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UNITED STATES v. ICC

December 21, 1955

UNITED STATES of America, Plaintiff,
v.
INTERSTATE COMMERCE COMMISSION et al., Defendants



The opinion of the court was delivered by: MCGUIRE

Petitioner, United States of America, brought this action originally against the Interstate Commerce Commission and the United States of America to suspend, enjoin, set aside and annul the order of the I.C.C. in the proceeding known as United States v. Southern Railway Co., Docket No. 30326, reported in 286 I.C.C. 203.

However, since the movement of the freight involved has ceased, the Government now merely seeks compensation by way of reparations on past shipments.

 Jurisdiction is based on 28 U.S.C. § 1336, 1398, 49 U.S.C.A. 9 and 5 U.S.C.A. § 1009. In the light of United States v. I.C.C., 337 U.S. 426, 69 S. Ct. 1410, 93 L. Ed. 1451, the Court is satisfied that the jurisdictional requirements have been met and the proceeding is one of review.

 The facts, briefly stated, are these: In 1947 plaintiff began shipping large quantities of bauxite ore from the ports of Mobile, Alabama and New Orleans, Louisiana to Bynum, Alabama via Southern Railway. The Southern Railway filed section 22 rates with the Treasury Department. These were rejected by the Government as being excessive. The price sought was the lowest rate published and scheduled by the railroad from Mobile to Lister Hill, Alabama. It based its demand on the socalled intermediate rule contained within the Tariff Rules.

 This Rule in essence provides that points intermediate between an origin and a more distant point take the rate of the more distant point if lower than the rate to the intermediate point, and if the intermediate point is on a route permitted by the tariff to the more distant point.

 (The relative locations here involved may be seen on the sketch attached.)

 The rate sought by the petitioner was applicable over a route of the Southern Railway described as follows: 'Southern Railway (through Parrish, Alabama).' The railroad rate has been paid by the Government under protest. It is to recover the difference that this proceeding was commenced. The I.C.C. found that the 'intermediate rule' did not apply. With this the Court agrees.

 Plaintiff cites A. E. West Petroleum Co. v. Atchison T. & S.F. Ry. Co., 8 Cir., 212 F.2d 812, 821. We have no quarrel with the result in it. In it the Court stated and properly so, that 'a 'route' for 'intermediate-point" rate purposes is subject to the limitation that it must not be unreasonable. That 'unreasonableness' depends upon (a) the extent and direction of circuity, and (b) the commercial usage of a 'route'. The Commission found a 22.5% circuity and no commercial usage. There is substantial evidence to support this finding and its ultimate conclusion that the Rule did not apply.

 Plaintiff further contends that the evidence in the record on the issue of reasonableness of rates was not properly appraised and taken into account. However, it may be said:

 '* * * The structure of a rate schedule calls in peculiar measure for the use of that enlightened judgment which the commission by training and experience is qualified to form. * * * It is not the province of a court to absorb this function to itself. * * * The judicial function is exhausted when there is found to be a rational basis for the conclusions approved by the administrative body.' Mississippi Valley Barge Co. v. United States, 292 U.S. 282, 286, 54 S. Ct. 692, 694, 78 L. Ed. 1260.

 It is plain that the Commission had a rational basis for its decision.

 A third point raised by the United States is whether or not it is bound by the time limitations contained in Section 16(3)(b) and (c) of the Act, 49 U.S.C.A. § 16(3)(b, c). This, in our view, by reason of the result reached here, is now moot.


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