of basic findings. Cf. United States v. Pierce Auto Freight Lines, supra, 66 S.Ct. at page 696.
Second. There is sufficient warrant in the record to support the Commission’s findings and order.
The report and order now under attack are the culmination of eight years of litigation before the Interstate Commerce Commission. A prior report
Comparisons were made with freight rates on bituminous coal. It was found that anthracite rates to the tidewater district were out of line. .The Commission concluded, “In the circumstances set forth above it is clear that rates on anthracite from the origin territory to the tidewater piers should more nearly approximate the level of the rates on bituminous coal to those [Lake Erie] piers.”
The Commission was justified in considering such a comparison as a factor in its rate making. Cf. Northern Pacific Railway Co. v. State of North Dakota, 1915, 236 U.S. 585, 599, 35 S.Ct. 429, 59 L.Ed. 735, L.R.A.1917F, 1148, Ann.Cas. 1916A, 1. The evidence before it amply indicated the competitive character of bituminous vis a vis anthracite. We find no error in the conclusion that an adjustment in anthracite rates to the tidewater is required to bring them in line with those applicable to bituminous.
We believe that the Commission applying proper criteria arrived at a correct conclusion which is amply supported by the evidence.
Third. The carriers have failed to prove that the rates set by the Commission are in fact confiscatory.
The argument on behalf of the carriers comes to this: Costs are increasing to such an extent that a reduction in anthracite rates as prescribed by the Commission will decrease revenue to the carriers to a point below actual costs of service. Evidence in support of this argument consisted of testimony by a railroad accountant who prepared various exhibits. The proof
At most, the carriers indicated a need for a general increase in rates for all commodities. The financial distress of the carriers should not be corrected by placing an unreasonable rate on a particular commodity. It. may be that a new general rate structure applying to all commodities is indicated.
The plaintiffs’ prayer for an injunction and other relief must be dismissed. Further, the Interlocutory Injunction issued by this court must be dissolved and the sums received by plaintiff carriers in excess of the rates prescribed in the Commission’s order and which are now being held in trust, pursuant to the order of this court in said Interlocutory Injunction must be refunded to the proper parties entitled thereto. An appropriate order will be submitted to the court within fifteen days.
The rates in question apply to transportation from the mines located in the AVyoming, Lehigh and Schuylkill regions of Pennsylvania to destinations on the New Jersey shore of New York Harbor, called the Upper and Lower Piers, for transshipment. The rate to the Upper Piers is 5 cents higher than that for shipment to the Lower Piers. The rates include dumping of coal into boats, but no transportation over water. On October 10, 1945, the Commission handed down a report finding that “the assailed rates on anthracite from mines in the Wyoming, Lehigh, and Schuylkill anthracite regions of Pennsylvania to New Jersey tidewater points designated as the Upper Piers and Lower Piers are and for the future will be unjust and unreasonable to the extent that they exceed or may exceed rates of $2.25 per long ton on prepared sizes and $2.13 per long ton on pea and smaller sizes of anthracite to the Upper Piers and
256 I.C.C. 401.
49 U.S.O.A. § 15a(2) provides: “In the exercise of its power to prescribe just and reasonable rai.es the Commission shall give due consideration, among other factors, to the effect of rates on the movement óf traffic by the carrier or carriers for which the rates are prescribed; 1o the need, in the public interest, of adequate and efficient railway transportation service at the lowest cost consistent with the furnishing of such service; and to the need of revenues sufficient to enable the carriers, under honest, economical, and efficient management to provide such service.”
263 I.C.C. 639.
256 I.C.C. 401.
Since the hearing before us, the Commission has authorized an interim general increase in freight rates, effective July 1, 1946. This includes an increase of 9 cents a gross ton for anthracite. See New York Times, June 22, 1948, pp. 1 and 17.