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BALTIMORE & O.R. CO. v. UNITED STATES

May 27, 1946

BALTIMORE & O. R. CO. et al.
v.
UNITED STATES



The opinion of the court was delivered by: GOODRICH

Following an investigation of coal rates initiated by itself, the Interstate Commerce Commission has made certain orders with regard to freight rates on bituminous coal from points in Pennsylvania to the Youngstown, Ohio area. The plaintiff carriers are affected by the lowering of rates ordered by the Commission and now have appeared before a three-judge statutory court *fn1" to enjoin making the new rates effective. The case has been heard both upon oral argument and submission of briefs and the court has had before it the transcript of the proceedings before the Commission.

Four rates are involved. They are as follows:

 1. The all-rail rate from Indianola and Russellton, in the Freeport district, to named destinations.

 2. The all-rail rate from the Pittsburgh district to named destinations.

 3. The all-rail rate from the Leetonia district.

 4. The ex-river rate from Conway and Colona.

 I. Rate from Indianola and Russellton in the Freeport District.

 Upon this target plaintiffs have unleashed all their heavy artillery. The very number of objections made tends to make a court hearing them for the first time be at least skeptical of the seriousness with which some of them are advanced. They are nevertheless examined both as a whole and individually.

 Ten major arguments are offered against the Freeport district rate. Analytically, these may be reduced to three of which one is so slight as to merit comparatively little attention even from the plaintiffs. Their complaints come down to: (a) attacks on comparative rates relied on by the Commission, 'in part', in reaching its decision to lower the Indianola and Russellton rate; (b) charges that Republic Steel has been granted an arbitrary and discriminatory rate preference; (c) a charge that the Commission's cost studies were not complete enough.

 Comparative Rates.

 The first comparative rate whose applicability is questioned is that from the Freeport district to Greenville, Pa. The argument takes several forms. We are told that the distance there involved was not set out in the record. Perhaps it was not, at least not in so many words. But there was enough material in the record so that the Commission could and did determine distance by the simple process of addition and subtraction. *fn2" We are also told that the railroad petitioners had no opportunity to prove that the Greenville rate applied to less distant points as well and hence was allegedly unfair as a standard of comparison. Furthermore, it is contended this constituted 'acting without evidence' on the part of the Commission. The fact is that the railroads in one of their own exhibits *fn3" indicate that the Greenville rate applies to intermediate points also. *fn4"

 Another rate whose comparative value is questioned by the railroads is that from mines on the Butler Branch of the B. & O. to Youngstown and other points in Ohio and Pennsylvania. The railroads contend that this rate applies to less distant points as well. That familiar argument, however, only goes to the weight of the evidence and that is not a question for court review. They also argue that they offered to prove that the movement to Youngstown on the route whose rate was used as a comparison was negligible. The record already showed movements prior to 1943. In 1944 the record closed and figures subsequent to July of that year had to be excluded. The Commission had evidence enough before it to exercise its discretion validly. Equally within the discretion of the Commission was its use of short-line distances as opposed to average distances for a basis of comparison. Thus the fact that the short route from origin over the Bessemer & Lake Erie to Butler, thence to destination by B. & O., was utilized as a standard by the Commission is not indicative of error in law, as contended by the petitioners. The railroads stress the principle previously laid own by the Commission that 'A carrier with a long route is not obliged as a matter of law to meet the rate of a short-line competitor.' Commercial Coal Co. v. Baltimore & O. R. Co., 15 I.C.C. 11, 14, and other cases to similar effect. It should be noted that the new Freeport rate ($ 1.32) does not meet the short haul rate ($ 1.17); on the contrary it still substantially exceeds it. The average distance on the former rate if 90.4 miles while on the latter rate it is 76.5 miles. The Old Freeport rate was $ 1.42 and the Commission considered the spread too large. It therefore exercised its judgment to the extent of a 10 cent decrease, still leaving a 15 cent spread in favor of the longer haul.

 It is alleged that in making the Greenville comparison the Commission arbitrarily disregarded the fact that the Freeport district to Youngstown rate applies also to Warren and Niles which are more distant. The Commission answers by pointing to a 9 cent differential in favor of the Freeport district over Greenville. *fn5" This shows, we think, an absence of arbitrary action and the existence of a considered judgment upon the matter

 The new rate is also questioned because based on a policy of the Bessemer & Lake Erie to make lower rates from the Freeport district than the Pittsburgh district. The railroads object that no proof of such policy appeared in the record. While no one so testified, again this was a matter which could be inferred from ...


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