United States District Court, Northern District of Illinois, E.D
February 5, 1974
CHICAGO AND NORTH WESTERN TRANSPORTATION COMPANY, A CORPORATION, PLAINTIFF,
SOO LINE RAILROAD COMPANY, A CORPORATION, DEFENDANT.
The opinion of the court was delivered by: Marshall, District Judge.
This matter is before the court on plaintiff's motion for
summary judgment pursuant to Rule 56 of the Federal Rules of
Civil Procedure and defendant's cross-motions pursuant to
Rules 12(b)(6) and 56 of the Federal Rules of Civil Procedure,
for a dismissal of plaintiff's complaint for failure to state
a claim upon which relief can be granted or in the alternative
for summary judgment. Jurisdiction is founded on 28 U.S.C. § 1331(a)
and 1337. For the reasons hereinafter stated,
plaintiff's motion is Granted and defendant's motions are
Plaintiff Chicago and North Western Transportation Company
(hereafter "North Western") seeks to recover $10,756.64 from
defendant Soo Line Railroad Company (hereafter "Soo") as the
total costs North Western incurred in re-icing 560
refrigerator cars delivered to it by the Soo.
North Western's Wood Street Terminal operates as a receiving
and distribution point for carloads of perishable produce
moving to Chicago on common carriers by rail. In this capacity
North Western operates as a switching carrier. It receives no
portion of the through line-haul freight charges collected
from the shipper.
Common carriers by rail are obligated by their tariffs to
provide protection against heat and cold to shipments of
perishables in refrigerator cars. This obligation extends
throughout the period when a perishable shipment is under the
control of a rail carrier. Consequently, the North Western is
obligated to provide protective services to shipments of
perishables while they are under its control at the Wood
In return for providing this protective service, the
originating carrier is paid a standard refrigeration service
charge by the shipper. The charge is set forth in National
Perishable Freight Committee Perishable Protective Tariff 18,
I.C.C. No. 37, published and on file with the Interstate
Commerce Commission, pursuant to 49 U.S.C. § 6(1) and covers
the shipper's obligation to pay for protective services given
between the points of origin and final destination.
The rights and obligations of rail carriers between each
other with respect to through shipments moving over more than
one carrier are covered by division agreements among the
carriers. These division agreements include National
Perishable Freight Committee Division Sheet 7 (hereafter
"Division Sheet 7") and National Perishable Freight Committee
Circular 20-F (hereafter "Circular 20-F") to which North
Western and Soo are parties. Switching carriers are paid for
re-icing services performed on their lines pursuant to
Division Sheet 7. Item 124 of Division Sheet 7, applicable to
re-icings performed at stations in Illinois, provides that in
the case of the immediate re-icings of cars upon delivery, the
originating carrier pays the switching carrier from the
standard refrigeration rate paid to it by the shipper.
Rule 235 of Circular 20-F and Rules 225(B) and (D) of
Perishable Protective Tariff 18 in part provides:
Rule 235 of Circular 20-F, Part 2 —
"Applicable only for account of the Chicago and
North Western Railway Company . . . unless
otherwise provided by tariff, billing, local
agreement, established practice or special
instructions, cars under refrigeration should be
re-iced to capacity before delivery to
connections, or agent of delivering line should
arrange for immediate re-icing by connection, if
any icing facilities are maintained at such
interchange or receiving line."
Rules 225(b) and (D) of Perishable Protective
Tariff 18 —
"After arrival of car in the terminal train yard
serving destination, and up to time car is in
process of unloading on team track, or until
private lock or seal has been applied, or until
placed on private track, car will be re-iced to
capacity when necessary. . . ."
". . . Cars placed on hold, inspection or
delivery tracks, at intermediate stop points,
hold points, or at destination with bunkers less
than three-fourths full of ice, will be re-iced
to capacity and expense included in Standard
Refrigeration charge. . . ."
Read together these provisions obligate a rail carrier
delivering a refrigerator car to a switching line to deliver
the car with its ice bunkers at least three-fourths full.
Rules 225(B) and (D) further provide that the cars should be
re-iced to capacity by the switching line when they arrive
with bunkers less than three-fourths full and thereafter when
During the period June 1, 1965 to December 31, 1969, So
delivered 560 refrigerator cars to North Western for switch
movement at the Wood Street Terminal: 317 were less than
three-fourths full on delivery; 243 required refilling
subsequent to their delivery and during the time the cars were
under North Western's control. Ten of the cars were re-iced
more than once. Accordingly, North Western performed 570
re-icings of the Soo's cars during the above period.
The cost to North Western of re-icing the cars during the
time they were under its control was $24,935.60, including the
cost of the ice ($24,092.00) and the cost of supervising the
re-icing operations ($843.60). Soo refuses to pay this amount.
Instead, it argues that the North Western has received the
full compensation to which it is entitled, from the amount
paid to it under Division Sheet 7, Item 124 ($14,178.96) which
included the partial cost of supervision paid by the
originating carrier. This amount was paid out of the standard
refrigeration service charge collected from the shipper and
was not paid by Soo unless Soo happened to be the originating
North Western seeks the difference between its actual cost
of re-icing services performed on Soo's refrigerator cars and
the standard refrigeration rate collected by North Western
from the originating carrier pursuant to Item 124 of Division
Sheet 7. The dispute reduces to whether North Western can
recover under the provisions of the division agreements
between North Western and Soo, North Western's costs over and
above amounts collected by it under Item 124 of Division Sheet
The court has concluded that North Western is entitled to
reimbursement for its total cost of re-icing Soo's cars. North
Western's tariffs obligate it to re-ice Soo's cars. It should
not be penalized for fulfilling its tariff obligations. North
Western does not receive any revenue from the through
line-haul charge. Thus it has no revenue against which to
offset the cost of re-icing except that which is provided by
Item 124 of Division Sheet 7. Soo Line, on the other hand, may
offset any expense incurred because of re-icing against the
line-haul revenue generated by the cars.
Division Sheet 7, Item 30-K, paragraph (A)13 reads:
"(a) Cost of ice or ice and salt supplied, also
switching, when assessable against the shipment
on basis of section 4 will be credited to the
carrier on whose rails services performed or for
whose account the services rendered.
"(b) When cost of ice or ice and salt is
included in Standard Refrigeration Service
Charge, see paragraph D."
Paragraph D, noted in section (b), provides that bills for ice
and salt supplied
in connection with shipments moving under the standard
refrigeration service should be submitted to the originating
carrier on the basis of Items 100-198 of Division Sheet 7.
Soo, in delivering refrigerator cars to North Western for
switching operations, constitutes a line-haul carrier. North
Western argues that if the actual cost of re-icing is not
covered by Item 124, it is entitled to charge the remaining
cost to Soo, the line-haul carrier for whose account the
re-icing was rendered, irrespective of whether Soo may also
have been the originating carrier. See Rule 225(a) of Division
Sheet 7, Item 30-K, paragraph A(13).
The court agrees with North Western's interpretation. Soo
was the carrier on whose behalf North Western performed the
re-icing services. If Rule 225(a) is not interpreted the way
North Western suggests, Soo will receive North Western's
services without cost, unless Soo was an originating carrier.
Furthermore, if the cost of re-icing exceeds the amount which
is provided North Western under Item 124 of Division Sheet 7,
North Western will sustain a loss. That result would be
contrary to the policy of fair compensation for carriers
established in section 1(4) of the Interstate Commerce Act.
49 U.S.C. § 1(4). Accordingly, Soo is required to reimburse North
Western for the remainder of its actual re-icing costs not paid
by the originating carrier out of the standard refrigeration
service charge. This is the case even if Soo was an originating
carrier as well as a line-haul carrier.
Soo argues that the phrase "the carrier . . . for whose
account the services rendered" was intended to be deleted in
the reading of Rule 225(a). The language of the provision is
unambiguous. Soo cannot delete the express terms of a contract
with allegations concerning the interpretation of the
provision by other railroads whose shipments are governed by
Tariff 18 and Division Sheet 7.
North Western may recover the cost of supervision in
providing icing services. Alton & S.R.R. v. United States,
49 F.2d 414, 417-418 (N.D.Cal. 1931).
Soo has moved to dismiss North Western's complaint for
failure to state a claim upon which relief can be granted,
contending that Section 16(3)(f) of Title 49 of the United
States Code precludes North Western's recovery. That statute
"A complaint for the enforcement of an order of
the commission for the payment of money shall be
filed in the district court or the State court
within one year after the date of the order, and
North Western filed this action in 1973. Soo argues that North
Western is seeking to enforce a 1962 order of the Interstate
Commerce Commission which provided that charges for protective
services to perishable shipments should yield to the
performing party no less than the cost of services. North
Western, however, is suing for the cost of services rendered
pursuant to Division Sheet 7, a written contract between the
parties. 49 U.S.C. § 16(3)(f) is not applicable. Accordingly,
Soo's motion to dismiss on this ground is Denied.
The court further finds that 49 U.S.C. § 1(14)(b) does not
preclude North Western's recovery. That provision reads:
"It shall be unlawful for any common carrier by
railroad or express company, subject to this
chapter, to make or enter into any contract,
agreement, or arrangement with any person for the
furnishing to or on behalf of such carrier or
express company of protective service against
heat or cold to property transported or to be
transported in interstate or foreign commerce, or
for any such carrier or express company to
continue after April 1, 1941, as a party to any
such contract, agreement, or arrangement unless
and until such contract, agreement, or
arrangement has been submitted to and approved by
as just, reasonable, and consistent with the
Soo argues that the failure to obtain approval of Division
Sheet 7 precludes liability based on that agreement. The word
"person" in Section 1(14)(b) of Title 49 does not include
common carriers. Section 1(3)(a) of the same act defines
"common carrier" and "person" differently. In Section 1(14)(b)
Congress meticulously differentiates between "common carriers"
and "persons." Thus, the Interstate Commerce Commission's
approval is not required with regard to protective service
arrangements between common carriers. The failure to obtain
approval of Division Sheet 7 by the Interstate Commerce
Commission does not defeat North Western's claim against Soo.
Accordingly, Soo's motion to dismiss on this ground is Denied.
It Is Ordered and Adjudged that plaintiff North Western have
judgment against defendant Soo in the amount of $10,756.64
together with its costs.
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