What has been said up to this point on the issues presented relates to the proceedings before the Commission and the issues raised by the plaintiffs in this court. The issues raised require the court to examine the decision made by the Commission to determine whether it was arbitrary, capricious, and an abuse of discretion or otherwise not in accordance with the law and ultimately to determine whether or not it was supported by substantial evidence. The scope of judicial review is limited.
Many decisions have been cited by counsel as to the function of the court in reviewing an Interstate Commerce Commission decision. It seems to this court that the quoted excerpt from United States v. Pierce Auto Freight Lines, 327 U.S. 515, at page 535, 66 S. Ct. 687, at page 698, 90 L. Ed. 821, prescribes this court's duty. The language of the Supreme Court is:
'We think the court misconceived not only the effects of the Commission's action in these cases but also its own function. It is not true, as the opinion stated, that '* * * the courts must in a litigated case, be the arbiters of the paramount public interest.' This is rather the business of the Commission, made such by the very terms of the statute. The function of the reviewing court is much more restricted. It is limited to ascertaining whether there is warrant in the law and the facts for what the Commission has done. Unless in some specific respect there has been prejudicial departure from requirements of the law or abuse of the Commission's discretion, the reviewing court is without authority to intervene. It cannot substitute its own view concerning what should be done, whether with reference to competitive considerations or others, for the Commission's judgment upon matters committed to its determination, if that has support in the record and the applicable law.'
It is the duty of this court to keep in mind that the Commission has found that the 'assailed rates are not shown to have been or to be unjust or unreasonable.' (Emphasis supplied.)
The statute law is (49 U.S.C.A. § 1(5)) that the carriers charges '* * * shall be just and reasonable, and every unjust and unreasonable charge for such service or any part thereof is prohibited and declared to be unlawful.' (Emphasis supplied.)
Before this court the decision of the Commission carries a presumption of validity. Plaintiffs have the burden of showing that it is invalid because it is unjust and unreasonable in its consequences. Again the language of the Supreme Court in an Interstate Commerce Commission review case is pertinent. In I.C.C. v. Jersey City, 322 U.S. 503, at page 512, 64 S. Ct. 1129, at page 1134, 88 L. Ed. 1420, the court quotes the following from a previous decision:
"* * * Moreover, the Commission's order does not become suspect by reason of the fact that it is challenged. It is 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., 320 U.S. 591, 602, 64 S. Ct. 281, 288 (88 L. Ed. 333). The Commission considered that it had, and we find no reason to doubt that it had, the evidence before it that was needful to the discharge of its duty to the public and to the regulated railroad. 'With that sort of evidence before them, rate experts of acknowledged ability and fairness, and each acting independently of the other, may not have reached identically the same conclusion. We do not know whether the results would have been approximately the same. For there is no possibility of solving the question as though it were a mathematical problem to which there could only be one correct answer. Still there was in this mass of facts that out of which experts could have named a rate. The law makes the Commission's finding on such facts conclusive.' Interstate Commerce Commission v. Union Pacific R. Co., 222 U.S. 541, 550, 32 S. Ct. 108, 112, 56 L. Ed. 308.
"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 Corp. v. United States, 307 U.S. 125, 145-146, 59 S. Ct. 754, 764, 765, 83 L. Ed. 1147; Mississippi Valley Barge Line Co. v. United States, 292 U.S. 282, 286-287, 54 S. Ct. 692, 693, 694, 78 L. Ed. 1260.'
Plaintiffs argue that the railroads are unable to defend a rate which is higher on billets than is the coiled rod rate from the western trunk line to official territory. Plaintiffs also pose the query, How can the railroads deny reparation to the plaintiffs at least to the level of coiled rod rates to Pittsburgh and Avis when the same defendants voluntarily paid reparations on shipments of coiled rods to Avis and Palmer? But regardless of the seeming logic in plaintiffs' argument taken step by step this court cannot find as a matter of law that the Commission's decision was unsupported by substantial evidence. As they must, to succeed in this court, plaintiffs must destroy the weight of the evidence presented to the Commission by the witness C. E. Larsen. It is noticed that the evidence before the Commission under its modified procedure was in the form of affidavits by the witnesses whose names have been mentioned. These affidavits present a picture of factual statements interspersed with argument and conclusions. The witnesses in general compare billets and coiled rods as to the various sizes and shapes, loading methods, the type of cars in which the shipments are carried, the market value and state of manufacture of billets and coiled rods, and that they are not damaged in transit. By the usual criteria used in rate determination, standing alone, billets would not carry a higher rate than coiled rods. But other factors apparently influenced the Commission in its determination that the assailed rates are not unreasonable.
Plaintiffs offered as their expert witness, C. Peyton Collins, a transportation specialist. He reviewed the history of the rates involved and made comparisons of the products shipped. To considerable extent his testimony is factual, but much of it is devoted to an attempt to persuade th Commission under the circumstances the Commission under the circumstances plaintiffs' steel billets should have been lower than the rates on coiled rods. He drew the conclusion that the assailed rates were unreasonable.
It does not appear that the Commission or the railroads have any serious dispute as to the factual matters presented by plaintiffs. But in this connection, plaintiffs point to the Commission's finding which plaintiffs say was solely based on the evidence of C. E. Larsen that the coiled rod rates to Palmer and Buffalo were published to enable the shipper to distribute its excess production in eastern markets and also that the defendant carriers anticipated a continuing and expanding movement in coiled rods and that the railroads claim that the rates are accomplishing their purpose. Plaintiffs say that Larsen's statement contains not one word about the rates on coiled rods from Minnequa to Buffalo. An examination of the Larsen evidence shows that plaintiffs are no doubt technically correct in stating that the witness Larsen made no mention of the rates on coiled rods from Minnequa to Buffalo. However, an inspection of the evidence given by this witness does indicate that he was speaking of the general subject of rates from the western trunk line to official territory, on iron and steel articles including billets and coiled rods. For instance, he says on pages 6 and 7 of his affidavit, which is part of this record, in analyzing plaintiffs' exhibits, that the only coiled rod rate in effect when most of plaintiffs' shipments moved was to Palmer; that the rate was put in to cover a plant-to-plant movement for the Colorado Fuel and Iron Corporation; that subsequently voluntary rates were put in to Roebling and Trenton, New Jersey and points in Ohio and Indiana. In context he was undoubtedly speaking of coiled rod rates and he indicates that these rates were below the maximum level and were put in to produce some long haul traffic in competition with eastern producers. The witness makes the statement that the coiled rod rates were so-called 'missionary' rates and that figures indicate they are accomplishing their mission.
Plaintiffs point to the two special docket applications wherein reparation was awarded for shipments of coiled rods. The Commission in its decision mentioned these two reparation awards. In one the carriers sought and were authorized to pay awards. In one the carriers sought and were authorized to pay reparation on shipments of rods moved between September 2, 1950 and January 26, 1951 from Minnequa to Palmer to the basis of the rate established on January 29, 1951. The Commission says the average weight of the shipments was 113,811 pounds per car.
In the second case the carriers sought and were authorized to pay reparation on shipments of coiled rods from Minnequa to Buffalo, shipped between February 3 and June 5, 1951, to the level of the rate established on June 10, 1951. The average weight of these shipments was 96,206 pounds.
The two special docket reparation cases were based on an agreed statement of facts. The Commission action simply authorized reparation to shippers who had been charged at a higher initial rate than the rate subsequently established to be reasonable. The first special docket case is No. 222577. The application of the carrier stated that between September 2, 1950 and January 26, 1951, 170 carloads of coiled steel rods moved from Minnequa to Palmer. Prior to that time coiled rods were obtained in official territory. The application further recited that on September 1, 1950 it became impossible to obtain coiled rods in official territory; that carriers had not concluded their handling of the request for the establishment of a through rate on rods from Minnequa to Palmer and before the rate was approved and became effective, 170 carloads had been shipped. The carrier admitted in the application that the rate charged under the circumstances and conditions was excessive and unreasonable. The Commission order approved paying of reparation to the level of the established rate.
In general in the second case, special docket No. 223238, the same reasons were advanced by the carrier and the shipper. The shipments involved 74 cars of steel rods moving from Minnequa to Buffalo between February 3, 1951 and June 5, 1951.
From the two special docket applications which necessarily involved an admission by the railroads that the rates charged had been unreasonable, plaintiffs in the instant case argue that it must follow that the billet rate charged them is also unreasonable. However, it does not follow as a matter of law or even as a matter of unassailable argument that because the coiled rod rate is lower, then the billet rate must be found to be unreasonable and unjust under the circumstances presented in the instant case. In its decision, page 191, the Commission reviewed several of its previous decisions, prescribing rates on manufactured iron and steel articles. It examined its own records in Western Trunk Line Class Rates, 164 I.C.C. 1, where it prescribed rates on manufactured iron and steel articles between western trunk line territory and official territory on the basis of 32.5 percent of first class.
In American Steel Abrasives Co. v. Ann Arbor R. Co., 266 I.C.C. 505, rates on scrap iron were prescribed from the various western trunk line points to official territory. The Commission points to the argument made by defendants that the basis of rates on billets in official territory does not set a limit beyond which interterritorial rates may not be maintained. The Commission points to the defendants' citation of the American Steel Abrasives Co. v. Ann Arbor R. Co. case where it is stated that 70 percent of the class 28 basis is about 10 percent higher than the basis prescribed on the same articles in official territory. And finally, the Commission mentioned and accepted defendants' argument that rates on the basis of 85 percent of either the class 28, class 29, or class 32.5 ratings are proper standards by which to measure the reasonableness of the rates assailed. The Commission finds that the 85 percent basis is midway between the iron and steel level and the scrap iron level, which corresponds approximately with the pricewise position of billets, namely, about halfway between the price of iron and steel articles and scrap iron.
In plaintiffs' recital of the Commission findings it has overlooked the Commission finding, page 192:
'* * * Excluding the Ex Parte No. 175 increase, rates on the same basis of 85 percent of class 29 are on approximately the same level as the rates charged; 85 percent of class 32.5 would result in rates approximately 10 percent higher than those charged; and the same percentage of class 29 produces rates 4 cents less than those charged.'
Plaintiffs have cited two decisions, United States v. Abilene & So. Ry. Co., 265 U.S. 274, 44 S. Ct. 565, 68 L. Ed. 1016 and Interstate Commerce Commission v. Louisville & Nash. R. Co., 227 U.S. 88, 33 S. Ct. 185, 57 L. Ed. 431 as authority for the proposition that the Commission findings must be based on evidence of record before it. This court believes that the Commission complied with the holding in the cited cases. It acted on evidence. However, it must be conceded that the Commission had the right to take judicial notice of its own decisions on the same subject matter. From an examination of the whole record and the law, this court finds that plaintiffs have not sustained their burden. From the record of the Commission it appears, and this court finds, that the decision of the Commission is based on substantial evidence; that there is a rational basis in the record for the conclusions reached by the Commission; and that it has discharged its duty under the Interstate Commerce Act in that it has given full consideration to the contention of the plaintiffs and has applied the applicable law. The complaint will be dismissed.
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