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WESTINGHOUSE ELEC. CORP. v. UNITED STATES

February 4, 1975

WESTINGHOUSE ELECTRIC CORPORATION, Plaintiff,
v.
UNITED STATES OF AMERICA AND INTERSTATE COMMERCE COMMISSION Defendants. and THE BALTIMORE AND OHIO RAILROAD COMPANY, GEORGE P. BAKER, RICHARD C. BOND AND JERVIS LANGDON, JR., TRUSTEES OF THE PROPERTY OF PENN CENTRAL TRANSPORTATION COMPANY, DEBTOR, Intervening Defendants



The opinion of the court was delivered by: DUMBAULD

 This case involves an interesting aspect of the time-honored principle that the rates charged by common carriers for the transportation of freight must be just and reasonable. At common law a shipper might sue the carrier to recover the excessive charges. Texas & Pacific Ry. Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 436, 51 L. Ed. 553, 27 S. Ct. 350 (1907). A new era began with enactment of the Interstate Commerce Act in 1887, creating the Interstate Commerce Commission. Thereafter primary jurisdiction to determine the reasonableness of rates was vested in the Commission. Ibid., 442, 448. Judicial review of Commission orders, ordinarily effected through a three-judge court, is performed by a single judge in the case of orders granting or denying reparation for excessive charges by a carrier. U.S. v. I.C.C., 337 U.S. 426, 441-43, 69 S. Ct. 1410, 93 L. Ed. 1451 (1949). Such an order is attacked by a shipper in the case at bar. The limited scope of review is the same as when a three-judge court is required. That topic was recently discussed in some detail by this Court in Pittsburgh New England Trucking Co. v. U.S., 345 F. Supp. 743, 747-48 (W.D. Pa. 1972), aff'd, United States v. Interstate Commerce Com., 409 U.S. 904, 93 S. Ct. 235, 34 L. Ed. 2d 169 and 409 U.S. 1070, 93 S. Ct. 686, 34 L. Ed. 2d 660.

 Under the Interstate Commerce Act carriers are required to charge rates specified in published tariffs. Such rates are known as legal rates. However the legal rate is not necessarily a lawful rate: "it was lawful only if it was reasonable . . . [The] shipper was bound to pay the legal rate; but if he could show that it was unreasonable, he might recover reparation." Arizona Grocery Co. v. A., T. & S.F. Ry. Co., 284 U.S. 370, 384, 52 S. Ct. 183, 76 L. Ed. 348 (1932). In the case of rates prescribed by the Commission (as distinguished from carrier-initiated rates) there is "no difference between the legal or published tariff rate and the lawful rate." Ibid., 387. But "the great mass of rates" are "carrier-made rates, as to which the Commission need take no action except of its own volition or upon complaint, and may in such case award reparation by reason of the charges made to shippers under the theretofore existing rate." Ibid., 390.

 Since a carrier must be able to charge a legal published tariff rate for any article tendered to it for shipment anywhere, tariffs contain "classifications" or "lists containing descriptions of every commodity moving by freight and the class or classes to which it is assigned, i.e., its classification rating or ratings. . . . The class rates are in the form of a schedule which shows the price per 100 pounds for moving first-class freight every possible distance it may be moved. The cost of shipment for a given commodity is determined by ascertaining its classification rating, the first-class rate per 100 pounds for the haul involved, and the percentage of the first-class rate to which the classification rating in question is subject." N.Y. v. U.S., 331 U.S. 284, 290, 67 S. Ct. 1207, 91 L. Ed. 1492 (1947). But class rates "move but a small percentage of the traffic." Ibid., 343. Hence they are often called "paper rates." Where there is a substantial volume of traffic moving, it usually moves on another type of rate, which is ordinarily lower than the class rate which must theoretically be available for any sort of unusual shipment which might be tendered to a carrier. It should be noted that

 
" Exception rates are rates resulting from the transfer of a commodity out of its regularly assigned class in the classification and into another class.
 
" Commodity rates are special rates established for particular commodities. For purposes of these rates a commodity is not given a classification rating; the result is that the commodity rates have no fixed percentage relationships to first-class rates.
 
" Column rates are fixed as definite percentages of first-class rates but like commodity rates they apply only to particular commodities and are assigned no regular class." Ibid., 290.

 It should also be observed that where a shipment moves over the lines of two or more carriers, the through rate for such shipment may be calculated as a combination rate by adding the local rates of each carrier over its own line for the route of movement used; or may be a combination of several factors ("proportional" rates) published for use in determining through rates over such route; or may be the sum of local and joint factors; or may be a joint single-factor rate published specifically as a joint rate in which the carriers participate who are involved in the movement. St. L.S.W. Ry. Co. v. U.S., 245 U.S. 136, 139, 38 S. Ct. 49, 62 L. Ed. 199 (1917) [Brandeis, J.].

 The routes over which a rate is applicable must be specified in the published tariff, and the rate constitutes a legal rate only over available tariff routes. Any resemblance between available tariff routes and the most direct physical route over existing railroad tracks is purely coincidental. While carriers are compellable to establish reasonable through routes and joint rates, preference is ordinarily given to the carrier originating the traffic and each carrier is entitled to preserve its long haul over its own lines over as much of the distance as possible between the origin and destination points of the through route. Ibid., 143-44

 With these facets of "railroad jargon" *fn1" in mind, we are in a position to examine what took place in the case at bar. The facts are basically undisputed, but are to be gleaned from the written statements filed by the parties rather than from the cross-examined testimony of witnesses "on the hoof", since the case was heard under the Commission's abbreviated "modified procedure." Under this procedure the waggish pronouncement is perhaps truer than usual that in I.C.C. practice the lawyers do the testifying and the witnesses elucidate the applicable law.

 Two types of shipment by the same shipper (the plaintiff) are involved. The plaintiff, hereinafter called Westinghouse, is a prominent manufacturer of electrical equipment. It shipped nine carloads of circuit breakers and parts from Trafford, Pa., to Buckeystown and Doub, Md. This transportation is involved in No. 35439. Plaintiff also shipped an electric generator, on a car owned by plaintiff, from East Pittsburgh, Pa., to Potomac Electric Power Co., at Woodzell, Md. This shipment gave rise to No. 35415 before the Commission.

 In both instances the shipments, because of their large weight or size, could not be handled over the established routes between origin and destination for which the usual published tariff rates were applicable. Instead the carriers collected the legal rates over the actual route of movement. They admit, however, that such rates are excessive, and that shipper is entitled to a lawful (i.e., reasonable) rate over the route of movement. The dispute is as to what constitutes such a reasonable rate.

 With regard to the circuit breakers (disregarding arithmetical overcharge), the normal published rate from Trafford to Buckeystown and Doub (over a route through Frederick, Md., of 320.7 miles to Buckeystown and 323.6 miles to Doub, 313 miles in each case being Penn Central) is a single-factor Column 2300 rate of 79 cents per hundred pounds. The short-line distance to both destinations is 260 miles.

 The actual route of movement was 297 miles to Buckeystown and 294.1 miles to Doub. The route was Penn Central to Hyndman, Pa. (173 miles) thence B&O to destination (124 and 121.1 miles). The rate collected was calculated as a combination rate of 118.25 cents, being the sum of 56.5 cents from Trafford to Hyndman, and 51.5 cents from Hyndman to Buckeystown and Doub (plus certain applicable general increases). With respect to the circuit breaker shipments the carriers contend that the legal rate of $1.1825 is lower than the maximum reasonable rate of $1.25 calculated by applying the Class rates, *fn2" and hence that no reparation is due.

 With regard to the generator (disregarding special train charges, which were separately paid and as to which there is no contest), a single-factor column 2380 rate of $1.33 is applicable from origin to destination over Penn Central. *fn3" This route would have been 319 miles.

 The actual route of movement was 476.9 miles; Penn Central 323 miles to Cumbo, W. Va. (involving a local rate of 92 cents); thence B&O. 97.9 miles to Ft. George Meade, Md. (local rate 66 cents); and thence 56 miles to destination over Penn Central ...


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