1. Approval of rates as reasonable and nondiscriminatory by the
Interstate Commerce Commission fixes their character as such in
relation to a shipper who took part in the proceedings. P.
260 U. S.
161.
2. A combination of carriers to fix rates may be illegal and
subject to proceedings by the government under the Anti-Trust Act
even though the rates are reasonable and nondiscriminatory, and, it
seems, even though they have been approved by the Interstate
Commerce Commission. P.
260 U. S.
161.
3. But a private shipper cannot recover damages from the
carriers in such a case, under § 7 of the Anti-Trust Act, upon the
ground that he lost the benefit of rates still lower which, but for
the conspiracy, he would have enjoyed, because:
(a) The fact that a rate results from a conspiracy in violation
of the Anti-Trust Act does not render it necessarily illegal, and,
as the legality of rates is determined by the Act to Regulate
Commerce, and the shipper who suffers from illegal (unreasonable or
discriminatory) rates has his remedy in damages under that act, it
seems that Congress did not intend to provide him a further remedy
for such illegal rates under § 7 of the Anti-Trust Act, and
a
fortiori none where the rates fixed by the conspiracy were
found legal by the Commission. P.
260 U. S.
162.
(b) The right of action given by § 7 of the Anti-Trust Act to
one "injured in his business or property" implies violation of a
legal right, but the legal right of a shipper respecting a
carrier's rates is measured by the published tariff, and, to
enforce a departure from this through a recovery under § 7 would be
in effect to give the shipper an illegal preference. P.
260 U. S.
163.
(c) Recovery would depend upon the plaintiff's proving that
lower rates which, but for the conspiracy, the carriers would have
maintained would have been nondiscriminatory -- a question which
generically must first be submitted to the Interstate Commerce
Commission, yet which, specifically, is not within its cognizance,
because hypothetical. P.
260 U. S.
163.
Page 260 U. S. 157
(d) The damages, if any, resulting to the shipper from the
establishment of the higher rates could not be proved by facts from
which their existence and amount were logically and legally
inferable, but are purely speculative. P.
260 U. S.
164.
271 F. 444, affirmed.
Error to a judgment of the circuit court of appeals affirming a
judgment of the district court for defendant railroad companies and
individuals in an action brought by Keogh under § 7 of the
Anti-Trust Act to recover damages alleged to have resulted from a
combination to fix railroad rates in restraint of interstate
commerce.
Page 260 U. S. 159
MR. JUSTICE BRANDEIS delivered the opinion of the court.
This action, under § 7 of the Anti-Trust Act of July 2, 1890, c.
647, 26 Stat. 209, was brought by Keogh in the Federal District
Court for Northern Illinois, Eastern Division, in November, 1914.
Eight railroad companies and twelve individuals were made
defendants. The case was heard upon demurrer to a special plea; the
demurrer was overruled; judgment was entered for defendants,
plaintiff electing to stand upon his demurrer, and this judgment
was affirmed by the Circuit Court of Appeals for the Seventh
Circuit. 271 F. 444. The case is here on writ of error.
The cause of action set forth was this: Keogh is a manufacturer
of excelsior and flax tow at St. Paul, Minnesota. The defendant
corporations are interstate carriers engaged in transporting
freight from St. Paul to points in other states. Prior to September
1, 1912, these carriers formed an association known as the
Western
Page 260 U. S. 160
Trunk Line Committee. The individual defendants are officers and
agents of the carriers, and represent them in that committee. It is
a function of the committee to secure agreement in respect to
freight rates among the constituent railroad companies, which would
otherwise be competing carriers. By means of such agreement,
competition as to interstate rates from St. Paul on excelsior and
tow was eliminated, uniform rates were established, and interstate
commerce was restrained. The uniform rates so established were
arbitrary and unreasonable; they were higher than those theretofore
charged, and they were higher than the rates would have been if
competition had not been thus eliminated. Through this agreement
for uniform rates, Keogh was damaged. The declaration contains a
schedule of the amounts paid by him in excess of those which would
have been paid under rates prevailing before September 1, 1912, and
which, but for the conspiracy, would have remained in effect. He
claims damages to the extent of this difference in rates. He also
alleges as an item of damages that the increase in freight rates
lessened the value of his St. Paul factory through loss of
profits.
Defendants set up the fact that every rate complained of had
been duly filed by the several carriers with the Interstate
Commerce Commission; that, upon such filing, the rates had been
suspended for investigation, upon complaint of Keogh, pursuant to
the Act to Regulate Commerce of February 4, 1887, c. 104, § 15, 24
Stat. 379, 384, as amended; that, after extensive hearings, in
which Keogh participated, the rates were approved by the
Commission, and that they were not made effective until after they
had been so approved. The character of the proceedings before the
Commission was more fully shown by reference to Keogh v. Chicago,
Burlington & Quincy R. Co., 24 I.C.C. 606; also Rates
Excelsior and Flax Tow from St. Paul, Minn., 26 I.C.C. 689;
Rates
Page 260 U. S. 161
on Excelsior and Flax Tow from St. Paul, Minn., 29 I.C.C. 640;
Morris, Johnson, Brown, Manufacturing Co. v. Illinois Central R.
Co., 30 I.C.C. 443; The Excelsior and Flax Tow Cases, 36 I.C.C.
349.
The case is presented on these pleadings. Whether there is a
cause of action under § 7 of the Anti-Trust Act is the sole
question for decision. Keogh contends that his rights are not
limited to he protection against unreasonably high or
discriminatory rates afforded him by the Act to Regulate Commerce;
that, under the Anti-Trust Act, he was entitled to the benefit of
competitive rates, that the elimination of competition caused the
increase in his rates, and that, as he has been damaged thereby, he
is entitled to recover. The instrument by which Keogh is alleged to
have been damaged are rates approved by the Commission. It is,
however, conceivable that, but for the action of the Western Trunk
Line Committee, one or more of these railroads would have
maintained lower rates. Rates somewhat lower might also have been
reasonable. Moreover, railroads had often, in the fierce struggle
for business, established unremunerative rates. Since the case
arose prior to Transportation Act of February 28, 1920, c. 91, §
418, 41 Stat. 474, 485, the carriers were at liberty to establish
or maintain even unreasonably low rates, provided they were not
discriminatory.
Compare Interstate Commerce Commission v.
Baltimore & Ohio R. Co., 145 U. S. 263,
145 U. S. 277;
Skinner & Eddy Corp. v. United States, 249 U.
S. 557,
249 U. S.
565.
All the rates fixed were reasonable and nondiscriminatory. That
was settled by the proceedings before the Commission.
Los
Angles Switching Case, 234 U. S. 294.
But, under the Anti-Trust Act, a combination of carriers to fix
reasonable and nondiscriminatory rates may be illegal, and, if so,
the government may have redress by criminal proceedings under § 3
by injunction
Page 260 U. S. 162
under § 4, and by forfeiture under § 6. That was settled by
United States v. Trans-Missouri Freight Association,
166 U. S. 290, and
United States v. Joint Traffic Association, 171 U.
S. 505. The fact that these rates had been approved by
the Commission would not, it seems, bar proceedings by the
government. It does not, however, follow that Keogh, a private
shipper, may recover damages under § 7 because he lost the benefit
of rates still lower which, but for the conspiracy, he would have
enjoyed. There are several reasons why he cannot.
A rate is not necessarily illegal because it is the result of a
conspiracy in restraint of trade in violation of the Anti-Trust
Act. What rates are legal is determined by the Act to Regulate
Commerce. Under § 8 of the latter act, the exaction of any illegal
rate makes the carrier liable to the "persons injured thereby for
the full amount of damages sustained in consequence of any such
violation," together with a reasonable attorney's fee. Sections 9
and 16 provide for the recovery of such damages either by complaint
before the Commission or by an action in a federal court. If the
conspiracy here complained of had resulted in rates which the
Commission found to be illegal because unreasonably high or
discriminatory, the full amount of the damages sustained, whatever
their nature, would have been recoverable in such proceedings.
Louisville & Nashville R. Co. v. Ohio Valley Tie Co.,
242 U. S. 288. Can
it be that Congress intended to provide the shipper, from whom
illegal rates have been exacted, with an additional remedy under
the Anti-Trust Act?
See Meeker v. Lehigh Valley R. Co.,
162 F. 354. And if no remedy under the Anti-Trust Law is given
where the injury results from the fixing of rates which are
illegal, because too high or discriminatory, may it be assumed that
Congress intended to give such a remedy where, as here, the rates
complained of have been found by the Commission to be legal and
while in force had to be collected by the carrier?
Page 260 U. S. 163
Section 7 of the Anti-Trust Act gives a right of action to one
who has been "injured in his business or property." Injury implies
violation of a legal right. The legal rights of shipper as against
carrier in respect to a rate are measured by the published tariff.
Unless and until suspended or set aside, this rate is made, for all
purposes, the legal rate, as between carrier and shipper. The
rights as defined by the tariff cannot be varied or enlarged by
either contract or tort of the carrier.
Texas & Pacific R.
Co. v. Mugg, 202 U. S. 242;
Louisville & Nashville R. Co. v. Maxwell, 237 U. S.
94;
Atchison, Topeka & Santa Fe Ry. Co. v.
Robinson, 233 U. S. 173;
Dayton Iron Co. v. Cincinnati, New Orleans & Texas Pacific
Ry. Co., 239 U. S. 446;
Erie R. Co. v. Stone, 244 U. S. 332. And
they are not affected by the tort of a third party.
Compare
Pittsburgh, Cincinnati, Chicago & St. Louis Ry. Co. v.
Fink, 250 U. S. 577.
This stringent rule prevails because otherwise the paramount
purpose of Congress -- prevention prevention of unjust
discrimination -- might be defeated. If a shipper could recover
under § 7 of the Anti-Trust Act for damages resulting from the
exaction of a rate higher than that which would otherwise have
prevailed, the amount recovered might, like a rebate, operate to
give him a preference over his trade competitors. It is no answer
to say that each of these might bring a similar action under § 7.
Uniform treatment would not result, even if all sued, unless the
highly improbable happened and the several juries and courts gave
to each the same measure of relief.
Compare Texas & Pacific
Ry. Co. v. Abilene Cotton Oil Co., 204 U.
S. 426,
204 U. S.
440.
The character of the issues involved raises another obstacle to
the maintenance of the action. The burden resting upon the
plaintiff would not be satisfied by proving that some carrier
would, but for the illegal conspiracy, have maintained a rate lower
than that published. It would be necessary for the plaintiff to
prove also that
Page 260 U. S. 164
the hypothetical lower rate would have conformed to the
requirements of the Act to Regulate Commerce. For, unless the lower
rate was one which the carrier could have maintained legally, the
changing of it could not conceivably give a cause of action. To be
legal, a rate must be nondiscriminatory. And the proceedings before
the Commission in this controversy illustrate how readily claims of
unjust discrimination arise.
See Morris-Johnson-Brown
Manufacturing Co. v. Illinois Central Railroad Co., 30 I.C.C. 443.
For this reason, it is possible that no lower rate from St. Paul on
tow and excelsior could have been legally maintained without
reconstituting the whole rate structure for many articles moving in
an important section of the country. But it is the Commission which
must determine whether a rate is discriminatory, at least in the
first instance.
See Abilene case, supra; Great Northern Ry. Co.
v. Merchants' Electric Elevator Co., 259 U.
S. 285. It has been suggested that this requirement does
not necessarily bar an action involving that issue, for a court
might suspend its proceeding until the question of discrimination
had been determined by the Commission. But here the difficulty
presented could not be overcome by such a practice. The powers
conferred upon the Commission are broad. It may investigate and
decide whether a rate has been, whether it is, or whether it would
be, discriminatory. But by no conceivable proceeding could the
question whether a hypothetical lower rate would under conceivable
conditions have been discriminatory, be submitted to the Commission
for determination. And that hypothetical question is one with which
plaintiff would necessarily be confronted at a trial.
Finally, not only does the injury complained of rest on
hypothesis (
compare International Harvester Co. v.
Kentucky, 234 U. S. 216,
234 U. S.
222-224); but the damages alleged are purely
speculative. Under § 7 of the Anti-Trust Act, as under § 8 of the
Act to Regulate Commerce (
230 U. S. S. 165�
R. Co. v. International Coal Mining Co., 230 U.
S. 184), recovery cannot be had unless it is shown,
that, as a result of defendants' acts, damages in some amount
susceptible of expression in figures resulted. These damages must
be proved by facts from which their existence is logically and
legally inferable. They cannot be supplied by conjecture.
* To make proof of
such facts would be impossible in the case before us. It is not
like those cases where a shipper recovers from the carrier the
amount by which its exaction exceeded the legal rate.
Southern
Pacific Co. v. Darnell-Taenzar Co., 245 U.
S. 531. Here, the instrument by which the damage is
alleged to have been inflicted is the legal rate, which, while in
effect, had to be collected from all shippers. Exaction of this
higher legal rate may not have injured Keogh at all, for a lower
rate might not have benefited him. Every competitor was entitled to
be put -- and we must presume would have been put -- on a parity
with him. And for every article competing with excelsior and tow,
like adjustment of the rate must have been made. Under these
circumstances, no court or jury could say that, if the rate had
been lower, Keogh would have enjoyed the difference between the
rates or that any other advantage would have accrued to him. The
benefit might have gone to his customers, or conceivably, to the
ultimate consumer.
Affirmed.
*
Compare Central Coal & Coke Co. v. Hartman, 111
F. 96;
Motion Picture Patents Co. v. Eclair Film Co., 208
F. 416;
Locker v. American Tobacco Co., 218 F. 447;
American Sea Green Slate Co. v. O'Halloran, 229 F. 77, 79;
Noyes v. Parsons, 245 F. 689.