United States v. Munson Steamship Line

Background

The federal government, at the request of the Interstate Commerce Commission, sued to force a steamship company to file schedules of rates for moving goods by water from Baltimore to Florida. The shipping company operates steamers to Jacksonville and Miami and accepts goods brought by rail from inland points. Those shipments were not under through bills of lading or joint rates, and there was no agreement to divide charges with the railroads. Shippers sent rail bills to the steamship company with the consignee’s name; the carrier paid rail charges on delivery, issued its own bill for the water leg, and collected both amounts at the Florida destination.

Reasoning

The key question was whether the rail and water legs were made "under a common arrangement" so the steamship line had to file tariffs under a federal statute. The government conceded there was no common control or management. The Court explained that mere continuity of transportation is not enough; the statute allows a water carrier to keep its water carriage separate when facts show independence. Because the steamship company had separate contracts with shippers, set its own rates, took direct instructions from shippers, and only informed railroads of sailings and charges, the Court found no common arrangement and affirmed the lower courts’ verdict for the company.

Real world impact

The ruling means similar steamship lines that keep separate contracts and rates can transport rail-shipped goods without being forced to file water tariffs with the Interstate Commerce Commission. Advising railroads and shippers about schedules or charges, by itself, does not convert an independent water carrier into part of a common rail-water arrangement.