Pennsylvania Railroad Company v. United States

PETITIONER: Pennsylvania Railroad Company
RESPONDENT: United States
LOCATION: Superior Court of Bibb County

DOCKET NO.: 451
DECIDED BY: Warren Court (1958-1962)
LOWER COURT:

CITATION: 363 US 202 (1960)
ARGUED: May 17, 1960
DECIDED: Jun 13, 1960

Facts of the case

Question

Media for Pennsylvania Railroad Company v. United States

Audio Transcription for Oral Argument - May 17, 1960 in Pennsylvania Railroad Company v. United States

Earl Warren:

Number 451, Pennsylvania Railroad Company, Petitioner, versus United States.

Mr. Cox.

Hugh B. Cox:

May it please the Court.

This case is here on a writ of certiorari from the Court of Claims.

And the case arose in this way.

In 1941 and 1942, the Pennsylvania Railroad Company carrying 75 shipments of iron and steel articles for the account of the United States from various points in the East to the port of New York.

The shipments were consigned to that port for export.

Because of conditions created by the war, they were not exported to that port but stored for a while in New York and then they sent it elsewhere.

Some of them ultimately went to Canada, some of them were ultimately exported to other ports.

The controversy in this case relate to the charges and only to the charges, or no shipments from the point of origin to the port of New York versus the set of charges.

They are under the tariff --

Felix Frankfurter:

Were the shipping -- were the shipping documents changed after they couldn't --

Hugh B. Cox:

They were changed afterwards, Mr. Justice Frankfurter.

There were two sets of rates that might have been applied to these shipments.

One, were the ordinary domestic rates on iron and steel article, the other were lower export rates.

The Railroad billed the United States on the basis of the higher domestic rates and the Unites States paid for the shipment on that basis.

Subsequently, on post audit by the Controller General, he decided that the United States should not have been billed on that basis but it -- it should have been billed on the basis of the export rate.

He took the position first that the -- in the conditions that applied to these shipments, the export rates under the tariffs were applicable.

And alternatively, he took the position that any rate higher than those export rates as applied to these shipments would have been unreasonable.

He therefore deducted under the procedure provided for in the post-audit statute from freight bills admittedly owing to the Railroad an amount equal to the difference between the domestic rates and the lower export rates that came to approximately $7237.

The Railroad then brought suit in the Court of Claims to recover that amount.

There was a report by a Commissioner, an argument before the Court of Claims and then to Court of Claims, held that the doctrine of primary jurisdiction as laid down by this Court in the Western Pacific case in 352 U.S., required the Court of Claims to suspend its proceeding until the Interstate Commerce Commission could decide what rates should lawfully and properly be applied to these shipments.

The Court of Claims entered an order suspending the proceeding and directing the United States to institute a proceeding before the Interstate Commerce Commission to have that question determined.

United States instituted that proceeding by all the petition, asserting alternatively that the export rates should apply on -- that they didn't apply any rate higher than those rates, was unreasonable.

There were -- the case was sent by the Commissioner to an examiner.

Before the examiner, the United States abandoned the position of the -- the export rates were applicable and relied solely on the ground that the -- any rates higher than the export rates were unreasonable.

The examiner made a report favorable to that contention of the United States.

Exceptions to the report were overruled by Division 2 which entered an order discontinuing the proceeding and a petition for a reconsideration was denied by the whole Commission.

Felix Frankfurter:

I take it that the question of whether export rate of parts, the rates couldn't be higher -- the reasonable rates couldn't be, or a rate higher than the export rates would be unreasonable, was itself a subject matter for the so-called family jurisdiction.

Hugh B. Cox:

As I think there's no doubt about that.