American Trucking Associations, Inc. v. Atchison, Topeka & Santa Fe Railway Co.

delivered the opinion of the Court.

These three cases present the following question: Does the Interstate Commerce Commission have authority to promulgate rules providing (1) that railroads which offer trailer-on-flatcar (TOFC or “piggyback”) service to the

A three-judge district court, convened under 28 U. S. C. §§ 1336 , 2284, 2321-2325, at the request of various railroads and freight forwarders, set aside the rules which the ICC had promulgated in a rulemaking proceeding initiated on its own motion. 244 F. Supp. 955 (D. C. N. D. Ill. 1965). The case is here on direct appeal. 28 U. S. C. §§ 1253 and 2101 (b). 384 U. S. 902 (1966).

The appellees are the railroads and freight forwarders who initiated the District Court proceeding. The appellants are the United States and the ICC (No. 60), together with the American Trucking Associations, Inc., et al. (No. 57), and the National Automobile Transporters Association (No. 59), which intervened below as defendants.

More specifically, the issue presented is the validity of Rules 2 and 3, promulgated by the Commission in Ex parte 230, supra. 49 CFR §§ 500.2 and 500.3 (Supp. 1967). Rule 2 provides that “TOFC service, if offered by a rail carrier through its open-tariff publications, shall be made available” at the same charge to all other persons. In substance, it is a paraphrase of § 2 of the Interstate Commerce Act, 24 Stat. 379 , as amended, 49 U. S. C. § 2 (hereinafter cited only to U. S. C.). Rule 3 provides that, with certain qualifications and subject to certain conditions, “motor common and contract carriers, water common and contract carriers, and freight forwarders may utilize TOFC service in the performance of all or any portion of their authorized service

Plan I (Joint Intermodal):

Railroad movement of trailers or containers of motor common carriers, with the shipment moving on one bill of lading and billing being done by the trucker. Traffic moves under rates in regular motor carrier tariffs, and the railroad’s compensation is arrived at by negotiation between the two carriers.

Plan II (All-Rail):

Door-to-door service performed by the railroad, which moves its own trailers or containers on flatcars under open tariffs usually similar to those of truckers.

Plan III (All-Rail):

Ramp-to-ramp rates to private shippers and freight forwarders, based on a flat open-tariff charge, regardless of the contents of trailers or containers, which are usually owned or leased by freight forwarders or shippers. No pick-up or delivery is performed by the railroad.

Plan IV (All-Rail):

Flat open-tariff charge for loaded- or empty-car movement, the railroad furnishing only power and rails. Shipper or forwarder furnishes a trailer or container-loaded flatcar, either owned or leased.

Plan V (Joint Intermodal):

Joint railroad-truck or other combination of coordinated service rates. Either mode may solicit traffic for through movement, and traffic moves on originating carrier’s bill of lading.

While data are not available precisely to define the growth of traffic under the various plans, the evidence indicates that major growth has been primarily in the

The three-judge District Court concluded that Rules 2 and 3 (and Rule 5, id., § 500.5, insofar as it amplified those Rules) exceeded the Commission’s authority and set them aside. In substance it held that the Interstate Commerce Act did not forbid a railroad to refuse to carry the trailers or containers of a competing mode of carrier; that the structure and plan of the Act, as well as the specific absence of compulsory power to the Commission in § 216 (c), which authorizes voluntary joint rates and through routes by motor and rail carriers, indicated that the ICC is not at liberty to require the railroads to provide TOFC service to competing modes; that provisions of the Act regulating freight forwarders impelled the same conclusions; and that the Commission’s long history of support for the position which its rules now repudiate, as well as legislative history, compelled rejection of the rules now promulgated. We disagree.

Section 1 (4) of the Act, 49 U. S. C. § 1 (4), provides that it shall be the duty of common carriers by rail to provide transportation “upon reasonable request therefor” and to establish just and reasonable rates. Section 2, 49 U. S. C. § 2 , prohibits discriminatory rates or charges. Section 3 (1), 49 U. S. C. § 3 (1), forbids undue

“The contention that a carrier when goods are tendered to him for transportation can make the mere ownership of the goods the test of the duty to carry, or, what is equivalent, may discriminate in fixing the charge for carriage, not upon any difference inhering in the goods or in the cost of the service rendered in transporting them, but upon the mere circumstance that the shipper is or is not the real owner of the goods is so in conflict with the obvious and elementary duty resting upon a carrier, and so destructive of the rights of shippers as to demonstrate the unsoundness of the proposition by its mere statement.” 220 U. S., at 252 .

This Court was faced with an intermodal problem, comparable to that in the present cases, in United States v. Pennsylvania R. Co., 323 U. S. 612 (1945) (the Seatrain case). The railroads refused to interchange their freight cars with Seatrain, a water carrier, for interstate transportation by Seatrain in competition with the railroads. The ICC ordered the railroads to desist from this practice, and the railroads brought an action to set aside its order. The railroads contended that the Transportation Act of 1940, 54 Stat. 898 , did not in “specific language” authorize the Commission to require them to furnish the disputed facility to a competing water carrier. But this Court rejected that contention. It said:

“There is no language in the present Act which specifically commands that railroads must interchange their cars with connecting water lines. We cannot agree with the contention that the absence

of specific language indicates a purpose of Congress not to require such an interchange. True, Congress has specified with precise language some obligations which railroads must assume. But all legislation dealing with this problem since the first Act in 1887, 24 Stat. 379 , has contained broad language to indicate the scope of the law. The very complexities of the subject have necessarily caused Congress to cast its regulatory provisions in general terms. Congress has, in general, left the contents of these terms to be spelled out in particular cases by administrative and judicial action, and in the light of the Congressional purpose to foster an efficient and fair national transportation system. Cf. Chicago, R. I. & P. R. Co. v. United States, 274 U. S. 29 , 36; Interstate Commerce Commission v. Railway Labor Executives Assn., 315 U. S. 373 , 376-377.” 323 U. S., at 616 .

In Seatrain, this Court emphatically rejected the analysis upon which the District Court here essentially based its position — that since the Act regulates rail, motor, and water carriers separately, in Titles I, II, and III, the Commission may not compel the mutual furnishing of services and facilities other than as expressly directed. Recognizing that in the case of water carriers (as distinguished from motor carriers), the Act specifically directs railroads to establish through routes with them, the Court held that this is not the end of the railroads’ obligation or the limit of the Commission’s power. On the contrary, the Court, relying on the National Transportation Policy (49 U. S. C. preceding § 1), held that the Act is designed “to provide a completely integrated interstate regulatory system over motor, railroad, and water carriers . . .” 323 U. S., at

“The 1940 Transportation Act is divided into three parts, the first relating to railroads, the second to motor vehicles, and the third to water carriers. That Act, as had each previous amendment of the original 1887 Act, expanded the scope of regulation in this field and correlatively broadened the Commission’s powers. The interrelationship of the three parts of the Act was made manifest by its declaration of a 'national transportation policy of the Congress to provide for fair and impartial regulation of all modes of transportation subject to the provisions of this Act, so administered as to recognize and preserve the inherent advantages of each.’ The declared objective was that of ‘developing, coordinating, and preserving a national transportation system by water, highway, and rail, . . . adequate to meet the needs of the commerce of the United States ....’ Congress further' admonished that ‘all of the provisions of this Act shall be administered and enforced with a view to carrying out the above declaration of policy.’ 54 Stat. 899 .” 323 U. S., at 616-617 .

In view of this, we cannot accept arguments based upon arguable inference from nonspecific statutory language, limiting the Commission’s power to adopt rules which, essentially, reflect its judgment in light of current facts as to the proper interrelationship of several modes of transportation with respect to an important new development. For example, § 216 (c), 49 U. S. C. § 316 (c), authorizes the railroads to enter into voluntary arrangements for through routes and joint rates with motor carriers. There is no Commission power to compel the railroads to do so, and it is argued that from this we

It is also argued that a proviso to § 3 (1) of the Act, 49 U. S. C. § 3 (1), demonstrates that Congress did not intend to inhibit the railroads from discriminating against motor carriers. This contention, strenuously supported, is without merit. Section 3 (1) broadly prohibits any common carrier by rail from giving “any undue or unreasonable preference” to any person, locality or type of traffic. It then sets forth this proviso: “Provided, however, That this paragraph shall not be construed to apply to discrimination, prejudice, or disadvantage to the traffic of any other carrier of whatever description.” This is language more notable for its awkwardness than for its clarity; but it certainly was not intended, as appellees urge, to grant license to discriminate against traffic offered to the railroad by another carrier. We have noted above that this Court has clearly held that such discrimination is not permissible. Moreover, there is an intelligible meaning which can be ascribed to the proviso and which is consistent with its history. The proviso means that the prohibition against “undue or unreasonable preference or advantage” is not to be construed to forbid practices, otherwise lawful, solely because they operate to the prejudice of another carrier. It was in these terms that the language of the proviso was explained by Senator Wheeler, the bill’s sponsor. The proviso was taken almost verbatim from § 216 (d) of the Motor Carrier Act, 1935, 49 Stat. 558 (now 49 U. S. C. § 316 (d)). Explaining it, Senator Wheeler said:

“Paragraph (d) . . . prohibits unjust discrimination or undue prejudice or disadvantage. The com

mittee has added a provision that this prohibition shall not be construed to apply to the traffic of any other carrier of whatever description.

“In other words, some of the truck and bus operators were afraid that the railroads would come in and complain, and we added this provision so as doubly to protect the truck and bus operators.

“This provision is added to meet the objection of certain interests that the original paragraph might have been construed so as to make it unlawful for a motor carrier to charge a rate which would place a rail carrier or any other carrier at a disadvantage. This contention is not well founded in our judgment inasmuch as the provisions of this paragraph are substantially the same as those in section 3 (1) of the Interstate Commerce Act, which has been in effect since 1887, and have always been interpreted as covering unequal and unjust treatment by a carrier of its patrons. However, as I said, to make assurance double sure, this provision was added.” 79 Cong. Rec. 5656 (1935). (Italics added.)

Accordingly, we are remitted to consideration of the provisions of the Act which, in the most general terms, require the railroads to perform as common carriers. It is not our duty, of course, to concern ourselves with a nice evaluation of the arguments as to whether the Commission pursued the course of wisdom in ordering the railroads to make piggyback service available to motor carriers if it is offered to others on open-tariff rates. It is our task to scrutinize the Commission’s authority, not the substance of its exercise. We conclude that, in light of the mandate of the National Transportation Policy, the Commission had authority derived from the common-carrier obligations of the railroads as reflected in §§ 1 (4), 2, and 3 (1) of the Act to promulgate Rule 2 requiring

Rule 3, in general, authorizes “motor common and contract carriers, water common and contract carriers, and freight forwarders” to “utilize TOFC service in the performance of all or any portion of their authorized service through the use of open-tariff TOFC rates published by a rail carrier.” At the outset, as discussed above, we reject the contention that the railroads, despite their common-carrier obligations and the absence of an exception thereto in the Act, may exclude carriers by competing modes of transportation from access to their publicly offered services and facilities; and we do not accept the argument that § 216 (c), 49 U. S. C. § 316 (c), which authorizes voluntary through route and joint rate arrangements between railroads and truckers, implies that the railroads have no other obligation to motor carriers and that no other obligation may be imposed upon them by the ICC in this respect. That contention is refuted by the Seatmin case, supra.

It is strenuously contended, however, that whatever may be the railroads’ duty, common carriers by motor vehicle may not be authorized to substitute transportation by rail for the transportation by road which is the basis of their franchise — except with the agreement of the railroad. It is this exception that saps the argument of some of its force, if not its fervor. One would assume that if the motor carriers are not authorized by their franchise under the Act to substitute transportation by rail for transportation by road, they could not do so with the consent of the railroads. But neither the railroads, most of which, by agreement, provide

It is true, as we have stated, that the Commission for over 25 years has insisted that railroad concurrence is essential for trucker use of TOFC services. In Substituted Freight Service, 232 I. C. C. 683 , the Commission held' that a person may not be both a carrier and a shipper as to the same service. See also Ringsby Truck Lines, Inc. v. Atchison, T. & S. F. R. Co., 263 I. C. C. 139 , 141 (1945); and the New Haven case, 293 I. C. C. 93 , 104-105 (1954). But see the earlier contrary holding in Trucks on Flat Cars Between Chicago and Twin Cities, 216 I. C. C. 435 (1936). The Commission’s Report argues that Substituted Freight Service, correctly understood, does not proscribe the kind of substituted service here at issue, “in which one common carrier service is substituted for another through the use of an

It is true that the attention of the Congress had been called to the need for action to secure the relief which the Commission subsequently granted in its rules. In February 1962, the American Trucking Associations, in the course of oral argument in Gordon’s Transports, Inc. v. Strickland Transp. Co., 318 I. C. C. 395 , sustained sub nom. Strickland Transportation Co. v. United States, 219 F. Supp. 618 (D. C. N. D. Tex. 1963), apparently

It is obvious that there is a good deal of overlap between the work of the freight forwarders and that of the other common carriers. The freight forwarders’ argument here is that the Act authorizes only freight forwarders to engage in the assembly and consolidation of shipments and the subsequent use of rail facilities for transportation, and that permitting the truckers to engage in this sort of service, by means of TOFC on open tariffs, is to authorize them to engage in this service in violation of the Act’s prohibition against licensing other carriers as freight forwarders.

Forwarders are presently permitted to utilize railroad open-tariff TOFC service. Movement of Highway Trailers by Rail, 293 I. C. C. 93 , 111 (1954). They may even quote trailer-load rates in competition with truckers and with rails. Eastern Express, Inc. v. United States, 198 F. Supp. 256 (D. C. S. D. Ind.), aff’d, 369 U. S. 37 (1962). But railroads, within their terminal areas (§ 202 (c), 49 U. S. C. § 302 (c)), and truckers have also traditionally assembled, consolidated, and distributed cargo in connection with providing their authorized transportation services. The Act expressly exempts from the freight-forwarder provisions any person who performs these services — which are similar to those of freight forwarders — as a carrier subject to another part of the Act. §402 (a)(5), 49 U. S.

Accordingly, the decision below is

Reversed

Mr. Justice Black and Mr. Justice Stewart would affirm the judgment of the District Court for the reasons stated in the opinion of District Court Judge Hoffman reported at 244 F. Supp. 955 , 961-964.

Mr. Justice Harlan, finding it impossible to escape the impact of the proviso to §3(1) of the Interstate Commerce Act, 49 U. S. C. §3 (1), would, for reasons elaborated in the portion of Judge Hoffman’s opinion dealing with that point, 244 F. Supp. 955 , at 961-964, affirm the judgment of the District Court.