Before Major, Senior Circuit Judge, and Juergens and Poos,
Chief District Judges.
The opinion of the court was delivered by: Major, Senior Circuit Judge.
This action was brought under Sections 1336, 1398, 2284 and
2321-2325 of Title 28 U.S.C.A., to enjoin, set aside, annul
and suspend a report and orders of the Interstate Commerce
Commission entered January 11, 1965 and April 29, 1965, in the
Commission's Docket No. 34274, Calcium Carbonate Company v.
Missouri Pacific Railroad Co. et al., reported at 323 I.C.C.
The shipments here involved moved from Carthage and Joplin,
Missouri, to various destinations in that state as well as in
the states of Arkansas, Kansas, Louisiana, Oklahoma and Texas,
during the period 1960 to early 1963. Throughout that time the
railroads had rendered freight bills for such shipments at the
Section 4 rates which had been duly published and filed with
the Commission, pursuant to the provisions of Section 6(7) of
the Interstate Commerce Act (49 U.S.C.A. § 6(7)), which
plaintiffs had paid. In early 1963, the railroads submitted
revised freight bills to plaintiffs, based on the contention
that Section 4 rates previously charged and collected
throughout the preceding three years on shipments of ground
limestone to feed mills were inapplicable and that the higher
scale of rates contained in Section 3 of the same tariff was
Plaintiffs refused to pay the higher rates demanded by the
railroads in 1963, retroactively for the shipments made during
the preceding three-year period, whereupon the railroads
initiated civil actions to collect the difference in charges.
The Missouri Pacific Railroad Company and the St. Louis-San
Francisco Railway Company filed suits against Calcium
Carbonate, the former in the United States District Court for
the Western District of Missouri, and the latter in the
Southern District of Illinois, seeking to collect the
difference in such charges. The same two railroads also filed
suits against Calcium Products Company in the United States
District Court for the Western District of Missouri, also
seeking to collect the alleged undercharges on the shipments
of ground limestone.
Plaintiffs as defendants duly filed appropriate answers in
the suits commenced by the railroads. During the pendency of
such suits, Calcium Carbonate filed complaint with the
Commission, alleging that the Section 4 ground limestone rates
it had been paying were applicable and, in the alternative, if
inapplicable, the higher rates of Section 3, if imposed, would
be unjust and unreasonable. The railroads claiming the higher
rates on the shipments were named as the defendants before the
Commission. A similar complaint was filed with the Commission
by Calcium Products, which presented the same issues as those
raised by Calcium Carbonate.*fn1
A hearing was held before a Commission Examiner, at which
evidence was adduced by Calcium Carbonate and by the
railroads. The Examiner issued a recommended report and order
dated May 1, 1964, sustaining the contention urged by Calcium
Carbonate that the Section 4 rates which had been collected
were and are the legally applicable rates. Upon appeal by the
railroads from this report, Division 2 of the Commission
issued its report on January 11, 1965, reversing the Examiner
and holding that the Section 4 rates were inapplicable and
that the higher Section 3 rates sought by the railroads were
and are the applicable rates on plaintiffs' shipments. It
further held that the higher Section 3 rates were not shown to
have been unjust and unreasonable or otherwise unlawful.
On July 12, 1965, Calcium Carbonate and Calcium Products
(which had agreed to be bound by the disposition of the
Calcium Carbonate complaint) filed a joint complaint in this
Court for a judicial review of the Commission's decision.
Answers were filed by the respective parties,
including the railroads as intervening defendants.
On plaintiffs' request and pursuant to statute, a special
Court of three Judges, including a Circuit Judge, was
constituted to hear and decide the case. No question is raised
as to the propriety of this procedure.
Plaintiffs raise two questions: (1) Did the Commission err
as a matter of law in concluding that Calcium Carbonate's
ground limestone does not fall within the tariff commodity
description in Section 4 of the tariff? and (2) Is there a
rational basis for the Commission's conclusion that the
Section 3 rates are not shown to be unjust or unreasonable?
The Examiner in his recommended report decided the first
issue in favor of plaintiffs and, therefore, had no occasion
to consider the second issue. The Commission decided the first
issue against plaintiffs, thereby disagreeing with the
Examiner's report. It then proceeded to a consideration of the
second issue, which it also decided adversely to plaintiffs.
Section 4 rates were established in 1940, and from that time
until this controversy arose plaintiffs shipped their
limestone under the rates therein provided. The limestone
description governing the application of the section was twice
amended prior to December 1, 1959, when, as proposed by the
railroads and at their insistence, it was amended to describe
the commodity as follows: "Limestone, having value
only*fn2 for building, paving, road-making or roofing purposes
(and so certified by shipper on Bill of Lading), broken,
crushed, ground or pulverized, in bulk or in paper bags, in
straight CL or in mixed CL with common shells having value only
for building, paving, road-making, or roofing purposes."
The commodity description in Section 3 reads, "limestone,
ground or pulverized," without qualification.
While the sections evidently provide different rates for the
same commodity, "the tariff specifically provides that,
wherever the lower section 4 rates apply on a commodity for
which rates are also provided in section 3, the section 4
rates take precedence and are the applicable rates." Thus, for
the present we need only be ...