Amicus Curiae Brief — Canada Packers, Ltd. v. Atchison, Topeka & Santa Fe Railway Co.

‘TABLE OF CONTENTS

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' Argument..........- UkGhhubpleeidamnatedenae ae 5

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CITATIONS

aie v. Mills, MTS, Docrccnecncee mii oadbie 12

Atlantic & Y.R. mS ee eee een et ae

GS as ch aitartte see tscs dng ae Gab aiek chided healers clara abana aia 12 r

Atlantic Coast Line R. Co. v. Smith Bros., Inc., 63 F. 24

a et cai a fe earian eckcacae aa ara a ees Repecabaeibas 12 .

Black Horse Tobacco Co. v. Illinois Central R.R. -Co.,:

SPR ee eee 8, 13,18

British American Oil Co. v. Canadian Pacific By. Co.,

|S kL a SNe SLPS TN Sone een * 15

British American Oil Co. v. Grand Trunk Ry. Co., 9 Z

CE Siiesrcndaceksccgaccanbnimbna ads 14

Brotherhood of Maintenance of Way Employes v. United

eT EN Ea ew cin k am heme wees -

Brown & Sons Lumber Co. v. L. ENR. Co., 299 U.S.

Ulli arty dines atari nthdi ticki eenininn ming lean ime 2 :

Brown Motor Co. v, Canadian Pac. Ry., 75 C.R.T.C. ‘

$90.5. --20..% I ap as encod ini secede hte aay eed alinianite 14°

Canadian Shippers’ Traffic Bur. v. Canadian National as

IE Mics ons nkh cn ocase cates 14

. Chas." H. Lilly Co. v. Great Northern By. Go., 298 :

GI ot sinoctnaacanbetaenaninnstan cs 14

Consolidated Rendering Company v. Atchison Topeka & -

Santa Fe Ry. Co:, 300 L.C.C. 87_-.......---.-..-- ee »

Continental Co. v. Union Carbide, 370 U.S. 690_____- 12

Cyanamid and Cyanide From. Niagara Falls, 155

I in cht ea ir ni dickies ad iewinsd in hk acai tn eine 12, 13, 17

Direct Winters Transport Ltd. v. Duplate Canada Lid.,

tye RE Rn eee oney wy een Angee es 16

Federated Metals Co. v. Pennsylvania R. Co., 185 1.C.C.

399 bbe sean head aeaieane beaks eh widiohaaie 13-14

231-262—66—1 *

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‘ChewXinitieed : . Page

- Galveston & C. Ry. Oo. v. Woodbury, 254 U.S. 357__- 9

Grand Trunk R.W. Go. v. British American Oil Co.,

ob Pek Se ee ek Te) a ee ee |

@reat Northern v. Sullivan, 294 U.S. 458_-_-..-_=--- 12

H. K. Porter Co. v. Central Vermont R. O., 366 U.S.

i NE Re pected RBs hae Badge ae ORS RN an gr 13

International Nickel Co. v. Director General, 66 I.C.C.

© SON PAE AE RA SION Nin ee Scr ee ey (Ow 10

Lewis-Simas-Jones Co. v. Southern Pacific Co., 283

ike Aicdtieiechcume ele eiete tng. cae 12,13

News Syndicate Co. v. New York Central R. Co., 275 ~

WS ccbditnkcendebWe. vob Laatiahiseeees 11, 13,17

Norwegian Nitrogen ae v. United States, 288 U:S. 294_- 11

m Lbr. Co. v. Atlantic Coagt.Line R. Co., 293,

ERE ER I eE ei e AMi Een nae Aart ates ae 14 —

‘Spanish River Pulp & Paper Mills v. A. & i.

RE Ae ee ene me ne epee 13

United States v. Public Utilities Com’n., 345 U.S. 295. _- 11

West Lorne Lhr. Co. v: Canadian Pacifi Railway,

PI Miia on drcnern nc cuhiminocmnmiiiaeeee 13

Western Peat Co. v. Iltinois Central R.Co., 297 1.C.C

aaa Blair ar cnn np sini niet ance atid 12, 16

Yellow Jacket Boat Co., Inc. v. A.T. é& SF. Ry. Co.,

305 L.C.C. 116. .-. FREE Pe NL GA ge A aE EN 12

_ Statutes: .° ° +

* Act to regulate commeryee, 1887, 24 Stat. 379_________ 6 .

Canadian Railway ea eaters Laer 14,15

Interstate Commerce Act: |

| EES SSSR aaa 5, 6, 7, 10

EE A eT Ra pe ie 6

Snags Saks dn’ sede ware neve es ojos okiomen a

PR eaRGU Cs bil cacwaenicknancdaasen hone sae

ea 2

EI esa six tasty ecole ace ek ohana 17

II RES Sele ae Se ney I PPPS eT De 17

ECE ae ee 6, 9

‘Transportation Act of 1920, 41 Stat. 474..._.......- 8,11

Transportation Act of 1940; 54 Stat. 898.._.___- ee

Miscellaneous :

BF Ee SE ie eb tenaetncanensonnagins uawag

H.R. 4378, 66th Cong., ist Sess. .....-.-.---------

H. Rep. 456, 66th Cong., Ist Sess.__....-----------

“Problems of the Softwood Lumiber Industry,” Hear-

ings before the Senate Committee on Commerce, _

. §7th Cong., 2d Sess. (1962) ..=- 22-22 -_---------

“Return of the Railroads to Private Ownership,” °

Hearings on H.R. 4378 before the House Committee

on Interstate and Foreign Commerce, 66th Cong.,

SE , SE cc co cecagin rennwsoncsncavaeee

Gu the Sugreme Court of the United ates

-OctoBER TERM, 1966

es

| “No. 11

Canapa Packers, LIMITED, PETITIONER

Vv.

ATCHISON, ‘Borer AND Santa FE RaILway CoMPANY,

ET AL.

ON WRIT OF CERTIORARI TO THE terran STATES COURT OF

APPEALS hates THE SEVENTH ete T

BRIEF #0R THE INTERSTATE COMMERCE COMMISSION AS

AMICUS ——

This brief is submitted by the Interstate Commerce

Commission as amicus curiae pursuant to Rule 42 of -

the Rules of this Court, in view of the substantial

question of the Commission’s statutory jurisdiction

over international rates raised by the parties and the

United States.

STATEMENT .

This cppeal. raises the question whether the Com- |

mission possesses statutory jurisdiction to order. the

appellee railroad to pay the petitioner, a Canadian *

shipper, aaa based on the determination that

(1)

” o - baie atti vai

2

the joint through rates*-on various - shipments: of

potash from New Mexico into Canada were unjustly

an@ unreasonably high. Involved are 1948 shipments

of potash from Carlsbad and Loving, New Mexico,

to several Canadian destinations. The Commission

found that the rates assessed exceeded a just and rea-

sonable level by a total of $6,694.56 and awardéd the

Canadian corporation reparations’ of that amount.

The railroads pajd the shipper $5,304.01, the dif-

ference representing ‘the share retained-by the Ca-

nadian railroads for that portion of the transportation

that occurred beyond the ifiternational boundary. The

shipper sued for the difference, and the distri

sustained the entire reparations awarth

* The court of appeals reversed (342 F. 2d 563, R. 36),

holding that, since the domestic railroads had on file

rates from the involved ‘origins to points on the in-

ternational bouridary,’ a just and reasonable level of .

1The rates here in issue are “through rates” in the sense

that they contemplate continuous carriage from origin to

destination. They are “joint rates”: in the sense that they

have been estahlished by two or moge carriers as a single

charge from origin to destination with each carrier obtain-

ing an agreed-upon “division” of such charge. In thé absence

of an agreed-upon charge for this transportation, the rates

would be “through”, but not “joint”; and the several carriers

would be required to file “the separately @tablished rates * * *

applied to the through transportation” by Section 6(1) of.the

Act, 49 U.S.C.°6(1). The separately established rates may be

“local rates” or “proportional rates,” commonly the former. See

Brown & Sons Lumber Co. v. L. &' N&R. Co., 299 U.S. 398, 395.

? The reasonableness of rates to the border and to Canada on

' this same traffic had been decided by the Commission in ‘an

earlier proceeding. Consolidated Rendering Company v. Atché-

son, Topeka & Santa Fe Ry. Co., 300 1.C.C. 87.

3 s

stich domestic rates affords the maximum guide in

awarding damages to the shipper. “Te conclude

otherwise would mean: that the defendant railroads

would be required | to .pay reparation to a Canadian

consignee on account of freight charges received for:

transportation performed within Canada by Canadian

railroads which are not parties to this action. Such

a result clearly is prohibited by the territorial limi-

tation .provisions of section 1 of the Interstate Com-

merce Act, 49 U.S.C.A. §§ 1, et seg.” (R. 40).

INTRODUCTION

The United States, amicus curiae, urges that both

the \couyt .of appeals and the~Commission erred.

While conceding that “‘since the American carrier and

the foreign carrier have agreed among themselves on

a single rate for the entire international journey, they

should be deemed jointly liable if the rate is excessive”

(Br. .24),-it nevertheless advances she proposition

that ‘‘the Commission hag’ no power ‘to determine

what is a reasona e for a transportation serv-

ice performed partly within a foreign coyntry, and

hence no power to determine, for reparation or other

' purposes, when a} joint through international rate or

a combination of proportional rates for an interna-

ional rail skipment—in either case a charge involving

foreign transportation—is unlawful” (Br. 11-12). It

would find the jomt through rate excessive as to the

domestic railroads only to the extent that the agreed

division that they, receive exceeds what the Commis-

sion may determine to.be a just and reasonable level

for proportional rates (Br. 12). We disagree.

ww

4 ao

i. our view. the ‘Act authorizes ‘the Commission to” ;

consider the lawfulness of: a joint through rate toor 4. .

from an adjacent. foreign country in accordance with

the standards set forth in the Interstate Commerce

. Act. If relief for the futute is asked, the Commis-

sion, although it may.not prescribe the rate for appli-

cation in a foreign country, may take the lesser step

of i issuing an order against, the American carrier, that

requires it.jo charge a reasonable through rate or.

cease its participation in the agreed joint rate. If

the i issue. is discrimination, the Commission may enter

an order’ yequiring the American carrier Sa end the.

. diserimination. :

oa

If, as in the present case, ‘the. shipper: seeks he

Yeparation for past injury,- t the Commission may

again consider the entire rate in accordance- with the

' . American standard,’ and compute damages | ‘based on

the unlawfulness found in the entire: joint through

. Tate. The American earrier is liable for the full

damage to the shipper on-the ground that the Ameri- ~

ean carrier is a jort tortfeasor in the publication and

collection of an unreasonable joint through -rate for

_ the transportation from origin to destination.

We turther believe that even if the Commission’s

- jurisdiction is held to be limited to a consideration of ©

rates, or portions of rates, to the border points, the

measure of damages based on divisions agreed upon -

between the railroads, as proposed by the United

Staten, is improper and unworkable. _

ae

24 .

di ~ Pet (CA Cop eee

The United States argues “that the Cornmnission Has

no power to determine what is an unreasonable charge

for a. transportation: service performed partly within ~

a foreign country * * *” (Br: 1). We believe ‘the ©

statute and its. legislative history support the view

that the Commission has this :power.

Under Sectin 1(1), the Commission has authority

over “carriers engaged in. (a) The transportation of

" passengers or property * * * from or to any. place in

the United States to or from a foreign country.”* -

The section does not grant jurisdiction “‘to‘or from”

Yorder point ‘crossings’. but rather ‘‘to or from” a

foreign country.”’ The language of the statute rr }

clear authority over foreign commerce. |

2

The proviso on which the United States Heavily.

relies provides that the Commission’ 's jurisdiction

extends ‘“‘only;in so far. as-such’ “transportation: takes

place within the United States.” But. this, in ‘our .

view, means that an order affecting foreign commerce -

a valid 80 long as it runs against a carrier perforni-

ing some transportation within the United States.

The proviso limits the- personal jurisdiction. of: the

; Commission, not*its subject matter jurisdiction. -See-

’ The limits of jurisdiction are precisely defined by the section *

as extending to transportation “from one State or Territory of —

the: United -States, or the District of Columbia, ‘to any other

State or Territory of the United States, or tlie ‘District of

- Columbia, or’ from one place in a Territory to anothérplace in

the same Territory, or from any~place in the’ United’ States

through a foreign country to any other place in the United

States, -or from or to any. place i in the United States to or from

-a foreign, country, but only in so far as such transportation

takes place within the United States. wal

231-262-662 - | : eee eee ise heat

Y ‘

tion -1(1) grants broad authority over ‘foreign com- ;

meree; the sole limitation is that valid orders may be

issued “only against carricgp providing transportation

within the United States. Our reading is also sup-

ported by Section 1(2)(c) of the Act, 49 U.S.C. § 1

(2)(¢), which shows that where: Congress has wanted

to exempt certain carriers that. otherwise “would * * *

be subject to the provisions of this’ part’’ because they

.perform some land transportation, it has done so

The United States would limit the Commiggion to a

‘ consideration of only the damestic portion of an

indivisible journey to or from a foxeign country.

Such an interpretation, we submit, would foreclose

_ the very jurisdiction, over foreign commerce to which

the proviso pertains. Moreover, Section 20(11) of

the Act, 49 U.S.C. § 20(11), admittedly extends to.the

. entire transportation with ati adjacent foreign coun- ©

_try;* the United States would apparently recognize

that the Commission has jurisdiction to enter a “re-

leased rates”’ order pursuant to this section on the =

basis of the entire joint through rate, while denying

‘that any other form’ of order under a different section> _

relating to such transportation is permissible.

_.. The provi¥o to Section 1(1) on which the United

States relies did not appear in the original “Act to

regulate commerce,” approved February 4, 1887.’

ne ;

‘See Brief for the United States; p. 25. :

©9%4 Stat. 379.

9

te .

,

— 3

‘

‘

i

* The ogiginal Act was applicable both to fo com-

meree and, like the present statute, “‘from place ~

in the United States through a foreign country to

any other place in the United States,” The clause.

relating to foreign commetce read “from any place

in the United S.ates to an — foreign country’

(24 Stat. 379).

The Solicitor General seems to be referring to the

portion of the history relating to the “through a for-

eign country”’ clause, when hé states (p. 14, n. 4),

. that the legislative history of Section 1(1) has to do

. with “extra-territorial application of the Act es ies

in special ipstances which are not relevant here.”

However, we believe the footnote overlooks relevant.

legislative history.

The original Act to Regulate Commercé was ap-—

plicable to railroads engaged in transportation “from

any place in the United ‘States to an adjacent foreign

country,” without any proviso. In reporting the, bill

which became the 1887 Act to the Senate floor, Sena:

tor Cullum explained: ‘

é While the provisions of the bill are » made to

a apply mainly to the regulation of interstate

. coamerce, in order to regulate such commerce

fairly and effectively it has been deemed nec-

essary to extend its application also to certain -

classes of ‘foreign commerce which are inti-

mately intermingled with’ interstate commerce,

such as shipments between the United States

and adjacent countries by railroad, and

the transportation by railroad of shipments

*17 Cong: Rec, 2472, April 14, 1886.

a, by ¥. . >

5

{

between-peints .in the United States and ports —

. Of transshipment or of entry when such ship- .

ments are destined: to or received from a for-

eign country on through. bills of lading. To

avoid any uncertainty as to the meaning .of

_ these provisions in regard to what may ‘be at

_ the same time in some instances State -and

foreign commerce, it is expressly provided that

the bill shall not apply to the transportation.

of property wholly within one State and not

destined to or received ‘from a foreign country.

_.. [Emphasis added.] © ~ i

Thus, the bill undertook ‘‘to regulate foreign com-

merce so far as interstate shipments By rail are con-

cerned.”” Id. at 3723, April 22, 1886.

The proviso came into the act in the Transportation

' Act of 1920, 41 Stat. 474. Prior to the 1920 legisla-

tion, the entire: Commission had held in Black Horse

Tobaceo Co. v. Illinois Central B.R. Co., 17 L.0.C. 588, -

590-91, that it had jurisdiction (1) to require Ameri-

can carriers to cease applying an unlawful joint

through rate on traffic into Mexico, and (2) to award

reparation on the entire through rate, sinee “every

“carrier party to a joint rate is jointly and severally

responsible for that rate.’’ ee

‘The House bill (H.R. -4378) which became the

‘Transportation Act of 1920 confirmed the Commis-

sion’s jurisdiction over eommerte to an adjacent for-

eign ‘country, and added to the provisions of Section

1 a jurisdiction over traffic ‘from an adjacent foreign

. country to any place in the United States.”’ Com-

. -+ During the course of the legislative history of the 1920 Act,

some carriers were litigating whether the -Act (specifically

a

7 9 |

‘maissioner Olark in testifying for the Commission

favored the addition ,to jurisdiction as follows :.*

It is a general provision that puts that trans- |

portation under the provisions of this act and

Makes entirely clear in the statute what we

have uniformly held—that we had jurisdiction

of that transportation in so far as it was per-

formed within the confines of the United States,

and that if the carriers should persist in main-

taining a joint through rate which we found to

be unduly prejudicial or unjustly discrimina-

tory, we had the power to require the carrier

operating within the U: mted States to withdraw

its concurrence from that joint through rate’

and establish a reasonable proportional or other

rate for the transportation from the boundary

to destination in the United 2 States. [Em-

phasis added. ] ra

The report of the House committée, which added the

. proviso here in issue, apparently formalized: what the

Commission had been doing, for it merely stated,’

_ Section 400 [of the bill] amends the first five

paragraphs of section-1 of the commerce act,

making minor corrections and clarifying the

Section 20(11)) applied to traffic. from a foreign country.

The Supreme. Court decided: that even the language of Section

20(11), in téms of “from. the United States to an adjacent

foreign country,” applied on traffic in the opposite direction.

Galveston, ée. Co. v. Woodbury, 254 U.S. 357, 859, decided

*“Return of the Railroads to Private Ownership,” Hearings

on H.R. 4378 before House Committee on Interstate and For-

eign Commerce, 66th Cong., ist Sess., vol. 1, p. 10 (1919).

* H. Rep. 456, 66th Cong., 1st Sess., p. 27, ’

10

language in-several respects, but makes no im-

portant change in policy. .

- Shortly after the passage of the 1920 Act, the entire

Commission reiterated its view that it possessed juris-—

diction to consider. the entire joint through rate in

International Nickel Co. v. Director General, 66

1.C.C. 627. As recently as 1962, the Commission re-

‘ ported to Congress its interpretation of the jurisdic-

tional provisions of Section 1(1), including the proviso

' language. Commissioner Murphy, for example, then

‘testified before the Senate Committee on Commerce

that the Commission had often held that it could not

apie international rates. He continued as

follows: * 2 ae

.. "The: Comdgian. however, has many times

* held, as in the cited case, that where a U.S.

railroad enters into through route and. joint

rate arrangements with foreign railroads, it

will be held responsible for the lawfulness of ;

_ the through rate, both with respect to ‘repara-

tion for past unreasonable rates and as to rates

for the future. The decisions indicate that if

the foreign railroads are unwilling to establish

joint through rates on the basis found to be

lawful, it is the duty of the U.S. carrier to

withdraw from the joint rates and establish

rates to and from the boundary which are just,

reasonable,’ and otherwise lawful.

The CHarRMAN Well, what if the carrier does

not do it? ~

1°“Problems of the softwood Lumber Industry,” Hearings

before the Senate Comm. om Commerce, 87th Cong., 2d Sess.,

Part I, p. 129 (1962) ; see also Part IV, p. 972.

11

Mr. Mueruy. You mean the——

The CHarRMAN. Well, you say it is the bai

of the U.S. carrier to withdraw from the joint

rates and establish rates to and from the bound-

ary that are just and reasonable and.lawful.

What if the carrier does not do it?

Mr. MurpHy. The Commission can, on a

proper record, order them to do that.

In the forty-six years since the enactment of the

Transpogtation Act of 1920, both Congress and the

railroads have acquiesced in the views of the Supreme

Court and of the ICC that the Commission possesses

jurisdiction to order reparation based upon an entire

joint through rate between the United States and .

Canada. The Act has been amended numerous times,

including the major codification and revision in the

Transportation Act of 1940, 54 Stat. 898, but no

question has been raised concerning the Commission’s

consistently asserted jurisdiction over,such -rates.”

The Commission finds nothing anomalous in its

_ considering the reasonableness of the entire joint rate;

a single charge to the shipper and the only rate that

legally may be charged when it is filed.” The Inter-

4% An established and unvarying shselalsbiaiins interpretation

of ‘a statute acquiesced in for many years, will not be over-

turned except for cogent reasons. WV orwegian Nitrogen Co. v.

United States, 288 U.S. 294, 315; United States v. Public

Utilities Com’n., 345 U.S. 295, 314-15; Brotherhood of Main-

tenance of Way Employes. v. United States, 366 U.S. 169, 179.

% We further see no “apparent implication” (Br. of US.,

p. 21, n. 9) of the Court’s opinion in News Syndicate Co. v.

New York Central R. Oo., 215 US.- 179, discussed hereinafter,

that somehow American’ carriers may file more than one rate

- and give the shipper a choice. The Court plainly stated that

the joint rate was there charged since no rate to the border was.

‘

Ma

fe .

12

state Commerce Act attaches to such transportation.

by. its: terms, a matter no more anomalous than the

fact that the antitrust laws apply to conduct of

American corporations in foreign countries (e.g.,

Continental Co. v. Union Carbide, 370 .U.8.-690, 704,

706).

American carriers are held liable for the entire

unlawfulness inherent in an international joint rate,

since they are joint tortfeasors in the promulgation

and charging of such rates. The collection of an

- unreasonable charge is a tort (Adams v. Mills, 286

U.S. 397, 407); and “the general rule as to liability

of joint tort-feasors applies where two or more con-

necting carriers combine to impose excessive charges

for transportation over their connecting lines” (Lewis-

Simas-Jones Co. v. Southern Pacific Co., 283 U.S. 654,

660). 13

(or could be) legal “applicable” after the filing of the joint

y P

_ rate. . (275 U.S. 179, 187). And see Cyanamid and Cyanide

From. Niagara Falls, 155 ¥.C.C. 488, 491.

13In. Great Northern v. Sullivan, 294 U.S. 458,. the Court re-

fused to permit a shipper to show the gnlawfulness inherent in

a proportional rate to the border point, holding that the Com-

mission must determine whether the entire charge is unreason-

able. Notwithstanding Atlantic Coast Line R. Co. v: Smith

Bros. Inc., 63 F. 2d 747, 748 (C.A. 5), certiorari denied, 289

US. 761; and Atlantic & Y. Ry. Co. v. Carolina Button Core.

74 F. 2d 870 (C.A. 4), the Commission has applied Sullivan -

only where the combination rates are made up of proportional

rates and not where they are made up of local rates. See

Yellow Jacket Boat Co., Inc. v. A.T. & SF. Ry. Co., 305 I.C.C.

113, 116-17. It is not clear from the cases cited by ‘the United

States (Br., p. 16) whether the combination rates there con-

sidered were composed of locals or proportionals, except in

Western Peat Co. v. Illinois Central R. Co., M7 1.C0.C. 273.

But the Western Peat proportional only related to a technical

,

1

. Just as in ‘H. K. Porter Co.-v. Coane Vermont R.

Co., 366 U.S. 272, involving a finding of preference |

_and prejudice based upon the entire joint through

rate, the orders in News Syndicate and Lewis+Simas-

_ Jones, contrary to the position of the United States

(p. 15, n. 5) similarly ‘‘affected only the American

part of the transportation.’’ In all three cases the

entire joint through rate was considered and the order

so drawn as to run only against carriers performing

some transportation within the United States. _

The Commission has consistently refrained from

prescribing joint through rates (Br. for the U.S.,

p. 18, and cases cited).*. Its. orders run exclusively —

against carriers engaged in transportation in the

United States, and hence itis without authority to

require Canadian or Mexican carriers to agree on

joint rates to or from their countries.. To prevent

unlawfulness in the future, the Commission will issue’

a cease and desist order requiring American carriers

to cease preference and prejudice, as in the H. K.

_ Porter Co. case, or to end participation in unreason- |

ably high joint rates unless such rates be voluntarily -

reduced.” The Commission has not in any manner

question under Section 4 of the Act, rather than jurisdiction

. under Seetion 1; and it farther reached a result consistent with

similar interpretation by « Canadian court, as discunsed in

footnote 18, infra. —

%* The Canadian Board has taken a similar position concern-

ing its authority. See West Lorne Lbr. Co. v. Canadian Pacifio

Railway, 70 C.R.T.C. 23, 31 (1958).

** Black Horsé Tobacco case, supra; Spanish River Pulp &

Paper Mills v. A. & W. Ry. Oo., 120 LCC. 251, cited in News

Syndicate; Cyanamid and Cyanide From Niagara Falls, 155

LC.C. 488, 492, and cases cited; Federated Metals Corp. v.

14

directly interfered with the jurisdiction of any foreign -

government. * eae Sere ;

The United States would authorize the: Commission

to determine the lawfulness of the rate to the border,

and compel the shipper to seek reparation in Canada

for that part of the transportation service which

occurred in Canada. The anomaly of the position

appears in the fact that (1) the law of Canada recog-

nizes the ICC’s jurisdiction over an entire joint |

through rate, and (2) the agencies and courts of

Canada exercise an identical concurrent jurisdiction

over the entire joint rate when suit is brought in that

forum. The position of the United States would

disrupt the rule of international conflict of laws.recog-

nized in this field by Canada, and deny to the Com-

mission the concurrent jurisdiction over the entire

joint rate exercised by the Canadian Board of

Transport Commissioners.” - ees. -

In the first “Stoy” case” before the Canadian

Board, the American carrier had filed a “joint tariff” _

setting forth one through rate on’ petroleum and its

products from Stoy, Indiana, to Canada: The con- '

Pennsylwania R. Co., 185 1.C.C. 399; Sherman Lbr. Co. v. At-

lantic Coast Line R. Co., 293 1.C.C. 261, 263, 264; Chas. H.

Lilly Co. v. Great Northern Ry. Oo., 298. 1.C.C. 407, 410.

16 The Canadian Board is without power to order reparation.

It may issue a declaratory order stating what the lawful rate

‘was or should have been, but recovery, if any, can be obtained —

only through the courts, pursuant to Section: 385 of the Railway

Act, R.S.C., 1927, ch. 170. See Brown Motor Co. v. Ganadian

Pac. Ry., 75 C.R.T.C. 230, 236 (1957); Canadian Shippers’

| Traffic Bur. v. Canadian National Ry., 32 C.R.C. 3, 6 (1926).

11 British American Oi Co. v. Grand Trumk Ry. Co., 9 C.R.C.

178 (1909). | : :

mt)

necting railroad. in Canada (Grand Trunk Ry. Co.)

filed an “‘exception” to the tariff, stating it did not

concur, and that its local rates would apply from the

border. The Board of Railway Commissioners For

Canada (now Board of Trarfsport Commissioners)

applied Canadian law to the entire rate, holding: _

1. With respect to the exception, “whatever effect

that may have had in the United States, it can have |

none here. The procedure a by the [Canadian]

Railway Act must govern.”. It further stated, “We

cannot introduce here, or follow the practice estab-

79?

lished in the United States regarding ‘exceptions,

which violate Canadian law (p. 183). 3

2. A subsequent filing by the American carrier is

also of no. effect, since, unlike the United States law,

“once a joint, tariff is filed, unless it is dissallowed, it

remains in force until replaced by another joint tariff,

-and it is not open to the carrier filing it to destroy .

.. its effect by filing a supplement alleging that the sum

of the locals shall be substituted for. the joint east |

“rate” (p. 187).

3. The “‘only legal rate from Stoy a Toronto” was

the originally filed joint rate (¢bid.) ; the Grand Trunk °

‘‘should be at liberty to refund the difference between

. that sum and the amount collected”’ (p. 190).

The Board’s decision was sustained by the Supreme

Court of Canada, sub nom. Grand Trunk R.W. Co. v.

British American Oil Co., 43 8.C.R. 311, 11 C.R.C.

118 (1910). The Canadian Board later followed this —

_ decision ‘in the second “Stoy” case, British ‘American

Oil Co. v. Canadian Pacific Ry. Co., 12 O.R.C. 327.°

- (1911), noting that respondent alleged that its United

ep.

16

States connections ‘have refused to join in any re-

funds” since the rates charged were the legal and

proper rates under the. Interstate a Act.

The Board -stated (p. 333) :

It does not seem that we can enter into con-

sideration of the effect of what was done in the

. United States, or under the laws there; ; whether

the carriers there have refused to join in re-

funds, or whether they are morally entitled to

do so or ‘not.

‘Recently, a Canadian court has specifically recog-

nized the concurrent jurisdiction of the Commission,

stating, ‘‘As ‘to rates for routes from the United States

of America. into Canada, the Interstate Commerce

Commission has authority to consider the entire route

and the rate therefor.’ ‘Direct Winters Transport

Lid. v. Duplate Canada Lid. 83 C.R. fT. C.. 54, 68

(1962) .**

The United States would limit . ities Ss re-

‘covery against the United States carrier ‘to an amount

- by which a hypothetical rate to the border exceeds the ;

division agreed upon between the United States and

the-foreign carrier. If-a joint rate is published, such

. rate ‘takes precedence ‘over any combination of rates.

Any rate to the border would be only a hypothetical |

18 At the same time the Canadian Court held that the sum of

Canadian and United States factors (locals or, proportionals)

may not be compared to the joint through "rate published

in an ICC tariff in determining whether the latter rate is

higher than the “aggregate of intermediate rates,” and hence a

violation of Section 4 of the Interstate Commerce Act. 83

C.R.TC. at 68. The ICC had made the identical interpreta-

- tion of the requirements of Section 4 in the Western Peat case.

footnote 13, supra. .

pee es eee nee NS

” 17 ? . ¥ = : @

- rate for the service in question: “The rates to the

| border would not necessarily provide the proper meas-"

‘ure of the joint rate, since they might be filed with

some other use in mind in forming through rates.

The Wnited States assumes, we think improperly,

that the shipper’s recovery should be limited by the

amount received by the American carrier. This Court

rejected such an argument in News Syndicate, holding

that the shipper is’ entitled to recover his damages

sustained in consequence of the earrier’s failure to

make or publish a lawful rate. The shipper’s “right

to reparation does not depend upon the amounts re-

tained by defendants’in error [the railroads] pursuant

to agreed divisions” (275 U.S. at 187). The ship-

per’s theory of recovery is actual damages, not quan- :

tum merit.

Although divisions may be useful as evidence of the

reasonableness. of the rates charged,” they are not con-

elusive, for they are governed by statutory standards

totally different from those applicable.to rates. Un-

‘der Section 1(4) rates must be just and reasonable,

and Section 15a(2) directs the Commission to con-

sider -certain specific standards; neither section ap-

plies to divisions between carriers. The latter. are

governed by the standards of Section 15(6), which

requires, among other things, consideration,of any

facts or circumstances which entitle one carrier to

* For example, if the railroads have evidence that conditions

in Canada require relatively higher rates, they should present

such evidence to the Commission for its consideration. See

Cyanamid and Cyanide From, Niagaca Falls, 155 1.C.C. 488, 497.

No such‘evidence appears in the present record.

18

more or less than another carrier to a given division.

Section 15(6) does not and cannot be made to govern”

the limit of a shipper’ 8 recovery for damages oc- .

_ -easigned by unlawful earrier conduct in foreign

commerce. Te

. CONCLUSION

‘ta the more thin fifty years since the Pasiaeseieuts s

decision in. the Black Horse case, there has been no

evidence that, the Commission’s jurisdiction to con-

sider the lawfulness of an entire joint through rate

im foreign commerce ‘has. either discouraged the pub-

lication of such fates or in any way affected our rela-

', tions ‘with Canada or Mexico. On the contrary, the . *

Canadian Board simultaneously exercised a concur-

rent jurisdiction in the “Stoy’”’ cases when Black Horse

“was decided. And we are ynable‘to find a single

_ American or Canadian case involving a suit between

an American ‘and Canadian (or Mexican), railroad

for contribution. This indicates to us that American

éarriers are consistently able to obtain contribution

through informal channels when held liable as joint

tortfeasors for the unlawfulness in at entire inter-

. national rate.

In_ contrast..to the apparent ease with which the

American carriers over a very long period have am-

icably settled their relative liability for reparations

with their. foreign counterparts, the approach of the

United States would increase the burden of shippers

seeking to obtain reparation. The shipper would be

required to bring separate suits in the United States

and in Canada, a procedure that we doubt would be

Renee ©

19

feasible to obtain a small award, such as is involved

in the present case

We submit that no legal or. practical need has been

shown for réversal of the long-standing decisions of

this Court governing international rates. The court

of appeals erred in holding that. thé ‘railroads had

“met the burden of proving” the rates from New

Mexico to the border points, and that such rates ‘“‘must

be considered as maximum guides in awarding dam-

_ages to plaintiff” (Canada Packers) (R. 40). We

submit that the decision of the court of appeals should ©

be reversed and the judgment of the district court

reinstated. :

Respectfully submitted. | pare

Roserr W. Garston,

General Counsel,

LeonarD 8. ‘GoopMAN,

Assistant General Counsel,

Interstate Commerce Commission.

,*

SEPTEMBER 1966.

I authorize the filing of the foregoing brief. « -

THURGOOD MARSHALL,

Solicitor General.