The Cincinnati, New Orleans & Texas Pacific Railway Co. v. United States

1970-12-07

Headline: Affirms denial of southern railroads’ challenge to a $22 per-car transit charge, letting the interstate agency block the new fee and protecting shippers from the added charge.

Holding: The Court affirms the lower court’s denial of relief and upholds the interstate agency’s refusal to allow the railroads to impose the $22 per-car transit charge because the record showed likely diversion of traffic.

Real World Impact:

Allows the agency to block railroads’ $22 per-car transit charge.
Protects shippers from the proposed transit fee on cotton and molasses.
Leaves the Commission’s factual findings about diversion intact.

Topics: railroad freight charges, transit fees for goods, shipping costs, agency review of rates

Summary

Background

Several railroads in the southern United States proposed a new $22 per-car transit charge in 1967 for cotton and molasses. Shippers protested and the Interstate Commerce Commission ordered the railroads not to impose the charge while it held a hearing. An Examiner and then the Commission found the railroads failed to show the charge was reasonable and that the charge would likely divert traffic to motor carriers.

Reasoning

The core question was whether the railroads could impose the new transit fee. The three-judge District Court found the Commission had used an incorrect standard in one respect but nonetheless concluded the Commission’s finding that the charge would divert traffic was supported by substantial evidence and denied relief to the railroads. The Supreme Court affirmed that judgment, leaving the denial of relief and the Commission’s action in place.

Real world impact

Railroads that proposed the $22 transit charge remain unable to collect it for the listed cotton and molasses movements covered by the proceedings. Shippers named in the protests avoid the separate transit fee at the specified points. The decision leaves the Commission’s factual findings intact and lets enforcement against the new charge continue.

Dissents or concurrances

Justice White dissented, arguing the District Court misapplied judicial-review rules and that the case should be sent back to the Commission for proper reconsideration under the statute and settled agency-review principles.