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HYGRADE FOOD PROD. CORP. v. NEW YORK CENTRAL RAILROAD CO.

April 18, 1967

HYGRADE FOOD PRODUCTS CORPORATION, PLAINTIFF,
v.
THE NEW YORK CENTRAL RAILROAD COMPANY ET AL., DEFENDANTS.



The opinion of the court was delivered by: Austin, District Judge.

OPINION AND ORDER

This is a civil action by the plaintiff, Hygrade Food Products Corporation (Hygrade), under Section 16(2) of the Interstate Commerce Act (the Act), 49 U.S.C. § 16(2), to enforce a reparation order of the Interstate Commerce Commission (the Commission). Based upon a decision by the Commission in Hygrade Food Products Corporation v. Atlantic Coast Line R., 318 I.C.C. 501 (1962), the order was entered on May 27, 1963.

This action also involves a cross-complaint authorized by 28 U.S.C. § 1336, 49 U.S.C. § 17(9), and Interstate Commerce Commission v. Atlantic Coast Line R. Co., 383 U.S. 576, 86 S.Ct. 1000, 16 L.Ed. 2d 109 (1966), filed by the defendants against the United States and the Interstate Commerce Commission to set aside the order of the Commission awarding reparation to Hygrade. Hygrade intervened as a party defendant to the cross-complaint.

Each of the six defendants is a common carrier by railroad engaged in the transportation of canned meats and other properties from Indianapolis, Indiana, to various points in the southeast, and as such, each common carrier is subject to the provisions of the Act. Hygrade is a New York corporation with its principal place of business at Detroit, Michigan. It is engaged, among other things, in the business of producing and marketing canned meats, fresh meats, and packinghouse products. By complaint filed with the Commission on August 21, 1961, Hygrade alleged that the rates charged by the defendants on 14 carloads of canned meat from Indianapolis, Indiana, to Morehead City, North Carolina; Charleston and Columbia, South Carolina; Albany and Thomasville, Georgia; and Jacksonville and Hialeah, Florida, which moved on and between May 9 and November 16, 1956, were inapplicable, unjust, and unreasonable in violation of the Act.

The proceeding before the Commission, known as Docket No. 33857, Hygrade Food Products Corporation v. Atlantic Coast Line Railroad Company, et al., was tried on modified procedure whereby a written evidentiary hearing, as supplemented by an oral hearing for the purpose of cross examination, was held. The Commission found that the rates charged on the involved shipments were inapplicable, that Hygrade was entitled to reparation in the amount of the difference between the charges collected and those which would have accrued at the rates found applicable, together with interest. Hygrade Food Products Corp. v. Atlantic Coast Line R.R., supra. The defendants having failed to comply with the order, Hygrade filed the present action.

Upon the trial in this Court the plaintiff introduced in evidence certified copies of the Commission's report and order, and the defendants filed with the Court a certified copy of the entire record before the Commission. It was agreed that if the Court upholds the validity of the order, the defendants would offer no defense to Hygrade's complaint. No oral testimony was offered by any party.

The issue in this case is what rates were properly applicable to the shipments in question under the defendants' tariffs lawfully published and on file with the Commission pursuant to Section 6(7) of the Act, 49 U.S.C. § 6(7). The facts are set forth in the Commission's findings and order which, under Section 16(2) of the Act, 49 U.S.C. § 16(2), are made prima facie evidence of the facts therein stated. There being no dispute over the facts, the Court adopts the Commission's findings as properly stating the facts, which will be repeated here only to the extent necessary for a proper understanding of the issues.

Each of the shipments in question moved from Indianapolis over the New York Central Railroad to Cincinnati, Ohio, thence via the other defendants to the various destinations. There were no point-to-point commodity rates on canned meats published from Indianapolis to the destinations, and Hygrade paid and bore charges based on class 22 exceptions rates, which were published in Central Territory Railroads Tariff Bureau tariff I.C.C. No. 3636 (the class rates tariff). This tariff was published jointly by tariff publishing agents for the Central Territory and the Southern Territory.

There were, however, lower commodity column 20-Y rates from Evansville, Indiana, to the same destinations in Southern Freight Association Tariff Bureau tariff I.C.C. No. 513 (the commodity tariff). This tariff was published only by the tariff publishing agent for the Southern Territory. Evansville, but not Indianapolis, was named as a point of origin in the commodity tariff. Indianapolis is alleged by Hygrade to be an intermediate point in constructing a route from Evansville to each southeastern destination involved. The commodity rates are subject to an item 20 series which contains a holdout type intermediate rule, the effect of which is to provide rates from intermediate points on authorized routes when a rate is not specifically published in the tariff from such intermediate point.

By applying the intermediate rule, the Commission found that the rates in the commodity tariff, applicable from Evansville to the involved destinations on shipments such as these, were applicable over authorized routes of the New York Central Railroad from Evansville via Indianapolis to Cincinnati, thence to the destinations via the lines of the other defendants. It is this determination of the Commission that is challenged here.

I. The Scope of Judicial Review.

The scope of judicial review is determined by whether the issue presented for review was within the primary jurisdiction of the Commission. I.C.C. v. Atlantic Coast Line R. Co., 383 U.S. 576, 579-580, 594, 86 S.Ct. 1000, 16 L.Ed.2d 109 (1966). Here the Commission determined that the commodity rates found in the Southern Freight Association tariff from Evansville, Indiana, to the destinations applied to the shipments in question. The propriety of this determination is the sole question presented for review. In reaching this determination, the Commission merely construed the provisions of the Southern Freight Association tariff. This question does not raise "issues of transportation policy which ought to be considered by the Commission in the interests of a uniform and expert administration of the regulatory scheme laid down by" the Interstate Commerce Act, see United States v. Western Pacific R. Co., 352 U.S. 59 at 65, 77 S.Ct. 161, 1 L.Ed.2d 126 (1956); nor is "the inquiry * * * essentially one of fact and of discretion in technical matters, * * *", see Great Northern R. Co. v. Merchants Elevator Co., 259 U.S. 285, 291, 42 S.Ct. 477, 479, 66 L.Ed. 943 (1922) (emphasis supplied). The principal issue involved here, whether the determination by the Commission to apply the commodity tariff to these shipments by virtue of the intermediate rule found in the tariff was an unlawful construction of that tariff, is not beyond the understanding of the Court unassisted by expert guidance. Its resolution does not depend upon evaluation of "voluminous and conflicting evidence" that can only be accomplished by expert knowledge of the transportation industry. See Great Northern R. Co. v. Merchants Elevator Co., supra, 259 U.S. at 291, 42 S.Ct. 477, 66 L.Ed. 943; National Van Lines, Inc. v. United States, 355 F.2d 326 (7th Cir. 1966). Thus, the determination of the Commission is solely a question of tariff construction, and hence one of law. Great Northern R. Co. v. Merchants Elevator Co., supra; United States v. Western Pacific R. Co., supra; Armour & Co. v. Chicago, M., St. P. & Pac. R. Co., 188 F.2d 603, 608 (7th Cir. 1951); I.C.C. v. Atlantic Coast Line R. Co., supra; National Van Lines, Inc. v. United States, supra.

The tariffs here involved do not admit of facile comprehension and construction. Indeed, the degree of effort required to understand the tariffs and their proper application in light of the applicable legal principles of tariff construction might well argue in favor of adopting a more limited scope of judicial review than has heretofore been prescribed for cases of this nature. See Associated Grocers of Colorado, Inc. v. Atchison, T. & S.F. Ry. Co., 191 F. Supp. 435 (D.Col. 1961). But the Court may not abdicate the responsibility that is rightfully lodged with it to insure that the Commission construes tariffs in accord with the law merely because the question of construction is painstakingly difficult to resolve. The Court, therefore, in the exercise of its independent judicial function has reviewed the tariffs in question in light of applicable legal principles of tariff construction. The Court has concluded that the order of the Commission must be set aside and its enforcement enjoined. To reach this determination, it was necessary for the Court in construing the tariffs to ...


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