United States v. Interstate Commerce Commission

Background

The dispute involved the United States Army, several railroads serving Norfolk, Virginia, the private terminal operator Stevenson & Young, and the Interstate Commerce Commission. Railroads used a single export rate that included wharfage and handling when the carrier or its agent controlled pier operations. During the Korean conflict the Army took direct control of portions of the Norfolk piers and hired Stevenson & Young to handle Army shipments, paying that company itself while railroads continued to charge the same line-haul rate and refused to pay a $1 per ton allowance they had paid for commercial traffic.

Reasoning

The central question was whether railroads must grant the Army the same allowance for wharfage and handling when the Army operates its own pier areas. The Court accepted the Commission’s factual findings that Army operations did not conform to the tariff conditions for carrier-controlled or public piers. It reasoned that the Army was treated like private shippers who control their own piers, that requiring allowances in this situation would force carriers to extend the concession at all private piers, and that the Commission’s factual conclusions had a rational basis. The Court therefore affirmed the dismissal of the Government’s complaint.

Real world impact

As a result, Army export shipments at the Norfolk base will not receive the $1-per-ton allowance for wharfage and handling that commercial shippers received when the carriers or their agents controlled the piers. The ruling upholds the Commission’s role in resolving factual differences about shipper conditions and leaves tariff practices unchanged unless those facts are shown to be unlawful.

Dissents or concurrances

Justice Black (joined by the Chief Justice) dissented, arguing the treatment amounted to unlawful discrimination and that the Government should recover the portion of the line-haul rate for services it could not use.