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ATCHISON, TOPEKA AND SANTA FE RAILWAY CO. v. U.S.
August 20, 1965
THE ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY ET AL., PLAINTIFFS,
UNITED STATES OF AMERICA AND INTERSTATE COMMERCE COMMISSION, DEFENDANTS.
Before Castle, Circuit Judge, and Hoffman and Decker, District
The opinion of the court was delivered by: Julius J. Hoffman, District Judge.
Piggyback service — the movement of highway trailers on
railroad flatcars — constitutes "probably the most significant
recent development in transportation", in the opinion of the
Interstate Commerce Commission. Because of the "explosive growth"
of this service in the past five years, the Commission in 1962
instituted on its own motion a proceeding to investigate the
subject generally and "to explore new approaches" to its
regulation. That proceeding culminated in a Report and Order of
the Commission issued under the title Substituted Service —
Charges and Practices of For-Hire Carriers and Freight Forwarders
(Piggyback Service), Ex Parte No. 230, reported at 322 I.C.C.
301-417, dated March 16, 1964, rehearings denied June 22, 1964,
and December 21, 1964. By this Report and Order, the Commission
promulgated eight rules intended to regulate trailer-on-flatcar
(TOFC) service. These Rules, herein referred to simply as Rules
1 through 8, are officially designated and reported as sections
500.1 through 500.8 of title 49, Code of Federal Regulations.
This suit was brought to enjoin and set aside the Commission's
order on the ground that four of the eight rules issued by the
Commission are beyond its authority and unlawful.*fn1 Pursuant
to Sections 2284 and 2321 through 2325 of the Judicial Code,*fn2
the matter has been tried before a three-judge court. We conclude
that the Commission's order must be set aside.
The plaintiffs and intervening plaintiffs are aligned as five
separate parties in interest, comprising three groups of
railroads, one railroad individually, and a group of freight
forwarders. For the defense, the American Trucking Associations,
Inc., and some of its members, the Contract Carrier Conference,
and the National Auto Transporters Association all intervened to
join as defendants with the Commission and the United States.
Despite this multiplicity, the several
plaintiffs are agreed on the main point of the railroads'
controversy with their rivals, the truckers, and in their
objections to the Commission's new rules.
The primary issue to be decided is the validity of Rules 2 and
3, promulgated by the Commission in its proceeding by a divided
vote. Briefly glossed, they require a railroad which offers TOFC
service on an open-tariff basis, that is, to the regular shipping
public, to make that service available on the same terms without
discrimination to motor carriers*fn3 acting in that capacity in
hauling freight, and, as a corollary, authorize the motor
carriers to substitute this TOFC service of the railroads for
their regular highway transportation by truck. In full, these
500.2 Availability to all of TOFC service. — TOFC
service, if offered by a rail carrier through its
open tariff publications, shall be made available to
any person at a charge no greater and no less than
that received from any other person or persons for
doing for him or them a like and contemporaneous
service in the transportation of a like kind of
traffic under substantially similar circumstances and
500.3 Use of open-tariff TOFC service by motor and
water carriers in the performance of economically
regulated transportation. —
(a) Except as otherwise may be prohibited by these
rules, motor common and contract carriers, water
common and contract carriers, and freight forwarders
may utilize TOFC service in the performance of all or
any portion of their authorized service through the
use of open-tariff TOFC rates published by a rail
(b) Motor and water common carriers shall utilize
open-tariff TOFC service only if their tariff
publications give notice that such service may be
utilized at their option, but that the right is
reserved to the user of their services to direct that
in any particular instance TOFC service shall not be
(c) Motor and water contract carriers shall utilize
open-tariff TOFC service only if their transportation
contracts and schedules make appropriate provision
(d) Tariffs of motor and water common carriers and
contracts and schedules of motor and water contract
carriers providing for the use of open-tariff TOFC
service shall set forth the points between which TOFC
service may be performed and the names of the rail
carriers whose TOFC service may be utilized.
(e) Motor and water common and contract carriers
utilizing open-tariff TOFC service in the performance
of authorized transportation shall tender traffic to
and receive traffic from rail carriers only at points
which the motor and water carriers are authorized to
These Rules break new ground. To the present time, the
available TOFC service has been divided among five categories or
"plans" which have evolved from the carriers' practices and the
Commission's rulings. As capsulized in the Commission's Report,
the five plans involve the following arrangements:
Railroad performs its own door-to-door service,
moving its own trailers or containers on flatcars
under tariffs usually similar to those of truckers.
Ramp-to-ramp rates based on a flat charge, regardless
of the contents of trailers or containers, usually
owned or leased by freight forwarders or shippers. No
pickup or delivery is performed by the railroad.
Shipper or forwarder furnishes a trailer or
container-loaded flatcar, either owned or leased. The
railroad makes a flat charge for loaded or empty-car
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