U.S. Supreme Court
ICC v. Mechling, 330 U.S. 567 (1947)
Interstate Commerce Commission v. Mechling
Argued February 12, 13, 1947
Decided March 31, 1947
330 U.S. 567
1. An order of the Interstate Commerce Commission authorizing, on the "Chicago to the east" leg of grain shipments originating west of Chicago, a proportional rate 3 cents per hundred pounds higher on ex-barge than on ex-lake or ex-rail shipments, held not based on adequate findings and evidence, and therefore unlawful under the Interstate Commerce Act as amended by the Transportation Act of 1940. Pp. 330 U. S. 572-573, 330 U. S. 583.
(a) The policy and provisions of the Transportation Act of 1940 forbid approval by the Commission of barge rates or barge-rail rates which do not preserve the inherent advantages of cheaper water transportation, but which discriminate against water carriers and the goods they transport. Pp. 330 U. S. 574-577.
(b) "Chicago to the east" railroads cannot lawfully charge more for carrying ex-barge than for carrying ex-lake or ex-rail grains to and from the same localities, unless the eastern haul of the ex-barge grain costs the eastern railroads more to haul than does ex-rail or ex-lake grain. P. 330 U. S. 577.
(c) Section 307(d) of Part III of the Interstate Commerce Act, authorizing the Commission to fix differentials as between through water-rail and through all-rail rates, does not authorize the Commission to neutralize the effective prohibitions of other provisions chanroblesvirtualawlibrary
which were strengthened in 1940 expressly to prevent discrimination against water carriers. P. 330 U. S. 577.
(d) The Commission, no more than it could require the barge carriers to raise rates inbound to Chicago which it accepted as reasonable, cannot lawfully bring about the same prohibited result by raising the railroad rates charged by eastern roads for ex-barge grain shipments east from Chicago. Pp. 330 U. S. 577-578.
(e) The Commission's order is not supported by its conclusion that it is "inequitable" for the barges to charge a much lower rate for the inbound grain haul than the competitive western railroads can afford to charge for the same haul. P. 330 U. S. 578.
(f) It is not within the province of the Commission to so adjust rates as to equalize the transportation cost of barge shippers with that of shippers who do not have access to barge service or to protect the traffic of railroads from barge competition. P. 330 U. S. 579.
(g) Congress has not granted the Commission discretionary power to approve any type of rates which would reduce the "inherent advantage" of barge transportation in whole or in part. P. 330 U. S. 579.
(h) Partial compensation of eastern roads for additional transit costs cannot be made in a manner which singles out ex-barge grain for discriminatory treatment in violation of the Interstate Commerce Act. P. 330 U. S. 583.
2. To justify the higher proportional rates on ex-barge grain, the Commission would have to make findings supported by evidence to show how much greater is the cost to the eastern roads of reshipping ex-barge grain than of reshipping ex-lake or ex-rail grain moving from the same localities and requiring the same service as does the ex-barge grain. The "unsifted averages" put forward by the Commission in this case do not measure the allegedly greater costs, nor show that they exist. P. 330 U. S. 583.
3. Since, in this case, the United States was a necessary party to the proceedings in the district court, the order of that court requiring the Commission to serve notice of appeal on the United States was not prejudicial error. P. 573, n 6.
In 1939, the eastern railroads filed with the Interstate Commerce Commission schedules which imposed on ex-barge grain the local rate from Chicago east, but allowed ex-rail and ex-lake grain the benefit of 8-cent lower "reshipping" rates on the eastern haul. The Commission, chanroblesvirtualawlibrary
after a hearing, made an order which left the railroad-proposed higher rates in effect, but stated that,
"in a proper proceeding, we might prescribe proportional rates on the ex-barge traffic lower than local, or joint barge-rail rates lower than the combinations."
248 I.C.C. 307. A District Court set aside t he Commission's order on the ground that fixing higher rates for ex-barge grain than for ex-rail and ex-lake grain "discriminates against water competition by the users of barges." 44 F.Supp. 368. On appeal, this Court reversed, but with "no implication of approval of any rates here involved." ICC v. Inland Waterways Corp., 319 U. S. 671. In further proceedings, the Commission authorized ex-barge grain rates east from Chicago 3 cents per hundred pounds higher than rates for ex-rail and ex-lake grain. 262 I.C.C. 7. The appellees then brought this suit in the District Court to set aside the order of the Commission insofar as it permitted the railroads to put the higher ex-barge grain rates into effect. The District Court set aside and enjoined enforcement of the order. The Commission appealed to this Court. Affirmed, p. 330 U. S. 583. chanroblesvirtualawlibrary