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