Canada Packers, Ltd. v. Atchison, Topeka & Santa Fe Railway Company

PETITIONER:Canada Packers, Ltd.
RESPONDENT:Atchison, Topeka & Santa Fe Railway Co., et al.
LOCATION:Canada Packers LTD. Headquarters

DOCKET NO.: 11
DECIDED BY: Warren Court (1965-1967)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 385 US 182 (1966)
ARGUED: Nov 08, 1966 / Nov 09, 1966
DECIDED: Dec 05, 1966
GRANTED: Feb 21, 1966

ADVOCATES:
Charles B. Myers – for the petitioner
Harvey Huston – for the respondents

Facts of the case

Several American railroad companies delivered 131 cars of potash from New Mexico to Canada Packers’ plants in Canada. Canada Packers agreed to, and paid, a joint through international rate for the shipment. Later, Canada Packers’ sued the railroads for reparations citing the international rate as unreasonable. The Interstate Commerce Commission (ICC) ordered the railroads to pay reparations to make up for the unreasonably low original payment. The railroads refused to pay for the part of the journey that took place in Canada, arguing that the ICC had no authority to regulate shipping rates outside the U.S.A. The district court ruled in favor of Canada Packers and the court of appeals reversed.

Question

Does the Interstate Commerce Commission have the power to determine a reasonable shipping rate outside the United States?

Earl Warren:

Number 11, Canada Packers Limited, Petitioner, versus the Atchison, Topeka, and Santa Fe Railway Company, et al.

Mr. Myers.

Charles B. Myers:

Mr. Chief Justice, may it please the Court.

The question in this case is, to what extent does the Interstate Commerce Commission have jurisdiction to make an award of reparation to a shipper, who has been required to pay unreasonably high joint through international rates on its traffic from points in the United States to points of Canada?

This case had its origin in an informal complaint which we filed with the Interstate Commerce Commission in 1950.

That complaint alleged that the international through rates from Carlsbad and Loving, New Mexico to our plants at Toronto in Welland and Ontario Province and in — at Montreal in Quebec Province, and at Saint John in Brunswick were unreasonable and we prayed for reparation.

Now, the shipments in question moved during the period of January 5 to May 5, 1948 and over the lines of the respondent railroads and two Canadian railroads.

It was during this period that the railroads had assessed at 20% increase in all their rates on potash.

And that increase was only an emergency increase authorized by the Interstate Commerce Commission.

The Commission later determined effective May 6, that the maximum increase on such shipments should be 20% but in no case more than $1.60 a ton.

Now, perhaps I can illustrate what’s involved.

The basic rate from Carlsbad to Toronto was $12.20 a ton.

When that rate was increased by the temporary increased of 20%, it went up to $14.64.

When the Commission decided what the maximum permit increase was with $1.60 a ton that rate on May 6.

It came a $13.80 a ton.

Our complaint before the Commission asked that we be awarded reparation for the difference between the $14.64 and the $13.80.

Now, that same proposition was pending in number of cases before the Commission on potash and public commodities as well.

One of those cases was Consolidated Rendering versus the Santa Fe Railroad.

The Commission decided that Consolidated Rendering case in 1957 and among the destinations involved in that case, destination of potash were car of — I think this is also from Loving and Carlsbad New Mexico and the destinations involved included Detroit and Port Huron, Michigan.

Now those two points are border points through which all of our traffic moved in route to Canada.

The Commission held there as we had hope they would in our case that the shippers were entitled to reparation or the increase rates exceeded the basic rates plus $1.60 a ton and they awarded reparation.

Now, the railroads refused to satisfy our informal complaint and that required us to bring the form of complaint with the Commission in which we made the same allegations as we did in the informal pleading.

After hearing, the Commission decided in our case as it did in the Consolidated Rendering case and awarded us reparation for the entire difference between the joint through international rates which bore the 20% increase and what would have been reasonable joint through international rates increased by the $1.60 a ton.

The respondents refused to pay all of that award.

They paid us $5,300.00 but decline us — decline to pay us the remaining $1,400.00 on the ground that that represented freight charges for transportation in Canada and that was beyond the Commission’s jurisdiction.

William O. Douglas:

Was that arrived at by on the basis of the expected contributions made in American —

Charles B. Myers:

Quite frankly —

William O. Douglas:

— and to be assigned by the carrier on this approval?

Charles B. Myers:

Quite frankly sir, I don’t know how it was arrived at.

I think that’s the railroad explanation, yes.

William O. Douglas:

That is whatever arrangement they have made with the Canadian Carrier?

Charles B. Myers:

Yes.

William O. Douglas:

As to how much the Canadian Carrier is to get —

Charles B. Myers:

Yes.

Now whether that was on the flat percentage of the total revenue or on so much of the rate, I don’t know?

William O. Douglas:

Yes.

Charles B. Myers:

Now, we filed suit in the District Court of Chicago to enforce this $1,400.00 claim and the District Court held in our favor granting the full amount of the award, gave us interest in the reasonable attorney’s fee as authorized by the statute.

The railroads appealed to the Court of Appeals for the Seventh Circuit and that court reversed the District Court, we’re here in certiorari.

It is our basic position in this case that the Commission was correct in awarding for reparation and then in doing it, all it was doing was invoking the jurisdiction that its exercise consistently in these cases for the last 50 years.

The Commission’s decision in this nature go back to 1910, consistently holding that where a shipper has paid an excessive joint through international rates is entitled to full reparation for his damages.

Earl Warren:

Has that been challenged often, Mr. Myers?

Charles B. Myers:

It was challenged twice in this Court sir and that’s about what I’m going —

Earl Warren:

Thank you.

Charles B. Myers:

— going us referred to.

We say that the jurisdiction of the Commission was challenged here in News Syndicate versus New York Central case reported at 275 U.S. 179 and subsequently, in New York decision in the Lewis-Simas-Jones versus Southern Pacific Company in 283 U.S. 654.

Now the respondents have no argument with us that these two cases stand for the proposition that is a shipper isn’t entitled to full reparation where he is in required to pay excessive joint through international rates.

But they say that these cases are not controlling here because the situation in those cases, the record in those cases did not reveal as this record does a maximum reasonable rate from Carlsbad and in Loving to the border trustees that is for the American portion of the free transportation.

They argue that since the Commission had prescribed in the Consolidated Rendering case, what was the maximum reasonable rate for that American portion of the whole that the Commissions without jurisdiction to award anything more than what it awarded to Detroit in Court hereon in the Consolidated Rendering case.

We of course take very rigorous exception to that.

Now, the jurisdiction of the Interstate Commerce Commission is —

Earl Warren:

It’s only the because of the through rate that you are here, isn’t it?

Charles B. Myers:

Yes, sir.

And as I’ll develop in a moment Mr. Chief Justice, we have no alternative but to pay through rate.

The Commission’s jurisdiction over rail transportation is defined in Section 1 of the Act.

And that Section reproduced in the first page of our appendix to our brief and it starts out with paragraph with the heading, Carrier Subject to Regulation.

The provisions of this chapter shall apply to common carriers engaged in the transportation, and skipping over a little bit here, of properly wholly by railroad and then dropping down to the third line from the bottom of that paragraph, from or to any place in the United States, to or from a foreign country and with this proviso but only insofar such transportation takes place within the United States.

Now, we have an addition to the petitioner and the respondent railroad to amicus curiae participations, one by the United States represented by the Solicitor General, one by the Interstate Commerce Commission represented by Mr. Goodman.

So the Solicitor General’s position in these proceeding that because of the proviso limiting the transportation only insofar as it takes place within the United States is that the Commission has no power over a rate in a foreign country and consequently it has no power for reparation or other purposes to determine what is a portion of a joint — a reasonable portion of a joint through international rate.

They take a similar position with respect to a combination of proportional rates to and from the board.

Now that situation is not involved in our ca — in our review of the lower court’s decision.

Charles B. Myers:

As a consequence, the Solicitor General is asking this Court to overrule its decision in News Syndicate and in Lewis and with respect to the Court proportional rates in your decision in Great Northern versus Sullivan 294 U.S. 458.

He would also if he prevails reverse 50 years of Interstate Commerce Commission precedent.

As I mentioned earlier, the Commissions here and it’s going to participate in response to the views of the United States.

I’ll confine my presentation to answering the respondents and dealing with the lower court’s decision.

There is one very important point which I think we would — should establish before we get into a discussion of the News Syndicate and Lewis cases.

And that is that the joint through international rates which were assessed on our shipments where the rates legally applicable.

We have no quarrel with the respondents over that.

They stipulated that this is so.

And this is important because this Court is frequently held that there can only be one legal rate on a given ship.

Now it’s our position that if once we were assessed, the legal rate that is the joint through international rate, there was no other rate which could have applied to those — to that transportation.

Not the rates from Loving and Carlsbad to Detroit before hereon.

Not the rates to Buffalo or to any other gateway but only the international rates.

And we say that’s the whole point of this case, the applicability of rates and what we were required to pay and what our measure of damages should be.

Now, —

Abe Fortas:

Where a Canadian company —

Charles B. Myers:

Yes, sir.

Abe Fortas:

And through —

Charles B. Myers:

Yes, sir.

Abe Fortas:

Now, can you tell us something about the — how the arrangements were made for this transportation?

Did you — is this covered just transportation from New Mexico to Canada of both —

Charles B. Myers:

This covers three transportations.

Yes, sir.

Abe Fortas:

Both directions?

Charles B. Myers:

No, I only not — I think both directions sir, because the —

Abe Fortas:

I guess it’s only from New Mexico?

Charles B. Myers:

Only from New Mexico which is a very substantial source of potash as the modern —

Abe Fortas:

I see and the carriers here was arranged with the United States carrier, was it?

Charles B. Myers:

Well, that would be arranged that way at Oregon.

Yes, sir.

Abe Fortas:

What role did the petitioner play in arranging for the potash to be transported?

Charles B. Myers:

I’m sorry sir, I don’t know.

It wasn’t in fact —

Abe Fortas:

Well, (Voice Overlap)–

Charles B. Myers:

Other than the fact that we bore — paid and bore of the charges.

Abe Fortas:

And to whom did you make that payment, was it to the Canadian carrier?

Charles B. Myers:

To the Canadian carriers.

Yes, sir.

Abe Fortas:

In other words, you paid the Canadian carrier when the potash was delivered in Canada?

Charles B. Myers:

Yes, that’s my understanding.

Abe Fortas:

And then presumably the Canadian carrier made a division with the US carrier?

Charles B. Myers:

Yes.

Abe Fortas:

And now you’re suing the U.S. carrier if theory of that you can recover the entire over payment?

Charles B. Myers:

Yes.

We take the position as the Commission has for many years that where you have joint through international rates under excessive that carriers are jointly and severally liable for the full damages sustained.

Abe Fortas:

Could you have sued the Canadian carrier?

Charles B. Myers:

We could have sued the Canadian carrier.

Yes, sir.

It’s been my experienced when we sued Canadian carriers in the United States; the first thing you get is a plea that they’re not subject to the jurisdiction.

Abe Fortas:

Of course, you could have sued them in Canada and to your Canadian accomplices — Canadian carrier?

Charles B. Myers:

Yes, sir.

I think that’s the record —

Abe Fortas:

You could sued them in Canada —

Charles B. Myers:

Yes.

Abe Fortas:

Will you tell us what the rule would it been to Canada with respect to the —

Charles B. Myers:

Well —

Abe Fortas:

— major recovery of any or what the rules would have been there?

Charles B. Myers:

In Canada, it’s my understanding that you have to bring a — an action in the courts not before the Board of Transport Commissioners.

Abe Fortas:

And what part when the ICC determinations have played in that action if any?

Charles B. Myers:

Well, I don’t know what effect it would have in Canada?

I know in this country, its prima facie evidence when we you seek to enforce the reparation award.

Abe Fortas:

The court — well, none of this gathers that — this is not a situation in order that United States carrier received the total amount of what is not claim in the over payment of the rights?

Charles B. Myers:

You are correct, sir.

They did not.

Abe Fortas:

They didn’t receive it but you nevertheless seeking the recovery from?

Charles B. Myers:

Well, let’s see if I understand you.

They did not receive the total transportation charges.

Yes, that correct.

Abe Fortas:

Nor did they receive a total alleged double payment?

Charles B. Myers:

Well, I don’t know how we would know that.

Abe Fortas:

Well, you’d know that at least that’s reasonable — is the reasonable statement if you disregard and then principle of allocation.

Where here in since it’s been —

Charles B. Myers:

I’m not so sure that’s so sir because the rates which we paid both before and after the proscription were relevantly higher than the rates to the American destinations for the comparable distances as much as $2.16 a ton in some cases, so I’m not that all sure that the American carriers gave any portion to the Canadian carriers?

I really don’t know.

Well maybe the railroads can clear that.

Abe Fortas:

There’s a Canadian carrier that receive a money initially and then, —

Charles B. Myers:

Yes.

Abe Fortas:

— accounted to the American carrier on —

Charles B. Myers:

For its division.

Whatever that may be.

Yes.

Abe Fortas:

— to this.

Charles B. Myers:

Yes.

Now, I was making the point that there can only be one rate applicable on given shipment.

And then if you have a joint rate, it removes the application of any other rates.

And this is the reason in which underlies with Commission said in this case regarding the carrier’s liability with respect to international traffic.

The railroads within this country have a clear alternative with respect to their participation in international track.

They may publish rates to or from the boundary and stand answerable only for those rates or they as they done here.

Participate in joint through international rates and beheld jointly or severely liable for any unlawfulness in those rates.

We think that’s the rationale of this Court’s decision in the News Syndicate and Lewis cases.

News Syndicate involved a rate from a point in Canada to New York City and an action brought before the commission.

Charles B. Myers:

The Commission held that the rate was excessive and that altered to the rise full reparation.

Carrier refused to pay and an action was sought in Court.

Now, only the American Railroads was sued which is also the situation here.

Abe Fortas:

Why is an American company, the U.S. company, would assume where they rates paying in the United States to the American carrier or where they paid in Canada that’s in your case to the Canadian carrier?

Charles B. Myers:

Well, I would assume that the rates were paid in the United State because it’s my recollection that the News Syndicate — I burn I speculate sir.

I can’t say.

I don’t think they took the Court’s decision reveals that.

Now, in your decision in News Syndicate, the Court said that the Interstate Commerce Act defines to and from the International Boundary and that the carriers are required by Section 1 of the Act to published joint — I beg your pardon, to publish rates covering that service.

They hadn’t done in the News Syndicate case.

And this Court decided that was a violation of the Interstate Commerce Act for which the carriers would be liable under Section 8 for any damage cars of the shipper.

They also pointed out that the failure to establish a rate between the border and American destination compel the shipper to pay the joint through international rates.

Now, that’s the same situation which we have here.

We have no alternative but to pay this joint through rates.

The conclusion of the Court was since the joint through rates were the only rates before it, the Commission had jurisdiction to inquire as to the reasonableness of those rates to determine whether or not the shipper was damaged.

And it concluded as I have said that it was damaged and awards the reparation.

Now, that case was decided in 1927, four years later in the Lewis case, you restated and reaffirmed what you had said in News Syndicate.

The Lewis case involved the shipment from point in Mexico to San Francisco and the Commission had determined that the rate was excessive and awarded reparation.

Here again, only the American carrier was sued.

Now, the action was brought in state courts as opposed in federal courts but the railroads had also maintained that local rate from the border crossing to San Francisco.

And it was there contention that having published that rate, having it in existence excused them from any violation of Section 1.

They said that they had complied with their obligation under the Act by publishing such rate.

The state court and the appellate courts state agree.

This Court disagreed and said that the News Syndicate case was controlling.

And in the course of that decision, Court pointed out that the local rate and the border crossing to San Francisco didn’t apply on the transportation and that the shipper was damaged by the joint through international rate which the Commission found was excessive.

And that the shipper was entitled to reparation here respective of how the carriers divided their revenues in here respective of any portion of the revenue that was in the foreign country.

The underlying basis of the Lewis case was that the collection of an excessive rate is a tort.

And since the rate was joint, the tort was joint and the carriers were jointly and severally liable as joint tortfeasors.

This is a position which the Commission has consistently followed and follows to this day.

Now in the two cases that is News Syndicate and Lewis in our case, the joint through international rates were the only rates that applied which means that none other was couldn’t been applied to us and we think that all three cases are comfortable.

Now, the respondents argue that there obligation under the Act have been satisfied by the fact that the Commission had prescribed and Consolidated Rendering the maximum reasonable rate from Carlsbad and Loving to these two border points.

Charles B. Myers:

We say that that’s immaterial.

The Railroads didn’t assess us on that rate.

They made us pay the through rates and we don’t think our damages can be measured in some fashion except by that relation to what would be a reasonable joint through international rate.

The Court of Appeals agreed with the Railroads and if said that the Railroad had met their burden of establishing the rates from the New Mexico origins to the border points.

We say that situation, that holding is the same as the state courts made in the Lewis case which respect to the local rate from the Arizona border to San Francisco.

This Court held that that rate had no application.

Now, if what the Court of Appeals and what the respondents argue is correct then we have a situation where railroads operating within the United States are going to have full freedom to establish any level of international rates that they want to.

In other words, under the Court of Appeals decision, as long as there is an existence a reasonable rate, to or from the boundary.

That satisfies the respondent’s obligation under the Act.

We say that’s wrong because if that were the case.

The Commission would have no jurisdiction, no control over excessive joint through international rates.

The shipper would have no right to complaint as to the through rate.

It might be two or three times what the rate should be or it might be destructively low.

But as long as it was joint rate and the carrier had also kept in effect a rate to or from the boundary that is between points in United States.

The Commission would be powerless to do anything about it.

Now, we don’t think that that was Section 1 of the Act means and we don’t think that Congress intended to render this Commission powerless in that respect.

We think that the judgment of the Court of Appeals was erroneous.

I think it should be reversed and the judgment of the District Court reinstate.

Earl Warren:

Mr. Goodman.

Is that order in which you wanted to —

Leonard S. Goodman:

I believe I was to follow Mr. Solicitor General.

Earl Warren:

Oh!

That’s very well.

Mr. Solicitor General, Mr. Claiborne, were you going to argue or?

Louis F. Claiborne:

No, but Mr. Chief Justice —

Harvey Huston:

The respondents sir —

Louis F. Claiborne:

— will argue now.

Harvey Huston:

We’re going to go next on with the agreed upon or —

Earl Warren:

Very well, you may proceed your own order.

Harvey Huston:

Mr. Chief Justice, may it please the Court.

Harvey Huston:

I’m here representing the nine American Railroads which participated in this through international shipments.

And in order to put our decision into proper perspective, I want to discuss first precisely in dollars and cents fashion what the Commission has done here.

Mr. Myers has discussed the decision in the Commission in the Consolidated Rendering case in which rates of potash were found unreasonable and reparation of origin.

The theory the Commission and the Consolidated Rendering case was that a temporary authorized rate increase of 20% was excessive to the extent that it exceeded a subsequently authorized maximum increase of a $1.60 a ton, to give an example the exactly how that works.

The rate charge during this period the first five months of 1948 on potash from Carlsbad to Detroit, Michigan, excuse me, the basic rate before the increases are applied is $11.10.

During these five months period, the 20% temporary increase supplied to that that came to $2.22.

Then when the Commission decided that they would throw out all of these temporary increases above the $1.60 a ton.

That meant that the rate to Detroit was excessive by the difference of $0.62 a ton and so, the commissioner awarded reparation in the Consolidated Rendering case on the Detroit shipments in the amount of $.062 a ton.

Now when we come to the Canada Packers case, that case had been held and obeyed inspite the Commission pending the outcome of a Consolidated Rendering case.

And the Canada Packers case was based upon the Consolidated Rendering case and precisely the same formula was applied to determine unreasonableness.

In order words, the difference between the 20% increase and a final maximum increase with the $1.60 a ton.

For example, to Toronto, this meant that the basic rate which has been increased from $12.20 by 20% rose to 14.64 during the period these shipments moved.

Any shipments move during the precise period of time as the shipment in the Consolidated Rendering case.

From this now, let’s open the origin as the same commodity.

And all of these shipments went through Detroit for herein.

I used Detroit as an example because the same rate applied through both of the border crossing.

So when the Commission applied this formula to this Canadian shipments because the formula has a, you might say a built bias against the higher rated shipments for the longer distances, you come up with the finding that the rates in Toronto were excessive by $0.84 a ton whereas the rates to Detroit were excessive by $.062 a ton.

The only difference between the shipments to Detroit and a shipment to Toronto was an additional transportation it was performed entirely within Canada.

It’s even more interesting to see what the Commission did by applying this arbitrarily on a shipment that went from Carlsbad through Detroit to Toronto beyond Montreal.

Thereby applying the same formula, you come up with an excess of a $1.28 a ton.

More than twice the measure of unreasonableness of the Detroit rates.

We go all the way to Saint John to Brunswick.

You come up with an excess of a $1.80 per ton.

I should mention the Saint John situation is under little unusual because this shipments reentered United States for a short distance across northern portion of the State of Maine because the aiding pacific take a shortcut across there.

Now, Mr. Justice Brennan wanted to know exactly what the railroads did in complying with the reparation or what was entered here.

The order itself here’s on pages 19 and 21 of the record that contains in it some qualifying language in two places that it applies only insofar as the transportation took place within United States.

So when the claim for this reparation totaling over $6,600.00 of total transportation charges of some what over $100,000.00.

There are 131 shipments involved.

When that claim for the $6,600.00 was presented to the auditor of the freight accounts of one of the American railroads, which was the origin carrier with the claim for payment.

He computed — recomputed the award by deducting a division representing the share of the Canadian railroads for each of this particular shipments.

Harvey Huston:

Now those division vary — divisions vary the percentages depending upon what the destination in Canada is and they even vary depending upon which particular railroads in the United States participated in the movement.

But on a weighted average basis, the division of the Canadian railroads comes to slightly less from 21% and that is how we computed the figure of $1,390.00 for which the — this suit was brought.

Now when the suit was brought in the District Court —

Abe Fortas:

Was that computed on the basis of the rates from by the ICC to be proper?

The way it shows?

Harvey Huston:

Well the total — the total award was —

Abe Fortas:

Explain that?

What about the 21%?

Harvey Huston:

Well, that was computed split.

We did that strictly on a divisional basis.

Abe Fortas:

As it has been divided by agreement —

Harvey Huston:

That’s right.

Abe Fortas:

— in the country?

Harvey Huston:

The — in other words, the revenue was divided 21% to the Canadian railroad, 79% to the American.

Therefore the reparation award was divided in the same manner.

So the American railroads paid out 79% and said that’s all we’re going to pay.

Now when the suit was brought in the federal courts, we defended on two grounds.

The first ground was the fact that the language in the reparation order specifically carried these restrictions where the limitations to apply of transportation performed within the United States and we defended on the ground that the order was it best ambiguous.

If you can look at the dollar amounts in the reparation order, you can see that the Commission applied the same formula as it had done on domestic shipments that saw the (Inaudible) case.

But we took the position that the order was ambiguous and that even on the old terms of the Commission’s order.

We had it right to make this deduction.

That point was discussed in the opinion of the Court of Appeals but it was not specifically resolved one way or another.

So our alternative defense those that assuming the dollar amounts in the Commission’s award take precedents over this limiting language.

In other words, ignore the limiting language.

Then you come up quite frankly against the Lewis case which — on which the petitioner relies so heavily.

The Lewis case is an extension of the News Syndicate case and they held there that even if there was shown the existence of a domestic rate covering the domestic portion of a few transportation.

That alone was not enough to bring it out from underneath the rule of the Lewis case so as to restrict the payment of repara — the award of reparation to something other then representing the complete transportation — complete international transportation.

Now the Lewis case, the Court hold attention to that that when a defendant filed his answer.

He referred to this domestic rather this the railroad, referred to this domestic rate.

But the Court also pointed out that they did not specifically claim that it was maximum reasonable rate and three or four other chimes in this opinion, the Court comments on the fact that this was not a maximum reasonable rate.

Harvey Huston:

It’s our position that the Lewis case stands for the proposition that merely proving that aim great exist between the two United States portions of the two transportation does not permit a reduction in the reparation award so as to exclude any extra territorial effect.

Now, we think the significant portion of this decision in the Lewis case is the emphasis upon a maximum reasonable rate.

And here, we have demonstrated that a maximum reasonable standard.

We don’t say that a maximum reasonable rate here from Detroit to Carlsbad to Detroit applied to these shipments.

We say that the Commission itself has established a standard or shipment of potash from Carlsbad to Detroit and the establishment of that standard by Commission is the best possible proof of what a maximum reasonable proportion would be of the through international rate.

Abe Fortas:

Are you saying that in the previous cases — you’re saying in the previous cases that there had been a maximum rate for U.S. portion of the court that the result in those cases would have been different?

Harvey Huston:

Yes, Mr. Justice Fortas.

That is our position that if the Commission in other words had set up a maximum reasonable standard.

Here it was contemporaneous the same period January 5 through May 5, 1948 —

Abe Fortas:

Is there anything in those cases if anything the Court’s opinion in those cases to the effect that words arriving at this result, is because it can’t do any better?

Harvey Huston:

The Commission has twice done that.

The Commission in the Black Horse Tobacco case and the Citizens Gas Utility case, a recent case both cited in the petitioner’s brief.

The Commission in effect threw up his hand, they said, “this is undivided whole and you can’t chop up in two and it is too much for us.”

Abe Fortas:

But there’s no indication in our — in this Court’s previous decision that we have that this Court arrived at each result because it did not have information or standard that it need to arrive with the — in others?

Harvey Huston:

Well, I don’t think there’s specific holding.

I — I think the Lewis case should be interpreted as certainly implying that the result might be different if they had evidence of a maximum reasonable standard.

Abe Fortas:

What difference opinion principle would that make as your view?

Harvey Huston:

In principle?

Abe Fortas:

Yes.

Harvey Huston:

Well, I think it’s certainly it forces the Commission to sta — to recognize the same standard for all comparable shipments.

In other words, the transportation through the United States is just the same.

And I think the Arizona Grocery case decided by this Court in 1932 is very pertinent here.

In that case the Court held that when the Commission had once established a maximum reasonable rate between two points.

They couldn’t go back later and say, “Well, we think that that decision was wrong and someone charging was charged at maximum reasonable rate can go back and get some additional reparation.”

Now, we think by analogy that the same principle applies here because you got the only difference between the shipments from Carlsbad to Detroit were this maximum reasonable rate was established is some additional transportation beyond Detroit into Canada.

That’s the only difference that you have from the shipments determining at Carlsbad — at Detroit at the border.

William O. Douglas:

Mr. Huston, are you saying that what for the establishment of the maximum reasonable rates here between Carlsbad and Detroit but for that fact.

Lewis and News Syndicate would require reversal in this case?

Harvey Huston:

I’m very much afraid that’s true.

The Commission itself voluntarily on a few occasions has done somewhat the other way, the Carlowitz case, the International Paper case both of which are cited in our brief.

Harvey Huston:

There the Commission looked only if the reasonableness of the American factor of the international joint rate and ruled upon that.

But the great majority of instances, they form the other way and refused to —

Byron R. White:

I will ask as a practical matter.

Assuming now News Syndicate and Stan and Lewis, is this going to mean that hereafter and all of these reparations cases where international rates were involved?

The Commission will have to determine the maximum reasonable rates for the American segment?

Harvey Huston:

I would certainly think that —

Byron R. White:

As a practical matter, is that what’s going to mean?

Harvey Huston:

Well as a practical matter, of course here it’s a little difficult to answer your question because here the Commission did it for us.

Byron R. White:

Yes.

Harvey Huston:

And if may be that the Commission could take the positions that, well in the future, if the railroads want to avoid and reparation award this sort.

Then they got to bring in some sort of evidence to help us determine what would be the maximum reasonable proportion.

Byron R. White:

Imagine these things are already take a good deal of time, don’t they?

Harvey Huston:

Very much —

Byron R. White:

What — what’s this going to add to the Commission’s burden?

Harvey Huston:

I don’t know that it would add very much.

Certainly, I would think they would have every bit of cooperation from the railroads involve that, in other words, it means a financial saving to them.

Now, the Commission and the petitioner are both called attentions in their briefs to the proposal made by the Solicitor General on which I’ll touch in just minute that this would mean that railroads would have to bring in evidence of divisions to and from the border crossings and they might be reluctant to do that.

Well, I’m sure there would no reluctance where it would be a financial advantage to American railroads to do that.

Abe Fortas:

Well, then the Commission here established a maximum permissible rate on approved basis through the international rate?

Harvey Huston:

Yes, they made a specific finding to each of these Canadian destinations —

Abe Fortas:

Well, why would the availability of the U.S. rate to Carlsbad – Detroit rate maintain a difference, I’m having trouble seeing that?

Harvey Huston:

Mr. Justice Fortas, that’s our theory is that this sets up a standard beyond which the Commission cannot —

Abe Fortas:

Well, why does it show that the standard’s right why the standard runs on the understanding because the maximum international through rates also standard then there are question which one is — was commissioned permitted to choose?

Harvey Huston:

Well, I think the answer to that is found in the fact that the standard applied in the international through rate was the identical standards that they applied on a domestic rate to Detroit.

In other words, the difference between this 20% interim freight rate increase at a maximum of $1.60 per ton.

They use precisely the same theory and the same formula.

And so you get to these results that I have called attention to that by applying the same formula.

They would require a refund of $0.62 per ton if the shipment only goes to Detroit; if it goes beyond the Toronto, it goes up to $0.84; if beyond that to Montreal its $1.28; Saint John to Brunswick it’s a $1.80.

All these directed traceable to additional transportation in Canada.

Abe Fortas:

Why — isn’t the standard be more costly to the railroad?

Abe Fortas:

What I’m trying to find out is what is the reason in the law or I’m saying to the ICC that in this situation where you had two standards, two maximum permissible rates?

One US, one international, that you have to take the domestic rather than the international?

Harvey Huston:

Oh, I think certainly if the Commission is using the same line of reasoning in both examples.

I don’t see how they can say that this one kind of a thing applies which is a domestic shipment.

But my golly, if you’re going to go on beyond in the Canada, we’re going to take more out of your height.

This is the whole — this is really what’s — what are annoyance here is?

Abe Fortas:

I understand that if that I’m trying to find out why we should decide one rather than the other.

Harvey Huston:

We’re asking the Commission to follow a fix — a consistent standard.

I think I also should mention here that the — now the theory of the court below in the Canada in the Court of Appeals in there interpretation of precisely how this reparation should be paid out is slightly different than what we did in withholding this $1,390.00 out of divisional basis.

The decision of the court below would mean simply that you take the $0.62 a ton held to be the unreasonable measure on shipments going to starts the border and applied to have — to the total tonnage involved here.

And in that respect you come out with the total reparation figure.

That however is not a matter of record here because the divisions and the weights of the various shipments are not a part of the record.

Now the Solicitor General has a third method of calculating damages in the case of this sort.

The Solicitor General’s theory that if the Commission make a finding of max of — a finding that an international joint rate is unreasonable.

Before awarding reparation they must make a subsidiary finding of what a just and reasonable proportion of that should be for the domestic portion of it.

So in other words, taking the example of a shipment to Toronto for instance, the Commission should decide that what would be on a true shipment to Toronto.

What would be the maximum reasonable proportion up to the Detroit?

And when they make that kind of determination then, they compare that with the division received by the American railroads on the two shipments to Toronto.

And if the maximum reasonable rate to Detroit is less than the division actually received by the American railroads, that division must be turnover to or in this case it would be Canada Packers.

We have no objection in theory to what the Solicitor General suggests.

We think it’s a good practical solution which should be fair to parties in these cases.

In this particular case, we contend and here is where we have our differences.

We contend that it is not necessary to do this a specific finding because the Commission has already done it in the Consolidated Rendering case.

And we think it could be usual thing to go back nearly 19 years later and say, “Please determine, what is a maximum reasonable proportion from Carlsbad to Detroit on this 1948 shipment.”

Tom C. Clark:

It is — does it have to be a difference between what the road would receive and the —

Harvey Huston:

Oh!

Not necessarily.

As a matter of fact, if could be very well be the other way.

Tom C. Clark:

I mean in this case you’re suggesting the Solicitor General as I understand, as we ought to send it back and let that be determined?

Harvey Huston:

Yes.

Tom C. Clark:

And you’re saying that doesn’t have to be done because it’s already been?

Harvey Huston:

It’s already been done.

Now this —

Tom C. Clark:

Now my question was —

Harvey Huston:

Certainly.

Tom C. Clark:

— the rate that was fixed in the Consolidated case, compared with the division here that the American roads received, would that leave a balance onto the ship or not?

Harvey Huston:

The — oh, that’s, well I can answer that question.

I have that information works out.

In other words, you assume that the maximum reasonable rate to Detroit would be found to be of proper proportion.

Tom C. Clark:

Yes.

Harvey Huston:

Alright.

Now that comes to $12.70 per ton.

I have had the auditor freight accounts of one of the railroads here make a determination of that question and that rate produces a total sum of something over $87,000.00.

Now, the divisions receive by the United States carriers on these shipments come to something over $85,000.00.

So on that theory, the Canada Packers should not have any reparation at all.

The Solicitor General has suggested also that possibly the — that maximum reasonable rate to Detroit might not be appropriate as a proportion because of the fact that presumably the rate to Detroit included a factor for the terminal services involved at Detroit and that might not be appropriate for a shipment going beyond Detroit determinating at Toronto.

I think this is not a matter of great moment.

The Commission in the Consolidated Rendering case in discussing this potash traffic from Carlsbad made a specific comment that terminal operations on this traffic are relatively simply.

So I don’t think that’s going to be a serious objection that has been made by the Solicitor General.

I think the enforcement of the or rather I think the restrictions upon the Commission’s reparation of award would then determine to the appropriate by the Court of Appeals.

I think have a great deal of merit because if you don’t agree with that conclusion, in effect you’re telling the Commission that, it’s alright to the domestic portion to find that rates where excessive by $0.62 a ton, if you’re only going to Detroit but by $0.84 a ton, a$1.28 a ton or $1.80 a ton depending on how far you go into Canada.

I don’t think that type of award is within the confines of the jurisdictional limitations of Section 1 of the Act.

And we’re asking that the judgment of the Court of Appeals be affirmed.

Thank you.

Earl Warren:

Mr. Claiborne.

Louis F. Claiborne:

Mr. Chief Justice, may it please the Court.

At the outset, let me say that it is with reluctance that we find ourselves here taking at somewhat noble position and urging the Court to overturn some 50 years more or less consistent practices by the Commission and also in some sense three decisions of this Court.

Perhaps if the Court had been invited our views, we would have let this matter sleep for another 50 years.

William J. Brennan, Jr.:

May I ask Mr. Claiborne.

Do you — are those three decisions, are they decisions of statutory interpretation that instructs of the power of the statute to finding the power to dismiss?

Louis F. Claiborne:

I think it can be so viewed Mr. Justice Brennan.

The decisions are not —

William J. Brennan, Jr.:

Well, then how — if they are, does this involved us in the problem of the extent of which this Court overrules decisions of statutory construction that Congress can take care of more evident?

Louis F. Claiborne:

Well, I think there is that element — there is that obstacle here but I must say that in all three of the decisions, they are all suggestions as to mean through which the railroad can avoid.

It’s my ability for the entire trip suggestions which we cannot fully understand because one of them is not consistent with position taken by the Interstate Commerce Commission and a position as to which all counsel here are agreed that is that seems to be a suggestion that, if only the railroad had published an alternative rate to the border.

Then it would not have been liable for the entire reparation due on the joint through rate.

Yet, this Court has held and the Commission has consistently held that there can only be one rate available to a particular shipper or a particular shipment.

Therefore that alternative doesn’t seem to us to be a real one.

Now, since that is part of the premise of these decisions, it is difficult to follow the decisions get through of any of that and that may give less reluctance in qualifying them or overturning them at this great day.

William J. Brennan, Jr.:

Well, we have it very often?

Had we overturn decision of — that’s been statutory construction.

If Congress can redress the things were wrong?

Louis F. Claiborne:

I think that’s true Mr. Justice Brennan.

What I’m really suggesting is that Congress also may have been in some doubt as to the meaning of these decisions and it may not be altogether fair to attribute to Congress any clear understanding of then that we have now.

In connection with the Your Honor’s question Mr. Justice Brennan, suggesting that it would be imposing on the Commission a very heavy additional beauty by requiring it to find —

William J. Brennan, Jr.:

Well, I really wasn’t suggest that —

Louis F. Claiborne:

Well —

William J. Brennan, Jr.:

— I was wondering.

Louis F. Claiborne:

Our answer is that it would impose no additional duty whatever.

Instead of finding a reasonable international joint though rate which the Commission had done in this case and would under its practice do in every such case.

It would instead not in addition but instead find the maximum reasonable proportional rate to the border.

A thing which it would seem to us to be an easier operations since we’re dealing with the familiar American carriers, familiar American cars, familiar American territory and not looking somewhat blindly over the border in Canada which is necessary aspect to determine in the total reasonable rate.

So there is no problem of imposing additional burden on the Commission.

I should say perhaps also at the outset that we could not agree with the respondents — there attempt to distinguished these three decisions of the Court.

Because we have the same difficulty that I think it was voice by Mr. Justice Fortas.

We cannot see really what difference it makes if there is an additional rate published to the border, especially, if that additional rate to the border is not available to this particular shipper.

If he’s compelled where there is a joint through rate to ship to pay that charge then its more comfort to the shipper that there is another rate which that can give that.

It is true that the Commission’s finding as to this other rate if it has been done independently in a prior proceeding, may furnish evidence of what that portion of the trip, what charge should be meet to that portion of the trip.

And to that extent, here the carrier cannot be taxed with having failed to enlighten the Commission as to an alternative way of computing reparations because the Commission itself perhaps if this Consolidated Rendering case is appropriate — it is an appropriate then had already found on its own such a standard.

And therefore there is no need for the carrier to make that choice to the extent that those early decisions of this Court rest on a default of the carrier that show the Commission, how else to go about accessing reparations, this may be a distinguishable case.

Louis F. Claiborne:

However as we say, it seems to us that in every case the maximum allowable reparation is with respect to the American portion of the trip.

Hugo L. Black:

With the respect to what?

Louis F. Claiborne:

The American portion of the trip that is put it in simpler terms perhaps the American carrier on international journey ought to be made to disgorge only so much as he had pocketed that is the excess the amount pocketed.

He is —

William J. Brennan, Jr.:

That was your (Inaudible) — what, like having here.

For instance, the statutes permits the argument if you don’t know it’s approved?

Louis F. Claiborne:

Well, that is what I mean Mr. Justice Brennan.

That the Commission can go no further from this.

Now, I think we all begin with the common ground that the Commission’s only proper concern is to regulate rail transportation in the United States.

I think that’s very plainly what the statute says.

That is that the parties we’re concerned here to prevent or to provide a remedy for excessive charges made by rail carriers in this country.

It has no concern with the conduct to all the charges imposed by Canadian railroad in Canada or Mexican railroads or Mexico.

Nor is this surprising that short of extra territorial jurisdiction might prevent serious questions.

Nor is the Commission had report to have an expertise about conditions in foreign countries or of the conditions that foreign carriers.

Here is may be —

Abe Fortas:

Is that lead you to an attack on the whole practice of the Commission approval of maximum rates for international food traffic?

Louis F. Claiborne:

The Commission does not claim any jurisdiction, Mr. Justice Fortas to prescribe joint through international rates.

On the contrary, recognizes that it has no such authority and yet, it is willing or fix it must have those, judge what it cannot control and that is judge the reasonableness of the charge made for the Canadian portion of the traffic.

Eventhough it concedes that it has no jurisdiction to control that judge regularly.

Abe Fortas:

Well, I know is that necessarily inconsistent?

Here is as I understand it or what happen is that the Commission did establish in some form a 1380 rate, is that right?

Louis F. Claiborne:

I’m — I frankly I’m not familiar with the figures Mr. Justice Fortas.

Abe Fortas:

That is only, I think so when it comes to that — that’s in the brief, I think.

That’s was send in the effect of its action and I believe when it said that the maximum increase is a $1.60.

Louis F. Claiborne:

It made that finding solely for the purpose of computing the reparation.

It concedes that cannot prescribe that rate as the international rate —

Abe Fortas:

Well, it is your point that since it cannot prescribe a rate as to the through that international rate, it can make no judgment as to the — through international rate or it is your point that since it can prescribe no — through international rate.

Although, it can make a judgment as to the reasonableness of that rate, you say it cannot compel the American carrier to this Court.

Do you — do I make myself clear?

Louis F. Claiborne:

I think we take first of those positions Mr. Justice Fortas.

Louis F. Claiborne:

We say that each neither can it prescribe the international joint though rate nor can it judge the reasonableness of an international joint through rate.

Abe Fortas:

So what you —

Louis F. Claiborne:

That would it involve within the judging what is beyond its proper concern.

Abe Fortas:

Right.

Well, that’s would I thought because I thought that logically our position really cut more deeply than I understood your brief to say, logically what you’re saying is that this goes beyond that position that the Commission cannot make a judgment as to the unreasonableness of the international through rate and then compel the American carrier to pay only the American portion of it.

Logically, if I correctly understand you, your position would leave to the conclusion that the Commission just can’t say that the international rate as such is unreasonable.

But as to consider the US segment and the US segment only both in terms of reasonableness or unreasonableness and in terms of reparations.

Louis F. Claiborne:

You’re entirely right, Mr. Justice Fortas that is our position.

Perhaps our brief doesn’t isn’t officially emphatic on that point.

Well, the basic fallacy here it seems to us is judging the reasonableness of an international rate part of which occurs in Canada and yet, the Commission judges it under American standards which are legally inapplicable and otherwise, inappropriate to transportation in Canada which is subject to a Canadian law and a Canadian Commission under wholly different standards.

It makes no sense to say that by American standards an international joint through rate is unreasonable.

Abe Fortas:

If that’s all this discussion in your brief about the way that go about this job is the sad point, isn’t it?

That is to say then that were so all the information would do if they to make a judgment of what is the reasonable made under US segment compel the US carrier to pay the difference and you wouldn’t to have an allocation such as you suggests?

Louis F. Claiborne:

Well Mr. Justice Fortas, we see no reason to prohibit and I think it seems to us clear that the Act does not prohibit the entering into such joint international rates.

Nor that we think there is any public interest on the contrary and in discouraging the entering into such joint international rates which normally have benefits to shippers.

So, recognizing the virtue of joint rates and yet the inability of the Commission to judge them.

We have attempted to device a way in which these two principles can be accommodated and yet the shipper can receive full reparation from the American carrier to the extent that the American carrier is responsible for the open charge.

And at the same time the carrier is not deterred from entering into these joint rates by being told that when he does then he must spare the entire reparation award eventhough his Canadian partner is responsible for a large share of it.

And incidentally, his Canadian partner, his Mexican partner maybe the Government of Canada or the Government of Mexico.

One of the railroads in this case is owned by the Government of Canada and as I understand it, most Mexican railroads internationalized.

Now, under their law it may be — it might be surprising particularly would be contrary to the normal presumption to suppose that the Government of Canada or the Government of Mexico allows its own railroad to over charge.

Therefore, if even proper to have permission —

Abe Fortas:

You mean that would surprise you — that would surprise you?

Louis F. Claiborne:

It would surprise me to have — I think it’s necessary to have a Commission pass on the rate of nationalize railroad for all those have those rates administratively determine in the first instance that a correct standards.

I think that probably is the situation in Mexico.

When you have both private and public carriers that are in Canada and probably both subject to the board and treated very much alike.

Now, let me made clear that our position does not go so far as to suggest that the bar on the Commission’s poaching into Canadian territory should result in any injuries or inability by the shipper to obtain full reparation from the American carrier to the extent that the American carriers are responsible for that excessive charge.

And —

Byron R. White:

Incidentally, I gather the railroads in this instance for example.

The initial charge was fixed to what by which railroad or was it by being to the Canadian and American carriers, how was it done?

Louis F. Claiborne:

I frankly don’t know, this record does not disclose Mr. Justice —

Byron R. White:

Well, it is — is it ordinarily done by agreement of the carriers?

Louis F. Claiborne:

I take if that the — it is ordinarily done.

It is a jointly agreed tariffs and the divisions between the roads of —

Byron R. White:

And the tariff is filed I gather by the American — would be in this instance, I suppose by the American carrier since the ships (voice overlap) originated in the United States, is that right?

Louis F. Claiborne:

I take it that’s correct.

Yes.

Byron R. White:

And the shipper has no choice but to pay whatever he is suppose to pay, does it?

Louis F. Claiborne:

That is subject to this that he may ask the Commission.

I understand the Commission’s practice it will if it — Commission goes a differently than we would but if they find that the American carriers we would put it’s overcharging — receiving too much money for his portion of this joint transportation.

They can require him to withdraw from this particular tariff.

Now, the Commission —

Byron R. White:

In order to this then there’s no joint through rate then?

That if he withdraws at least from that joint through rate is —

Louis F. Claiborne:

Yes.

But that is this — the commission’s owned recognition of the limitation of the jurisdiction.

And–

Byron R. White:

And that —

Louis F. Claiborne:

He cannot describe a new law joint through rate.

Byron R. White:

And the alternative for the shipper to pay the rate and then to attempt to in a reparation proceeding that would cover any excess, is that it?

Louis F. Claiborne:

Yes.

Hugo L. Black:

If you’re going to submit a question to Congress try to settle this thing so it would have sense in, what would you recommend?

Louis F. Claiborne:

I — I assume Your Honor’s question is directed to this solution that we would propose to Congress.

Hugo L. Black:

Yes, you can read that for example.

Louis F. Claiborne:

I am — it seems to us that whether — let me say that might be two alternatives so, one is to have the American Commission governing transportation heading north in the case of Canada.

And Canada is doing it when its point of origin is in Canada.

As I understand at one time the Commission, American Commission and the Canadian Commission informally or perhaps formally agreed to this sort of exchange in jurisdiction that is clearly no longer in effect because the American Commission purports to regulate reparation purposes in both directions.

But even there their all the problems we see here and it would seem to us.

We don’t see any real problem with a legislative solution of the kind we suggest here as open on the present statute.

The statute very clearly says and it now reads, the Commission has jurisdiction over foreign transportation what one so long — only in so far as the transportation occurs in the United States.

Hugo L. Black:

Does it serve the United States?

Louis F. Claiborne:

As it occurs within the United States.

Hugo L. Black:

Occurs?

Louis F. Claiborne:

Now, the suggestion is that this is meaningless if the Commission’s jurisdiction or all perhaps this adopts the border.

It seems to me the plain purpose of this provision of statute is to cover what might otherwise be intrastate transportation and therefore beyond the jurisdiction of the Commission, beyond the jurisdiction of Congress.

A shipment destined for a foreign country eventhough it only travels through one state is foreign commerce.

Yet, it can be regulated only to the border.

It seems to be that’s reason enough to have this provision in the statute and that is all it was meant to provide.

Hugo L. Black:

It seems to me like it — the best I can gather with all these confused arguments that’s made in this case, confused because of my ignorance about it.

It is that United States can regulate its commerce here and that can’t regulate it in Canada.

Louis F. Claiborne:

It’s just simple as that Mr. Justice Black and that’s — that’s what we’d expect to find an American Commission limited to and since it works since it can work.

There’s nothing unworkable about that limitation.

We don’t see why it shouldn’t be the practical rule for reparations purposes as it is for rate making purposes.

Let me —

Hugo L. Black:

Does the Government regulate that here and not try to regulate that, it’s a broad at all.

Louis F. Claiborne:

That’s correct.

Hugo L. Black:

So how can that be done, that seems to be the problem?

Louis F. Claiborne:

Well, our suggestion is that it did not present an insuperable problem.

Abe Fortas:

But the contract carries so to speak is made in this country, isn’t it?

Louis F. Claiborne:

I would — I don’t know that’s inhibitively, I suppose it can be made either by the ship or the consignee?

Abe Fortas:

Well, let’s assume — let’s assume that you have a U.S. ship and a U.S. carrier here and they enter into a contract carriage on the potash from Carlsbad or wherever it is to Canada and the let us also assume which is not this case as I understand it, that the freight is prepaid and everything takes place in this country.

And the rate has been posted by the carrier here.

Now, is there anything about carrier being responsible for the just – justness and reasonableness in that right?

Louis F. Claiborne:

Well, of —

Abe Fortas:

Anything in our governmental theory that runs — come into that?

Louis F. Claiborne:

Well, I think there is or let me say if Your Honor fully appreciates that is the reverse of this case where its rather ironic for the Canadian consignee to be coming for the Interstate Commerce Commission rather that its own courts and to the claiming reparations from the American carrier or all of them the persons he dealt with, the Canadian.

Abe Fortas:

Yes, and what —

Louis F. Claiborne:

But returning —

Abe Fortas:

That bothers me in this case.

But then the fact principle I think —

Louis F. Claiborne:

But even if it were as Your Honor puts in the hypothetical case.

It seems to me that it would assume unrealistically that the American carrier was in full control of the rate to be charge to the point of destination.

Or it would involve the Commission as I say in judging reasonableness beyond the border.

Now for purposes of liability for damage on the goods that is the rule Mr. Justice Fortas and there there’s certainly no objection to it.

But for purposes of awarding reparations which unfortunately involves this element of judging the reasonableness of rate, it becomes unfair and the unfinished may not always be against the carrier.

It’s maybe unfair to the shipper.

Abe Fortas:

Suppose the goods are damaged on the Canadian sector of the trip, the shipper nevertheless has some action against the U.S. carrier, does he not?

Louis F. Claiborne:

That is — that is true and that is explicitly provided for in the statutes and we take that as a legislative indication that when there is extra territorial jurisdiction as it worked.

The Congress has been careful in this act to expressly provide for it.

Let me say one word —

Earl Warren:

Mr. Claiborne, may I ask you.

As the Government tried to get Congress to change this rule so as to conform to the principles that you are advocating now?

Louis F. Claiborne:

I really don’t know Mr. Chief Justice but I would strongly doubt it.

I don’t think this problem has come to the attention of the executive branch of the Government.

I don’t pretend that it is a very momentous problem as has been said.

As far as I know or wholly accurately the Commission has been using another formula for many years and it has not created very upsetting problems.

On other hand, when this Court after 40 years has decided to take another look at it.

It seems to us that the existing system while tolerable in some sense does not make sense.

It is not — does not conform to the statute is unfair both to shippers and the carriers in different situations.

And that it should not be perpetuated eventhough the world would not come to an end if it were.

Now, it’s just this simply has been no occasions for the executive branch to address itself to this problem and therefore no suggestion to —

Earl Warren:

The Lewis case throws this sort of a power to at least on your position that admit the News Syndicate and if the practice of the ICC for great many years as been to the contrary of what you’re advocating now and the decisions of this Court agree in principle with the ICC — why wouldn’t it appeal to the Government if they want to maintain the principle that you’re maintaining here.

Go to the Congress and have them say so, instead of asking this to overrule our cases in order to give the interpretation that you want?

Louis F. Claiborne:

Well Mr. Chief Justice, I see the points of your suggestion.

I — all I can say in defense of our position here is that we felt this was not a matter of the Congress.

This Congress had already spoken rather plainly as to where the line was drawn.No one has much notice of that the Commission has step over that line.

Now, this Court has condoned it and grant the serious obstacles that are presented by this Court’s prior decision.

All I can say about them is that the — we submit they were wrongly decided and should be reexamined.

They rest on the joint tortfeasor doctrine and I think if I could demonstrate the inapplicability of that doctrine here.

The force of those decisions might be somewhat lesser.

Louis F. Claiborne:

The joint tortfeasor doctrine in this situation, unlike the domestic carriage situation rests on the premise that a tort has been committed and when we ask where the tort has been committed, it must be in Canada.

Now, it must be in Canada because the theory of the decision of this but it doesn’t matter where it happened so long as these two partners have joined in creating it — in creating an excessive rate which may be excessive only because the Canadian portion of it is excessive by American standards.

Then the tort for the purpose of my hypothetical at least, occurred in Canada.

Now it’s all the strange notion that an American Commission should be deciding whether a Canadian Company in Canada committed a tort and worst by applying American law.

If we were to apply Canadian law eventhough at the present problems of the American Commission not being expert in Canadian law and the suggestion that it might lead that question better to the Canadian Authority.

At least there would no problem about finding the tort.

But here by hypothesis, we have a rate which is legal, lawful in Canada and —

Hugo L. Black:

Which is what?

Louis F. Claiborne:

— which is lawful under Canadian standards.

But which by American standards is too high.

Hugo L. Black:

But it couldn’t be too high, could it because any rate in Canada is just unreasonable as fix by Canadian law?

Louis F. Claiborne:

But Mr. Justice Black, the American Commission does not follow up expressly say and I suppose that counsel will confirm it.

That when the judge the international joint through rate for the Canadian as for the American portion, they applied American standards.

They wholly disregard the Canadian law and the committee — Canadian Commissions prescriptions of the rate for that portion of the transportation.

Hugo L. Black:

But what you are arguing that we should force the Commission to follow Canadian law?

Louis F. Claiborne:

No, that they would be best advised to say are we all together since it isn’t necessary.

The difficulty is involved —

Hugo L. Black:

It seems to me like it’s all the problem we have?

You got a rate that’s just and reasonable in Canada because it’s Canadian rate.

And the problem seems to be to get this country either through the commission of something else to attach the legal American rate to the legal Canadian rate which is whatever rate they have in Canada.

Louis F. Claiborne:

That is exactly the solution we suggest Mr. Justice Black.

Hugo L. Black:

It seems to me like that’s a — the reason I’m asking, it seems to me like that but you’re asking.

But what does it take to get that done?

Louis F. Claiborne:

I think the Court is not only free to do it but I think that the statute which says that the Commission shall not have jurisdiction over transportation except as it occurs in this country or should be confined to that jurisdiction.

Let me finish my point by saying that of course, if there’s no tort, there can’t be any joint tortfeasor.

Without one tortfeasor, there can’t be two.

Hugo L. Black:

But it can be a tort in Canada if it’s a legal Canadian rate?

Louis F. Claiborne:

Exactly.

Nor is there anything to the argument of convenience that an American shipper would — if our position were expounded have to go to Canada to collect that portion of the overcharged.

By definition in my hypothetical, there is no overcharge in Canada.

Louis F. Claiborne:

And therefore, no occasion for him to go, nor any possibility from the point of view of the American carrier of obtaining contributions because he can’t be reimburse by his Canadian partner.

I assume under Canadian law, if the charge actually received by the Canadian carrier was wholly lawful under the laws of that country.

Hugo L. Black:

However sample it may be, we then have basing just as the Chief Justice said, according to the rule?

Louis F. Claiborne:

Well, that — I grant that and I do not pretend that those decisions can be got round.

I do think they deserve reexamination.

It is worthy of note that if they are all three in serious that are all are very plainly based one on the other.

There is really one decision here that we must admit these are reconsideration.

Now as to the disposition of this case, we frankly ought to know how the Commission determined this maximum reasonable international joint through rate.

If they did it by attacking on an increment of the Canadian portion of the trip over and above the rate they found reasonable in Consolidated Rendering, then there maybe no need for a remand.

On the other hand, reading the Commission’s opinion we are unable to tackle perhaps counsels for the Commission can enlighten the Court as to how that was done.

One final point, I want to emphasize that this can all work the other way.

Hugo L. Black:

But?

Louis F. Claiborne:

It is possible that the charging Canada will be under Canadian law.

Legal, lawful and yet less than would be permitted by American law.

Now in that instance, under the Commission through the total rate may be reasonable by American standards.

Yet, the American carrier is over charging and still under a Commission through is immune from any reparation.

That means to us an unnecessary of the haven for improper wrong.

Earl Warren:

Mr. Goodman.

Leonard S. Goodman:

Mr. Chief Justice, may it please the Court.

The Commission appears here as an amicus curiae, respectfully opposing the views of the Solicitor General on the Commission’s jurisdiction to order appellee railroads to pay reparation to the appellant shipper on basis of the entire joint rate, the shipper was charged from origins in the United States to Canada.

The Solicitor General states that the basis fallacy of the Commission’s decision it is judging the reasonableness of international rates and as I recall Mr. Justice Black also oppose the problem of regulating rates in Canada.

I should like to begin with the Porter case decided by this Court in opinion by Mr. Justice Black in 1961.

There the Commission considered the entire joint rate from Canada to the United States found discrimination in the entire rate in order the American carriers to end it.

This Court sustained the Commission’s jurisdiction.

Hugo L. Black:

How did you find it with reference to the Canadian rate?

Leonard S. Goodman:

What standard the Commission used?

Commission compared rates in that case.

Hugo L. Black:

They did what?

Leonard S. Goodman:

The Commission compared the rates in that case.

Compare the rates from Canadian origins to the United States with combination rates that applied from Canadian origins to other points in the United States.

Hugo L. Black:

But the Commission of course couldn’t change the Canadian law by what’s the fair rate there?

Leonard S. Goodman:

The Commission didn’t attempt to change the law.

The Commission attempted however to determine whether or not the railroads operating here in the United States, Mr. Justice Black, were discriminating against members of the shipping public.

And when it found such discrimination based upon considering the entire joint rate.

The Commission ordered the American carriers to end such discrimination.

Hugo L. Black:

In effect, it found that the total pro rate was unfair because it found that the part of the rate going to Canada was unfair, isn’t it?

Leonard S. Goodman:

Well, the Commission wasn’t concerned with whether the portion —

Hugo L. Black:

But that —

Leonard S. Goodman:

— within Canada —

Hugo L. Black:

Was that — what matters?

Leonard S. Goodman:

Commission look at —

Hugo L. Black:

Maybe that’s the best way to handle it.

I’m not —

Leonard S. Goodman:

The only thin I can suggest is the Commission look at the entire rate.

The entire rate charge the shipper.

It was only the applicable rate.

The Commission did not seek to fragment that rate.

Hugo L. Black:

Part of it it’s in Canada and part of it here.

Leonard S. Goodman:

That’s true.

Hugo L. Black:

And the one that’s in Canada is governed by Canadian law, isn’t it?

Leonard S. Goodman:

It’s also governed by United States law.

Hugo L. Black:

But it’s governed by Canadian law and insofar as the rate they have it?

Leonard S. Goodman:

Insofar as the American carriers participated in that rate is governed by American law.

Hugo L. Black:

What you’re saying is it governed in determining the legal rate in America.

Each country has a right to consider whether to let some law charge by Canada be charge here?

Leonard S. Goodman:

I think that’s true.

To this limited extent.

The Commission does have jurisdiction over foreign commerce.

The statute speaks in terms of the Commission’s jurisdiction over transportation “from or to” any place in the United States, to or from a foreign country.

Now, this is jurisdiction over foreign commerce and to the extent that the American carriers participate in that commerce.

Leonard S. Goodman:

They are subject to the standard of the Interstate Commerce Act.

The proviso which reads only insofar as such transportation takes place within United States refers to the limiting the commission’s orders to the American carrier.

Hugo L. Black:

If what you’re saying is an order to do business in this country, it’s best to agree to do business on its central plans and programs and rules?

Leonard S. Goodman:

I think that’s true under the Interstate Commerce Act.

I think it’s true under the antitrust laws, yes, just because of certain —

Hugo L. Black:

I’m not —

Leonard S. Goodman:

— conduct occurs abroad.

Hugo L. Black:

— questioning it, I’m questioning you.

Leonard S. Goodman:

Oh, I’m sorry.

Because some of the conduct of American carriers occurs abroad does not exempt those carriers from the standards of Interstate Commerce Act.

This Court has so held in antitrust cases.

Earl Warren:

We’ll adjourn now Mr. —