CINCINNATI, NEW ORLEANS & TEXAS PACIFIC RAILWAY CO. V - 400 U.S. 932 (1970)

U.S. Supreme Court

CINCINNATI, NEW ORLEANS & TEXAS PACIFIC RAILWAY CO. V , 400 U.S. 932 (1970)

December 7, 1970

The judgment is affirmed.

Mr. Justice WHITE, dissenting.

The Court today affirms the District Court in a case involving the relationship of various factors in determining a 'just and reasonable' charge under 15(7) of the Interstate Commerce Act. [Footnote 1] Because I think the court below was clearly in error, I would reverse and remand the case to the Interstate Commerce Commission for further consideration.

The appellants, various railroads operating in the southern United States, submitted to the ICC in 1967 a tariff proposing a $22 per car transit charge for cotton and molasses. [Footnote 2] The Commission, on protests from shippers, ordered appellants to refrain from imposing

Page 400 U.S. 932 , 933

the new charges pending a hearing under 15(7) to determine if the new charge was 'just and reasonable.'

A hearing was held in 1968, and after receiving testimony from appellants and the protesting shippers the Examiner concluded that (a) the appellants had the burden of proving the charge was just and reasonable by 'clear and convincing' evidence, (b) the $22 charge was not shown to approximate the actual costs involved in transiting a freight car, (c) the existing line haul rates returned more than out-of-pocket costs for all services performed, including transit, and made a contribution to overhead as well, (d) the likely effect of the charge would be to divert traffic to motor carriers and thus reduce the railroads' overall revenue. 'All things considered,' the Examiner concluded, appellants had failed to show that the charge was just and reasonable. The Commission adopted the findings and conclusions of the Examiner without change. Transit Charges, Southern Territory, 332 I.C.C. 664 (1968).

On review, the three-judge District Court3 found that the Examiner and thus the Commission had misstated the law in holding that the carriers had a burden of showing the charge was just and reasonable by 'clear and convincing evidence.' Had the court stopped there and simply remanded the proceedings to the Commission with directions to apply what the court deemed to be the proper standard of proof, there would be no need to review this case. However, the court went on to discuss the Commission's findings on the merits. It concluded that the Commission had not justified its conclusions that (a) the $22 charge was not shown to approximate transit costs and (b) the line haul rate was sufficient to cover the costs involved. The court then found that the Commission's conclusion that the new charge would [400 U.S. 932 , 934]