Secretary of Agriculture v. United States

PETITIONER:Secretary of Agriculture
RESPONDENT:United States

DECIDED BY: Warren Court (1955-1956)

ARGUED: Oct 12, 1955
DECIDED: Jan 09, 1956

Facts of the case


  • Oral Argument – October 12, 1955 (Part 2)
  • Audio Transcription for Oral Argument – October 12, 1955 (Part 2) in Secretary of Agriculture v. United States

    Audio Transcription for Oral Argument – October 12, 1955 (Part 1) in Secretary of Agriculture v. United States

    Earl Warren:

    Number 6, Number 7, Number 11 and Number 12 on the docket.

    Secretary of Agriculture versus the United States of America, Interstate Commerce Commission, et al.

    Mr. Frankel.

    Marvin E. Frankel:

    May it please the Court.

    These are direct appeals from a decision of a three-judge Court for the District of Utah, which by a divided vote sustained an order of the Interstate Commerce Commission approving certain tariff regulations to the nation’s railroads.

    Under the Commission’s order, which I shall describe more fully in a while, the railroads all over the country are free in all circumstances for specified percentages of damage in egg shipments delivered by them.

    A number of protestants appeared before the Interstate Commerce Commission and opposed these regulations.

    The protestants included egg shippers all over the country, the Secretary of Agriculture in his role as statutory representative of the agriculture community, the Department of the Army on behalf of the national military establishment, which buy the lot of eggs.

    The United States with the statutory defendant as it is in all such cases in the court below.

    However, it aligned itself with the Secretary of Agriculture in urging that the Commission’s order and the regulations, the Commission approved were invalid and the United States is here again aligned with the secretary in urging reversal.

    Now, I’m here to argue on behalf of the secretary and the United States.

    We filed a joint brief.

    Three other appellants, egg shippers have filed a separate brief also urging reversal, are substantially, on the grounds we pressed with differences, of course, in the answers and detail.

    Now, these other appellants have relinquished their time for oral argument and I shall present as fully as I can, the grounds on which we commonly urge reversal.

    Now, the regulations have approved, issued with the Commission’s approval by the railroad appear at –at pages 52 through 54 of Volume 1 of the record.

    And we are concerned here particularly with section 6 and 7 of these regulations, which are at pages 53 and 54 of the record.

    These regulations if you can see provide that, “On eggs placed in packages at rail point of origin of the shipment, the railroads are in no case to be liable for damage, where the damage does not exceed 3% of the contents of the packages containing damaged eggs.”

    Section 7 provides that where the eggs are placed in packages at points elsewhere than a the rail point of origin, the limitations, well, I shouldn’t say limitation, that’s our issue.

    The percentage for which the railroads are not to be liable is 5%.

    In both cases, the 3% and 5% regulations, if carrier liability is shown, that liability is not to be for anything except the excess over the 3% and 5%.

    So that in all cases, the railroads are not liable for either 3% or 5%.

    Now, both of these sections contained a — an exception.

    And that exception provides that where the shipper has obtained a federal or a state grading certificate showing the amount of damage in the eggs at the rail point of origin the percentage for which the railroad is not to be liable is to be that amount plus 1%.

    Now, we argued below on a number of grounds that these regulations were unreasonable and unlawful under the Interstate Commerce Act.

    But our main argument was then and my main argument here will be that these are limitations of liability forbidden by Section 20 (11) of the Interstate Commerce Act, which is it is set out and printed in part at pages 20 and 21 of the Government’s brief.

    In a word, our position has been that regulations, which declare as this do, that no claim shall be allowed for specified percentages of the damage, our position has been that this is clear and unmistakable limitation of liability forbidden, admittedly, limitations of liability are forbidden by Section 20 (11).

    We have a segment that the —

    Harold Burton:

    Did you say that at least, absolutely forbidden as to half a percent or 1% or any other percent and it — it doesn’t turn on the 3 and the 5?

    Marvin E. Frankel:

    It doesn’t turn on the 3 or the 5, Your Honor.

    Now, I — I should say we have a second point, less important, but also in itself an independent ground for reversal which is, that the findings of the Commission do not sustain its order approving these regulations in this case.

    Marvin E. Frankel:

    But our main argument is that no such regulations could be valid under Section 20 (11) of the Interstate Commerce Act.

    Felix Frankfurter:

    You mean a class regulation?

    Marvin E. Frankel:

    A class regulation, which covers all shipments in advance without regard to these particular facts of any particular case and the evidence in any particular case.

    Now, I’m pleased to report that for both of these arguments, it’s unnecessary for the Court to wade through the evidence in these too cumbersome volumes of the record.

    However, the Court will want to have as the concrete setting, which these issues arise had recognized that we are seeking to overturn an administrative determination.

    And before proceeding with my argument, I shall review in some detail the findings and the conclusions of the Interstate Commerce Commission.

    Felix Frankfurter:

    I’m sorry I have to interrupt you.

    Marvin E. Frankel:

    Yes, sir.

    Felix Frankfurter:

    I Am to infer from that you have used the general question to all that is pending and (Inaudible)

    Marvin E. Frankel:

    That’s correct, Your Honor.

    We are not — we do not raise the question of substantiality, the sufficiency of the evidence to support the findings.

    We do —

    Felix Frankfurter:

    I don’t need to hear that.

    Marvin E. Frankel:

    We — well, I — I had hoped that the outset, then to report of the secretary.

    We do contend and this is another point, to which you need consider only the Commission’s findings.

    We contend that there was a finding, contained inconsistencies and deficiencies, which makes them insufficient to support this order.

    But for that, you need only look at those findings in the Commission’s report.

    Felix Frankfurter:

    (Inaudible) the Government has made sure that do not alter findings without (Inaudible)

    Marvin E. Frankel:

    That’s right, Your Honor, that’s right.

    And for that, I may slip occasionally and make reference to the evidence for illustrative — illustrative purposes but I think I can barely say that as our positions presented in this Court, we have not raised those questions about the sufficiency of the evidence to support the Commission’s findings.

    And if we don’t agree with the Government that we will have read the evidence.

    Marvin E. Frankel:

    Well, I can’t visualize the possibility of the Court’s not agreeing but I’m trying to imagine it, I would say that we have a serious problem getting you to read the evidence on the basis of the questions we presented to you.

    Felix Frankfurter:

    Is that true at all with the issue (Inaudible)

    Marvin E. Frankel:

    No, I should say that the — the egg shippers have raised questions as to the sufficiency of the evidence.

    And I have heard and I appreciate the question because although I don’t represent the egg shippers, I should do nothing to damage their case.

    They may have fairly presented the problems with the evidence and then I do regret my (Inaudible)

    I hope to make up with by demonstrating that you don’t have to read the evidence, anyhow.

    Now, in the Commission’s report, which appears beginning at page 12 of the record and it goes on at page 43, the Commission noted at the outset that beginning after 1941, the railroads had been paying large claims for damage to shell egg shipments.

    I emphasize that they’ve paying them, not merely receiving them.

    But the Commission pointed out in its findings that the problem had not been a serious one prior to World War II.

    Marvin E. Frankel:

    In 1941, the total of damage payments for the entire country was $110,000 a modest figure.

    Thereafter however, the amount rose steadily and very sharply reaching a peak of some $2,300,000 in 1947.

    Now, the findings show that there were no changes in the chickens or the eggs or in the practices of the people packing them.

    The Commission did find that during the war and for sometime thereafter, poor railroad equipment and inexperienced railroad personnel had contributed to this damage.

    The Commission then noted that this situation, this deficiency in the railroad, had apparently improved at some point after the war.

    But the high post-war damage claims as contrasted with the modest pre-war claims continues.

    Now, there is no finding in the Commission’s report to indicate why this should have been so, why there was difference between the low pre-war and the high post-war claims for damage to show it.

    Felix Frankfurter:

    Would you at this point in view of another district (Inaudible)

    Marvin E. Frankel:

    Yes, Your Honor.

    The Commission also found that this increase in the war years and the years after resulted almost entirely from a great increase in claims on the eastern seaboard on eggs coming to the eastern seaboard and particularly to New York.

    The Commission expressly found that generally there had been no increases in the South or the West and the Southwest.

    But that in New York, the increase was so dramatic as to account for substantially all of this nationwide increase in claims.

    Now on that, the shippers testified and this is reviewed in the Commission’s findings that the high damage claims in New York could be accounted for by rough handling of cars, poor switching and its loading operations in New York area.

    The Commission stated that it was unable to determine from this record that this explanation accounted for the situation in New York.

    The carriers on the other hand suggested that consignees in New York are more fastidious and that this accounted for the high claims in New York.

    The Commission expressly rejected that attempted explanation as being unsupported by the record.

    The upshot on this striking difference between the eastern seaboard and the rest of the country is that there is no finding anywhere in the Commission’s report as to why this difference exist.

    No finding despite the fact that they ultimately issued regulations of nationwide applicability over the protests of shippers across the nation.

    The Commission made another important finding.

    It found that on trucks, the damaged egg is negligible.

    For the railroads, the Commission later approved tolerance regulations based through substantial extent on the proposition that most of these tolerance percentages are taken up in damage in the egg when the shipper gives them to the carrier.

    Now, the Commission found that shipping practices are uniform throughout the country.

    There is no finding in the Commission’s report to explain why then there is negligible damage on trucks with these uniform practice and the supposed handling by the shipper to the carrier of damaged egg.

    Why there is no damage on trucks was mentioned and this — our damage on the railroad confined for these in figures.

    On this, the Commission merely found and it has figures to demonstrate this that in the late years of the last decade, there was a dramatic shift of the egg shipping business from the railroads to the trucks.

    Now, the findings show that thousands of cases of eggs are shipped to all parts of the country with no damage, arriving in good order.

    And this, of course, includes New York, people in New York who’ve eaten soft-boiled eggs know that some eggs get to New York without being broken.

    As a matter of fact, large amounts of them do.

    There all are extremely large and impressively large claims for damage in New York.

    If I mentioned here your point, it seems to us in court that in New York to some degree and in the rest of the country for a very marked degree, eggs are shipped and arrive without damage.

    Felix Frankfurter:

    There are different from the (Inaudible)

    Marvin E. Frankel:

    The records does not show that, Your Honor.

    The shippers who have switched from the railroads to the trucks are presumably making the same shipments.

    In fact, shippers from the Far West testified in the record that their shipments from there to New York arrive more quickly by truck than by train which in addition to the lower damage and better service that was one of their reasons for switching to the trucks.

    Now, the Commission did find, and we don’t excuse this finding, that eggs are fragile, that a substantial amount of them are imperfect when they are given to the carrier.

    And that some are inevitably damaged in transit.

    At pages 31 and 32 of the record, the Commission reviewed certain studies on this problem.

    One study by the Department of Agriculture showed that in 115 cars of eggs, there has been 1.4% of stains and dirties, dirty to stained eggs or eggs stained from contact with broken eggs.

    Dirty eggs are eggs with adhering — they’re usually from the nest and not a kind of imperfection that would be likely to be a part of the damage, a carrier would have to pay for.

    In these 115 cars, there was found an average of 1.4% stains and dirties, 1.9% checked eggs.

    Checked eggs are eggs with some imperfection in the shell usually are not visible through the naked eye with the shell membrane intact so that the egg does not leak or in any way spewed its content.

    1.4% stains and dirties, 1.9% checked eggs and 1/10th of 1% designated loss in this study by Department of Agriculture of eggs as they were about to be handed to the carrier for shipment.

    Now, other studies showed varying percentages.Other studies by the Department of Agriculture and the railroads themselves showed percentages of this kind of imperfection ranging from below 1% to upwards of 3% and in some individual cases, 7%.

    Now, concentrating on this 3.4% study, I should emphasize that over half of this month’s total of 3.4% was the 1.9% checks which the Commission pointed out was a kind of imperfection which could not be detected by the kind of inspection performed by the company at destination.

    These checks were detected by candling and clicking, candling is process of holding an egg before a light to examine its interior quality and its exterior imperfections not visible to the naked eye.

    Clicking is a process I can’t describe expertly that involved bumping eggs together to tell by the sound about imperfections that can’t be seen.

    According to the record, to a trained ear a perfect shell gives a clear and bell-like tone when the eggs are — come together and click.