# Opposition Brief — Farley Terminal Co. v. Atchison, Topeka & Santa Fe Railway Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385608_1429%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 1975 - **Citation:** 423 U.S. 996 ## Text SUBJECT INDEX Page Rn I tn ee ee Os oe 1 eet 2 SU sai ni udabnemaseumassine a Reasons for Not Granting the Writ .............0.......... 6 I The Decision Below Does Not Conflict With the Decision Rendered by This Court in Arizona Grocery Co. v. Atchison, Topeka and Santa Fe Ry. Co., 284 U.S. 370 (1932) .................. 6 II The Holding Below Does Not Conflict With the Decision of Another Court of Appeals ............ 7 Ill Santa Fe Did Not Unilaterally Circumvent a Systemwide Contract Rate ..........000000000020000.... 8 IV Santa Fe Had No Duty to Publish Its Own Tariff : Containing Rates Consistent With Existing : NINE = Stites ni sidgSeenswconcaintukacbonigecnncsicptearsimenill 9 BUI ocr > nisi » if ~ ge RE AB Oe ES, Pe eee Ma ee Lr Rasa 2 Association, Inc. v. A., T. & S. F. R. Co., 387 US. 397, 406 (1967). In this connection, a tariff, rate, or charge, duly established in accordance with the Act, is the legal rate; it has the force of statute and is binding on carrier and shipper alike. See Lowden v. Simonds- Shields-Lonsdale Grain Co., 306 U.S. 516, 520 (1939); Pennsylvania Railroad Company v. International Coal Mining Company, 230 U.S. 184, 196-197 (1913); Rob- inson v. Baltimore and Ohio Railroad Company, 222 U.S. 506, 508-510 (1912).* And a contract valid when made is nevertheless rendered void by subse- quently established tariff rates which are inconsistent, at least to the extent of the inconsistency. See Mottley, supra, 219 U.S. at 480-486.‘ Moreover, a shippers %Appellants rely heavily on Macco Construction Company v. Farr, 137 F.2d 52 (9th Cir. 1943), and Ets-Hokin & Galvan, Inc. v. Maas Transport, Inc., 380 F.2d 258 (8th Cir. 1967), cert. denied, 389 U.S. 977 (1967). We think both decisions are inapposite. In Macco, we held that a contract which in- cidentally violated a California licensing statute was not there- by rendered unenforceable because the California legislature did not intend that such violations void otherwise legal con- tracts. 137 F.2d at 55. And in Ets-Hokin, which relied in part on Macco, the Eighth Circuit held that a contract which violated the Motor Carrier provisions of the Interstate Com- merce Act was not unenforceable because Congress, in pass- ing those provisions, did not intend “that contracts resulting in violations of that portion of the Act be illegal and void.” 380 F.2d at 260-261. Here, however, as noted in the cited cases, Congress did intend to render void rates inconsistent with those established in conformity with the Act. ‘Appellants cite Chicago, Milwaukee, St. Paul & Pacific Railroad Company v. Alouette Peat Products, 253 F.2d 449 (9th Cir. 1957), for the proposition that, even though ship- pers are required to pay carriers the rate on file with the ICC, a showing that such a rate was not lawfully established would entitle them to recover the difference between what they had thus paid and the lawfully established rate. Here. however, appellants have presented no showing that the pub- lished rate was unreasonable or otherwise established in violation (This footnote is continued on next page) E. ; : Oe at tek Cees _ knowledge of duly published tariff provisions is pre- sumed. American Railway Express Company v. Daniel, 269 U.S. 40, 42 (1925); Kansas City Southern Railway Company v. Carl, 227 U.S. 639, 653 (1913); Chicago & Alton Railroad Company vy. Kirby, 225 U.S. 155, 166 (1912); Mugg, supra, 202 U.S. at 245.° Appellants’ remaining contention—that the Santa Fe was required under the circumstances to establish a tariff rate identical to that enumerated in its pre-existing agreement with appellants—is without merit. It is well settled that a carrier is entitled to initiate rates, and to adopt such policy of rate-making as it deems wise, subject to the revisory powers conferred upon the ICC. See Diamond Tank Transport v. United States, 23 F. Supp. 497, 501 (W.D. Wash., N.D. 1938) (three- judge court), affirmed, 305 U.S. 567 (1938); United States v. Illinois Central Railroad Company, 263 U.S. 515, 522 (1924). And in light of the congressional intention, already noted, that pre-existing agreements be abrogated by subsequently promulgated regulations, at least to the extent of the inconsistency, we think it clear that a carrier’s decision fixing a proposed tariff rate to be charged uniformly to all should not be foreclosed by its pre-existing obligation to charge a different rate to a few. AFFIRMED. of the Act. The mere fact that the published rate is incon- sistent with a rate enumerated in pre-existing contracts does not render it violative of the Act. 5Southern Pacific Company yv. Miller Abattoir Company, 454 F.2d 357 (3d Cir. 1972), relied on by appellants, is not to the contrary. That decision merely held that a provi- sion in a shipping contract, requiring that the railroad immedi- ately notify the consignee if a cargo of livestock were stopped in transit by quarantine, was not satisfied by the railroad’s publication of a tariff explicitly stating that screw worms existed in Arizona and that livestock leaving that state would be stopped for inspection. See 454 F.2d at 361-362. — APPENDIX C. Judgment of the United States District Court for the Central District of California, entered February 19, 1974, In the United States District Court, for the Central District of California. Farley Terminal Co., Inc., Plaintiff, vs. The Atchi- son, Topeka and Santa Fe Railway Company, Defend- ant. Civil Action No. 73-1818-EC. JUDGMENT This action came on for hearing before the Court, Avery E. Crary, District Judge, presiding, and the issues having been duly heard and a decision having been duly ordered, IT IS ORDERED AND ADJUDGED, that the plain- tiff take nothing and that the action be dismissed on the merits. DATED at Los Angeles, California, this 19th day of February, 1974. /s/ E. Avery Crary United States District Judge CEE Ee in oa a | Sy - x — APPENDIX D. Findings of Fact and Conclusions of Law of the United States District Court for the Central District of California, entered February 19, 1974. In the United States District Court, for the Central District of California. Farley Terminal Co., Inc., Plaintiff, vs. The Atchi- son, Topeka and Santa Fe Railway Company, Defend- ant. Civil Action No. 73-1818-EC. PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW The Court, having duly heard defendant’s Motion for Summary Judgment on February 11, 1974, does hereby make the following findings of facts and conclu- sions of law: That on February 20, 1967, plaintiff and defendant executed a Lease Agreement, wherein defendant would lease to plaintiff, on an availability basis, TOFC equip- ment (flat cars and trailers) at rates specified in the terms of the aforementioned Lease Agreement; That prior to November 17, 1967, defendant charged plaintiff for lease and use of such equipment pursuant to the aforementioned Lease Agreement; That subsequent to November 17, 1967, Trans-Con- tinental Freight Bureau Tariff Supplement 41 to Freight Tariff 2F, Item 4900, Section I, was approved by the Interstate Commerce Commission and filed and became effective; That the aforementioned tariff had the force and effect of law and was the proper tariff for defendant to charge plaintiff for plaintiff's use of defendant’s TOFC equipment in Interstate Commerce; a That the rates provided in said tariff, as a matter of law, rendered null and void the rates contained in the Lease Agreement, dated February 20, 1967; {although Ex Parte 230 did not express an intent to negative existing rate contracts | That, therefore, as a matter of law, the proper rates for defendant to charge plaintiff for its use of defend- ant’s TOFC equipment for eastbound movements in Interstate Commerce, were the rates contained in the aforedescribed tariff. It is ordered, therefore, that defendant’s Motion for Summary Judgment be and the same hereby is granted and that said Judgment be entered herein in the de- fendant’s favor, dismissing this action with costs to be taxed by the Clerk in favor of the defendant and against the plaintiff. DATED: Feb. 19, 1974 /s/ E. Avery Crary United States District Judge Pe Sy ae ARRAN a a APPENDIX E. SUBSTITUTED SER VICE—PIGGYBACK John E. Faulk, R. M. Hartsock, and Clement T. Mayo for Department o: Defense. William R. Pierce for General Services Administra- tion. John BH. Fallon, Harvey Gobetz, and Asa J. Merrill for Bureau of Inquiry and Compliance, Interstate Com- merce Commission. Report of the Commission on Oral Argument By the Commission: This proceeding, instituted on June 29, 1962, on our own motion under the authority of parts I, II, III, and IV of the Interstate Commerce Act and section 4 of the Administrative Procedure Act, constitutes this Commission’s first general investigation of what is prob- ably the most significant recent development in trans- portation—trailer-on-flatcar or piggyback service. The notice of proposed rulemaking made it known that we intended this investigation to be broad in scope, encompassing every aspect of TOFC operations, and that we intended to explore new approaches to piggy- back service. Among the matters specifically mentioned in the notice as a subject for consideration was: The extent to which motor carriers, water car- riers, express companies and freight forwarders should be permitted to use Plans III and IV [open-tariff] rail rates and service in their operations. It was also made clear that we intended to reexamine existing precedents and practices, and that consideration ation would be given to the adoption of rules and regulations which might be found necessary to regulate coordinated and substituted service transportation in the public in- terest. The order instituting this proceeding named as re- spondents all railroads, motor carriers, and water car- riers of property, freight forwarders, and express com- panies operating in interstate commerce, and authorized and directed our Bureau of Inquiry and Compliance to participate. It also assigned the matter for a pre- hearing conference, which was held October 9, 1962, and at which proposed rules, reproduced as appendix II hereto, were distributed. Oral hearings have not been held, but representations, verified statements, and reply statements have been received from numerous interested parties. The proceeding was assigned to two hearing examiners who recommended adoption of the regulations contained in appendix III hereto. Exceptions to the ........ A similar, perplexing problem for shippers and car- riers has been interpretation of the “mixture” tariff rule applicable to plan III transportation of “all-com- modity” traffic. Ordinarily this type of rule will provide that not more than 60 percent of the weight of a total, two-trailer shipment may consist of any one com- modity or article. One frequent variation of this tariff rule provides the alternative test; not more than 60 percent of the total shipment or not more than 60 percent of 70,000 pounds. The carriers do not seem to be applying any consistent approach in determining whether commodities being shipped are the “same” commodity or article. In general, neither commodity classifications nor other published listings are used to determine whether the articles included in a single = shipment are sufficiently dissimilar to constitute differ- ent commodities for the purposes of mixture rules. This state of affairs leaves a railroad free to haul ‘straight truckloads of high-rated commodities at hidden bargain rates should it choose to do so for a favored shipper. Bearing in mind the historical development of piggy- back transportation and its present-day problems—as well as its appealing advantages—we shall now proceed to an examination of the issues raised directly by the instant investigation. The Proposed Rules At the prehearing conference held in this proceeding on October 9, 1962, a series of proposed rules, repro- duced as appendix II hereto, was distributed. As noted at that time, they were designed to serve as a framework upon which rules ultimately to be adopted, if any, could be developed. The proposed rules represented something of a new approach to TOFC terminology as they attempted to separate TOFC service, without regard to the five numbered plans now in common use, into two more basic classes: “joint intermodal” TOFC service which would include any piggyback serv- ice performed jointly by a rail carrier and a motor or water common carrier; and “all-rail” TOFC service which would include any piggyback service in which traffic moves exclusively at rail rates and on rail billing. The proposed rules were predicated upon the basic premise that all persons desiring to use TOFC service should be able to do so, with the charges for the same services being equal to all users, whether they be motor or water carriers, freight forwarders, or private shippers. The proposed rules B-4, B-5, C-1, and C- — It is apparent that this state of affairs places a premium on a shipper’s having a sophisticated traffic department, capable of assessing the various available services, charges, and allowances, and of determining what combination offers the best transportation bargain in moving a particular shipment. We think that carriers should be encouraged to use as simple a method of tariff publication as possible, and should be discouraged from permitting the kind of situation illustrated. It is also clear that the general practice by which railroads and their affiliates trip lease trailers to shippers for immediate use in TOFC service contains potential seeds of discrimination. Unless the same opportunity to lease equipment is made available to all similarly situated shippers at the same price, the leasing of a trailer to a favored shipper can become a concession violative of the Elkins Act. While we recognize that there are opportunities for discrimination in present rate publication and equipment leasing practices, we cannot agree with the A.T.A. that the only available cures are a straitjacket for TOFC tariffs and major surgery to excise trailer leasing. The contentions that rail carriers are required by statute to publish rates only for a “complete” service and that they are obligated to furnish trailers wherever TOFC service is provided were disposed of in Eastern Central M. Carriers Assn. v. Baltimore & O. R. Co., 314 1.C.C. 5, 45-47, aff'd. sub nom. Cooper-Jarrett, Inc., v. United States, .... F. Supp. .... (W.D. Mo. 1964) (civil action No. 13469, February 6, 1964). The basic flaw in the A.T.A’s legal argument, which was also pointed out in that decision, appears to be the false assumption that a highway trailer necessarily is an “instrumentality of transportation” which carriers must - ee eS PLD IMRE LACIE NGS AL AY OE SST IN“ ctelert es po eae furnish. This can, of course, be the case when a railroad holds out a service which by its nature requires perform- ance of some motor carriage. But it need not hold out to perform more than rail service, and in that case the trailer, tendered for transportation by a shipper, is nothing more than a container—an “article of com- merce.” We must point out here that we are not holding that the service which a carrier holds out to perform can only be ascertained from the actual words of its tariff. When a rail carrier offers a ramp-to-ramp TOFC service, ostensibly confined to the line-haul rail trans- portation of loaded highway trailers tendered at its terminal by shippers, but then proceeds to lease trailers, and to provide drayage, loading, and other “accessorial” services, we think that it is in fact holding out a complete door-to-door service. In such a case, all the services it provides become transportation services rath- er than mere accessorial services, and they are required to be the subject of its tariff publications. This, we think, disposes of the New York Central’s argument that we have no authority to require the publication of accessorial services. To agree with the Central’s position would be to allow any carrier, by self-imposed limitations contained in its tariffs, to designate what it considers to be transportation services and what it considers nontransportation services. This distinction is, we believe, a matter of fact and not one that can be imposed by fiat. The nature of piggyback—the fact that its advantage lies in its being a combination of rail and motor transportation—makes rail carriers tend to offer to their customers services which were tradi- tionally provided only by motor carriers and which can physically be performed only with motor vehicies. SESSION NNR OIE HERON TERT CONOR Egy =—=™= Such services, we believe, will normally be transporta- tion services when offered in connection with TOFC transportation. The existence of opportunities to engage in discrim- inatory practices, standing alone, will not, in our opin- ion, justify our requiring a strict format for TOFC rate publications or striking down the prevalent prac- tice of trailer leasing by railroads. The record before us is almost completely devoid of evidence that these opportunities for discrimination have been misused. In spite of the variety and complexity of all-rail TOFC tariffs, they seem to be serving their purpose effec- tively, and we would not be justified in imposing a new scheme of publication in the absence of specific shipper complaints. The same appears to be true of trailer leasing. Where complaints of discrimination have been made, as in the case of certain midwestern meat-packers, the railroads involved have taken steps to correct the situation. We agree with the examiners that tariff rules providing for the publication of charges for leasing trailers and for other special TOFC services will eliminate many of the present opportunities for abuse. Should this approach prove ineffective, addi- tional steps can be taken at some future time. At present, we conclude that they are not needed, and that regulations substantially similar to those recom- mended will suffice. The only significant change we think necessary in the recommended tariff rules is to provide for publication by rail carriers of the leas- ing charges of affiliates. To omit the practices of rail- affiliated leasing companies from the effect of the leas- ing rule would obviously be to create a legal loophole and to allow the doing by indirection of what could not be done directly. The following rules will be adopt- ed: ERE LIE EE LY CAI STERN, BONIS SPL Ga OIE PIE » OE LES PN RS 1 Arye 2 RR Ca Mr an 7 Tariff publication regulations. (a) Each railroad performing or holding out to per- form TOFC service shall publish, post, and file tariffs (itself or through an agent) which shall contain in clear and explicit terms all of the rates and charges for and the rules governing the leasing of equipment to any person using its TOFC service (whether by the railroad itself or by any person affiliated with or controlled by the railroad or any agents of the railroad), and other special services or practices, includ- ing charges for pickup or delivery service when such charges are in addition to line-haul transportation charges. Such tariffs shall also contain, in clear and explicit terms, all amounts to be paid to any shipper for tie lease of any empty truck, trailer, or semitrailer (or the container portion of any truck, trailer, or semi- trailer having a demountable chassis) when such empty equipment is being transported incidentally to its prior or subsequent use in TOFC service. (b) No allowance shall be payable by a rail carrier to any shipper, freight forwarder, or consignee which renders any service or furnishes any instrumentality in connection with TOFC service unless (1) such serv- ice is one that the rail carrier is obligated to perform or provide under the applicable rate and (2) the amount of the allowance is published in tariffs on file with the Interstate Commerce Commission. (c) The area within which pickup and delivery serv- ice will be performed by a rail carrier offering to provide TOFC service shall be described specifically and the description published in clear and explicit terms in the tariff. It is not permissible to refer to decisions of the Commission for the description nor to state pens Naan gh ORR Gah Eh Saat ce re = a that the area within which pickup and delivery service will be performed is that defined by the Commission in a formal proceeding. (d) All rail tariffs containing rates for TOFC trans- portation of property shall specify the extent to which such rates do or do not include the loading and un- loading of property from or to the highway vehicle by the carrier. When charges in addition to the line- haul TOFC transportation charges or in addition to pickup or delivery charges, if any, are made for the loading or unloading of property, they shall be pub- lished in appropriate tariffs and filed with the Inter- state Commerce Commission. (e) Highway vehicles or rail cars provided by ship- pers or freight forwarders in connection with all-rail TOFC service, while on railroad premises, shall be subject to the storage or demurrage rules, regulations, and charges published in tariffs on file with the Inter- state Commerce Commission. Billing and Notification Rules Section D of the proposed rules and the examiners’ recommended rules 19 through 23 deal with the billing of TOFC shipments and » Loe fe ee —— . X . a 4 SOLS ROR Ray EN PTR NERC IRE OTE ATR AAT DREN LS --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385608_1429%3A2. Public record. Not legal advice.