Appendix — South Carolina ex rel. South Carolina Public Service Commission v. United States

INDEX TO APPENDIX

Pas

Opinion of the United States District Court .......... 35

Filed

Jan. 3, 1956

ERNEST L. ALLEN

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF SOUTH CAROLINA

Civil Action No. 5261

State of South Carolina ex relatione South Carolina Public

Service Commission, Complainant,

versus

The United States of America, The Interstate Commerce

Commission, and the Atlantic Coast Line Railroad

Company as the representative of all the railroad com-

panies affected by the report of the Interstate Com-

merce Commission dated June 20, 1955 and by its order

dated September 19, 1955, Docket No. 31291, Defend-

ants.

This cause coming on to be heard before the under-

signed constituting a special District Court of three judges,

convened in accordance with statute; and being heard upon

the pleadings, the record made before the Interstate Com-

merce Commission and the briefs and arguments of coun-

sel; and being submitted by all parties for final decree:

The Court finds the facts to be as set forth in the Re-

port of the Interstate Commerce Commission, and being of

opinion, for the reasons set forth in the written opinion

filed herewith, that the plaintiffs are not entitled to the

relief prayed and that the action should be dismissed:

(35)

36 Strate or S. C. ez rel., APPELLANT, v. U. S. A. et al., APPELLEES

Now therefore, it is ordered that the prayer of the

complaint be denied and that the action be dismissed, and

that the costs hereof be taxed against plaintiffs.

This the 3lst day of December, 1955.

JOHN J. PARKER,

Chief Judge, Fourth Circuit.

U. 8. District Judge, Eastern

and Western Districts of

South Carolina.

ASHTON H. WILLIAMS,

U.S. District Judge, Eastern

District of South Carolina.

On Application for Injunction.

Argued November 4, 1955. Decided.

Before Parker, Circuit Judge, and Timmerman and

Williams, District Judges.

T. C. Callison, Attorney General of South Carolina, and

Irvine F. Belser, General Counsel South Carolina Public

Service Commission, for Complainant; R. B. Gwathmey,

Douglas McKay, U. B. Ellis, Charles P. Reynolds, James

A. Bistline, James B. McDonough, Jr., John H. Lumpkin

and Frank G. Tompkins, Jr., for Defendant Railroad Com-

panies; Stanley N. Barnes, Assistant Attorney General, N.

Welch Morrisette, Jr., U. 8. Attorney, James E. Kilday,

Maurice A. Fitzgerald, Samuel R. Howell, Leo H. Pou,

Robert W. Ginnane, for defendants United States and

Interstate Commerce Commission.

Parker, Circuit Judge:

This is an action to set aside and enjoin the enforce-

ment of an order of the Interstate Commerce Commission

entered under section 13(4) of the Interstate Commerce

APPENDIX 37

Act, 49 U.S. C. A. 13(4),* granting an increase in the intra-

state freight rates for hauling certain commodities on rail-

roads in the State of South Carolina. A court of three

judges has been constituted as required by statute, the case

has been heard upon the record made before the Commis-

sion and the briefs and arguments of counsel and has been

submitted for final decree. The contention of plaintiff is

that the order of the Commission is not supported by sub-

stantial evidence on the whole record that the railroads will

realize any substantial increase of revenue from the in-

crease of rates allowed by the order.

The facts are that the State of South Carolina is

crossed by the great railroads constituting the principal

arteries of commerce in the southeastern section of the

United States and most of the hauling by railroad within

the state is done by these systems. There is not now and

for many years has not been any distinction in the handling

of freight in interstate and intrastate commerce, the bulk

of both interstate and intrastate freight being handled in

the same way and with the same instrumentalities. If there

has been any difference, it is that the cost with respect to

intrastate freight is greater. The Commission found spe-

cifically, and there is no question as to the correctness of the

finding, that ‘‘the conditions incident to the intrastate

transportation of freight in South Carolina are not more

favorable than those incident to interstate transportation of

98 Srare or S. C. ex rel., APPeLLant, o. U.S. A. et al., APPELLEES

freight between points in South Carolina, on the one hand,

and the adjoining states in Southern Territory, on the

other.”’

It has long been the policy of the railroads to maintain

intrastate rates in South Carolina and other southeastern

states on the same level as interstate rates. During the

period of advancing prices which have prevailed since the

second world war, the railroads sought and obtained sev-

eral general increases in interstate rates to meet their need

for additional revenue caused by increased operating costs

in providing the adequate and efficient railway transporta-

tion service required by the Federal Railway Transporta-

tion Act. These increased operating costs were incurred in

the movement of intrastate as well as interstate traffic. To

the extent that intrastate traffic fails to bear its fair share

of the increased operating cost by providing additional rev-

enue commensurate with that provided by interstate traffic,

it places an undue burden on interstate commerce, and to

relieve this burden a petition was filed with the Commis-

sion asking that the intrastate rates on certain commodities

be raised to permit the same percentage increases allowed in

interstate rates.* The Commission thereupon conducted an

extended hearing and filed a lengthy report in which it

reviewed the history of the rates affecting the commodities

involved, as well as the evidence relating thereto and the

contentions of the parties, and made the following findings,

which are crucial to the decision in this case, viz.:

«3. The present intrastate rates and charges in

South Carolina on clay, cotton, in bales, Cottonseed,

cottonseed meal, cottonseed hulls, cottonseed oil, lime-

stone, ground or pulverized, used for agricultural pur-

poses, logs, sand, gravel, crushed stone and related

commodities, road building materials, and pulpwood,

imposed by authority of the State of South Carolina

and under investigation in this proceeding, are gen-

erally lower than the interstate rates and charges on

the same commodities between South Carolina and

points in adjoining States, and traffic thereunder fails

*The South Carolina Public Service Commission allowed the per-

centage increases on all intrastate traffic except on the commodities

to produce its fair share of the revenue required by the

respondents to enable them, under honest, economical,

and efficient management, to provide adequate and effi-

ecient transportation service, and thereby accomplish

the purpose of the Interstate Commerce Act as set

forth in the national transportation policy declared by

the Congress, to develop and preserve a national trans-

portation system adequate to meet the needs of the

ecommerce of the United States, of the Postal Service,

and of the national defense; the burden thus cast upon

interstate commerce is undue in and to the extent that

these intrastate rates and charges are less than they

would be on the basis herein approved; and these intra-

state rates and charges cause, and for the future will

cause, undue, unreasonable, and unjust discrimination

against interstate commerce.

**4. The undue, unreasonable, and unjust discrimi-

nation against interstate commerce herein found to

exist should be removed by applying to the South Caro-

lina intrastate rates and charges, on the commodities

described in finding 3, the same respective increases

which are, and for the future may be, maintained by

the respondents on like interstate traffic between points

in South Carolina and points in adjoining States under

our authorization in Ex Parte Nos. 162, 166, 168 and

175; provided, that no intrastate rate shall be increased

to a level that exeeeds the lowest level of the interstate

rates on like traffic over the same line of railroad to,

from, or through South Carolina.

**5. The establishment of increases in intrastate

rates and charges as provided in finding 4, and of the

increased rates there prescribed, will not result in un-

just or unreasonable rates or charges, nor rates or

charges that are unjust or unreasonable in relation to

the interstate rates and charges, and will substantially

increase the respondents’ revenues.’’

The findings of the Commission are not attacked except

with respect to the finding that the increased rates will sub-

stantially increase the revenue of the railroads. As to this,

plaintiff relies upon testimony, largely the prophecy of in-

ee ae — Ee ee ae ee . a

40 Stare or S. C. ex rel., APPELLANT, v. U. S. A, et al., APPELLEES

terested shippers, that the increased rates will result in the

diversion of traffic to carriers by truck. There is abundant

testimony, however, supporting the findings of the Commis-

sion. Traffic experts of the three great railway systems serv-

ing the state testified unequivocally that, while there might

be some diversion of traffic, the net result of the increase of

rates would be to substantially increase revenues; and this

testimony was not given ex cathedra but was supported by

traffic studies introduced in evidence including a special

four weeks’ study which showed the increase in revenues

due to increase in interstate rates on these commodities and

included a four weeks’ study showing the movement of

these commodities in intrastate commerce and how much the

revenues therefrom would have been increased by applica-

tion of the percentage increases allowed in interstate rates.

Thus the witness Kane, Assistant General Freight Agent of

the Seaboard Air Line Railway Company, testified:

**Q. What comments have you to make on Section

H of your exhibit?

‘*A. The Ex Parte 162 increases became effective

interstate on January 1, 1947, and the other Ex Parte

increases became effective interstate in 1948, 1949 and

1952. Most of the states granted these increases with

relatively few exceptions on intrastate traffic during

these same years. In Section H, I have shown the ton-

nage of each of the excepted commodities transported

by each of the four principal South Carolina railroads

during each of the years 1947 to 1952, inclusive, and

also the revenue which each of these railroads received

from these commodities during each of these years.

**T have also shown the total tonnage of the ex-

cepted commodities and the total revenue received from

these commodities by the four principal South Carolina

railroads during the years 1947 to 1952, inclusive. The

tonnage and revenue received in 1947 is shown as 100

opposite the word ‘Index’, and the tonnage and reve-

nue in the subsequent years have been related to the

tonnage and revenue received in 1947.

“*Tt will be noted that while there has been some

variation in tonnage and revenue from year to year,

the revenue received on each of the excepted commodi-

ties during the year 1952 was greater and in most in-

stances materially greater than that received in 1947.

. . .

**On road aggregates in 1952 tonnage exceeded the

1947 tonnage by 75 per cent and the 1952 revenue ex-

ceeded the 1947 revenue by 77 per cent.

**On pulpwood the 1952 tonnage of the Atlantic

Coast Line Railroad and Charleston & Western Caro-

lina Railroad exceeded the 1947 tonnage by 47 per cent

and the 1952 revenue of these two carriers exceeded

their 1947 revenue by 117 per cent. :

‘‘In my opinion this exhibit proves that the Ex

Parte increases have resulted in very substantial in-

creases in the carriers’ revenues.

**Q. State whether or not, in your opinion, the in-

creases sought in the instant case, if required by this

Commission, will result in an increase in the carriers’

revenues?

‘*A. The traffic officials of the Seaboard have given

very careful consideration to the effect of the increase

here sought on the carrier’s revenues, and they are

convinced these increases, if granted, will result in a

substantial increase in revenues. This conclusion, I

think, is amply supported by the showing made in Sec-

tion H of my Exhibit 3. This section of the exhibit

makes it plain that such diversions of traffic as may be

occasioned by the increased rates do not come any-

where near offsetting the increases in revenue derived

therefrom.’’

The witness Middleton, General Freight Agent of the

Atlantie Coast Line Railroad Company, testified :

**Q. Do you think that, if granted, the increases in

rates sought in this proceeding will produce increased

revenue?

‘*A. I do. The most convincing proof is, I think, to

look at what has happened to our total traffic since the

several Ex Parte increases have been added. Page D-1

of my exhibit shows the total number of cars and tons

42 Strate or S. C. ex rel., APPELLANT, v. U. S. A. et al., APPELLEES

handled by, and the freight revenues of Atlantic Coast

Line for the years 1945 through 1952.

‘*World War II ended in 1945 and the first increase

under Ex Parte 162 became effective in 1946. Using

1945 as a basis of 100, it will be observed that the per-

centage in cars and tons handled since shows a gradual

but erratic increase. The revenues have, however,

shown a much more consistent trend upward. While

there was an increase in both the number of cars and

tons handled in 1946, our revenues were slightly down.

Had even the 6 per cent increase which became effective

July 1, 1946, been in effect during the entire year there

would have been an increase instead. Beginning in 1947

there has been a consistent trend upward in our reve-

nues, except in 1949. This was a year of widespread

strikes, particularly in the coal and steel industry.

Fiven so our revenue was approximately 10 per cent

over 1945, whereas we handled a lesser number of cars

and less tons than in 1945. In 1952 our revenue was 57.6

ner cent over 1945, while the number of cars handled

had increased only 15.4 per cent and number of tons

handled 38.7 per cent.

‘‘No comparable figures are available for South

Carolina intrastate traffic, but, in my opinion, the total

system figures are more pertinent anyway. The system

figures include the movement under interstate rates,

which have been subjected to the full authorized in-

creases and have, therefore, borne the full impact of

competition from other transportation agencies to

which anv traffic could have been diverted account of

increased freight rates.

‘Tt is a fact that some diversion has taken place

ps the result of some of the ex parte increases. Where

such diversion has warranted, adjustments in the rates

heve heen made. Such general adjustments have also

heen given intrastate application, however. so that

these situations have also been met on intrastate traffic.

The sought rates are not higher than on interstate traf-

fie. We do not feel that the sought increases will be self-

defeating but are convinced that they will produce

more end not less revenue.’’

APPENDIX 43

The witness Dilli, Assistant Freight Traffic Manager of

the Southern Railway Company, testified:

**No doubt the question will arise as to the effect

upon rail carriers’ revenues if this Commission should

find that the rates under consideration in this proceed-

ing be increased to the level sought. Exhibit No. 11

shows particular data and, in addition, in the last col-

umn of figures on the right side there is shown the

increased revenue of Southern Railway Company fol-

lowing the several Ex Parte proceedings indicated by

reference marks on the extreme left hand side of the

exhibit. As will be noted, except for the year 1949,

Southern Railway Company’s revenue both as to inter-

state traffic and intrastate and interstate traffic com-

bined has increased each successive year since 1947. As

indicated by reference mark (a), the year 1949, during

which we had a decrease in freight revenue, was

affected by the ‘black days’ in the coal industry along

with other strike conditions in other industries. The

year 1949 was a bad business year for all types of

industry.

‘*If the increases sought in this proceeding are

authorized by the Interstate Commerce Commission

our revenue will be increased.

‘‘Now a word in respect to diversions to other

forms of transportation should the increase be author-

ized. Speaking for the Southern Railway, and I am

sure other railroads in Southern Territory carry out

the same policy as we do, we are constantly alert to all

existing and potential competition confronting us, and

it is ovr continuing purpose to take every available

step to hold traffic to our line so as to produce increased

revenue, and we are capable of exercising our manage-

rial discretion necessary to achieve that objective.’’

It is clear that the foregoing testimony, together with

the exhibits evidencing traffic studies upon which the testi-

mony is hased, furnish ample support for the finding of the

Commission which is assailed. In United States v. Louisi-

ana, 290 U. S. 70, 80, which involved an order raising intra-

state rates and the question as to whether the increased

-—————

44 Strate or S. C. ex rel., APPELLANT, v. U. S. A. et al., APPELLEES

rates would produce increased revenue, the Supreme Court

sustained an order of the Commission based on such testi-

mony in the absence of a formal finding. The court recog-

nized the judgment of the railroad traffic experts as an im-

portant factor for consideration by the Commission, saying:

‘The objection that the finding of unjust discrimi-

nation by the intrastate rates against interstate com-

merce is unsupported by any finding that the increased

rates would produce increased revenue is rested upon

the statement, separated from its context in the Com-

mission’s report, ‘we conclude that no positive finding

in regard to the revenue outcome of the increases can

be justified.’ It is manifest that any finding of undue

prejudice to interstate commerce, based upon the fail-

ure of prevailing intrastate rates to contribute their

fair share to the support of a national transportation

system, must necessarily rest upon a prediction that an

increase of the intrastate rates will result in an increase

of revenue, a prediction involving, especially since

1930, many elements of uncertainty. There are no

formal requirements for the findings to be made by

the Commission in this type of case, see Manufacturers

Ru. Co. v. United States, 246 U. S. 457, 490, and while

the particular form in which they were cast here is not

te he eommended, the report, read as a whole, suffi-

riently expresses the conclusion of the Commission,

hased nnon supporting data, including estimates of ex-

perienced railroad traffic men, to which the report

refers, that the probahilitv of increased revenue was

sufficiently great to make the increase of rates a rea-

sonably exercise of sound managerial iudgment. This,

we think, meets the requirements of the statute.’’

(Emphasis supplied.)

Whether experience with interstate rates is a depend-

able guide in judging the effect of a corresponding increase

in intrastate rates is a matter of expert judgment as to

which the opinion of the railroad traffic experts is cer-

tainly substantial evidence of real value, as their railroads

will bear the loss if the increase of rates which they pro-

pose results in a decrease of revenue. Certainly their opin-

APPENDIX 45

ion is entitled to as much weight as prophecies of traffic loss

by interested shippers who have everything to gain and

nothing to lose by holding intrastate rates at the existing

level. At all events, we cannot say that the evidence upon

which the Commission acted, which consisted not only of

the testimony of these experts but also of the traffic studies

upon which it was based, was not substantial evidence. The

matter involved is largely a matter of expert judgment; and

the Commission is ‘‘a tribunal appointed by law and in-

formed by experience’’ to deal with just such matters.

When it has based its order on evidence which is unques-

tionably substantial, we have no power to substitute our

judgment or the judgment of the state commission for its

judgment on the facts. This is too well settled to admit of

argument. The rule was thus laid down more than forty

years ago in Interstate Commerce Commission v. Union

Pacifie R. Co., 222 U. S. 541, 547:

‘‘In determining these mixed questions of law and

fact, the court confines itself to the ultimate question

as to whether the Commission acted within its power.

It will not consider the expediency or wisdom of the

order, or whether, on like testimony, it would have

made a similar ruling. ‘The findings of the Commission

are made by law prima facie true, and this court has

ascribed to them the strength due to the judgments of

a tribunal appointed by law and informed by exper-

ience.’ Ill. Cent. v. I. C. C., 206 U. S. 441 Its conelusion,

of course, is subject to review, but when supported by

evidence is accepted as final; not that its decision, in-

volving as it does so many and such vast public in-

terests, can be supported by a mere scintilla of proof—

but the courts will not examine the facts further than

to determine whether there was substantiai evidence to

sustain the order.”’

Direetly in point is the ease of Florida v. United States,

292 U. S. 1, 12, wherein the Supreme Court was dealing

with the power of the Commission to raise intrastate rates

to remove the same sort of diserimination against inter-

state commerce as is involved in the ease before us. Chief

46 State or S. C. ex rel., APPELLANT, v. U. S. A. et al., APPELLEES

Justice Hughes laid down the rule here applicable in the

following language:

‘‘The question of the weight of the evidence was

for the Commission and not for the court. The author-

ity conferred upon the Commission by sec. 13(4) of

the Interstate Commerce Act, with respect to intra-

state rates, is not different in its quality or effect from

that given to the Commission to prevent other sorts of

unjust discrimination against interstate commerce.

That authority rests upon the constitutional power of

the Congress, extending to interstate carriers as in-

struments of interstate commerce, to require that these

agencies shall not be used in such manner as to cripple,

retard, or destroy that commerce, and to provide for

the execution of that power through a subordinate

hody. Shreveport case, 234 U. S. 342, 351, 354, 355;

Railroad Commission of Wisconsin v. Chicago, B. é Q.

R. Co., supra. The purpose for which the Commission

was created was to bring into existence a body which,

from its special character, would be best fitted to de-

termine, among other things, whether upon the facts

in a given case there is an unjust discrimination against

interstate commerce. United States v. Louisville &

Nashville R. Co., 235 U. S. 314, 320. That purpose un-

questionably extended to the prohibited discrimination

produced by intrastate rates. In relation to such a dis-

crimination, as in other matters, when the Commission

exercises its authority upon due hearing, as prescribed,

and without error in the application of rules of law,

its findings of fact supported by substantial evidence

are not subject to review. It is not the prince of the

courts to substitute their judgment for that of the

Commission.’’

See also Mississippi Valiey Barge Co. v. United States,

292 U. S. 282, 286; Swayne & Hoyt Ltd. v. United States,

300 U. S. 297, 304. The rule as above stated with respect to

sustaining the order if supported by substantial evidence

is the rule of the Administrative Procedure Act. See

Universal Camera Corp. v. N. L. R. B., 340, U. S. 474; N.

L. R. B. v. Southland Mfg. Co, 4 Cir. 202, F. (2d) 244.

APPENDIX 47

The case of Mississippi Public Service Corp. v. United

States, 124 F. Supp. 809, upon which plaintiff chiefly relies,

was considered and quoted from by the Commission but was

distinguished on the ground that in the present case there

was substantial evidence to support the finding as to the

increased rates producing increased revenue.

Another case upon which plaintiff places great reliance

is State of North Carolina v. United States, 325 U. S. 507;

but that case was distinguished from a case such as this

by the Supreme Court in King v. United States, 344 U. S.

254 on the ground that the order there was based upon the

mere disparity between intrastate and interstate rates and

did not contain the essential findings which were made in

the King case and have been made here.

Of course the estimates of the experts may prove to

be erroneous and the increased rates may not produce in-

creased revenue. If so, application will doubtless be made

for another change in the rates and an appropriate order

will be entered by the Commission ;* but such a possibility

would not warrant our setting aside an order which is un-

questionably supported by substantial evidence on the

whole record now before us.

For the reasons stated, the petition to set aside and

enjoin the enforcement of the order of the Commission will

be denied and the action will be dismissed.

Petition denied and action dismissed.

I econeur.

JOHN J. PARKER,

U.S. Cireuit Judge.

ASHTON H. WILLIAMS,

U. 8. District Judge.

* The railroads have already asked and been allowed to withdraw

—— for a increases as to a few commodities as to which

oe been mstrated that raise in rates would result in loss of

enue.

48 Strate or S. C. ex rel., APPELLANT, v. U. S. A. et al., APPELLEES

Timmerman, District Judge:

I do not agree with the views of my able and distin-

guished colleagues in this case, as such views are expressed

in the opinion of Chief Judge Parker.

There is for consideration and determination this

simple question: Is the conclusion of the Interstate Com-

merce Commission, that revenues of the railroads will be

substantially increased by allowing increased intrastate

freight rates on certain commodities to be shipped wholly

within the State of South Carolina, supported by substan-

tial evidence? I think not.

Evidence, if it is to be regarded as substantial, must

have substance. It cannot be classed as substantial if it is

vague or uncertain, or is the product of guess or surmise,

or is equivocal. The evidence upon which the Interstate

Commerce Commission acted is not only equivocal in many

respects, it is vague and uncertain. I find in the record no

established facts from which there can be drawn legitimate

inferences as to what proportion of the commodities af-

fected by the increased rates will be diverted by reason

thereof from the railroads to other type carriers having

lower rates. I do know as a matter of mathematical cer-

tainty that if the railroads lose twenty-five percent of the

affected commodities the rate on the remaining three-

fourths will have to be promoted by one-third to leave the

railroads’ revenue the same as it was before. I also know

that if the commodities handled are reduced by only one-

fifth that the rate on the remaining four-fifths will have to

be increased by one-fourth to equal the revenue obtained

before the rate was changed; and so on.

If we go in the other direction and reduce the com-

modities by one-third the rate will have to be increased by

one-half for the railroads’ revenue to continue constant.

The substance of the testimony offered by the pro-

ponents of the proposed rate increases is that they guess

or surmise that the increased rates will result in increased

revenue. They have not established any facts from which

it can be concluded that the railroads will suffer only a

certair percentage of diversion by reason of the increased

rates.

APPENDIX 49

On the other hand, the shippers testified that in their

opinion the increased rates would result in decreased rev-

enue to the railroads. That testimony, like the other, is

largely guess and surmise. I find nothing in the record

which warrants giving the railroads’ witnesses preferential

consideration. Both groups of witnesses should be placed

in the same bracket. They both advocate acceptance of their

guesses, as it is natural that they would do. Each group is

undoubtedly biased in favor of its own opinions. If there

was nothing more in this case than merely finding out what

the railroads wanted it would have been unnecessary to

have a hearing. That could have been determined by writing

a letter. To say that if the railroads’ officials have guessed

wrong their guess can be corrected is to beg the question,

for it is also true that if the shippers’ guess is wrong it

too can be corrected. We do have one fact in common in

this case. It is true: Both groups agree that the increased

rates will cause diversion of traffic from the railroads to

other type carriers having lower rates. The only difference

between them is their generalizations as to how much di-

version will be accomplished by the increased rates. Of

course the railroads hope that the increased rates will bring

them increased revenue. This hope undoubtedly prompted

the opinion that they will. I see nothing else in the record

to justify the opinion. The shippers frankly are in favor

of cheaper freight rates, which is natural, and they indicate

that they intend patronizing the carriers that afford them

the cheaper rates. If so, what then becomes of the hope of

the railroads for increased revenue? To repeat, I have

found in the record no established fact or facts justifying

the conclusion that the revenue of the railroads will he

increased, or that the diversion of freight from the rail-

roads to other type carriers will be inconsequential by

reason of the incréased freight rates. I, therefore, dissent.

“~’

TABLE OF CONTENTS

Page

Motion to Affirm 1

The Questions Presented 3

The Findings of the Commission 4

What Constitutes Substantial Evidence in Cases In-

volving the Review of Orders of Administrative

Agencies, and the Weight to be Accorded Findings

Supported by Such Evidence 6

The District Court Followed the Correct Princi-

ples of Law in Upholding the Commission’s

Order 9

The Motion to Affirm Should Be Granted for the

Following Reasons 11

1. The Only Question Presented to the Court Is

a Question of Fact, and This Is Not the

Place to Review Conflicts of Evidence in

Cases Like the Instant Case __. 11

2. An Examination of the Opinion of the District

Court Makes it Apparent That the Commis-

sion’s Finding is Supported by Substantial

Evidence on the Record as a Whole 12

There Is No Conflict Between the Decision of the

District Court in This Case and the Decision in

Mississippi Public Service Commission v. United

States, 124 F. Supp. 809 14

Other Contentions of icoecnni ‘Are Without Sub-

stance . 15

TasBLe or Cases

Consolidated Edison Co. v. N.L.R.B., 305 U.S. 197... 6

Federal Trade Commission v. American Tobacco Co.,

274 U.S. 543 ...:. 15

Florida v. United States, 292 U. S. 1 8,9, 11

Increased Railway Rates, Fares and ee? 1946,

fiat. ee 2,3

Increased Freight Rates, 1947, 270 L Cc. C. 403. | 2,3

Increased Freight Rates, 1948, 276 LC.C. 9. . 2, 3, 16

—8385-7

i INDEX

Page

Increased Freight Rates, 1951, 284 1.C.C. 589, 28S

BRCM I By EE inns vw csc vac tea e deeds 5 2,3

Interstate Commerce Commission v. Union Pacific R.

PTI a rs eo. oad ons 11

King v. United States, 344 U.S. 254............... 3, 6, 16

Louisiana Public Service Commission v. United

eS SS re 14

Mississippi Public Service Commission v. United

States, 124 F. Supp. 809, 349 U.S. 908............ 4,14

N.L.R.B. v. Amercan Insurance Co., 343 U.S. 395... . 12

N.L.R.B. v. Pittsburgh S.S. Co., 340 U.S. 489... ..... 11, 12

N.L.R.B. v. Southland Mfg. Co., 291 F. 2d 244...... 6

O’Leary v. Brown-Pacific-Mazon, 340 U.S. 594...... 9

South Carolina Intrastate Freight Rates and Charges,

296 I.C.C. 159, 136 F. Supp. 897........ 2, 4, 5, 6, 9, 11, 13

United States v. Louisiana, 290 U.S. 70............ 6, 7, 16

Universal Camera Corp. v. N.L.R.B., 340 U.S. 474. 8, 12, 14

OG A HE SI DI vce Sees td eeuwveses 9

Sratutes CiTep

Administrative Procedure Act, 5 U.S.C. Section

NG Dayo SR Ee is Oe «nlp ee 7

ES ee See ati ee ee ets

Rep re ee ee e

RE SE SA epairateh RO is Babel once

I te Nt oe we Se

Interstate Commerce Act, 49 U.S.C.:

ES ey Re ae

To fa can wcu Gol welt ope Grd Kes 2

bo bo BS DO

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1955

No. 794

STATE OF SOUTH CAROLINA ex retatione SOUTH

CAROLINA PUBLIC SERVICE COMMISSION,

Appellant,

UNITED STATES OF AMERICA, er at,

Appellees

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF SOUTH CAROLINA

MOTION OF DEFENDANT AND INTERVENING

RAILROADS TO AFFIRM

Pursuant to Rule 16, Paragraph 1(c), of the Revised

Rules of this Court, the defendant and intervening rail-

roads, appellees, move that the judgment of the District

Court be affirmed on the ground that the questions raised

by appellant are so unsubstantial as not to need further

argument.

This is a direct appeal from a final judgment entered on

January 3, 1956, by a specially-constituted three-judge

2

District Court, pursuant to 28 U. S. C. Sections 1336 and

2321 to 2325, dismissing the suit of appellant to set aside

and enjoin an order of the Interstate Commerce Commis-

sion entered in a proceeding entitled ‘‘Docket No. 31291,

South Carolina Intrastate Freight Rates and Charges’’, 296

I. C. C. 159. The case below is reported in 136 F. Supp. 897.

Direct appeal to this Court is authorized by 28 U. S. C.

Sections 1253 and 2101(b), Notice of Appeal was filed on

January 31, 1956, and appellant’s Jurisdictional Statement

was received by these appellees on March 26, 1956.

The aforesaid order of the Interstate Commerce Com-

mission was issued under the power conferred upon it by

Sections 13(3)(4) and 15a(2) of the Interstate Commerce

Act (49 U.S. C. Sections 13(3) (4) and 15a(2)). The Com-

mission found that the South Carolina intrastate rates on

certain commodities? resulted in unjust discrimination

against interstate commerce, and its order required the

railroads operating in that State to increase their rates on

these commodities by the amounts by which their interstate

rates on said commodities had been increased under au-

thority granted by the Commission in Ex Parte No. 162, Ex

Parte No. 166, Ex Parte No. 168 and Ex Parte No. 175.*

In the proceedings just mentioned, the Interstate Com-

merce Commission authorized the railroads to make gen-

1 The commodities involved and the extent to which the South Carolina

Commission had refused to authorize the increases which had been applied

to the interstate rates on said commodities to, from, and between points

in South Carolina are stated in Appendix A to the Commission’s report

(296 I. C. C. 180).

2 The title and citations of the proceedings we have mentioned by num-

ber are: Ex Parte No. 162, Increased Railway Rates, Fares and Charges,

1946, 266 1.C.C. 537; Ex Parte No. 166, Increased Freight Rates, 1947,

270 I.C.C. 403; Ex Parte No. 168, Increased Freight Rates, 1948, 276

I.C.C. 9; and Ex Parte No. 175, Increased Freight Rates, 1951, 284

1.C.C. 589, and 289 I.C.C. 395. In a report dated November 14, 1955,

297 I.C.C. 17, the Commission authorized the railroads to make the Ex

Parte No. 175 increases permanent.

3

eral increases in their interstate freight rates and charges

‘‘for the purpose of providing the carriers with additional

revenue needed to meet increased costs for equipment,

materials, supplies, and wages required to maintain an

adequate and efficient railway service contemplated by the

national transportation policy and by section 15a(2) of the

act’’ (296 I. C. C. 161). These increased expenses were

incurred in intrastate as well as interstate transportation

(296 I. C. C. 161, 178), and the Commission’s reports au-

thorizing increases in the interstate rates show that it con-

templated that substantially the same increases would be

made in the intrastate rates. The South Carolina Public

Service Commission authorized the railroads to increase

their intrastate rates on some commodities but not on

others, the excepted commodities being among those which

move in large volume and produce the most intrastate reve-

nue. The assailed order of the Interstate Commerce Com-

mission simply required the intrastate rates on the excepted

commodities to be increased to the extent the interstate

rates thereon had been increased.*

The Questions Presented

Appellant contends (1) that the finding of the Interstate

Commerce Commission, that the increases required in the

intrastate rates on the commodities involved herein will

increase the railroads’ revenues, is not supported by sub-

stantial evidence and the District Court erred in failing so

3 King v. United States, 344 U.S. 254, 257-258; Ex Parte No. 162, 266

I.C.C. 537, 613; Ex Parte No. 166, 270 I.C.C. 403, 463; Ex Parte No.

168, 276 I.C.C. 9, 13, 113; Ex Parte No. 175, 289 I.C.C. 395, 396, 441.

*The Commission’s order, dated September 19, 1955, does not require

an inerease in the rates on pulpwood to Georgetown, S. C. The pro-

ceeding has been reopened for further hearing with respect to said rates,

and the further hearing is being had under modified procedure. Con-

sequently, the testimony of Messrs. J. E. MeCaffrey and J. P. Hearn,

mentioned on pp. 13 and 14 of appellant’s Jurisdictional Statement, is

entitled to no consideration.

+

to find; and (2) that the decision of the District Court in the

instant case is contrary to the decision in Mississippi Public

Service Commission v. United States, 124 F. Supp. 809

(motion to affirm granted, 349 U.S. 908).

Before discussing these questions it is advisable to set

forth the findings of the Interstate Commerce Commission,

and refer briefly to decisions of this Court defining ‘‘sub-

stantial evidence’’ and the scope of judicial review in cases

involving orders of administrative agencies.

The Findings of the Commission

The findings of the Commission appear on pages 179-180

of its report and are as follows:

‘*We find and conclude that—

‘‘1, The conditions incident to the intrastate trans-

portation of freight in South Carolina are not more

favorable than those incident to the interstate transpor-

tation of freight between points in South Carolina, on

the one hand, and the adjoining States in southern ter-

ritory, on the other.

‘*2. The amounts and percentages by which interstate

freight rates and charges between points in South Car-

olina and points in other Sates were increased, as au-

thorized in Ex Parte Nos. 162, 166, 168, and 175, were

and are just and reasonable.

‘*3. The present intrastate rates and charges in South

Carolina on clay, cotton, in bales, cottonseed, cottonseed

meal, cottonseed hulls, cottonseed oil, limestone, ground

or pulverized, used for agricultural purposes, logs,

sand, gravel, crushed stone and related commodities,

road-building materials, and pulpwood, imposed by au-

thority of the State of South Carolina and under in-

vestigation in this proceeding, are generally lower

than the interstate rates and charges on the same com-

5

modities between South Carolina and points in adjoin-

ing States, and traffic thereunder fails to produce its

fair share of the revenue required by the respondents

to enable them, under honest, economical, and efficient

management, to provide adequate and efficient trans-

portation service, and thereby accomplish the purpose

of the Interstate Commerce Act as set forth in the

national transportation policy declared by the Con-

gress, to develop and preserve a national transporta-

tion system adequate to meet the needs of the commerce

of the United States, of the Posial Service, and of the

national defense; the burden thus cost upon interstate

commerce is undue in and to the extent vat these intra-

state rates and charges are less than they would be on

the basis herein approved, and these intrastate rates

and charges cause, and for the future will cause, undue,

unreasonable, and unjust discrimination against inter-

state commerce.

‘*4 The undue, unreasonable, and unjust discrimina-

tion against interstate commerce herein found to exist

should be removed by applying to the South Carolina

in‘rastate rates and charges, on the commodities de-

scribed in finding 3, the same respective increases

which are, and for the future may be, maintained by

the respondents on like interstate traffic between points

in South Carolina and points in adjoining States under

our authorizations in Ex Parte Nos. 162, 166, 168, and

175; provided, that no intrastate rate shall be increased

to a level that exceeds the lowest level of the interstate

rates on like traffic over the same line of railroad to,

from, or through South Carolina.

‘*5. The establishment of increases in intrastate rates

and charges as provided in finding 4, and of the in-

creased rates there prescribed will not result in unjust

or unreasonable rates or charges, nor rates or charges

that are unjust or unreasonable in relation to the inter-

state rates and charges, and will substantially increase

the respondents’ revenues.

‘*The foregoing findings and conclusions are without

prejudice to the right of the authorities of the State

of South Carolina, or any other interested party, to

apply for modification thereof as to any specific intra-

state rate or charge affected thereby on the ground

that such rate or charge is not related to the interstate

rates or charges on like traffic in such a way as to con-

travene the provisions of the Interstate Commerce

Act.”’

The above findings, if supported by substantial evidence,

are adequate to sustain the Commission’s order, and there

is no contention that they are inadequate. King v. United

States, 344 U.S. 254.

What Constitutes Substantial Evidence in Cases Involving

the Review of Orders of Administrative Agencies, and

the Weight to Be Accorded Findings Supported by Such

Evidence.

In Consolidated Edison Co. v. N.L.R.B., 305 U.S. 197, 229,

Mr. Chief Justice Hughes stated:

‘*Substantial evidence is more than a mere scintilla.

It means such relevant evidence as a reasonable mind

might accept as adequate to support a conclusion.’’*

In United States v. Louisiana, 290 U.S. 70, which involved

an order of the Interstate Commerce Commission raising °

intrastate rates and the question whether the increased

rates would produce increased revenue, this Court sus-

tained the order, on basis of the testimony of railroad

5 See also N.L.R.B. v. Southland Mfg. Co., 201 F. 2d 244, 246 (opinion

by Judge Parker).

—— —

7

officials, in the absence of a formal finding by the Commis-

sion. In an opinion by Mr. Justice Stone, the Court stated

(p. 80):

‘‘The objection that the finding of unjust discrimina-

tion by the intrastate rates against interstate commerce

is unsupported by any finding that the increased rates

would produce increased revenue is rested upon the

statement, separated from its context in the Commis-

sion’s report, ‘we conclude that no positive finding in

regard to the revenue outcome of the increases can be

justified.’ It is manifest that any finding of undue

prejudice to interstate commerce, based upon the fail-

ure of prevailing intrastate rates to contribute their

fair share to the support of a national transportation

system, must necessarily rest upon a prediction that an

increase of the intrastate rates will result in an in-

crease of revenue, a prediction involving, especially

since 1930, many elements of uncertainty. There are

no formal requirements for the findings to be made by

the Commission in this type of case, see Manufacturers

Ry Co. v. United States, 246 U.S. 457, 490, 38 S. Ct. 383,

62 L. Ed. 831, and while the particular form in which

they were cast here is not to be commended, the report,

read as a whole, sufficiently expresses the conclusion

of the Commission, based upon supporting data, in-

cluding estimates of experienced railroad traffic men,

to which the report refers, that the probability of in-

creased revenue was sufficiently great to make the in-

crease of rates a reasonable exercise of sound mana-

gerial judgment. This, we think, meets the require-

ments of the statute.’’ (Italics supplied.)

Section 10(e) of the Administrative Procedure Act (5

U.S.C. Section 1009(e)) provides that in determining

whether or not the order of an administrative agency is

supported by substantial evidence, the Court shall review

‘‘the whole record.’’ This means, as stated in Universal

Camera Corp. v. N.L.R.B., 340 U.S. 474, 488, that:

‘‘The substantiality of evidence must take into account

whatever in the record fairly detracts from its weight.”’

But ‘‘the requirement for canvassing ‘the whole record’

in order to ascertain substantiality’’ was not intended to

negative the function of the Commission

‘*as one of those agencies presumably equipped or in-

formed by experience to deal with a specialized field

of knowledge, whose findings within that field carry

the authority of an expertness which courts do not

possess and therefore must respect. Nor does it mean

that even as to matters not requiring expertise a court

.may displace the Board’s choice between two fairly

conflicting views, even though the court would justifia-

bly have made a different choice had the matter been

before it de novo.’’ (340 U.S. 488.)

It has long been settled that the question of the weight

of the evidence is for the Commission and not for the court,

and that:

‘¢ * * * The purpose for which the Commission was

created was to bring into existence a body which, from

its special character, would be best fitted to determine,

among other things, whether upon the facts in a given

case there is an unjust discrimination against inter-

state commerce. United States v. Louisville & Nash-

ville R. Co., 235 U.S. 314, 320, 35 S. Ct. 113, 59 L. Ed.

245. That purpose unquestionably extended to the pro-

hibited discrimination produced by intrastate rates. In

relation to such a discrimination, as in other matters,

when the Commission exercises its authority upon due

hearing, as prescribed, and without error in the appli-

cation of rules of law, its findings of fact supported by

substantial evidence are not subject to review. It is not

the province of the courts to substitute their judgment

for that of the Commission.’’ Florida v. United States,

292 U.S. 1, 12.

The statement last quoted was made by Mr. Chief Justice

Hughes in a case, like the instant case, which involved the

validity of an order of the Interstate Commerce Commis-

sion, under Section 13(4) of the Interstate Commerce Act,

requiring an increase in intrastate rates in order to remove

unjust discrimination against interstate commerce.

The necessity for considering the record as a whole to

determine substantiality has not changed the rule that find-

ings of administrative agencies supported by substantial

evidence must be accepted by the courts. O’Leary v.

Brown-Pacific-Maxon, 340 U.S. 504, 508; Voris v. Eikel, 346

U.S. 328, 333-334.

The District Court Followed the Correct Principles of Law

in Upholding the Commission’s Order

The opinion of the District Court was written by Hon-

orable John J. Parker, Chief Judge of the Circuit Court of

Appeals for the Fourth Cirenit. The learned judge stated

(136 F. Supp. 899-900) :

‘*The findings of the Commission are not attacked

except with respect to the finding that the increased

rates will substantially increase the revenue of the

railroads. As to this, plaintiff relies upon testimony,

largely the prophecy of interested shippers, that the

increased rates will result in the diversion of traffic to

carriers by truck. There is abundant testimony, how-

ever, supporting the findings of the Commission.

Traffic experts of the three great railway systems serv-

10

ing the state testified unequivocally that, while there

might be some diversion of traffic, the net result of the

increase of rates would be to substantially increase

revenues; and this testimony was not given ex cathedra

but was supported by traffic studies introduced in evi-

dence including a special four weeks’ study which

showed the increase in revenues due to increase in in-

terstate rates on these commodities and included a four

weeks’ study showing the movement of these commodi-

ties in intrastate commerce and how much the revenues

therefrom would have been increased by application of

the percentage increases allowed in interstate rates.’’

Then, after reviewing the evidence and quoting from this

Court’s opinion in United States v. Louisiana, supra, he

continued (136 F. Supp. 902-903) :

‘‘Whether experience with interstate rates is a de-

pendable guide in judging the etfect of a corresponding

increase in intrastate rates is a matter of expert judg-

ment as to which the opinion of the railroad traffie ex-

perts is certainly substantial evidence of real value, as

their railroads will bear the loss if the increase of rates

which they propose results in a decrease of revenue.

Certainly their opinion is entitled to as much weight

as prophecies of traffic loss by interested shippers who

have everything to gain and nothing to lose by holding

intrastate rates at the existing level. At all events, we

cannot say that the evidence upon which the Commis-

sion acted, which consisted not only of the testimony

of these experts but also of the traffic studies upon

which it was based, was not substantial evidence. The

matter involved is largely a matter of expert judgment;

and the Commission is ‘a tribunal appointed by law

and informed by experience’ to deal with just such

matters. When it has based its order on evidence which

Ne ee OP ee ae ee OY OD ACI RE eS ———

11

is unquestionably substantial, we have no power to sub-

stitute our judgment or the judgment of the state com-

mission for its judgment on the facts. This is too well

settled to admit of argument.’’

Judge Parker next quoted from this Court’s opinions in

Interstate Commerce Commission v. Union Pacific R. Co.,

222 U. S. 541, 547, and State of Florida v. United States,

292 U. S. 1, 12, and stated (136 F. Supp. 903-904) :

‘** * * The rule as above stated with respect to

sustaining the order if supported by substantial evi-

dence is the rule of the Administrative Procedure Act,

5 U. S. C. A. Section 1001 et seq. See Universal

Camera Corp. v. N. L. R. B., 340 U. S. 474, 71 S. Ct. 456,

95 L. Ed. 456; N. L. R. B. v. Southland Mfg. Co., 4 Cir.,

201 F. 2d 244.”’

The Motion to Affirm Should Be Granted for the Following

Reasons

1. The Only Question Presented to the Court Is a Question

of Fact, and This Is Not the Place to Review Conflicts

of Evidence in Cases Like the Instant Case

We have shown that the District Court applied the cor-

rect principles of law in deciding the instant case. This

being so, the only question remaining is one of fact, i. e.,

is the Commission’s finding, that the railroads will receive

increased revenue from the increased rates, supported by

substantial evidence on the record as a whole. Appellant

is asking this Court to review the entire record consisting

of 889 pages of testimony and 51 exhibits to determine this

question of fact. But in NW. L. R. B. v. Pittsburgh S. S. Co.,

340 U. S. 489-503, the Court stated:

‘‘This is not the place to review a conflict of evidence

nor to reverse a Court of Appeals because were we in

its place we would find the record tilting one way rather

12

than the other, though fair-minded judges could find it

tilting either way. It is not for us to invite review by

this Court of decisions turning solely on evaluation of

testimony where on a conscientious consideration of

the entire record a Court of Appeals under the new

dispensation finds the Board’s order unsubstantiated.

In such situations we should ‘adhere to the usual rule

of noninterference where conclusions of Circuit Courts

of Appeals depend on appreciation of circumstances

which admit of different interpretations.’ Federal

Trade Comm’n v. American Tobacco Co., 274 U. S. 548,

544.’

See also Universal Camera Corporation v. N. L. R. B.,

supra, at pages 490-491, and N. L. R. B. v. American Insur-

ance Co., 343 U. S. 395, 401-410.

2. An Examination of the Opinion of the District Court

Makes it Apparent That the Commission’s Finding Is

Supported by Substantial Evidence on the Record as

a Whole

After this case was argued before the District Court, that

court gave the parties the privilege of filing supplemental

briefs on the sole question whether the finding of the Com-

mission, that the increases required in the intrastate rates

on the involved commodities would increase the railroads’

revenues, was supported by substantial evidence. Such

briefs were filed. The opinion of the court shows that it

gave careful consideration to this evidence, much of which

is quoted or summarized in its opinion. After quoting and

summarizing the evidence, the court stated (136 F. Supp.

902) :

‘“‘Tt is clear that the foregoing testimony, together

with the exhibits evidencing traffic studies upon which

13

the testimony is based, furnish ample support for the

finding of the Commission which is assailed.”’

In view of the fact that the evidence is summarized in

the opinion of the District Court, as well as in the report

of the Commission, we shall not undertake to discuss it

here. We do call attention to certain statements in the

court’s opinion and to findings of the Commission which

lend added weight to the conclusion that the increased rates

will increase the railroads’ revenues:

(a) *** * * The Commision found specifically, and

there is no question as to the correctness of the finding,

that ‘the conditions incident to the intrastate trans-

portation of freight in South Carolina are not more

favorable than those incident to interstate transporta-

tion of freight between points in South Carolina, on the

one hand, and the adjoining states in Southern Terri-

tory, on the other.’ ’’ (136 F. Supp. 898, and I. C. C.

Finding 1.)

(b) ‘*The establishment of increases in intrastate

rates and charges as provided in finding 4, and of the

increased rates there prescribed will not result in un-

just or unreasonable rates or charges, nor rates or

charges that are unjust or unreasonable in relation to

the interstate rates and charges * * *.”? (I. C. C.

Finding 5.)

(c) ‘It has long been respondents’ [the railroads’]

policy to maintain rates intrastate in South Carolina

and other southern States on the same level as the in-

terstate rates.’’ (296 I. C. C. 177-178.)

(d) ‘** * * Competition of the several transporta-

tion agencies, rail, truck, and barge, is not confined to

intrastate traffic but obtains also in the movement of

interstate traffic.”’ (296 I. C. C. 178.)

14

There Is No Conflict Between the Decision of the District

Court in This Case and the Decision in Mississippi Pub-

lic Service Commission v. United States, 124 F. Supp.

809.

Appellant relies principally upon an allegec conflict be-

tween the decision of the District Court in the instant case

and the decision in Mississippi Public Service Commission

v. United States, 124 F. Supp. 809, as justifying an exten-

sive consideration .by this Court of the question whether

the Commission’s finding is supported by substantial evi-

dence. But there is no real conflict between the two de-

cisions—certainly none of sufficient general importance to

warrant this Court’s burdening itself with a considera-

tion of the lengthy record involved.

Where decisions depend on questions of fact, they will

vary according to the evidence submitted in each case.

A holding in one case that the Commission’s finding is sup-

ported by substantial evidence, and a holding in another

that its finding is not so supported, do not create a con-

flict of decision, particularly where the proper standard

for determining the substantiality of the evidence has been

followed. In Universal Camera Corp. v. N.L.R.B., supra,

it was stated (p. 491) that:

‘“‘This Court will intervene only in what ought to be

the rare instance when the standard appears to have

been misaporehended or grossly misapplied.’’ (Italics

supplied.)

The Mississippi case and Louisiana Public Service Com-

mission v. United States, 125 F. Supp. 180, involved orders

of the Interstate Commerce Commission, under Section

13(4) of the Interstate Commerce Act, requiring certain

intrastate rates in both states to be increased by the amounts

of general increases authorized and applied to the inter-

state rates to, from, and between points in those states.

In each case the Commission made substantially the same

15

findings, and its orders required the intrastate rates on

many of the same commodities to be increased by the same

amounts in each of these adjoining states. In one case the

District Court held that the Commission’s findings were

not supported by substantial evidence and its order should

be enjoined. But in the other, another District Court held

that the Commission’s findings were supported by sub-

stantial evidence and its orders should not be enjoined.

This Court granted motions to affirm in both cases.®

It is plain, therefore, that the Court does not regard dif-

ferent decisions of district courts with respect to questions

of fact as creating a conflict of decision which it should

resolve.

The Interstate Commerce Commission and the court be-

low considered the decision in the Mississippi case (296

LC.C. 178, 136 F. Supp. 904). Both distinguish the instant

case from the Mississippi case on the ground that here the

evidence supporting the Commission’s finding is substan-

tial. This conelusion is not only correct, but the question

of its correctness is of insufficient general importance to

justify an examination of a lengthy record by this Court.

See Federal Trade Commission v. American Tobacco Co.,

274 U.S. 543.

Other Contentions of Appellant Are Without Substance

Appellant seeks to make much of the fact that the rail-

roads withdrew their request for increases in the rates on

cement and cotton. The request for increases in the rates

on these commodities was withdrawn because the railroads

reduced the rates.ori said commodities and established the

reduced rates for application both interstate and intrastate

within the South, including South Carolina (296 LC.C,

160, 161).

A reduction in the rates on two commodities does not

show that increased rates on the remaining commodities

*The motions to affirm were granted in 348 U.S. 885 and 349 U.S. 908.

PEELE KOE nen

16

will not increase railroad revenues, and neither does it

detract from the weight to be accorded the Commission’s

finding. What is does show is that the railroads are alive

to the competition with which they are faced and are not

asking for increases which will cause the loss of traffic.

Viewed in this light, the reductions add strength to the

Commission’s finding that increases in the rates on the

involved commodities will produce increased revenue.

It may be added that both the Commission and the rail-

roads realized that the latter could not take advantage of

the full amounts of the increases authorized in the rates on

all commodities in Ex Parte Nos. 162, 166, 168, and 175, and

that some revision of the rates on particular commodities

might be necessary from time to time. Increased Freight

Rates, 1948, 276 I. C. C. 9, 112. The railroads were ex-

pected to revise, and have revised, their state and interstate

rates when necessary to prevent the diversion of traffic.

Such revisions were made after the Commission’s order,

under Section 13(4) of the Interstate Commerce Act, re-

quiring increases in the Florida intrastate freight rates,

but the order order was upheld by this Court. King v.

United States, supra, at page 272.

Appellant also emphasizes the fact that neither the Com-

mission nor the railroads undertook to state the amount by

which the railroads’ revenues would be increased by the

increased rates. But, as pointed out in United States v.

Louisiana, supra, the effect of an increase in rates upon

railroad revenues ‘‘must necessarily rest upon a predic-

tion.’’ (290 U. S. 80.) In that case the Court upheld an

order of the Commission requiring an increase in intrastate

rates, although the Commission’s report contained the

statement that ‘‘we conclude that no positive finding in

regard to the revenue outcome of the increases can be

justified.’”’ (Ibid.). It is, therefore, obvious that no state-

REPEC ELSA Ae I SE SET BREE oO —

r nee

17

ment in dollars of the amount of the increased revenue is

necessary.

In the instant case the railroads conducted a traflic study

and showed in dollars the increase in revenue which would

be produced by the increased rates if said rates were ap-

plied to the traffic that moved during the period the study

was made. (296 I. C. C. 162.) Experienced traffic officials

testified that the increased rates would result in a substan-

tial increase in revenues, and that such diversions as might

occur would not ‘‘come anywhere near offsetting the in-

creases in revenue derived therefrom.’’ (136 F. Supp. 900,

902.) This evidence was sufficient.

For the foregoing reasons, it is manifest that this appeal

presents no new or substantial questions of law and that

the only question presented is one of fact. The Commis-

sion’s finding of fact is supported by substantial evidence,

as the District Court held. These appellees, therefore, urge

that this Court grant the motion to affirm the judgment of

the District Court.

Respectfully submitted,

James B. McDonoveg, Jr.,

Seaboard Air Line Railroad Building,

Norfolk, Va.;

Ricuarp B. GwaTHMeEY,

Atlantic Coast Line Railroad Building,

Wilmington, N. C.;

James A. BIsTLInE,

Southern Railway Company Building,

Washington, D. C.;

CHart: * P. Reynowps,

Shoreham Building,

Washington, D. C.;

Attorneys for Defendant and Inter-

vening Railroads, Appellees.

April 18, 1956.

18

CERTIFICATE OF SERVICE

I, Charles P. Reynolds, one of the attorneys for the rail- -

road appellees herein, and a member of the Bar of the

Supreme Court of the United States, hereby certify that on —

the 18th day of April, 1956, I served copies of the foregoing

Motion to Affirm on the several parties thereto as follows: ~

1. On the State of South Carolina, in duly addressed

envelopes, with first-class postage prepaid, to its respective —

attorneys as follows: 3

T. C. Callison, Atiorney General,

Columbia, S. C.

Irvine F. Belser, General Counsel for the

South Carolina Public Service Commission,

306 Barringer Building,

Columbia, S. C.

2. On the United States of America, by mailing a copy in

duly addressed envelopes, first-class postage prepaid, to the

Solicitor General, Department of Justice, Washington 26, |

D. C., to Stanley N. Barnes, Esq., Assistant Attorney Gen-

eral, and Maurice A. Fitzgerald, Esq., Department of Jus-

tice, Washington 25, D. C., and by mailing a copy to”

N. Welsh Morrisette, Jr., Esq., United States Attorney for

the Eastern District of South Carolina, Columbia, S. C.

a copy in a duly addressed envelope, first-class postage pre- ~

paid, to Robert W. Ginnane, Esq., its General Counsel, an¢ 4

to Samuel R. Howell, Esq., its Associate General Counsel, -

at the offices of the Commission, Washington 25, D. C. 3

(Signed) CHarues P. Reyno.ps,

Attorney for Defendant and Inter-

vening Railroads, Appellees,

940 Shoreham Building,

Washington 5, D.C.

(8385-7)

SO SG dg co Cee a aa a eke ee tee eee ee

Page

SE Svenevaspevevdcoutysbutheese’ cveceecaue 3

heat AGEs ees vaVG Ee NGERtE Ch adeede 8

CITATIONS

Cases:

King v. United States, 344 U.S. 254............5. 3

Louisiana Public Service Comm. v. United States,

125 F. Supp. 180, affirmed per curiam, 348 US.

a na suas eeewiées5 Sikes tees nN 7

Mississippi Public Service Comm. v. United States,

124 F. Supp. 809, affirmed per curiam, 349 US.

DN ee aires scidkavcukukeevatcvesahewws os 6,7

National Labor Relations Board v. Pittsburgh S.S.

en ane anviss dvaubaen’y e 6

New England Divisions Case, 261 U.S. 184...... 6

North Carolina v. United States, 128 F. Supp. 718,

affirmed per curiam, 350 U.S. 805............. 7

Radio Corp. v. United States, 341 U.S. 412 ...... 6

South Carolina Intrastate Freight Rates and

i Cee, Man ty eedee viccereteses 3

United States v. Detroit & Cleveland N. Co., 326

as Wie Se wedGk va tkeencencdbegesssess 6

United States v. Louisiana, 290 U.S. 70.......... 5

United States v. Pierce Auto Freight Lines, 327

anes Wicbende vate anese caNess ine. 6

Universal Camera Corp. v. Labor Board, 340 U.S

STE UiT eS clove paves tes e¥ ea ee rei eneebe? 6

Statutes:

Interstate Commerce Act, 24 Stat. 379, as amended

49 U.S.C. 1 et seq.:

Section 13(4) ...cscscccccvccssssecvveess 3

(1)

Authe Supreme Gourtof the United States

OcroBER TERM, 1955

No. 794

STaTE OF SouTH CAROLINA EX REL. SOUTH CAROLINA

PuBLic SERVICE COMMISSION, ET AL., APPELLANTS

Vv.

UnIitrep STATES OF AMERICA, INTERSTATE COMMERCE

CoMMISSION, ET AL.

ON APPEAL FROM THE UNITED STATES DISTRICT

COURT FOR THE EASTERN DISTRICT OF SOUTH

CAROLINA

MOTION TO AFFIRM

Pursuant to Rule 16, paragraph 1(c), of the

Revised Rules of this Court, appellees United

States of America and Interstate Commerce Com-

mission move that the judgment of the district

court be affirmed.

This is a direct appeal from a final judgment

(dated December 31, 1955, and filed January 3,

1956) of a three-judge district court convened

pursuant to 28 U.S.C, 2284, 2325, dismissing a

complaint seeking to set aside an order of the

(1)

<ddien e ~ ervey sar oe , yor pres . qed menrert seerents Pee ee ee rT

2

Interstate Commerce Commission. The order of

the Commission required appellee rail carriers

to increase their intrastate rates in South Carolina

on certain commodities to the level of the inter-

state rates applicable to such commodities.

After the Commission had ordered a general

increase in interstate freight rates, the railroads

operating in South Carolina requested the South

Carolina Public Service Commission to grant simi-

lar increases in intrastate rates. The South Caro-

lina Commission allowed the increases except on

certain specified commodities. The railroads then

petitioned the Interstate Commerce Commission

to increase the intrastate rates on the excepted

commodities. After full administrative proceed-

ings, the Commission found that the conditions

incident to the intrastate transportation of freight

in South Carolina were not more favorable than

those incident to the interstate transportation of

freight between points in South Carolina, on the

one hand, and points in adjoining States, on the

other; that the percentages by which the inter-

state rates had been increased were just and rea-

sonable; that the existing intrastate rates on the

excepted commodities were generally lower than

the interstate rates on the same commodities be-

tween points in South Carolina and points in ad-

joining States; that traffic under the intrastate

rates failed to produce its fair share of the revenue

required .by the railroads to enable them to pro-

vide adequate and efficient service; that the intra-

state rates were unjustly discriminatory as against

iF:

3

interstate commerce ; that the discrimination should

be removed by applying to the intrastate rates the

same percentage increases as had been applied to

the interstate rates; and that thus increasing the

intrastate rates would not result in unjust or un-

reasonable rates, and wouid substantially increase

the carriers’ revenues. South Carolina Intrastate

Freight Rates and Charges, 296 1.C.C. 159, 179-

180.

The Commission thereupon ordered the railroads

to increase the intrastate rates to the level at which

it previously had fixed the interstate rates.

On review, the district court (one judge dis-

senting) sustained the Commission’s order. Not-

ing that the findings made by the Commission

were not challenged as to adequacy, and that only

one’ of them as to the sufficiency of the evidence

to support it, the court (per Cireuit Judge Parker)

held, upon its review of the ‘‘whole record’’, that

the evidence furnished ‘‘ample support’’ for the

assailed finding.

ARGUMENT

1. Section 13 (4) of the Interstate Commerce

Act authorizes the Commission to prescribe new

intrastate rates if it finds that existing intrastate

rates cause (1) unjust discrimination against in-

terstate commerce, or (2) undue preference or

prejudice against persons or localities in inter-

state commerce. In King v. United States, 344

U.S. 254, this Court held (pp. 270-271) that a

'The finding that the increase in intrastate rates would

result in a substantial increase in the carriers’ revenues.

4

Commission order designed to remove unjust dis-

crimination against interstate commerce, which

increased Florida intrastate rates to the interstate

rate level, was supported by findings substantially

the same as the findings made by the Commission

in the instant case.

Appellants do not challenge the adequacy of

the findings to sustain the order. Their principal

contention (Jurisdictional Statement, 10, 24-30)

is that there is inadequate evidentiary support

for the finding that the inereases ordered in the

intrastate rates will produce a substantial increase

in the revenues of the appellee railroads. This

issue was fully briefed and argued before the lower

court which, after careful consideration, concluded

that this finding had ‘‘ample support’’ in the testi-

mony and documentary evidence, and that the Com-

mission’s order was ‘‘unquestionably supported by

substantial evidence on the whole record now be-

fore us.’? We submit that the correctness of this

conclusion is manifest, and that the case presents

no question of general importance or substance

warranting further review by this Court.

The district court pointed out that the record

contains ‘‘abundant testimony’? supporting the

challenged finding. ‘‘Traffic experts of the three

great railway systems serving the state testified

unequivocally that, while there might be some di-

version of traffic, the net result of the increase of

rates would be to substantially increase revenues;

and this testimony was not given ex cathedra but

was supported by traffie studies introduced in evi-

ey

5

dence including a special four weeks’ study which

showed the increase in revenues due to increase

in interstate rates on these commodities and in-

cluded a four weeks’ study showing the move-

ment of these commodities in intrastate commerce

and how much the revenues therefrom would have

been increased by application of the percentage

increases allowed in interstate rates”’ (136 F. Supp.

at 900). The district court’s holding that the testi-

mony of the railroad traffic experts, supported by

the described traffic studies, constituted substan-

tial evidence to support the Commission’s finding

that the higher intrastate rates would increase the

carriers’ revenues is supported by the decision of

this Court in United States v. Louisiana, 290 U.S.

70, 80.

In substance, appellants contend that the dis-

irict court should have weighed, and that this

Court should now weigh, the evidence pro and

con the question whether the increase in intrastate

rates will substantially increase the carriers’ reve-

nues. But, as the district court correctly held, it

is well settled that when the Commission ‘thas

based its order on evidence which is unquestionably

substantial, we have no power to substitute our

judgment or the judgment of the state commission

for its judgment on the facts.”” (136 F. Supp.

at 903),

The underlying evidence is fully summarized

both in the Commission’s report and in the opinion

of the court below (Juris. Statement, pp. 40-43),

and we shall not repeat it here. This Court has

a ae

6

indicated that the initial reviewing court has “‘ pri-

mary responsibility’? (National Labor Relations

Board y. Pittsburgh S. S. Co., 340 U.S. 498, 502)

for determining ‘‘whether on the record as a whole

there is substantial evidence to support agency

findings’’, and that this Court will re-examine the

record only in the ‘‘rare instance’’ where the re-

viewing court has ‘‘misapprehended or grossly

misapplied’’ the governing criteria. Universal

Camera Corp. v. Labor Board, 340 U.S. 474, 491.

There appear to be no special circumstances in

the instant case which would warrant a recanvass-

ing of the lengthy Commission record by a second

reviewing court. See New England Divisions Case,

261 U.S. 184, 203-204; Radio Corp. v. United States,

341 U.S. 412, 415. The fact that there may be

evidence in the record from which another trier

of the facts might have reached a conclusion con-

trary to that of the Commission affords no basis

for overturning the Commission’s order. See

United States vy. Detroit & Cleveland N. Co., 326

U.S. 236, 241; United States vy. Pierce Auto Freight

Lines, 327 U.S. 515, 536.

2. Appellants also contend (Jurisdictional State-

ment, 8, 24) that there is a ‘‘direct conflict’? be-

tween the judgment of the district court in this

ease and the decision of the district court in Mis-

sissippi Public Service Comm. v. United States,

124 F. Supp. 809 (S. D. Miss.), affirmed per curiam,

349 U.S. 908. We submit there is no such conflict,

fer the facts and the evidence were not the same in

the two cases. In Mississippi, the district court

7

found upon review that the evidence in the record,

considered as a whole, was insufficient to sustain the

Commission’s finding that the rate increases or-

dered would produce substantial additional revenue

for the carriers there involved. The court in the in-

stant case found that the Commission had cor-

rectly distinguished the Mississippi case ‘ton the

ground that in the present case there was substan-

tial evidence to support the finding as to the in-

creased rates producing increased revenue’? (136

F. Supp at 904).

There is no more logic in appellants’ contention

in this respect than there would be in an argument

that the Mississippi case (affirmed by this Court

in April 1955) is in eonfliet with Louisiana Public

Service Comm. v. United States, 125 F. Supp. 180

(EK. D. La.), affirmed per curiam (November 1954),

348 U.S. 885. The two cases involved similar rate

increases, on virtually the same commodities, and

on somewhat similar evidence. In the former, how-

ever, the district court held that the finding that the

increased intrastate rates would increase total reve-

nues was not supported by substantial evidence ; in

the Louisiana ease, the district court held there was

substantial evidence to support that finding. This

Court affirmed both judgments. The Mississippi

decision, therefore, is no more a controlling prece-

dent in the instant case than is the Louisiana de-

cision, or, for that matter, the more recent decision

in North Carolina v. United States, 128 F. Supp.

718 (KE.D. N.C.), affirmed per curiam (October

1955), 350 U.S, 805, which upheld an order raising

intrastate rates.

8

CONCLUSION

For the foregoing reasons, we submit that the

decision below is correct and that this appeal pre-

sents no substantial question. The judgment of

the district court should be affirmed.

Respectfully submitted,

Srvon E. Sopevorr,

Solicitor General.

STANLEY N. BARNES,

Assistant Attorney General.

Rogsert W. GINNANE,

General Counsel,

Leo H. Pou,

Associate General Counsel,

Interstate Commerce Commission.

“Apri. 1956

WU. S. GOVERNMENT PRINTING OFFICE. 1956 382903 iste

PRIN RRL RTI FU gre en

wre TRS Se ~ et eee

Supreme Court of the United

OCTOBER TERM, 1955

No. 794

STATE OF SOUTH CAROLINA ex rezatione S. C.

PUBLIC SERVICE COMMISSION, Appe.iant,

versus

UNITED STATES OF AMERICA, THE INTERSTATE

COMMERCE COMMISSION, ATLANTIC COAST LINE

RAILROAD COMPANY et at., APPELLEES

APPEAL FROM THE Unitep States Districr Court For

THE Eastern District or SoutH CAROLINA

BRIEF IN OPPOSITION TO MOTION TO AFFIRM

T. C. CALLISON,

Attorney General,

IRVINE F. BELSER,

Assistant Attorney General and

General Counsel for 8. C. Public

Service Commission,

Attorneys for Appellant.

The R. L. Bryan Company, Legal Printers, Columbia, 8. C.

WEP tale B09

SYNOPSIS AND INDEX

Introductory Statement ............0..cccccecceecce. 1

Brief in Opposition to Motion to Affirm:

I. Appellees Make No Argument as to Sufficiency

vidi cecheigcasce,,, BOE EP Te eae ee es 2

II. Case of United States v. Louisiana Does Not

Support Appellees’ Case ................ a

III. Majority Opinion of District Court Misappre-

hends Standard Established by Universal

Camera Corporation Case .............. 6

IV.The Mississippi Case is Controlling and Re-

ems ante ee hei... A REIS: i cord AGN 12

V. Summary and Conclusion ................... 17

(i)

TABLE OF CASES CITED

Florida v. United States, 292 U.S.1,12.............. 12

Florida v. United States, 282 U. S. 194, 211, 212, 75 L.

Ss & & 2 § 6s Beer rrr 2

Illinois C. R. Co. v. State Pub. Utilities Commission,

245 U. S. 493, 510, 62 L. Ed. 425, 438, 38 S. Ct.

Te oe ee Ee he SD Kk peccecuheedacedeheves 2

Interstate Commerce Commission v. Union Pacific R.

CG ee i A NG chen cekddsetoaconceturs 11

Louisiana Public Service Commission v. United States,

125 F. Supp. 180 (KE. D. La.), affirmed per curiam

(November 1954) 348 U. S. 885 ........ eer 15, 16

Mississippi Public Service Commission v. The United

States of America, 124 Fed. Sup. 809, affirmed by

U. S. Supreme Court, April 18, 1955 (99 L. Ed.

GE Catnanaue +a cretuee sein 3, 11, 12, 13, 15, 16, 17

Mississippi Valley Barge Co. v. United States, 292 U. 8.

BE ESS ci oe 6 6.5 bic Eas KAN Od ee EN ee a nebo 12

N. L. R. B. v. Pittsburg S. S. Co., 340 U. S. 480-503,

et Rae ee ey ere rr ee Tre 6, 9

North Carolina v. United States, 325 U. S. 507, 89 L.

NN oe Fin Vo CANS OE CREE OED alee Rik oi oc 2

Swayne & Hoyt Ltd. v. United States, 300 U. S. 297, 304 12

United States v. Louisiana, 290 U. S. 70, 78 L. Ed. 181

Re PCIE AE O8 TELS ae Ee DBO ae egy ee 3, 4, 6

Universal Camera Corporation v. N. L. R. B., 340 U. S.

ee eR ae err 3, 6, 10, 11, 12, 17

( iii)

Supreme Court of the United States

OCTOBER TERM, 1955

No. 794

STATE OF SOUTH CAROLINA ex reLationge S. C.

PUBLIC SERVICK COMMISSION, APPELLANT,

versus

UNITED STATES OF AMERICA, THE INTERSTATE

COMMERCE COMMISSION, ATLANTIC COAST LINE

RAILROAD COMPANY er au., APPELLEES

a a a et ae

APPEAL FROM THE Uniter States District Court For

THE Eastern District or SoutH Carouina

BRIEF IN OPPOSITION TO MOTION TO AFFIRM

INTRODUCTORY STATEMENT

The undersigned counsel for the appellant in the above

entitled case have been served with a Motion to Affirm by

defendant railroads and also with a Motion to Affirm by

counsel for the United States and for the Interstate Com-

merce Commission, the latter Motion being received on

April 25, 1956.

2 StTaTE or S. C., APPELLANT, v. U. S. A. et al., APPELLEES

In accordance with the rules of the Supreme Court,

we hereby submit on behalf of appeiiant our Brief in Oppo-

sition to the Motion to Affirm:

I

I. Appellees Make No Argument as to Sufficiency of |

Evidence.

The most striking thing about the Motions to Affirm

filed by the appellees is their total failure to meet, or even

to attempt to meet, the burden of proof cast upon them by

the authorities in cases of this sort.

It is clearly established by the authorities, that in or-

der to justify the Interstate Commerce Commission in set-

ting aside state-made freight rates the justification there-

for must clearly appear and the evidence must meet a high

standard of certainty.

**A scrupulous regard for maintaining the power

of the state in this field has caused this Court to re-

quire that Interstate Commerce Commission orders

giving precedence to federal rates must meet ‘a high

standard of certainty’. Jllinois C. R. Co. v. State Pub.

Utilities Commission, 245 U. S. 493, 510, 62 L. ed. 425,

438, 38 S. Ct. 170 P. U. R. 1918C 1279. Before the

Commission can nullify a state rate, justification for

the ‘exercise of the federal power must clearly appeal’.

Florida v. United States, 282 U. S. 194, 211, 212, 75

L. ed. 291, 301, 302, 51 S. Ct. 119. See also Yonkers v.

United States, 320 U. S. 685, 88 L. ed. 400, 64 S. Ct.

327 . . e 99

North Carolina v. United States, 325 U. S. 507, 89

L. Ed. 1760.

‘*The true rule is that, whenever the Commission

attempts to exert the power to interfere with intrastate

rates which are otherwise in the dominion of state regu-

lation, the justification for the exercise of such power

by the Commission must clearly appear of record.”’

—

mo

State or S. C., APPELLANT, v. U. S. A. et al., APPELLEES 3

Mississippi Public Service Commission v. The

United States of America, 124 Fed. Sup. 809,

affirmed by U. S. Supreme Court, April 18, 1955

(99 L. Ed. 502).

Appellees in their argument have not even under-

taken to question the principle established by the fore-

going authorities nor to gite any authority to the con-

trary.

Nor have the appellees undertaken to question or criti-

cize any of the evidence set forth in the Jurisdictional

Statement showing the unsubstantiality of the evidence

upon which the order of the Interstate Commerce Commis-

sion purports to be based. They have not cited any addi-

tional evidence other than that contained in our jurisdie-

tional statement, nor have they undertaken to give any

logical reasons to support their claim that such evidence

amounts to ‘‘substantial’’ evidence.

They have contented themselves with arguing princi-

pally that this Court should not review the findings of the

Interstate Commerce Commission holding the evidence

substantial. They have based their arguments principally

upon what we conceive to be a misconstructiom and misin-

terpretation of the United States v. Louisiana case, 290 U.

S. 70, 78 L. Ed. 181, and Universal Camera Corporation

case, 340 U.S. 474, 95 L. Ed. 456.

Appellees in their Motions to Affirm seek to make much

of the various findings by the Interstate Commerce Com-

mission. It is obvious, however, that if the evidence fails

to show that the increased rates would produce an increase

in revenue for the carriers, all the other findings of the

Commission are in fact irrelevant.

The principal questions would therefore seem to be:

1. Is the evidence of results in interstate operations,

together with opinions based thereon, sufficient to consti-

tute substantial evidence of the results to be expected in

Oto eh ne ‘: =

rf PO LE LOT ALE CLL ee Mae fm mae > UD Fine to oe - en ee ere ——— ay

4 STATE OF S. C., APPELLANT, v. U. S. A. et al., APPELLEES

intrastate operations, and of the high standard of certainty

required for orders of the Interstate Commerce Comiis-

sion interfering with state-made freight rates?

2. Did not the Court below misapprehend the proper

standard in basing its conclusion wholly on the opinion of

traffic experts and interstate operations and in disregard-

ing the contrary evidence of the shippers and the findings

of the South Carolina Public Service Commission?

II. Case of United States v. Louisiana Does Not Sup-

port Appellees’ Case.

Both counsel for the railroad companies in their argu-

ment (pages 6-7) and counsel for the Interstate Commerce

Commission in their argument (page 5) cite and quote from

the United States v. Louisiana case above cited (290 U. 8.

70, 78 L. ed. 181) as though that case supported their posi-

tion and as though it held that the testimony of railroad

traffic experts ‘‘constituted substantial evidence to support

the Commission’s finding’’.

It is submitted that that case when properly analyzed

and considered does not offer any real support to the ap-

pellees’ contention in this case.

It did not involve any question as to whether the evi-

dence supporting the order of the Commission was sub-

stantial.

The principal question involved in that case was

whether the order of the Interstate Commerce Commission

was defective as not containing a specific finding as to the

reasonableness of each individual rate. The Court below

had reversed the order of the Interstate Commerce Commis-

sion for failure to make a specific finding as to each indi-

vidual rate, but the Supreme Court reversed the order of

the District Court; this Court holding that the statute ‘‘does

not, in terms, command the Commission to find that each

TE APES ong

oan PIS oe —

Pees. a tae a

STATE oF S. C., APPELLANT, v. U. S. A. et al., APPELLEES 5

rate prescribed under § 15a is just and reasonable, as pre-

requisite to a general increase in rates’’ (78 L. ed. 186)

and that the provisions thereof ‘‘cannot rightly be con-

strued to require the Commission as a condition of any

action by it to find the réasonableness of each individual

rate’’ (78 L. ed. 186). (Emphasis added.)

Apparently the District Court had also reversed the

order of the Commission upon the theory that the order

of the Commission was ‘‘unsupported by any finding that

the increased rates would produce increased revenues’’;

this objection, as stated by this Court in its opinion being

‘*rested upon the statement, separated from its context in

the Commission’s report ‘we conclude that no positive find-

ing in regard to the revenue outcome of the increases can

be justified’ ’’ (78 L. ed. 188). (Emphasis added.)

This court thereupon proceeded to show that there

were other findings of the Commission expressly holding

that the increased rates would produce increases in the

revenue (78 L. ed. 188) and hence concluded that ‘‘the re-

port read as a whole’’ meets the requirements of the statute.

The language from this case relied upon and quoted

by counsel for the Appellees and by the Court below was

really used ‘‘arquendo”’ by this Court and was in effect

merely dicta.

There was no question there involved as to the suffi-

ciency of the evidence to constitute substantial evidence.

The case did not hold that opinions of traffic experts based

upon interstate operations constituted substantial evidence

of the results to be expected in intrastate operations.

It is elementary that the language used in any opinion

must be construed with relation to the questions and facts

involved.

It is also to be noted that this case was decided in 1933,

long before the enactment of the Administrative Procedure

allie Ninid lieth ot ee cae at ee tae ee

~

6 State or S. C., APPELLANT, v. U. S. A. et al., APPELLEES

Act (1946) which imposes upon the Court the duty to re-

verse orders of administrative boards which are not sup-

ported by substantial evidence and which imposes a greater

responsibility upon the courts than had previously been

exercised by them in reviewing orders of such commissions

(See Universal Camera Corporation case hereinafter dis-

cussed).

It is earnestly and confidently submitted that the above

cited United States v. Louisiana case when properly con-

sidered and analyzed offers no real support to the appellees

in this case.

III. Majority Opinion of District Court Misapprehends

Standard Established by Universal Camera Corporation

Case.

Counsel for the appellees in their Motions to Affirm

also cite and quote from the Universal Camera Corporation

case, 340 U. S. 474, 95 L. Ed. 456, and its companion case

N. L. R. B. v. Pittsburgh S. 8. Co., 340 U. S. 480-503, 95

L. Ed. 479, as though such cases support their views in the

case at bar.

It is submitted, however, that both of those cases when

properly considered and analyzed really support the ap-

pellant’s position in this case and that the decision of the

Court below clearly violates the principles laid down in

those cases.

Both those cases involved an ultimate consideration by

the Courts of the entire record before the administrative

agency and a reversal by the Courts of the agency’s order

thereon.

The Universal Camera Corporation case, after fully

discussing the matter, clearly lays down the principle that

the reviewing court must, under the Administrative Pro-

cedure Act, consider not only the evidence supporting the

ent

State or S. C., APPELLANT, v. U. S. A. et al., APPELLEES 7

order of the commission, but also the contrary evidence,

and further that the court must take a greater responsibil-

ity for the reasonableness of orders of such commissions

hereafter and that a failure so to do constitutes reversible

error.

The case involved an order of the National Labor Re-

lations Board which had held the Universal Camera Corpo-

ration guilty of unfair labor practices. Upon appeal by the

corporation to the Court of Appeals for the Second Circuit,

that Court upheld the order of the Board, failing to take

into consideration the contrary report of the Examiner.

Upon appeal to the United States Supreme Court, the judg-

ment of the Court of Appeals, as well as the order of the

Board, was reversed.

This Court, in an opinion by Justice Frankfurter, fully

discussed the history of the legislation culminating in the

Administrative Procedure Act of 1946 and held that it was

the purpose and intention of Congress by the passage of

that Act to require the courts to take and assume more re-

sponsibility for the reasonableness and fairness of orders

by administrative agencies and to reverse such orders un-

less ‘‘upon examination of the whole record’’ they were

found to be supported by substantial evidence. It was par-

ticularly pointed out in the Court’s opinion that it was the

duty of the courts not only to consider the evidence tending

to support the order of the agency, but also to consider and

weigh the evidence to the contrary; in this respect the prin-

ciple established being somewhat different from that which

had heretofore heen applied by some of the courts (See 95

L. Ed. 464).

The foregoing statement is clearly shown by the fol-

lowing quotations, passim, from the opinion of the Court:

**So far as the history of this movement for en-

larged review reveals, the phrase ‘upon the whole rec-

ord’ makes its first appearance in this recommendation

A PS er

A , B n

ee ee ee re

a et i EP a i

8 STATE oF S. C., APPELLANT, v. U. S. A. et al., APPELLEES

of the minority of the Attorney General’s Committee.

This evidence of the close relationship between the

phrase and the criticism out of which it arose is im-

portant, for the substance of this formula for judicial

review found its way into the statute books when Con-

gress with unquestioning—we might say even uncrit-

ical—unanimity enacted the Administrative Procedure

YY aah

The Committee reports of both houses refer to

the practice of agencies to rely upon ‘suspicion, sur-

mise, implications, or plainly incredible evidence’, and

indicate that courts are to exact higher standards ‘in

the exercise of their independent judgment’ and on

consideration of ‘the whole record’.’’? * * * (95 L. Ed.

464-465.) (Emphasis added.)

‘*From the legislative story we have summarized,

two concrete conclusions do emerge. One is the identity

of aim of the Administrative Procedure Act and the

Taft-Hartley Act regarding the proof with which the

Labor Board must support a decision. The other is

that now Congress has left no room for doubt as to the

kind of serutiny which a court of appeals must give

the record before the Board to satisfy itself that the

Board’s order rests on adequate proof.’’ * * *

‘*Whether or not il was ever permissible for courts

to determine the substantiality of evidence supporting

a Labor Board decision merely on the basis of evidence

which in and of itself justified it, without taking into

account contradictory evidence or evidence from which

conflicting inferences could be drawn, the new legis-

lation definitely precludes such a theory of review and

bars its practice. The substantiality of evidence must

take into account whatever in the record fairly de-

tracts from its weight. This is clearly the significance

of the requirement in both statutes that courts con-

sider the whole record. Committee reports and the

adoption in the Administrative Procedure Act of the

minority views of the Attorney General’s Committee

demonstrate that to enjoin such a duty on the review-

ing court was one of the important purposes of the

ineeeineiiaia nei adede nena SNES eR rp . we el

~

ee care pe.

STATE oF S. C., APPELLANT, v. U. S. A. et al., APPELLEES 9

movement which eventuated in that enactment. * * *

(95 L. ed. 467.)

**The legislative history of these Acts demonstrates

a purpose to impose on courts a responsibility which

has not always been recognized.’’ * * * (95 L. ed. 468.)

**We conclude, therefore, that the Administrative

Procedure Act and the Taft-Hartley Act direct that

courts must now assume more responsibility for the

reasonableness and fairness of Labor Board decisions

than some courts have shown in the past. Reviewing

courts must be influenced by a feeling that they are

not to abdicate the conventional judicial function.’’

* * © (95 L. ed. 468.)

‘*The Board’s findings are entitled to respect; but

they must nonetheless be set aside when the record

before a Court of Appeals clearly precludes the Board’s

decision from being justified by a fair estimate of the

worth of the testimony of witnesses or its informed

judgment on matters within its special competence or

both.’’ * * * (95 L. ed. 468-469.)

The Court concluded this portion of its opinion by say-

ing that the Court ‘‘will intervene only in what ought to

be the rare instance when the standard appears to have

been misapprehended or grossly misapplied’’ (95 L. Ed.

469). The Court then proceeded to show that the Court of

Appeals had misapplied the proper standard by treating

the special examiner’s findings as being ‘fas unassailable

as a master’s’”’ and by failing to give proper weight to the

examiner's report and hence this Court reversed the order

of the Court of Appeals and also the order of the National

Labor Relations Board.

Likewise, in the companion case of the National Labor

Relations Board v. Pittsburgh Steamship Company, 340 U.

S. 496-508, 95 L. Ed. 479, the Supreme Court affirmed a

judgment of the United States Court of Appeals for the

Sixth Cireuit reversing an order of the Board for failure

of the evidence to support the Board’s order.

—

10 State or S. C., APPELLANT, v. U. S. A. et al., APPELLEES

This Court expressly commented upon the fact that its

final judgment was based upon ‘‘consideration of the opin-

ion below in the light of a careful reading of the entire

record’’ (95 L. Ed. 482) and further that the Court below,

whose judgment it was affirming, ‘‘painstakingly reviewed

the record and unanimously concluded that the inferences

on which the Board’s findings were based were so over-

borne by evidence calling for contrary inferences that the

findings of the Board could not, on the consideration of the

whole record, be deemed to be supported by ‘substantial’

evidence’’ (95 L. Ed. 482).

We submit that it is clearly demonstrable that the prin-

ciples laid down in the foregoing cases have been violated

by the decision of the Court below in this case.

It is clear, it is submitted, that Judge Parker in writ-

ing the majority opinion of the Court below misappre-

hended the test laid down by the Administrative Procedure

Act and by the Universal Camera Corporation case above

cited in that he failed to give any proper consideration to

the contrary evidence of the shippers and to the contrary

findings by the South Carolina Public Service Commission.

This is apparent from the fact that Judge Parker in

his opinion only quotes from and relies upon the opinions

of the railroad companies’ witnesses and finally concludes

by saying, ‘‘Whether experience with interstate rates is

a dependable guide in juding the effect of a corresponding

increase in intrastate rates is a matter of expert judgment

as to which the opinion of the railroad traffic experts isi

certainly substantial evidence of real value, as their rail-

roads will bear the loss if the increase of rates which they

propose results in a decrease of revenue’’. (Emphasis

added.)

In other words, he says in effect that the opinion of

the railroad traffic experts is ‘‘certainly substantial evi-

StaTE oF S. C., APPELLANT, v. U. S. A. et al., APPELLEES 11

dence of real value’’ without indicating that in valuing

such opinions it is necessary to consider the contrary evi-

dence, as is required in the Universal Camera Corporation

case. Moreover, it is apparent from the reading of his opin-

ion that he did not give any proper consideration, or any

consideration at all, to the contrary evidence of the ship-

pers or to the findings of the South Carolina Public Service

Commission, which according to the decision in the Missis-

sippi case, affirmed by this Court, ‘‘detracts heavily against

the findings of the Interstate Commerce Commission, whose

testimony is taken before an examiner’’ * * *.

It is manifest that if the question at issue is to be de-

termined solely by the opinion of the railroad traffic experts

based upon the results in interstate commerce and if such

evidence is to be considered ‘‘certainly substantial evidence

of real value’’ then, of course, there is no purpose or sense

in considering the contrary evidence of the shippers and

the contrary findings of the South Carolina Public Service

Commission. Judge Parker’s opinion amounts to saying in

effect that the question is to be determined wholly on the

evidence offered by the railroad companies. But this is

directly in the face of the decision in the Universal Camera

Corporation case that the Court must take into considera-

tion the evidence leading to a contrary conclusion, and this

is what was done in the Mississippi case which correctly

followed the principle laid down in the Universal Camera

Corporation case.

It is therefore clear, it is submitted, that the opinion

of Judge Parker violates and misapprehends and misap-

plies the principle laid down in the Universal Camera Cor-

poration case.

It is also noteworthy that all the cases relied upon and

quoted from by Judge Parker in his opinion as sustaining

his conclusion (Interstate Commerce Commission v. Union

we a a ee ee Te . cor

EE PA DANES RI, BRE Ga ID Wee eae Pinms cme

12 STATE oF S. C., APPELLANT, v. U. S. A. et al., APPELLEES

Pacific R. Co., 222 U.S. 541, 547; Florida v. United States,

292 U. S. 1, 12; Mississippi Valley Barge Co. v. United

States, 292 U.S. 282, 286; Swayne & Hoyt Ltd. v. United

States, 300 U. S. 297, 304) were decided long before the

enactment of the Administrative Procedure Act and before

the decision in the Universal Camera Corporation case,

which decision largely discredits the previous decisions re-

lied upon by Judge Parker.

IV. The Mississippi Case is Controlling and Requires

Reversal.

Both counsel for the Government and counsel for the

railroad companies in their Motions to Affirm seek to dis-

tinguish the case at bar from the Mississippi case cited and

relied upon by us (124 Fed. Sup. 809, affirmed by the United

States Supreme Court, 99 L. Ed. 502).

They both, however, apparently overlook the fact that

the opinion in that case was affirmed by the United States

Supreme Court.

Counsel for the Government in their argument in this

Court (page 6) claim there is no conflict ‘‘for the facts and

the evidence were not the same in the two cases’’.

They do not, however, in their argument point out any

essential differences in the facts and the evidence. We sub-

mit that the facts in the two cases were essentially the

same, as shown in our Jurisdictional Statement.

This argument, moreover, represents a shift of posi-

tion on the part of the counsel for the Interstate Commerce

Commission and for the Justice Department. In their writ-

ten argument filed in the District Court in this case, coun-

sel for those departments expressly stated that ‘*The Com-

mission and the United States have not accepted as cor-

rect statements of the law all that was said in the majority

opinion in the Mississippi case, including several state-

—_~—— a ee

StaTE oF S. C., APPELLANT, v. U. S. A. et al., APPELLEES 13

ments indicating that findings of fact made by the Missis-

sippi Public Service Commission were entitled to greater

weight than the contrary findings made by the Interstate

Commerce Commission. (Emphasis added.) In this state-

ment by counsel there was no contention that the facts

or evidence in the two cases were essentially different.

Hence, it follows that the foregoing statement of counsel

for the Government in their argument in the District Court

must be interpreted as meaning that they do not accept as

correct statements of the law what was said by the court

in the Mississippi case as applied to the facts of that case,

which were essentially the same as the facts in the case

at bar.

For our part, we cannot believe that the United States

Supreme Court could have affirmed the Mississippi case

without meaning to affirm and approve the ruling of the

District Court contained in the following language:

‘“‘The Court in reviewing an order of the Inter-

state Commerce Commission has the duty to study

the entire record and it is the function of the Court to

determine from the whole record whether or not there

was substantial evidence before the Commission upon

which its order could be based. If there were no sub-

stantial evidence then it is the duty of the Court to

set aside such order and enjoin its enforcement. Con-

gress in enacting in 1946 the Administrative Procedure

Act, 5 U. S. C. A. § 1001 et seq., made it mandatory

that the reviewing court should set aside an order

that was unsupported by substantial evidence and

that it should review the whole record in making the

determination. The Supreme Court of the United

States in Universal Camera Corporation v. N. L. R. B.,

340 U. S. 474,, 71 S. Ct. 456, 95 L. Ed. 456, held that

in determining what is substantial evidence that the

Court must take into consideration whatever in the

record fairly detracts from its weight. Under the de-

cision in that case it is the duty of the reviewing court

when it cannot conscientiously find that the evidence

TOP SRI SE RE CNY RAE Bm TR aes M7

me .

supporting the order of the Commission is substantial,

when viewed in the light that the record in its entirety

furnishes, including the body of the evidence opposed

to the Board’s view, to set aside the order of the Com-

mission.

Substantial evidence is a legal term and presents

to the court for adjudication a question of law.’’ * * *

(124 Fed. Sup. 814.)

‘‘Substantial evidence is a term that cannot be

defined definitely, but whether the evidence in a partic-

ular case amounts to substantiality must be determined

from the facts of each case as it arises.”’

The order in this case when viewed in the light

of the entire record and all of the circumstances lead-

ing up to its passage and giving weight to all things

that detract from the sufficiency of the evidence is not

supported by substantial evidence and must be set

aside and its enforcement enjoined.’’ * * * (124 Fed.

Sup. 815.)

‘*Different conditions, circumstances and _ situa-

tions in different states require and justify different

results in fixing intrastate rates. The findings of a

state commission which is familiar with such condi-

tions in the state, with the location of competing high-

ways and other forms of carriers, when its opinion

differs from the Interstate Commerce Commission’s

findings detracts heavily against the findings of the

Interstate Commerce Commission, whose testimony is

taken before an examiner. * * * * *

The testimony of the various witnesses who are

shippers of many of the products involved herein dem-

onstrates that if the rates are permitted to stand as

fixed by the Interstate Commerce Commission, the in-

come of the railroads will be reduced rather than in-

creased. Many of these are shippers themselves and

testified positively and unequivocally that it would

be economy for them to use their own individual trucks

or private carriers by truck, who are unregulated so

far as rates are concerned in Mississippi.’’ * * * * (124

Fed. Sup. 815-816.) -

14 StTaTE oF S. C., APPELLANT, v. U. S. A. et al., APPELLEES

—

StaTe oF S. C., APPELLANT, v. U. S. A. et al., APPELLEES 15

‘‘The testimony of the various witnesses and ex-

perts who testified for the carriers along with their

many exhibits, opinions and tests has not been over-

looked but their testimony has been fully weighed in

the light of the entire record and proceedings in this

cause and when viewed in this light the testimony fails

to show substantially sufficient to uphold the order

here under attack and the findings that were made by

the Interstate Commerce Commission.’’ * * * (124 Fed.

Sup. 516.)

**On all of the commodities involved in the contro-

versy the competition by carriers is keen and would

come not only from regulated trucks for hire but from

unregulated trucks and from trucks owned and oper-

ated by the shippers themselves. This is clearly shown

by the record and by positive testimony and over-

whelmingly overthrows and overrides the opinions of

the experts.’’ * * * * (124 Fed. Sup. 817.)

The foregoing language from the Mississippi case is as

apt and apposite to the facts in the case at bar as though

expressly written for this case. It certainly holds and es-

tablishes as a matter of law that results in interstate op-

erations, if in the face of contrary evidence of intrastate

shippers and contrary findings by state commissions, do

not constitute substantial evidence of the results to be ex-

pected from intrastate operations.

Counsel for the Government in their argument (pp.

6-7) and also counsel for the railroads in their argument

(pp. 14-15) claim in effect that this Court should sustain the

judgment below because this Court affirmed the judgment

in the case of Louisiana Public Service Commission v.

United States, 125 F. Supp. 180 (E. D. La.), affirmed per

curiam (November 1954) 348 U. S. 885; counsel for the

Government claiming that the cases involved ‘‘somewhat

similar evidence’’.

It is submitted, however, that there is no showing

whatsoever in the official report of that case (125 F. Supp.

16 State or S. C., APPELLANT, v. U. S. A. et al., APPELLEES

pp. 180-183) or in the argument of counsel for appellees

that the cases involved really similar evidence.

Moreover, and more important, there was no indication

of the Court’s opinion in that case, as there was in the

opinion of the majority of the Court in the case at bar,

that the Court had confined its consideration to the evi-

dence offered by the railroads and had concluded that the

ultimate question ‘‘is a matter of expert judgment as to

which the opinion of the railroad traffic experts is certainly

substantial evidence of real value’’. It is thus plain that

while the Court in the Louisiana Public Service Commission

case apparently properly considered the whole record and

applied the proper standards, the majority of the Court in

the case at bar misapprehended the standard and decided

the case wholly upon the evidence offered by the railroad

companies.

In this respect the two cases are vitally and essentially

different.

Moreover, it is to be noted that the decisions in the

Mississippi case, both by the District Court and this honor-

able Court, were at a later date than the decision in the

Louisiana Public Service Commission case, and hence if

there be any conflict between the two, the decision in the

Louisiana Public Service Commission case must be con-

sidered to have been modified by the decision in the Missis-

stppi case which was affirmed by this honorable Court on

April 15, 1955.

It is earnestly and respectfully submitted that logically

it is impossible to have affirmed the judgment in the Mis-

sissippi case without reversing the judgment in the case

at bar.

Strate or S. C., APPELLANT, v. U. S. A. et al., APPELLEES 17

V. Summary and Conclusion.

Finally it is submitted that both on authority and on

reason and logic, the decision of the Court below must be

reversed.

The Mississippi case, following the Universal Camera

Corporation case, expressly holds that ‘‘substantial evi-

dence is a legal term and presents to the court for judica-

tion a question of law’’ (Fed. Sup. 124, page 814) and

further that ‘‘different conditions, circumstances and situ-

ations in different states require and justify different

results in fixing intrastate rates’’. The affirmance of the

said judgment by the Supreme Court, it is submitted,

amounts to the establishment by this Court as a matter of

law that the results obtained from interstate operations

cannot be considered as substantial evidence of the results

to be expected from intrastate rates.

But on this very point, Judge Parker’s opinion in the

Court below expressly holds that whether experience with

interstate rates is a dependable guide in judging the effect

of a corresponding increase in intrastate rates is a matter

of expert judgment as to which the opinion of the railroad

traffic experts is certainly substantial evidence of real value.

Thus Judge Parker’s opinion makes the conclusion wholly

dependent upon the opinion of the railroad traffie experts.

This judgment goes squarely in the face of the decision in

the Mississipp? case as affirmed by this Court.

It seems to us too clear for argument that Judge

Parker in his opinion has also disregarded the contrary evi-

dence and has misapprehended and misapplied the stan-

dards laid down in the Universal Camera Corporation case

and in the Mississippi case.

The same result follows by application of the princi-

ples of logic to the decision of the Court below.

18 STATE oF S. C., APPELLANT, v. U. S. A. et al., APPELLEES

The syllogistic reasoning underlying the decision of the

Court below and the opinion of the traffic experts upon

which that decision was based, is as follows:

The evidence shows that in interstate operations in-

creased rates have produced increased revenues; hence it

follows that in intrastate operations in the state of South

Carolina increased rates will produce increased revenues.

However, when it is realized that the evidence shows

that conditions in the different states in intrastate com-

merce are essentially different from the conditions in in-

terstate commerce, it is obvious that the result as stated

is unsound.

It is as though one should argue that because a race

horse can run a mile on a race course in less than two min-

utes, the race horse can also run a mile across country,

across ditches and fences and woods, in less than two min-

utes. The fallacy of such reasoning is too apparent for

argument.

In the case at bar there are at least three factors which

destroy the validity of the reasoning and argument under-

lying the decision of the Court below, such factors being:

1. The uniform testimony of the shippers, who were in

position to control the shipment of the commodities in ques-

tion, to the effect that if the rates were increased as sought

such shippers would divert their traffic to trucks and that

the railroad’s revenue would be decreased rather than in-

creased.

2. The finding by the South Carolina Public Service

Commission, who are familiar with local conditions in the

State of South Carolina, with the roads and the truck com-

petition, that the effect of the increase in rates would be to

decrease rather than increase the freight revenue; and:

3. The fact that the railroad companies themselves,

with the approval of the Interstate Commerce Commission,

- = —

STATE oF S. C., APPELLANT, v. U. S. A. et al., APPELLEES 19

after the taking of evidence in this case, found and con-

cluded that notwithstanding the evidence as to the increase

in revenue in interstate operations in cement and cotton,

cement being the largest single item concerned, it was nec-

essary to withdraw the request for the increase in cement

and cotton rates in order to continue to meet the truck com-

petition.

It is apparent, it is submitted, that the Court below did

not give any proper consideration to these factors in reach-

ing its conclusions as to the substantiality of the evidence,

but on the contrary based its decision wholly on the opin-

ion of the railroad company experts. Hence the Court below

misapprehended and misapplied the standard and its deci-

sion should be reversed.

By way of postcript, and in reply to the suggestion

contained in the argument of appellees railroads (page 11)

to the effect that we are asking the Court to review ‘‘the

entire record consisting of 889 pages and 51 exhibits’’, and

in reply to a similar suggestion by counsel for the Govern-

ment in their argument (page 6), we may say that at the

conclusion of the argument in the District Court, that Court

invited counsel for the appellees to submit the testimony

which they considered pertinent.

In response to this invitation, counsel for the United

States and for the Interstate Commerce Commission sub-

mitted a mimeographed statement containing ‘‘I Evidence

in support of increases’’ (pp. 6-17), 12 pages, and ‘‘IT Evi-

dence against increases’’ (pp. 18-29), 12 pages—total, 24

pages. Counsel for the railroad companies submitted a like

mimeographed statement entitled ‘‘The Evidence Upon

Which the Defendant Railroads Rely’’ (pp. 2-15)—14

pages. Counsel for the Atlantic Coast Line Railroad Com-

pany submitted a special statement entitled ‘‘Testimony of

Witnesses Showing That Increased Rates Would Substan-

OO a a ee eT Te et

20 STaTeE or S. C., APPELLANT, v. U. S. A. et al., APPELLEES

tially Increase Respondents’ Revenues on Pulpwood’’, said

statement consisting of 12 mimeographed sheets.

It is therefore apparent that in the determination of

this case there could be no real necessity for this Court to

review the entire record. The evidence on the disputed issue

is in fact undisputed and is fairly and fully set forth in our

Jurisdictional Statement.

In the face of the foregoing we do not see how counsel

for the railroads can fairly contend that it is necessary for

this Court to review an entire record consisting of 889

pages.

Moreover, it seems to us, as we have already shown,

that Judge Parker in his opinion has misapprehended the

standard and the function of the courts and that the judg-

ment on its face should be reversed, without any extensive

examination of any evidence.

Respectfully submitted,

T. C. CALLISON,

Attorney General,

IRVINE F. BELSER,

Assistant Attorney General

and General Counsel for S.

C. Public Service Commis-

sion, |

Attorneys for Appellant.