L. T. BARRINGER & CO. v. UNITED STATES ET AL.
No. 520
Supreme Court of the United States
Decided May 3, 1943
Argued March 3, 1943.
Mr. Robert L. Pierce, with whom Solicitor General Fahy, Assistant Attorney General Arnold, and Messrs. Daniel W. Knowlton and J. Stanley Payne were on the brief, for the United States et al.; and Mr. Roland J. Lehman, with whom Messrs. R. S. Outlaw, C. S. Burg, and Clinton H. McKay were on the brief, for the Atchison, Topeka & Santa Fe Railway Co. et al.,—appellees.
MR. CHIEF JUSTICE STONE delivered the opinion of the Court.
This is а suit by appellant, a shipper of cotton over the lines of appellee railroads, brought under
From the report of the Commission, on which its order was based, 248 I. C. C. 643, the following facts appear. Appellees сarry cotton from points in Oklahoma to ports on the Gulf of Mexico. Their lines also form relatively short parts of the through routes over which cotton moves from Oklahoma to points in the southeastern United States. During recent years carriers of cotton to the Gulf ports have been faced with serious truck competition. To meet it, successive rate reductions have been made. Until about ten years ago the only rates available on cotton were less-than-carload rates, since individual shipments of cotton are seldom, if ever, in carload quantities. As is customary on less-than-carload shipments, the cotton was loаded at the expense of the carrier.1
During 1932 and 1933 the carriers, in an effort to reduce rates and achieve operating economies, put in effect so-called carload rates for cotton which the Commission, after investigation, approved in Cotton From and to Points in Southwest and Memphis, 208 I. C. C. 677. Under these rates the cotton was typically collected in less-than-carload quantities at the ginning points, carried by rail for short distances to compressors, and after compression assembled in carload quantities for shipment
Despite the reduction in cоst to shippers produced by the adoption of these schedules, truck competition continued to be a serious problem. In 1939 carriers of cotton from Texas points effected a further rate reduction by eliminating the loading charge. The tariffs here under consideration, filed by appellees to be effective on June 11, 1941, similarly eliminate the loading charge for cotton moving from compress points in Oklahoma to certain ports on the Gulf of Mexico,2 while retaining it on cotton moving to the Southeast.
Appellant buys cotton in Oklahoma for resale to mills in the Southeast. Under the proposed tariffs it must continue to pay the loading charge on cotton which it ships to thе Southeast, while merchants who ship to the Gulf ports, and who compete with appellant in the purchase of cotton, are relieved of that charge. Contending that this situation would create an unjust discrimination under § 2, and would be unduly prejudicial under § 3 (1), appellant filed a petition with the Commission under § 15 (7) to suspend the proposed tariffs.
Division 3 of the Commission, after a hearing in which appellant participated, issued its report and order, refus-
Appellant‘s principal contention is that, in considering the validity of the proposed tariffs under § 2, the Commission could look only at the charge for the loading service and was not entitled to considеr conditions relating to the through line-haul rates. Section 2 of the Act declares it to be an “unjust” and prohibited discrimination for any carrier “directly or indirectly, by any special rate, rebate, drawback, or other device,” to charge one person more or less than another for “a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and con-
Section 2 is aimed at the prevention of favoritism among shippers. See Sharfman, Interstate Commerce Commission, vol. III-B, pp. 360-61. Where the transportation services are rendered under substantially similar conditions the section has been thought to prohibit any differentiation between shippers on the basis of their identity, Interstate Commerce Commission v. Baltimore & Ohio R. Co., 225 U. S. 326, 342; Interstate Commerce Commission v. Delaware, L. & W. R. Co., 220 U. S. 235, 252, or on the basis of competitive conditions which may induce a carrier to offer a reduction in rate to one shipper while denying it to another similarly situated. Wight v. United States, 167 U. S. 512, 516-18; Interstate Commerce Commission v. Alabama Midland Ry. Co., 168 U. S. 144, 166. Compare Seaboard Air Line Ry. Co. v. United States, 254 U. S. 57, 62. But differences in rates as between shippers are prohibited only where the “circumstances and conditions” attending the transportation service are “substantially similar.” Whether those circumstances and conditions are sufficiently dissimilar to justify a difference in rates, or whether, on the other hand, the difference in rates constitutes an unjust discrimination because based primarily on considerations relating to the identity or competitive position of the particular shipper rather than to circumstances attending the transportation service, is a question of fact for the Commission‘s determination. Hence its conclusion that in view of all the relevant facts and circumstances a rate or practice either is or is not unjustly discriminatory within the meaning of § 2 of the Act will not be disturbed here unless we can say that its finding is unsupported by evidence or without rational basis, or rests on an erroneous construc-
In considering the circumstances and conditions attending the transportation service, the Commission was not required to ignore the fact that the loading charges, although separately stated in the tariffs, are in each case a component part of the total line-haul cost to the shipper and inseparable from it. All the carrier loading costs not compensated for by the loading charges, if any, to shippers, are necessarily absorbed by the carrier out of the line-haul charges which shippers pay. The loading charge is not paid until the line haul is completed and the ultimate destination known, and then only by a reduction of the refund payable by the carrier on the transit settlement prescribed by the tariffs. And where cotton moves on less-than-carload rates, the cost of loading is absorbed by the carrier, although the loading services performed by the carrier are the same. In these circumstances the net effect, on the shipper‘s line-haul cost, of the remission by the tariff of any part of the loading charge is precisely the same as though the like reduction were made in the line-haul tariff.
It has long been established by our deсisions that differences in competitive conditions may justify a relatively lower line-haul charge over one line than another, and that it is for the Commission, not the courts, to say whether those differences are sufficient to show that a difference in rates established to meet those conditions is not an unjust discrimination or otherwise unlawful. Texas & Pacific Ry. Co. v. United States, 289 U. S. 627, 636-7, and cases cited; Manufacturers Ry. Co. v. United States, 246 U. S. 457, 481; United States v. Chicago Heights Trucking Co.,
This Court has held that the Commission may consider the through line-haul rate in determining whether a related accessorial charge is just and reasonable under § 1 (5) (a). Atchison, T. & S. F. Ry. Co. v. United States, 232 U. S. 199, 219-220. We find nothing in § 2 or in our decisions that precludes the Commission from similarly looking at the whole of the services rеndered to different shippers to determine whether the conditions are such as to justify a difference in charges made for one component part of that whole. Nor has the Commission found such a limitation in the statute. Archer-Daniels-Midland Co. v. Alton R. Co., 246 I. C. C. 421, 428, 430; Minneapolis Traffic Assn. v. Chicago & N. W. Ry. Co., 241 I. C. C. 207, 220, 224; Railroad Comm‘n of Wisconsin v. Ann Arbor R. Co., 177 I. C. C. 588, 592; State Docks Commission v. Louisville & Nashville R. Co., 167 I. C. C. 112, 115-116; Tide Water Oil Co. v. Director General, 62 I. C. C. 226, 227; Richmond Chamber of Commerce v. Seaboard Air Line Ry., 44 I. C. C. 455, 466.4
This is not to say that in every case where thе differences in total transportation services rendered are such as would justify a greater charge to one than to another shipper, the difference in charge can at the carrier‘s option be made in the charge for an accessorial service such as the loading service here involved. But the decision whether the circumstances and conditions are such as to justify a difference in the accessorial charge, or rather to require that any adjustment be made in the line-haul charge, is one which the statute has left to the determination of the
It is no answer to this determination of the Commission to say that the rates here approved as non-discriminatory may be open to attack in a proceeding under § 13 (1) to adjust the line-haul rates in which all connecting carriers who participate in the tariff are required to be parties by Rule II (c) of the Commission‘s 1936 Rules of Practice, or in a proceeding under § 15 (3) to establish divisions оf the through rates among the connecting carriers, “a matter which in no way concerns the shipper,” Louisville & Nashville R. Co. v. Sloss-Sheffield Co., 269 U. S. 217, 234. Here the difference in loading charge is assailed by a shipper only, and on the grounds alone that it is unjustly discriminatory or unduly preferential. The discrimination or preference, if any, is caused by the carriers who perform in part the line-haul transportation service. The Commission has not undertaken to pass upon the validity of the line-haul rates, and it does not appear that appellant has asked it to do so. It has passed only on the question of discrimination or preference resulting from the remission of the loading charge. In dоing so it has, as § 2 contemplates, looked at all the relevant circumstances and conditions, including the respective line-haul conditions, in order to ascertain whether the loading service and line hauls are made under substantially similar circumstances and conditions with respect to the particular discrimination charged. The Commission has found that they are not and that the difference in service charge is not unjustly discriminatory as to shippers.
Section 2 gives us no mandate, and none is to be implied from the statutory scheme, to reverse that finding and to
Nor do we find anything in § 6 (1) which precludes the Commission from looking at the entire through rate. That section merely requires carriers to file with the Commission all rates and charges established by them, and to “state separately all terminal charges, storage charges, icing charges, and all other charges which the Commission may require, all privileges or facilities granted or allowed . . .” Appellees have complied with its requirement that the loading charge, and the exceptions to it created by the present tariffs, be separately posted. We have not
What we have said of § 2 suffices also to dispose of the objection based on § 3 (1). That section makes it unlawful to give an “undue or unreasonable preference or advantage” to, or impose an “undue or unreasonable prejudice or disadvantage” on, any “person, company, firm, corporation, association, locality, port, port district, gateway, transit point, region, district, territory, or any particular description of traffic.” It differs from § 2 in that it may be availed of not only by shippers but by any other person who has been or may be injured by an inequality of rates.
But the facts which we hold sufficient to justify the Commission‘s finding that the elimination of the loading charge does not result in an unjust discrimination, are sufficient also to justify its finding that the elimination of that charge does not create an undue preference. Compare Clover Splint Coal Co. v. Louisville & Nashville R. Co., 197 I. C. C. 276, 277. We have frequently sustained the Commission‘s determination, in cases arising under § 3, that differences in competitive conditions justify lower through rates over one route than another. Texas & Pacific Ry. Co. v. United States, supra; Texas & Pacific Ry. Co. v. Interstate Commerce Commission, 162 U. S. 197, 205-217; Interstate Commerce Comm‘n v. Chicago Great Western Ry. Co., 209 U. S. 108, 119, 121-2.
We have considered appellant‘s attack on the sufficiency оf the evidence to support the Commission‘s findings, and conclude, as did the court below, that they are adequately supported by substantial evidence of record. Compare Florida v. United States, 292 U. S. 1, 12; Merchants Warehouse Co. v. United States, supra, 508.
Affirmed.
MR. JUSTICE DOUGLAS, dissenting:
Sec. 2 of the Act makes it unlawful for any common carrier “by any special rate, rebate, drawback, or other device” to receive from any person “a greater or less compensation for any service rendered” in the “transportation” of passengers or property than it receives from any other person for doing for him “a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar сircumstances and conditions.” Loading is clearly a “service rendered” in the “transportation” of property1 within the meaning of § 2. See Merchants Warehouse Co. v. United States, 283 U. S. 501. The practice which is now held to be free from the charge of unlawful discrimination under § 2 is the practice of loading cotton free for certain shippers who ship to one destination and exacting a loading charge from others who ship from the same points but to a different destination. That is to say, free loading of cotton is allowed shippers who ship cotton from Oklahoma to the
The Commission in its report justified that discrimination on the following considerations: (1) there is no trucking of cotton between points in Oklahoma and the Southeast, while there is considerable truck competition in the movement of cotton from Oklahoma to the Texas Gulf ports; (2) carload rates on cotton from Oklahoma to the Southeast are on a relatively lower basis than carload rates from the same origins to the Texas Gulf ports; and (3) rates from points in Oklahoma both to the Southeast and to the Texas Gulf ports are depressed. The Commission in its report made no specific reference to § 2. It now seeks to sustain its order on the ground that the conditions surrounding the rеspective line-hauls justified the carriers in absorbing the loading charge in the line-haul rates for one shipper but not for another. It endeavors to avoid the issue of discrimination by contending that § 2 as a matter of law has no application to the present situation. Its argument is that § 2 does not apply where the line-hauls are not over the same line, for the same distance, and to the same destination. That contention is based on Wight v. United States, 167 U. S. 512, which the Commission claims to have followed consistently.3
It was stated in Interstate Commerce Commission v. Baltimore & Ohio R. Co., 145 U. S. 263, 284, that “any fact which produces an inequality of condition and a change of circumstances justifies an inequality of charge.” Those inequalities of conditions may relate to the circumstances of carriage. But the fact that different rates for carriage are warranted doеs not necessarily mean that dif-
But it is said in reply that there is nothing in § 2 which limits the phrase “under substantially similar circumstances and conditions” to the circumstances surrounding the particular accessorial service in question; and that it is a factual issue for the informed judgment of the Commission whether line-haul conditions are to be considered in determining the validity of separate charges for services such as loading. The answer, however, seems clear. The service of loading, like the transit service in the Birkett Mills case, is identical whether the property is going south or southeast, whether its journey is long or short, whether it is transported by one carrier or another. A carrier which is loading in Oklahoma one car of cоtton for a southeastern mill and another car of cotton for a Gulf port is certainly performing a “like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and conditions.” A carrier which is loading two cars at the same time, on the same siding, with the same commodity is indeed performing the same service under the same circumstances and conditions. To charge the first shipper for loading his car and to load the other one free would be to impair the rule of equality which § 2 was designed
There may be cases of special charges for special services where the validity of the rate under § 2 is dependent on whether the line-haul conditions are the same.5 Yet § 2, though primarily related to the line-haul, is not restricted to it. Merchants Warehouse Co. v. United States, supra. At least where the service in question is purely accessorial, § 2 is applicable though the line-hauls are not over the same line, for the same distance and to the same destination. Where § 2 is applicable, competitive factors (such as those on which the Commission relied) are no justification for the discrimination. Interstate Commerce Commission v. Alabama Midland Ry. Co., 168 U. S. 144, 166; Interstate Commerce Commission v. Baltimore & Ohio R. Co., 225 U. S. 326, 342; Seaboard Air Line Ry. Cо. v. United States, 254 U. S. 57, 62; Absorption of Loading Charge, 161 I. C. C. 389, 391; Allowance for Driving Horses, 227 I. C. C. 387, 389. The justification under § 2 for “unequal rates must rest in the facts of carriage and not in the financial interests of the carrier.” Sharfman, The Interstate Commerce Commission, Pt. 3, Vol. B, p. 371.
There are, of course, occasions when a consideration of the line-haul rate in relation to the charge for an accessorial
But it is said that the loading charge is a component part of the total line-haul charge; that competitive conditions would justify a reduction in the line-haul tariff; and that a shipper is affected no more by an increase or decrease in one than in the other. It is therefore argued that changes in the charge for this accessorial service may be treated the same as if the line-haul tariff were in issue. That argument, however, results in this: an adjustment in charges for accessorial sеrvices such as loading is utilized as an indirect method of adjusting line-haul rates. That is not permitted under this statutory system. Although charges for services such as loading are a part of the total line-haul charge, they must be separately stated in the tariffs. § 6 (1); Rule 10 (a), supra, note 2. This proceeding put in issue not the line-haul tariff but the separately stated charge for loading, since the amended tariff made no change in the former. To allow this proceeding to be used to adjust indirectly the line-haul tariff is to circumvent the Act. The difference between the removal of a discrimination and the adjustment or fixing of rates
The determination by the Commission on the question of discrimination under § 2 is ordinarily a question of fact. Nashville, C. & St. L. Ry. v. Tennessee, 262 U. S. 318, 322. Its findings on that issue are entitled to great weight (Seaboard Air Line Ry. Co. v. United States, supra) and will be given the respect which expert judgment on the intricacies of rate structures deserves. But disregard of the statutory standards is another matter. Central R. Co. v. United States, supra.
MR. JUSTICE ROBERTS, MR. JUSTICE BLACK and MR. JUSTICE REED join in this dissent.
