United States v. ICC
352 U.S. 158 (1956)

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U.S. Supreme Court

United States v. ICC, 352 U.S. 158 (1956)

United States v. Interstate Commerce Commission

No. 12

Argued October 11, 1956

Decided December 17, 1956

352 U.S. 158

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Syllabus

Since May 1, 1951, railroads serving the port of Norfolk, Va., have refused to pay an allowance to the Army for the wharfage and handling services the Army performs for itself on military export traffic passing through Army base piers. In their tariffs, the railroads assumed the obligation to furnish such services for all shippers that complied with the tariffs, and accordingly furnished the services for commercial shippers at public sections of the same piers without additional charge. Because the Army provides these services itself, it claimed a right to the $1.00 per ton paid by the railroads on behalf of commercial shippers. A complaint charging the railroads with violating the Interstate Commerce Act was dismissed by the Interstate Commerce Commission, and the United States sued to set aside the order.

Held: in the circumstances of this case, the refusal of the railroads to make the allowance to the Army did not subject the Government to unjust discrimination and did not constitute an unreasonable practice in violation of the Interstate Commerce Act. Pp. 352 U. S. 160-176.

(a) The circumstances of Army shipments are markedly different from those of private shippers that received wharfage and handling services; and the Army was treated identically with those shippers who, for business reasons, did not care to comply with the tariff requirements. Pp. 352 U. S. 168-169.

(b) Although the Army hired the same private company as did the railroads to operate the Army portion of the base, the Army's control was "absolute." Pp. 352 U. S. 169-171.

(c) The method of handling government freight did not comply with the tariff requirements. P. 352 U. S. 172.

(d) Any deviation from tariffs by carriers violates § 6(7) of the Interstate Commerce Act unless they grant a concession to the United States under § 22. P. 352 U. S. 172.

(e) The Government was being treated just as any shipper who decides not to take advantage of the services offered in the tariff and takes deliveries of export rate traffic at private piers under his own control. Pp. 352 U. S. 172-173.

Page 352 U. S. 159

(f) That the Government took control of the piers to meet a national emergency cannot convert the Government's operation of its private piers into a category different from that of private shippers. P. 352 U. S. 173.

(g) The fact that the operations of the Government and the railroads are in the same pier area is immaterial. P. 352 U. S. 174.

(h) If the railroads gave an allowance in these circumstances, excepting one given as a concession to the Government under § 22 of the Act, they would have to give it at all private piers where the shipper wanted to handle wharfage at its own discretion. P. 352 U. S. 174.

(i) The Government has the right to have its shipments accorded the same privileges given others; in emergencies, its traffic my have "preference or priority in transportation," and it may be granted and may accept preferences in rates, but it cannot otherwise require extra services or allowances. P. 352 U. S. 174.

(j) United States v. United States Smelting Co.,339 U. S. 186, distinguished. P. 352 U. S. 175.

(k) Whether circumstances and conditions are sufficiently dissimilar to justify differences in rates or charges is a question of fact for the Commission's determination. Pp. 352 U. S. 175-176.

132 F.Supp. 34, affirmed.

Page 352 U. S. 160

MR. JUSTICE REED delivered the opinion of the Court.

This appeal requires a determination of whether railroads serving the port of Norfolk, Virginia, must grant the United States an allowance for the Government's performance of certain wharfage and handling services on its own export freight. For shippers who conform to the requirements of the tariff, the railroads assume these charges as a part of the rate. The United States, however, found it impractical to conform to the tariff requirements.

The present litigation was instituted pursuant to 28 U.S.C. § 2325, in a three-judge District Court of the District of Columbia by the United States, through its Department of the Army, against the Interstate Commerce Commission and the United States, to set aside the Commission's order in United States v. Aberdeen & Rockfish R. Co., 289 I.C.C. 49. That order dismissed a complaint filed by the United States on November 20, 1951, against several named railroads charging them with violations of the Interstate Commerce Act. The District Court, one judge dissenting, dismissed the complaint. 132 F.Supp. 34. We noted probable jurisdiction. 350 U.S. 930.

Since May 1, 1951, the railroads have refused to pay an allowance to the Army for the wharfage and handling [Footnote 1] services the Army performs on military export traffic passing through Army base piers in Norfolk, Virginia. The railroads have assumed in their tariffs the obligation to

Page 352 U. S. 161

furnish these accessorial services for all shippers that comply with their tariffs. And, in accordance with these tariffs, the railroads have furnished the services for commercial shippers at public sections of the same piers without additional charge. These services were performed for the Army and the railroads by the same private company -- for the Army under contract to carry out its orders for terminal and storage services; for the railroads by contract to act as the carriers' agent in accordance with their tariffs.

The Army sought a determination that the railroads' refusal to make an allowance to it to the same extent that the railroads paid the private company, Stevenson & Young, for handling of private shipments subjected the Government to unjust discrimination and constituted an unreasonable practice in violation of §§ 1, 2, 3, and 6 of the Interstate Commerce Act. [Footnote 2] The Army also requested

Page 352 U. S. 162

an order that the railroads cease and desist from such refusal in the future. [Footnote 3]

The transfer of export freight from rail carriers to outbound water carriers is made on piers or wharves that allow the unloading of freight from railroad cars to within reach of ships' tackle. Railroads are under no statutory obligation to furnish such piers or to unload carlot freight, Pennsylvania R. Co. v. Kittaning Iron & Steel Mfg. Co.,253 U. S. 319, 253 U. S. 323. [Footnote 4] In general, the railroads have taken on the duty of wharfage and handling for freight consigned for overseas shipment. [Footnote 5] In some instances, railroads have charged for the use of the piers ("wharfage") and the necessary "handling" separately from their charge for

Page 352 U. S. 163

line haul transportation. In other cases, there has been only a single factor export rate (one inclusive charge) providing for limited shipside delivery with the railroad furnishing these accessorial services pursuant to their tariffs at no extra charge to the shipper. The latter practice has been generally followed by railroads serving North Atlantic ports. Where railroads do not have their own piers, they have provided these services by contracting with commercial terminal operators.

I

The Norfolk piers, involved in this matter, were managed by such operators. They were built by the United States after World War I, and have been leased in part or in whole to a series of commercial operators since then. The leases were cancelled during World War II, but they were leased to Stevenson & Young, a private terminal operator, at tne end of that war. The railroads here involved, using the single factor shipside rate described above, contracted with Stevenson & Young, as their agent, to perform the wharfage and handling for 25

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