Opinion
Civil No. 710.
October 26, 1942.
Action by the Atlantic Lumber Corporation against the Southern Pacific Company and others containing two alleged causes of action, wherein the prayer of the second cause of action was that the court set aside an order of defendant Interstate Commerce Commission denying claim for damages resulting from alleged misconstruction of established tariff covering freight and demurrage, and required defendant to pay plaintiff the sum of $688.10. The second cause of action was determined by statutory three judge court.
Second cause of action dismissed.
See, also, 2 F.R.D. 313; 47 F. Supp. 514.
Atlantic Lumber Corporation shipped over the Southern Pacific Company sometime in May of 1939 certain cars of lumber. Shipments were initiated from certain points in Oregon and billed to East Portland, where they were to be loaded upon vessels for carriage to the final destination in Brooklyn, New York. A strike in Portland, Oregon, prevented the expected loading of the lumber from the Southern Pacific cars to the ships. Atlantic thereupon directed re-shipment to Vancouver, Washington. This was accomplished by shipment over the lines of the Union Pacific Railroad Company. There the vessels were loaded and the lumber proceeded to its destination. Established tariffs of the Southern Pacific were on file with the Interstate Commerce Commission governing movement from point of origin to East Portland. The original bills of lading issued for these shipments were based on rates therein designated. After, Atlantic Lumber Corporation ordered the trans-shipment of these cars from East Portland to Vancouver, the Southern Pacific issued new bills of lading under differerent items of tariff. As a result of this change, the freight and demurrage charges in the rates charged and collected by the Southern Pacific were higher than if the original idea had been carried out and the lumber re-loaded at East Portland. The ultimate claim of the plaintiff is that the difference in money between the rate which it intended first to pay and that which it finally paid should be refunded.
In September, 1939, Atlantic Lumber Corporation filed a claim for this alleged overpayment with the Interstate Commerce Commission. In the proceeding before the Commission, Atlantic joined charges that the rates and demurrage were unreasonable for the future, that plaintiff was entitled to reparations because of such unreasonable rates and finally asked for damages because of the application of a rate and demurrage schedule of the domestic all rail rate instead of an export rail and water schedule. An order was entered September 13, 1940, which in general denied plaintiff's claim absolutely and dismissed the complaint. A petition for re-hearing was likewise denied later. The ground of the decision was that the higher rate collected was in accord with and lawful under the established tariff. Thereafter, Atlantic Lumber Corporation brought the present action in this court. Judgment is demanded in a second amended complaint against Southern Pacific Company, a corporation, United States of America and the Interstate Commerce Commission in the sum of $688.10, which is alleged to have been unlawfully collected by the Southern Pacific from plaintiff, under misconstruction of the established tariff covering freight and demurrage involved. The "first cause of action" is upon this basis. The second claim or so-called "cause of action" re-alleges by adoption all of the allegations of the first cause and further sets up that the claim for damages therein contained had been filed with the Interstate Commerce Commission and that the Commission denied the claim by order dated September 13, 1940. The salient allegations of this claim are that the Commission's order, unsupported by substantial evidence, is arbitrary and contains a mistake of law in that the Commission improperly construed certain tariffs as established and improperly forced plaintiff to pay charges, which were unreasonable and unjust, upon the shipments heretofore mentioned. The prayer of this claim is that the court annual and set aside the Commission's order and require all the defendants to pay to plaintiff the sum of $688.10.
In view of the attack thus made upon the order, the District Judge under the statute requested that a statutory three-judge court be convened. Appropriate assignments were entered and the court met as constituted on a day set. Thereupon, after hearing argument, an order was entered by the statutory court to the effect that since "the first cause of action in the complaint herein is not to be determined by a Court composed of three judges, but is for the sole consideration of a United States District Judge, the hearing upon the said first cause of action is reserved to be heard by the Honorable James Alger Fee, sitting alone." The cause was submitted after trial upon the second amended complaint and the answer. The record before the Commission was introduced.
No further attention will be paid in this opinion to the allegations in the "first cause of action", except insofar as it be essential for a determination of the "second cause of action".
E. K. Marohn. of Seattle, Wash., for plaintiff.
Dey, Hampson Nelson, Paul P. Farrens, and R. R. Morris, all of Portland, Or., for defendant Southern Pac. Co.
Carl C. Donaugh, U.S. Atty., and C. Laird McKenna, Asst. U.S. Atty., both of Portland, Or., and S. R. Brittingham, Jr., Sp. Asst. to Atty. Gen., of Washington, D.C. for defendant United States.
Allen Crenshaw, Atty., Interstate Commerce Commission, of Washington, D.C. for defendant Interstate Commerce Commission.
Before HANEY, Circuit Judge, and BOWEN and FEE, District Judges.
The real basis of the claims filed before the Commission and the "second cause of action" here is the charge that the Commission acted contrary to the evidence and without evidence, in finding that the tariff applied on shipments delivered to vessels at East Portland was not applicable on those handled through Vancouver or other ports not served by defendant, Southern Pacific Company, and the rates charged were discriminatory and unreasonable. The ultimate purpose of both the original proceeding and the "second cause of action" was to lay basis for assessment of a reparation, or for damages.
It is obvious no jurisdiction subsists here of an action or claim for damages against the United States or the Interstate Commerce Commission, since the latter is solely an agency or adjunct of the sovereign in passing upon the reasonableness of rates and the right to reparations. The United States has given no consent to suit of this sort, either against the sovereign or the agency.
So long as the order of the Commission, which holds that the rates and demurrage charges collected were reasonable and applicable, stands, no reparations or damages could be awarded against the Southern Pacific Company or any other defendant.
The power to give reparations in rate cases is of statutory genesis and was unknown to the common law. It is a discretionary authority reposed in the Commission in order to round out the scheme of regulation. Congress endowed with administrative finality such orders of the Commission.
Jurisdiction of the District Court, sitting with three judges, in this type of situation is only to "enjoin, set aside, annul, or suspend in whole or in part any order of the Interstate Commerce Commission". There are many orders of the Commission which cannot be reviewed by such a court. Although the earlier cases used phraseology indicating that such a court had no jurisdiction to set aside a "negative order which denies relief without more compels nothing requiring enforcement, and contemplates no action susceptible of being stayed", it was found that this formula was too loosely stated for specific application. However, the courts constituted as this one is have no jurisdiction to review an order failing to allow reparations. The purpose of Congress in constituting the Commission and in the various acts giving jurisdiction was the establishment of uniformity of administration in light of the declared policy upon these very matters.
28 U.S.C.A. §§ 41, 43, 44, 45, 45a, 46, 47, 47a and 48.
Standard Oil Company v. United States, 283 U.S. 235, 238, 51 S.Ct. 429, 430, 75 L.Ed. 999. Procter Gamble Company v. United States, 225 U.S. 282, 32 S.Ct. 761, 56 L.Ed. 1091.
Rochester Telephone Corp. v. United States, 307 U.S. 125, 59 S.Ct. 754, 83 L. Ed. 1147.
Standard Oil Company v. United States, supra, explained in Note 23 at page 140 of 307 U.S. 59 S.Ct. 754, 83 L. Ed. 1147.
The prescription of reasonable and lawful rates for the future might be a basis for action, except that plaintiff obviously does not desire or seek annulment of the order upon the theory that relief should be granted as to this feature.
However, it is alleged that the charges failed to conform to the rate properly construed. The Commission found that the rate and demurrage charged was intended to cover shipments on domestic or all rail movements. The export rates and demurrage were to apply on shipments which left East Portland alone. The railroad was not bound to the export rate and demurrage where the shipment went over the line of another carrier by rail to a port not designated in the tariff and not under control of the defendant, Southern Pacific Company, so that that company could not police the movement. The question of the proper rate and demurrage was correctly determined by the Commission on the principle that the lower charges of an export rate are applicable only when there is strict compliance with all conditions stated therein.
See Mellon v. Erb, 9 Cir., 13 F.2d 752.
The "second cause of action" stated in the second amended complaint is dismissed.