author: ROSENN, Circuit Judge.

text:
    DELAWARE RIVER PORT AUTHORITY et al. v. TRANSAMERICAN TRAILER TRANSPORT, INC., Appellant.
    No. 74-1214.
    United States Court of Appeals, Third Circuit.
    Argued May 28, 1974.
    Decided July 30, 1974.

      John G. Harkins, Jr., Marjorie G. Marinoff, Pepper, Hamilton & Scheetz, Philadelphia, Pa., Amy Scupi, Olga Boi-kess, Galland, Kharasch, Calkins & Brown, Washington, D. C., for appellant.
    Abraham E. Freedman, Freedman, Borowsky & Lorry, Philadelphia, Pa., for ILA, Phila. District Council.
    Martin A. Heckscher, Duane, Morris & Heckscher, Philadelphia, Pa., for Delaware River Port Authority.
    Israel Packel, Harrisburg, Pa., Gordon P. MacDougall, Washington, D. C., for Commonwealth of Pennsylvania.
    Francis A. Scanlan, Deasey, Scanlan & Bender, Ltd., Philadelphia, Pa., for Phila. Marine Trade Assn, and Port of Phila. Marine Terminal Assn.

      M. Carton Dittmann, Jr., Ballard, Spahr, Andrews & Ingersoll, Philadelphia, Pa., for Phila. Port Corp. and Greater Phila. Chamber of Commerce.
    Martin Weinberg, Herbert Smolen, Philadelphia, Pa., for City of Philadelphia.
    James L. Pimper, Gen. Counsel, Douglas N. Jones, Atty., Federal Maritime Commission, Francis B. Burch, Atty. Gen., of Maryland, Eldred N. Bell, Jr., Baltimore, Md., Director of Transp. for Maryland Port Administration, for ami-cus curiae.
   OPINION OF THE COURT

Before ROSENN and HUNTER, Circuit Judges, and HANNUM, District Judge.

ROSENN, Circuit Judge.

This appeal involves a novel issue of considerable importance to the shipping industry and to American maritime ports. The plaintiffs are parties interested in the promotion of the shipping industry in the Port of Philadelphia. The defendant, Transamerican Trailer Transport, Inc. (TTT), is a steamship company and common carrier by water. TTT ships do not call at the Port of Philadelphia, but TTT maintains steamship service between New York and San Juan, Puerto Rico, and between Baltimore and San Juan. The plaintiffs contended before the district court that solicitation of cargo by TTT illegally encourages certain shippers of Puerto Rico-bound containerized cargo to ship their cargo from the TTT port facilities in New York or Baltimore, rather than from another carrier’s Philadelphia port facilities.

The district court, in an. action not contested on this appeal, held that the merits of the contention by the plaintiffs should first be considered by the Federal Maritime Commission (FMC) under the doctrine of primary jurisdiction. In addition, however, the district court entered a preliminary injunction prohibiting TTT from the “solicitation of cargo” which is “naturally tributary to the Port of Philadelphia” and which is destined for Puerto Rico, pending, ultimate resolution of the controversy by the FMC and the appellate courts.

TTT appeals from the grant of the preliminary injunction. The FMC and the Maryland Port Administration, as amicus curiae, have filed briefs supporting reversal of the injunction. For the reasons expressed below, we reverse.

Underlying our consideration of the issues is the proposition that,

[A]s a prerequisite to the issuance of a preliminary injunction the moving party must generally show: (1) a reasonable probability of eventual success in the litigation, and (2) that it will be irreparably injured pendente lite if relief is not granted to prevent a change in the status quo.

A.L.K. Corp. v. Columbia Pictures Industries, Inc., 440 F.2d 761, 763 (3d Cir. 1971). Moreover, this court has repeatedly stated that the district court, in considering whether to grant a preliminary injunction, should take into account, when they are relevant, (3) the possibility of harm to other interested persons from the grant or denial of the injunction, and (4) the public interest. It is also clear, however, that consideration of these factors by the district court requires a “delicate balancing,” and that the district court’s grant or denial of a preliminary injunction will be reversed only for an abuse of discretion. See, e. g., Scooper Dooper, Inc. v. Kraftco Corp., 460 F.2d 1204 (3d Cir. 1972), and cases cited therein. We must determine, therefore, whether the grant of a preliminary injunction in this case was an abuse of discretion.

We first consider whether the plaintiffs have shown “a reasonable probability of eventual success in the litigation.” The district court found, without further discussion of this issue, that the plaintiffs were “likely to prevail” before the FMC. Our consideration of this issue requires a review of the factual background of the case and of the legal theory upon which the plaintiffs rely.

The findings of fact made by the district court included the following:

7. The Holt Hauling and Warehousing Company, (Holt) maintaining its principal office in Philadelphia, Pennsylvania is the agent of TTT in approximately a five state territory from Pittsburgh, Pennsylvania to as far south as Washington, D. C. and as far east as the Atlantic seaboard.
8. As the agent for TTT, acting through its sales force and advertising, Holt solicited shipping business in the aforesaid territorial limits.
9. The purpose of said solicitation is to have shippers move their shipment by over-the-land motor carriers to the port of New York or Baltimore and there to be loaded upon the ocean carriers of the defendant. The ultimate destination for the loads to be delivered is San Juan, Puerto Rico.
10. As a result of the combined advertising and sales program carried on by TTT and Holt between thirty (30) and one hundred (100) truckloads of ocean freight [per week] is transported from various inland points to New York or Baltimore.
11. In the ordinary course of business a substantial part of the shipments bound for Puerto Rico would be carried via the Port of Philadelphia.
6. TTT does not pay any part of the inland transportation charge for cargo coming to its vessels from the Philadelphia Port area said charges being paid entirely by the shipper, according to tariffs on file with the Interstate Commerce Commission.

The specific practices by TTT of which the plaintiffs complain is not entirely clear from the record. It appears however, that at issue are the employment by TTT and Holt of sales and marketing personnel in the Philadelphia area, TTT advertising in the Philadelphia area concerning the availability of its service from New York and Baltimore, and the relationship between TTT and Holt pursuant to which Holt solicits business for TTT in the Philadelphia area and also trucks the cargo to TTT’s port facilities in New York and Baltimore.

The plaintiffs contend that these practices are illegal under the Shipping Act of 1916, 46 U.S.C. § 801 et seq., and the Merchant Marine Act of 1920, 46 U. S.C. § 861 et seq. In their complaint presently pending before the FMC, they point to three statutory provisions allegedly violated by TTT. First, they cite section 16 of the Shipping Act, 46 U.S. C. § 815, which makes it unlawful for a common carrier by water to “subject any particular . . . locality . . . to any undue or unreasonable prejudice or disadvantage in any respect whatsoever.” Second, they point to section 17 of the Shipping Act, 46 U.S. C. § 816, which prohibits carriers by water in foreign commerce from “demand[ing], charg[ing] or collect[ing] any rate, fare, or charge which is unjustly discriminatory between . . . ports .”

Finally, they rely upon section 8 of the Merchant Marine Act, 46 U.S.C. § 867, which imposes upon the Secretary of Commerce the duty, inter alia, “to investigate any . . . matter that may tend to promote and encourage the use by vessels of ports adequate to care for the freight which would naturally pass through such ports.”

In support of their contention that the TTT practices are detrimental, discriminatory and unduly prejudicial to the Port of Philadelphia and to businesses dependent upon that port, plaintiffs rely primarily upon several decisions of the FMC, particularly Intermodal Service to Portland, Oregon, 17 F.M.C. —, 14 P & F Shipping Reg. 107 (1973). Plaintiffs conclude that “a water carrier which does not bring its ships into the Port of Philadelphia may [not] send salesmen into the Philadelphia area and solicit cargo business which is naturally tributary to Philadelphia, and then move it overland to the Port of New York or Baltimore, and there load it aboard its vessel.”

The cases relied upon by the plaintiffs, however, do not strongly support their position. Each differs from the instant case in one respect. In each case, the practice held to violate the Shipping Act involved absorption by a water carrier of shippers’ overland transportation costs. The FMC, summarizing the principle for which these cases stand, recently stated:

Port equalization means the allowance or absorption by the ocean carrier of such amount as will make the shipper’s cost of overland transportation identical, or substantially so, from his inland point of origin to any one of two or more ports. Its purpose is to enable the ocean carrier to compete for cargo without calling at the port closest to, or enjoying the lowest inland transportation costs from, the point where the cargo originates. The most recent decisions of the Commission hold that port equalization violates section 16 of the [Shipping] Act where it (1) diverts traffic from a port to which the area of origin is naturally tributary, to a port in which the area is not naturally tributary, and (2) is not justified, in the shipper’s interest, by lack of adequate service out of the port from which traffic is so diverted.

Sea-Land Services, Inc. v. South Atlantic & Caribbean Line, Inc., 9 F.M.C. 338, 344 (1966).

There is no contention in this case that TTT absorbs the inland freight charges of the shippers and thus engages in port equalization. As noted above, the district court expressly found to the contrary in its sixth finding of fact. The challenged practices are simply the use of salesmen and advertising to point out to Philadelphia-area shippers the advantages of paying extra overland transportation costs to ship their Puerto Rico-bound cargo out of New York or Baltimore. Possible advantages to Philadelphia area shippers from such an arrangement would include faster or more efficient service. We are aware of no case which has intimated that these advertising practices are in any way illegal absent the additional practice of port equalization.

Moreover, the General Counsel to the FMC, in his brief as amicus curiae supporting reversal of the preliminary injunction, refers to plaintiffs’ action as “a novel cause of action,” and states that the merits of the action “are best characterized by doubt rather than certainty.” The brief states further:

As previously stated, the FMC has never found mere cargo solicitation to violate the Shipping Act. The Port Authority complaint is a case of first impression necessarily requesting an extension of prior FMC rulings on port discrimination and diversion. Although Appellees have implied that the solicitation of cargo in an area not directly served by a carrier is a per se violation of the Shipping Act, this is not the law. Every prior FMC decision, including [Intermodal Service to Portland, Oregon, supra] dealing with indirect service practices has involved the absorption of land transportation costs by the carrier.
•X- -X- -X -X- * -x-
Because [the case] presents unprecedented and difficult questions of law, there is no clear likelihood or assurance that the Port Authority interests will prevail on the merits, (citations omitted). Without meaning to prejudge the ultimate result in any way, the FMC submits that there is no basis for concluding that [the case] will be decided in Appellees’ favor. Such a result is possible, but not reasonably certain, (citation omitted) (emphasis supplied).

Since this case will be heard on the merits in the first instance by the FMC, and since the plaintiffs rely heavily upon FMC case law, we believe that considerable deference should be given to the FMC’s estimate, if any, of the likelihood that plaintiffs will succeed on the merits.

These considerations standing alone would impel us to reverse the grant of the preliminary injunction. As we have noted, however, several other factors must be weighed by the trial court in determining whether a requested preliminary injunction should be granted. These factors are the possibility of irreparable injury to the moving party and to other persons, and the public interest. If these remaining factors, on balance, strongly favored the grant of a preliminary injunction, the trial court’s grant of the injunction may not be an abuse of discretion even though plaintiffs did not demonstrate as strong a likelihood of ultimate success as would generally be required. See Gulf & Western Industries, Inc. v. Great Atlantic & Pacific Tea Co., Inc., 476 F.2d 687, 692-93 (2d Cir. 1973).

We do not believe, however, that the other factors are sufficiently compelling in this case to justify the grant of the preliminary injunction, absent a more convincing showing by plaintiffs of their likelihood of ultimate success in the litigation. We recognize that the district court found that the plaintiffs and the Philadelphia port area would suffer “extensive irreparable harm” if the defendant’s conduct were ultimately declared illegal, and that “[i]n comparison, the defendant’s injury would be minimal” if its conduct were ultimately declared legal. Even assuming the district court was correct in these conclusions, however, we believe that the court failed to take into account other factors which considerably reduce the weight to be given these conclusions.

First, the district court did not take into account the interests of third persons. It did not consider the interests of the Philadelphia shippers who prefer to utilize TTT’s service. Even more significantly, the district court failed to weigh the interests of the ports of New York and Baltimore. The instant case is essentially an attempt by Philadelphia Port interests to regain business which has been diverted to the ports of New York and Baltimore by allegedly illegal means. It is apparent that to the extent the Philadelphia area avoids injury by the grant of a preliminary injunction against TTT, the New York and Baltimore port areas suffer injury by the grant of the injunction. Plaintiffs produced no evidence to the contrary.

Relief saving one claimant from irreparable injury, at the expense of similar harm caused another, might not qualify as the equitable judgment that a stay represents.

Virginia Petroleum Jobbers Ass’n v. F P C, 259 F.2d 921, 925 (D.C.Cir. 1958). We believe that when considerable injury will result from either the grant or denial of a preliminary injunction, these factors to some extent cancel each other and greater significance must be placed upon the likelihood that each party will ultimately succeed on the merits of the litigation. We do not believe, therefore, that the district court’s finding of irreparable injury to the plaintiffs is sufficient to outweigh the plaintiffs’ rather weak showing concerning their likelihood of success on the merits.

In addition, the district court did not expressly take into account the public interest. We believe that weight must be given to the FMC’s views on this matter. The FMC amicus brief states that “the instant injunction seriously encroaches upon the FMC’s statutory responsibility to establish and maintain uniform maritime practices and policies . .” It points out that “ [c] argo solicitation agents are a customary marketing device in the shipping industry,” and that TTT’s arrangement with Holt was consistent with industry practice. The FMC apparently believes that these present industry-wide solicitation practices should be permitted to continue unless and until it determines that they are illegal; if found illegal, the practices will then be proscribed on an industry-wide basis.

We are not indifferent to the admirable zeal and public spirit which motivates the plaintiffs’ efforts to promote the Port of Philadelphia as a shipping center. We cannot, however, look at the facts and issues presented in this case in a provincial manner. We believe that the general public interest, as well as the other considerations discussed above, require us to hold that the district court abused its discretion in granting the preliminary injunction. We note that if TTT’s solicitation practices are ultimately declared to violate the Shipping Act, the plaintiffs can bring an action for damages against TTT pursuant to section 22 of the Act, 46 U.S.C. § 821.

The judgment of the district court granting the preliminary injunction will be reversed.

       Judge Hannum was present at oral argument but did not participate in the decision of this case.

      . 46 U.S.O. § 801.

      . Cargo is “naturally tributary” to a port when, “because of a combination of geographic, commercial, and economic considerations,” the port “would naturally serve such cargo.” Intermodal Service to Portland, Oregon, 17 F.M.C. —, 14 P & F Shipping Reg. 107, 125 (1973).

      . The pertinent provision of the preliminary injunction order, issued February 4, 1974, stated:
      Defendant, their agents, employees, officers, directors, and any person in active concert or participation with them who receive actual notice of this Court’s Order, are hereby restrained, pending a final decision by the Federal Maritime Commission or by any Appellate Court which review that decision from solicitation of cargo.
      In a separate opinion dated February 21, 1974, the court referred to the February 4 order as “an order enjoining the defendant from solicitation of cargo in the Philadelphia Port Area destined for Puerto Rico.” The court also stated that in framing the order it “deemed it advisable to target the area involved as that which is naturally tributary to the Port of Philadelphia.”
      As do all the parties before us, we will interpret the February 4 order in the manner expressed by the district court’s opinion of February 21.

      . In light of our disposition of this appeal, we do not reach TTT’s appeal from the district court’s order of February 21,- 1974, setting bond of $10,000 to be posted by plaintiffs.

      . See, e. g., Commonwealth of Pennsylvania ex rel. Creamer v. United States Dep’t of Agriculture, 469 F.2d 1387, 1388 (3d Cir. 1972) ; In re Penn Central Transportation Co., 457 F.2d 381, 384-385 (3d Cir. 1972) ; Nelson v. Miller, 373 F.2d 474, 477 (3d Cir.), cert. denied, 387 U.S. 924, 87 S.Ct. 2042, 18 L.Ed.2d 980 (1967). See also Virginia Petroleum Jobbers Ass’n v. FPC, 259 F.2d 921, 925 (IXC.Oir. 1958).

      . The plaintiffs’ complaint in the district court states that, [b]y soliciting and encouraging shippers located in the Port of Philadelphia area to move their cargo through other ports of exist or entry, defendant has in the past and is continuing in the present to divert cargo illegally from the Port of Philadelphia, as is more fully set forth in Exhibit “A” to this Complaint, which is a Complaint against these practices filed by plaintiffs with the Federal Maritime Commission.
      The complaint filed with the FMC, however, simply repeats the substantive provision of the above-quoted district court complaint, and does not specifically set forth the practices which jdaintiffs allege are illegal.

      . The trucking is actually done by Holt Motor Express, Inc., an affiliate of Holt Hauling and Warehouse Systems, Inc. (referred to in Finding 7 of the district court as 1-Iolt Hauling and Warehousing Company). For convenience we will refer to both companies as Holt.

      . 46 U.S.C. § 815 provides in relevant part:
      It shall be unlawful for any common carrier by water, or other person subject to this chapter, either alone or in conjunction with any other person, directly or indirectly—
      First: To make or give any undue or unreasonable preference or advantage to any particular person, locality, or description of traffic in any respect whatsoever, or to subject any particular person, locality, or description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever.

      . 46 U.S.C. § 816 provides in relevant part:
      No common carrier by water in foreign commerce shall demand, charge, or collect any rate, fare, or charge which is unjustly discriminatory between shippers or ports, or unjustly prejudicial to exporters of the United States as compared with their foreign competitors.
      This provision is inapplicable on its face because the East Coast-Puerto Rican sea route is not within foreign commerce within the meaning of the statute. See 46 U.S.C. § 801. It appears, however, that the FMC applies the same substantive standards to sections 815 and 816.

      . 46 U.S.C. § 867 imposes upon the Secretary of Commerce, in cooperation with the Secretary of the Army, “with the object of promoting, encouraging, and developing ports and transportation facilities in connection with water commerce over which he has jurisdiction,” to investigate numerous matters, including that quoted in the text, as well as “to investigate territorial regions and zones tributary to such ports, taking into consideration the economics of transportation by rail, water, and highway and the natural direction of the flow of commerce . . . . ” While this provision does not proscribe any particular conduct, the FMC takes into account, in enforcing the Shipping Act, the policies in this section favoring port improvement and development. See Port of New York Authority v. FMC, 429 F.2d 663, 670 (5th Cir. 1970), cert. denied, 401 U.S. 909, 91 S.Ct. 867, 27 L.Ed.2d 806 (1971) ; Pacific Far East Line v. United States, 101 U.S.App.D.C. 24, 246 F.2d 711, 716 (D.C. Cir. 1957) ; Intermodal Service to Portland, Oregon, supra, 17 F.M.C. at -, 14 P & F Shipping Reg. at 132.

      . Particular reliance is also placed upon Pacific Far East Line v. United States, 246 F. 2d 711 (D.C.Cir. 1957) ; Delaware River Port Authority v. United States Lines, Inc., 331 F.Supp. 441 (E.D.Pa.1971) ; Sea-Land Services, Inc. v. South Atlantic & Caribbean Line, Inc., 9 F.M.C. 338 (1966) ; Port Commission of City of Beaumont, Texas v. Sea-train Lines, Inc., 2 U.S.M.C. 500 (1941).

      . The record indicates that TTT’s service to Puerto Rico is twice weekly out of New York and once weekly out of Baltimore. The only service out of Philadelphia is a weekly feeder vessel by a different carrier taking cargo bound for numerous locations (including Puerto Rico) to the carrier’s port facilities in Elizabeth, New Jersey.

      . Intermodal Service to Portland, Oregon, supra, is not to the contrary. In that case, the FMC was called upon to determine the legality of a practice by a conference of water carriers in discharging cargo at Seattle and absorbing the overland transportation costs to Portland. Certain local cargo was naturally tributary to Portland, while other cargo destined for inland areas was not naturally tributary to any port. The FMC upheld the cost absorption practice, with the condition that “each line serving Portland by means of an indirect overland service serve that port by direct water service, with the frequency of at least alternate sailings.” 14 P & F Shipping Reg. at 128.
      There is no indication in the opinion that a carrier which did not absorb inland transportation costs would be prohibited from discharging Portland-bound cargo at Seattle. The Commission noted, for example, that its condition was adequate to implement the policy of section 8 of the Merchant Marine Act, supra, because the condition “will prevent carriers not calling at Portland by water from absorbing any inland transportation costs and insure a level of water service by those calling there sufficient, so far as the record here appears, to handle local Portland cargoes.” Id. at 132.

      . The PMC was unaware of the proceedings in the district court and thus had no opportunity to make its views known at that time. Under these circumstances, and because the FMC does not raise any contentions concerning factual determinations, we will consider the PMC position even though it was not before the district court. We believe that in the future, however, a district court deferring to an administrative agency under the doctrine of primary jurisdiction should actively solicit the views of the agency before issuing a preliminary injunction pending decision of the case by the agency. The agency’s position is not, of course, binding on the district court.

      . Plaintiffs’ witness testified on direct examination that the economic impact on the Philadelphia area from the challenged TTT practices totaled two to three million dollars annually, and that his experience indicated that the FMC would take at least two years to hand down its decision.

      . As previously noted, these views should preferably be taken into account by the district court in the first instance. See note 14 supra.

      . In light of this disposition, we need not consider TTT’s contentions that the injunction is invalid because it lacks precision in defining the area “naturally tributary” to the Port of Philadelphia, or that the injunction cannot be said to maintain the status quo when it prohibits a practice which has been in effect for several years.


source: Caselaw Access Project

author: CUMMINGS, Circuit Judge.

license: Public Domain

text:
    GRANITE CITY STEEL COMPANY, Petitioner, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent.
    No. 73-1846.
    United States Court oí Appeals, Seventh Circuit.
    Argued June 4, 1974.
    Decided Aug. 22, 1974.
    Randall Robertson, Granite City, 111., Leah S. Hamilton, Jenner & Block, Chicago, 111., for petitioner.
    Wallace H. Johnson, Asst. Atty. Gen., Peter R. Steenland, Atty., U. S. Dept, of Justice, Washington, D. C., for respondent.
    Before CLARK, Associate Justice, and CUMMINGS and SPRECHER, Circuit Judges.

       Associate Justice Tom O. Clark (Retired) of the Supreme Court of tlie United States is sitting by designation.

   CUMMINGS, Circuit Judge.

This matter arises on Granite City Steel Company’s (“the Company’s”)' petition to review a regulation promulgated by the United States Environmental Protection Agency (“EPA”) on August 23, 1973. The Company has asked us to suspend and set aside the regulation.

The regulation in question promulgates an interim compliance schedule for coke-oven pushing and quenching operations in Illinois. It provides as follows (40 CFR § 52.730(b) (2) (ii), 38 F.R. 22742):

“The owner or operator of any stationary source subject to Illinois Air Pollution Control Regulation Rule 203(d) (6) (B)(ii)(bb) shall take the following action with respect to the source no later than the date specified.
“(a) September 30, 1973 — Advertise for bids for purchase and construction or for modification of equipment sufficient to control particulate emissions from the source.
“(b) November 15, 1973 — Award contracts for emissions control systems or process modification, or issue orders for the purchase of component parts to accomplish emission control or process modification.
“(c) March 31, 1974 — Initiate on-site construction or installation of emission control system.
“(d) October 31, 1974- — Complete onsite construction or installation of emission control system.
“(e) December 31, 1974 — Achieve final compliance with Illinois Air Pollution Control Regulations Rule 203 (d) (6) (B) (ii) (bb).”

The Illinois rule referred to in the final paragraph of the federal regulation provides:

“On and after December 31, 1974, all coke-oven facilities shall be equipped with enclosed pushing and quenching systems with particulate collection equipment, or shall employ alternative methods of comparable effectiveness in reducing emission during pushing and quenching.”

This rule was part of the State of Illinois Air Pollution Implementation Plan. The federal regulation was one of several compliance schedules promulgated by EPA in furtherance of the State plan. It required companies operating coke ovens in Illinois to meet the four interim achievement dates established therein in order to assure progress towards full compliance with the December 31, 1974, Illinois deadline. The Company informs us that only four integrated steel companies are affected by this regulation.

In the Company’s coke-oven facilities in Granite City, Illinois, coal is converted into coke to manufacture iron and steel. After the coal becomes incandescent in the Company’s ovens, a large pusher ram enters the oven through one door and forces the incandescent coke out the other door into a hot coke car, also known as a quenching car, which carries the coke to a quenching tower. There the coke is deluged with water before the next step of the process. A fine coke breeze is emitted from the pushing and quenching of the coke. The Illinois rule and the EPA compliance schedule concern the pushing and quenching operations.

Pursuant to Section 110(a)(2) of the Clean Air Act (42 U.S.C. § 1857c-5(a)(2)), the EPA Administrator approved the above-quoted Illinois rule as submitted by the Illinois Pollution Control Board. 40 CFR § 52.722 (37 F.R. 10862 (May 31, 1972)). However, Illinois failed to establish “increment of progress” dates for meeting the December 31, 1974, deadline in its rule. Such increment of progress or milestone dates were required by 40 CFR § 51.15(c). Consequently, on June 20, 1973, the EPA Administrator proposed increment of progress dates. 38 F.R. 16171, 16175-16176. After Illinois hearings, the Administrator modified the proposal and published the regulation involved here on August 23, 1973 (38 F.R. 22736, 22742), precipitating the Company’s petition for review.

The Company did not petition this Court to review the December 31, 1974, attainment date in the Illinois rule when it was approved by the EPA on May 31, 1972. Such a petition had to be filed within 30 days from that approval under Section 307(b)(1) of the Clean Air Act (42 U.S.C. § 1857h-5(b)(1)). Although the Company formally disclaims any attack on the December 31, 1974, date, it is now attacking the increment of progress dates in the federal rule on the ground that the attainment date itself is unreasonable. Such a collateral attack would evade the time period for reviewing the attainment date and cannot be countenanced. Cf. Getty Oil Co. v. Ruckelshaus, 467 F.2d 349, 358-359 (3d Cir. 1972). The time limit is not arbitrary but is designed to get issues resolved promptly and thereby prevent delay in cleaning the air.

The increment of progress dates must be considered within the constraint of the December 31, 1974, Illinois compliance date. As noted, the EPA was required to establish increments of progress when not established by the State. Here the Administrator finally had a sixteen-month period available within which to maneuver, namely, between the August 23, 1973, promulgation date and the December 31, 1974, Illinois compliance date. The parties agree that the dates he selected are not to be set aside unless arbitrary or capricious.

Before promulgating the regulation under attack, the Administrator considered a technical support document and guidelines derived from a preliminary study first submitted to the EPA by PEDCo-Environmental Specialists, Inc. in April 1973. The pertinent PEDCo schedules in the record (Appendix 43-44) were based upon one system in operation (the Ford system) and one system of a different kind under construction (the Interlake system). They were formulated earlier than differing schedules contained in PEDCo’s July 1973 final report and are described in the record as rough approximations. These rough approximations of PEDCo indicated that 53 weeks were necessary to achieve compliance if the Ford system were used, and 79 weeks if the Interlake system were used. EPA allowed 75 weeks from the time its regulation was proposed, and 66 weeks from the time it was promulgated. The EPA also considered the April 1973 PEDCo report’s discussion of existing technology.

As noted, the December 31, 1974, compliance date is not really in issue, but rather the increment of progress dates. There is no explicable relationship between the time PEDCo thought necessary for each step and the time allowed by the regulation. However, the time steps allowed by EPA, computed from the date it proposed its regulation, are more generous than the time steps allotted by PEDCo to the Ford system. Apart from this and EPA’s consideration of the then existing technology, the only support in the record for the increment of progress dates is that they are reasonable on their face given the fixed compliance date. The Company has not suggested otherwise; it has not said, e. g., that it needed two additional weeks to let contracts and two fewer weeks for actual construction. Rather, the Company’s argument is that all the dates are too early. As against that attack, the dates are clearly reasonable and must be upheld, for they cannot all be delayed without violating the previously established December 31, 1974, compliance date.

The Company argues that this is a harsh and unreasonable result, and that no schedule should have been promulgated at all if the December 31, 1974, date is impossible to meet. It is a sufficient answer that a milestone schedule was required by 40 CFR § 51.15(c) and that the Company deliberately bypassed a chance to litigate the reasonableness of the endpoint. In these circumstances any harshness is irrelevant, but an affidavit filed by the EPA in response to the Company’s motion for stay pending appeal shows that adequate technology was available in time. The Great Lakes Carbon Company of St. Louis, Missouri, installed a system in seven months and has had it in operation since April 1972. A West German coke plant was operating a system on two batteries of ovens before August 1973; it installed its third system in six months. Although the affidavit is ambiguous, it appears that these are actual construction times and do not include planning and contract awarding. Two other companies were constructing such systems at three other plants with somewhat longer anticipated construction times. The affidavit concluded as follows:

“If a company had begun preliminary design work in the summer of 1973, the experience of the companies referred to herein indicates that purchase and installation of control technology for pushing operations at coke oven facilities could be completed, in most instances, by the end of 1974.”

This affidavit was not in the record of the rule-making proceeding. The April PEDCo report refers only to the Ford and Interlake systems, and they are referred to anonymously; they were identified for the first time in this Court. Ordinarily we would be reluctant to approve a regulation where so much of the information in support of the proposed rule was kept secret until after the hearing required by § 110(c), 42 U.S.C. § 1857c-5(c). The purpose of the hearing is largely subverted if interested persons cannot respond to the agency’s reasons for the proposed regulation. See Portland Cement Assn. v. Ruckelshaus, 158 U.S.App.D.C. 308, 486 F.2d 375, 393 (1973). Here the Company’s attack is in essence an attack on the compliance date. Therefore, the increment of progress dates, whose unreasonableness has not been satisfactorily shown by the Company, need not be set aside.

Proper forms of relief are potentially available to the Company. If it contends that the December 31, 1974, date is unreasonable solely because of grounds arising more than thirty days after it was promulgated, it may file a petition for review in this Court under Section 307(b)(1), 42 U.S.C. § 1857h-5(b)(1). If it can show that there was never an opportunity for judicial review under that Section, it can seek judicial review in an enforcement proceeding brought by the Administrator. § 307(b)(2), 42 U.S.C. § 1857h-5(b) (2). It may seek to qualify for an extension of time under several Sections of the Act. See § 110(e), 42 U.S.C. § 1857c-5(e); § 110(f), 42 U.S.C. § 1857e-5(f); § 112(c), 42 U.S.C. § 1857c-7(c); § 113(a)(4), 42 U.S.C. § 1857c-8(a)(4). EPA represented at oral argument that any such applications will be denied because the Company has made no effort to comply, and that an enforcement proceeding is inevitable. Even so, that does not accord the Company a present right to' indirect review of the final compliance date here. Given that date, the interim dates are reasonable. For any other relief, the Company is in the wrong forum at the wrong time.

The petition for review is dismissed.


author: HEANEY, Circuit Judge.

text:
    WESTERN ELECTRIC COMPANY, INC., Appellee, v. BURLINGTON TRUCK LINES, INC., et al., Appellants. The PROCTOR & GAMBLE DISTRIBUTING CO. et al., Appellees, v. IDEAL TRUCK LINES, INC., et al., Appellants. UNITED STATES of America, Appellee, v. BURLINGTON TRUCK LINE, INC., et al., Appellants.
    Nos. 73-1200 to 73-1202.
    United States Court of Appeals, Eighth Circuit.
    Submitted Feb. 11, 1974.
    Decided July 29, 1974.

      • Arthur R. Hauver, Denver, Colo., for appellants.
    Edwin E. Huddleson, Atty., Dept, of Justice, Appellate Section, Washington, D. C., for United States.
    Robert B. Ward, Cedar Rapids, Iowa, for Amana.
    John C. Noonan, Kansas City, Mo., for Western Electric.
    James F. McGovern, St. Paul, Minn., for Land O’Lakes.
    Don M. Jackson, Kansas City, Mo., for Proctor & Gamble.

      Before HEANEY and BRIGHT, Circuit Judges, and WANGELIN, District Judge.

       H. KENNETH WANGELIN, District Judge, Eastern District of Missouri, sitting by designation.

   HEANEY, Circuit Judge.

These are consolidated appeals by the defendant motor carriers from judgments entered after trial in favor of the plaintiff shippers. The actions filed by the shippers in the District Court were maintained to enforce an Interstate Commerce Commission refund order.

In March of 1968, the Middlewest Motor Freight Bureau, a tariff publishing agent for motor carriers in the middle-west territory, filed a schedule of rate increases with the I.C.C. These rate increases were to take effect on April 1, 1968. Although the I.C.C. did not suspend the operation of the schedule, it instituted an investigation of the lawfulness of the rates because of protests by various parties.

The Commission ordered that certain evidence be filed, and set a hearing date of May 20, 1968. On April 12, 1968, the General Services Administration and the Department of Transportation requested a 90-day extension for submission of the required evidence. On April 22, 1968, the Middlewest Bureau sought a like postponement for “the reason . that it [was] a physical impossibility for the respondents to compile the required data within the time allowed by the order . . . ”. On April 25, 1968, the Commission granted the extension in an order which read in part:

It is further ordered, That the time for filing the requested information and supporting data be, and, it is hereby extended to August 5, 1968; that the hearing be, and it is hereby postponed to August 19, 196&, conditioned upon respondents’ compliance with the refund provision ordered below * * *.
And it is further ordered, That respondents be, and they are hereby, ordered to make refunds to the shippers on any shipment moving after May 20, 1968, to the extent that the increases or any portion thereof under investigation herein are not approved by the Commission.

Increased Rates and Charges, From, To and Between Middlewest Territory, I.C. C. No. 34971 (Order of April 25, 1968). The Bureau petitioned for reconsideration of the refund requirement. It withdrew the petition when it learned that in other similar proceedings the Commission had, at the request of other carriers, vacated a refund order but reinstated the original hearing date.

The hearing was held on August 19, 1968. The Commission found, on June 5, 1969, that the proposed increases had not been shown to be just and reasonable, and it ordered:

* * * That, in accordance with the order entered herein on April 25, 1968, the respondents be, and they are hereby, required to refund to shippers the charges on shipments moving after May 20, 1968, to the extent that such charges included the increases herein found not shown to be just and reasonable.

Increased Rates and Charges, From, To and Between Middlewest Territory, No. 34971, 335 I.C.C. 142, 151 (June 5, 1969).

The carriers petitioned the Commission to reconsider the refund order or reopen the proceedings for further hearing. They also cancelled the disputed increases on statutory notice, effective August 31, 1969, and filed new rate schedules to become effective September 1, 1969. The schedules filed called for rates higher than those filed in March, 1968. The Commission entered an order on August 29, 1969, declining to suspend or investigate the new increases. It also denied the carriers’ petition to reconsider the refund order. It ordered the carriers, in accordance with its decision of June 5,1969, to:

* * * make refunds to the shippers presenting their claims to the carriers supported by paid freight bills or other appropriate evidence.

Increased Rates and Charges, From, To and Between Middlewest Territory, I.C. C. No. 34971 (Order of August 29, 1969).

On October 27, 1969, the Commission denied an October 9, 1969, petition for reconsideration of the June 5, 1969, decision as affirmed on August 29, 1969.

On January 26, 1970, sixty of the approximately 1,100 carriers filed a complaint in the United States District Court for the District of Colorado. They asked that a three-judge court be convened pursuant to 28 U.S.C. §§ 2284 and 2321-2325. They sought a declaration that the Commission’s refund orders were beyond the statutory authority and jurisdiction of the Commission and an injunction against enforcement of the refund requirement. On June 19, 1970, the Colorado District Court issued an order temporarily restraining the I. C.C. from effectuating its refund order. On November 6, 1970, the three-judge court issued a preliminary injunction to the same effect.

In a memorandum opinion and order filed on January 14, 1971, the three-judge court dismissed the carriers’ complaint finding that:

We are unable in good conscience, in view of the circumstances presented, to annul the order of the Commission. The Commission was acting in good faith in granting the extension, and the carriers were at the time agreeable to acceptance of the benefits of such an extension order. Their present posture appears to us to be grossly inequitable and not deserving of court intervention. While we do not commend the procedure as one which should be or could be practiced, we do hold that the peculiar facts of this case, arising as they did, are such as to not justify the granting of the relief requested, namely annulment of the Commission’s order and approval of the carriers’ conduct.

Admiral-Merchants Motor Freight, Inc. v. United States, 321 F.Supp. 353, 360 (D.Colo.1971).

The three-judge court entered judgment against the carriers on February 4, 1971, and vacated the injunction. The United States Supreme Court affirmed the judgment without an opinion on October 12, 1971, 404 U.S. 802, 92 S.Ct. 51, 30 L.Ed.2d 37.

The appellee-shippers then filed suit in the District Court for the Western District of Missouri seeking enforcement of the Commission’s refund order. The District Court entered judgment for the shippers in each case before it. It wrote its principal opinion in case No. 73-1201, Proctor and Gamble Co. v. Byers Transportation Co., Inc., 355 F. Supp. 547 (W.D.Mo.1973). It held: (1) that the carriers were precluded because of the decision in Admiral-Merchants from challenging the validity of the refund order under the principle of res ju-dicata and its related concepts; (2) that the Commission’s order was an order for the payment of money and, thus, enforceable under 49 U.S.C. § 16(2); (3) that the shippers were not barred from recovering damages because of the applicable statute of limitations; and (4) that the shippers were entitled to damages, interest and attorneys’ fees. The carriers question the court’s decision on each point.

EFFECT OF ADMIRAL-MERCHANTS

The District Court found that all carriers before it were either parties to or privy to parties in the three-judge court action and were bound by the latter court’s decision. The carriers do not challenge the court’s finding on privity. They do contend, however: (1) that the validity of the Commission’s order was not decided by the three-judge court and was subject to attack in the court below; and (2) that the Commission’s order is confiscatory and should not be enforced for that reason.

The Seventh Circuit, in discussing the first issue in a case similar to this one stated:

* * * The assertion of this argument requires, as the court below concluded, a “myopic reading of the opinion” of the Colorado three-judge court. * * * The statement of issues given by the three-judge panel negates any argument that the court was not concerned with the validity of the Commission’s refund order: * * *

Aluminum Co. of Amer. v. Admiral Merchants M. Frgt., Inc., 486 F.2d 717, 720 (7th Cir.), cert. denied, 414 U.S. 1113, 94 S.Ct. 843, 38 L.Ed.2d 739 (1973).

An examination of the three-judge court’s statement of the issues before it leads us to agree with the Seventh Circuit:

We must decide whether an order of the Commission in which a rate increase is denied, which order directs repayment of interim rates, if determined to be invalid, and which refund order wg,s entered by the Commission as a condition of granting an extension of time to the carriers at their request, is invalid and subject to a judgment annulling the same. We are not involved with the Commission’s order denying the increase. We are limited to the propriety and validity of a conditional rate refund order, which order was tacitly or impliedly (by withdrawals of objection) accepted by the carriers, plaintiffs herein.

Admiral-Merchants Motor Freight, Inc. v. United States, supra, 321 F.Supp. at 358.

As the validity of the Commission’s order was determined by the three-judge court, the doctrine of collateral estoppel was applicable and the appellees could not reassert its invalidity in the court below. See, IB J. Moore, Federal Practice |fff 0.410, 0.441 and 0.-443 (2d ed. 1965). Accord, S. S. Kresge Company v. A & B Transfer, Inc., 488 F.2d 894 (6th Cir. 1973), cert. denied, 415 U.S. 960, 94 S.Ct. 1491, 39 L.Ed.2d 575 (1974); Aluminum Co. of Amer. v. Admiral Merchants M. Frgt., Inc., supra.

The carriers’ second contention is that enforcement of the refund order will result in the confiscation of their property without due process. They argue that they have never had an opportunity to present evidence on this issue to the Commission or to a federal court, and that the due process requirements of the Constitution require that they be given such an opportunity. The District Court viewed this contention as an additional attack upon the validity of the order and held that the three-judge court decision in Admiral-Merchants precluded such an attack. We agree with District Court’s characterization of the attack. This is not to say that we necessarily agree that the three-judge court properly decided the issue by dismissing the complaint without granting the requested relief, but only that the carriers were precluded from raising the issue in the court below because of the three-judge court’s decision and the Supreme Court’s affirmance of it.

The carriers suggest alternatively that they are not attacking the validity of the order but are simply arguing that even if the order is valid, enforcement of it results in their property being taken without due process and that the courts should give them a hearing on this issue. The answer to this suggestion is the same. They raised the issue before the three-judge court and the Supreme Court, and were denied relief by both.

At oral argument, the carriers argued that public policy requires that we abrogate the carriers’ obligation to pay the refunds — the theory being that if the carriers were required to pay the funds, many of them would be bankrupted and the flow of goods throughout the United States would be slowed. To the extent that this concern is a valid one, it can be recognized by the Commission in a future proceeding.

ENFORCEMENT OF THE REFUND ORDER

Although the Interstate Commerce Act originally established a scheme for the regulation of railioads, the Act was amended in 1935 to give the Commission the additional authority to regulate motor carriers. 49 Stat. 543. The sections regulating railroads were designated Part I (49 U.S.C. § 1 et seq.), and the sections regulating motor carriers were designated Part II (49 U.S.C. § 301 et seq.). Part I of the Act provides two methods by which shippers may recover damages against railroads in post-shipment litigation. Section 15(7) [49 U. S.C. § 15(7)] provides for refunds, and §§ 13 and 16 [49 U.S.C. §§ 13 & 16] provide for reparations. Part II does not contain refund provisions. However, in response to T.I.M.E., Inc. v. United States, 359 U.S. 464, 79 S.Ct. 904, 3 L.Ed.2d 952 (1959), a reparations section was added in 1965.

The carriers contend that § 16(2) “creates a cause of action to enforce a railroad reparations order and for recovery of damages thereunder, only.”

The District Court held that:

* * * jror reasons enunciated in Aluminum Company of America v. Admiral-Merchants Motor Freight, Inc., 337 F.Supp. 674 (N.D.I11.1972) and Aluminum Company of America v. Burlington Truck Lines, 342 F. Supp. 166 (N.D.111.1972), the Court finds that Section 16(2) does provide a statutory cause of action to the plaintiff under' the facts presented.

355 F.Supp. at 561.

The cases cited by the District Court held that § 16(2) of Part I of the Interstate Commerce Act, was incorporated into § 205(g) of Part II of the Act, thus providing the shippers a statutory remedy for enforcement of the Commission refund order. We agree.

We read § 205(g) as providing that shippers by motor carrier shall have the same right of relief with respect to final orders of the Commission as do shippers by rail, and read the phrase “right of relief” as encompassing the right to bring an action. As § 16(2) gives shippers by rail a right to bring an action to require carriers to comply with an order for the payment of money in federal District Court, shippers by motor carrier have the same right.

The carriers assert that “[u]nless T. I.M.E. is to be disregarded entirely, plaintiffs have no cause of action under § 16 against motor carriers.” In T.I.M.E., a shipper challenged the reasonableness of motor carriers’ charges although they were in accordance with the published tariffs. The shipper contended that Part II of the Act creates a judicially enforceable right to recover unreasonable charges and that the Act preserves the common law right of a shipper by common carrier to recover exorbitant rates. The Supreme Court rejected both contentions. As to the first contention, the Court stated:

The very provisions of Part I, and their counterparts in Part III, which give a right of action to shippers against carriers for damages incurred by carrier violations of the Act and provide the mechanics for the enforcement of that right are conspicuously absent in the Motor Carrier Act. Thus, whereas § 8 of Part I provides that “any common carrier subject to the provisions of this chapter (who) shall do any act in this chapter . . . declared to be unlawful . . . shall be liable to the person or persons injured thereby for the full amount of the damages sustained . . . ," Part II has no comparable provision. Again, whereas § 9 of Part I gives an injured shipper the right to sue in the I.C.C. or in the Federal District Court, Part II contains no comparable provision. In addition, §§ 13(1) and 16 of Part I give a shipper claiming reparation the right to proceed in the Commission and to enforce his reparation award in the courts, and Part II contains no comparable provisions.

T.I.M.E., Inc. v. United States, swpra, 359 U.S. at 470-471, 79 S.Ct. at 908.

The dissenting judge in S. S. Kresge v. A & B Transfer, Inc., supra, 488 F.2d at 899, concluded:

The import of T.I.M.E. to the present case is apparent. The Supreme Court found that the remedies available to shippers by rail under § 16(2) were not present in the Motor Carrier Act. Consequently, any suggestion that § 16(2) is incorporated into Part II must fail unless, subsequent to the decision, Congress has provided for such incorporation.

However, in Aluminum Co. of Amer. v. Admiral Merchants M. Frgt., Inc., supra, 486 F.2d at 722, the Seventh Circuit ruled that:

* * * [t]he T.I.M.E. decision is clearly distinguishable since it involved the shippers’ right to reparations not their right to enforce a valid refund order. As stated by Judge Will in the court below, “in no sense did the T.I.M.E. decision consider the issue of whether, when the Commission does issue a valid refund order under Part II, the shippers for whose benefit the order was issued can proceed under Section 16(2) of Part I.” Admittedly, there is a dearth of legislative history and/or cases to which the court might look for assistance in interpreting § 305(g). Nevertheless, the plain language of the statute provides ample basis for the district court’s conclusion that the statute incorporates § 16(2) of Part I: * * *

We agree with the Seventh Circuit’s interpretation of T.I.M.E.

The carriers also argue that conditions precedent to the maintenance of an action under § 16(2) are not present here. We simply quote from Aluminum Co. of Amer. v. Admiral Merchants M. Frgt., Inc., supra at 724.

We remind defendants that we are concerned with plaintiff’s “right of relief,” i. e., its right to enforcement of the refund order, and not its compliance with technical requirements of questionable applicability. * * * Having accepted the benefits afforded by the continuance of the rate hearing, defendants should now be required to provide the agreed-upon exchange — the quid pro quo.

STATUTE OF LIMITATIONS

The court below held that the applicable statute of limitations, 49 U.S. C. § 16(3) (f), was tolled from June 19, 1970, the date the Commission’s refund order was restrained by the three-judge court, until February 4, 1971, the date final judgment was entered in Admiral-Merchants and the preliminary injunction was vacated. It found that the Commission’s June 5, 1969, refund order did not become final until October 27, 1969; and because the complaint in this case was filed on November 12, 1970, it was filed within the one-year limitation period. We affirm. During the period that enforcement of the Commission’s refund order was enjoined, “ * * * there was not an effective order upon which the statute of limitations could run.” 355 F.Supp. at 562.

INTEREST AND ATTORNEYS’ FEES

We agree with the District Court that interest on refunds should run from August 12, 1970, the date of the shippers’ demand on the carriers. We hold that the rate of interest should be set at four percent in all cases on appeal in this Circuit as a result of the Commission’s June 5, 1969, refund order. This interest rate will be consistent with that generally set by the Commission, see, e. g., Marion Power Shovel Co. v. Penna. R.R., 305 I.C.C. 465, 470 (1958), and will tend to promote nondiscrimination among competing carriers.

The District Court did not err in awarding attorneys’ fees to the shippers pursuant to 49 U.S.C. § 16(2). See n. 8 supra.

We turn to No. 73-1202, United States v. Burlington Truck Line, Inc., 356 F.Supp. 582 (W.D.Mo.1973), in which the District Court entered judgment for the shipper after trial. The issues in this case are virtually identical to those in Proctor and Gamble. With the exception of the following, the issues raised in this case are governed by our conclusions in Proctor and Gamble:

(1) The District Court’s application of the three-year statute of limitations, 49 U.S.C. § 16(3) (i), to the cause of action of the United States did not constitute error; and

(2) the District Court did not err in awarding interest from May 4, 1971 (the date of the filing of the complaint), because no evidence of a demand by the shipper was presented. See n.ll supra.

Finally, in No. 73-1200, Western Electric Co., Inc. v. Burlington Truck Lines, Civil No. 18471-4 (W.D.Mo. March 6, 1973), the District Court entered judgment for the shipper after a trial upon stipulated facts. This case is also governed by our conclusions in Proctor and Gamble. In addition:

(1) the District Court was correct in holding that the statute of limitations, 49 U.S.C. § 16(3) (f), did not begin to run until October 27, 1969, the date that the Commission’s June 5, 1969, order became final; and

(2) the District Court did not err in awarding interest from June 25, 1970, the date Western Electric filed its complaint. See n.ll supra.

Costs on appeal shall be taxed to the appellants.

Affirmed with modifications and remanded for action consistent with this opinion.

      . In case No. 73-1201, jurisdiction was asserted under 28 U.S.C. § 1336. In case No. 73-1202, jurisdiction was asserted under 28 U.S.C. § 1337. In case No. 73-1200, jurisdiction was asserted under 28 U.S.C. § 1345. Similar actions were filed in various jurisdictions including the Northern District of Iowa and the District of Minnesota. Cases appealed from those districts and decided by this Court in other opinions filed today are: No. 73-1507, Amana Refrigeration, Inc. v. A. W. Schmidt Transfer; No. 73-1508, Amana Refrigeration, Inc. v. Bruce Motor Freight, Inc.; No. 73-1509, Penick & Ford, Ltd. v. Admiral-Merchants Motor Freight, Inc.; No. 73-1510, LeFebure Corporation v. Bruce Motor Freight, Inc.; No. 73-1683, Penick & Ford, Ltd. v. Pacific Intermountain Express Co.; No. 73-1580, American Crystal Sugar Co. v. Indianhead Truck Lines; No. 73-1581, Land O’Lakes, Inc. v. United-Buckingham Freight Lines, Inc.; No. 73-1670, United States of America v. Admiral-Merchants Motor Freight, Inc.; and No. 73-1682, Container Corporation of America & Montgomery Ward & Co., Inc. v. 1-Iart Motor Express, Inc.

      . The carriers do not challenge that finding here.

      . The carriers attempt to present the confiscation issue to the Commission when they submitted their petition to reopen the proceedings for further hearing was rejected. In Admiral-Merchants, the carriers asked the three-judge court to remand the issue to the Commission for an initial determination. The three-judge court did not grant the request. The same request was made of the Supreme Court.

      . A succinct discussion of the difference between refunds and reparations is found in S. S. Kresge Company v. A &.B Transfer, Inc., 488 F.2d 894, 897 n. 1 (6th Cir. 1973) (dissenting opinion), cert. denied, 415 U.S. 960, 94 S.Ct. 1491, 39 L.Ed.2d 575 (1974) :
      “Refunds” and “reparations”, as they are used in the Interstate Commerce Act, are words of art. Under § 15(7), 49 U.S.C. § 15(7) the Commission may require a carrier which lias increased its rates to keep accurate accounts of “all amounts received by reason of such increase.” After the hearing the Commission may order the carrier “to refund, with interest, to the persons in whose behalf such amounts were j)aid, such portion of the increased rates or charges as by its decision shall be found not justified.” [Emphasis included.]
      Under the reparations procedure any aggrieved party may make a complaint to the ICC “of anything done or omitted to be clone by any common carrier subject to the provisions of this chapter . . ..” 49 U.S.O. § 13(1). The Commission may then investigate and, if it finds a violation by the carrier, it will “make an order directing the carrier to pay to the complainant the sum to which he is entitled on or before a clay named.” 49 U.S.C. § 16(1). There are a number of illegal activities that will give rise to a complaint for reparations, including: unreasonable charges, Lewis-Simas-Jones Co. v. Southern Pac. Co., 283 U.S. 654, 51 S.Ct. 592, 75 L.Ed. 1333 (1931), and discrimination by a carrier against or in favor of certain shippers, Pennsylvania R. Co. v. Weber, 257 U.S. 85, 42 S.Ct. 18, 66 L.Ed. 141 (1921).

      . Discussed infra.

      . Interstate Commerce Act § 204a, 79 Stat. 651, 49 U.S.C. § 304a.

      . The District Court also found that “ * * * plaintiffs could succeed under the facts on the theory of restitution * * * ”. Proctor and Gamble Co. v. Byers Transportation Co., Inc., 355 F.Supp. 547, 562 n. 30 (W.D.Mo.1973).

      . 49 U.S.C. § 16(2) provides :
      (2) If a carrier does not comply with an order for the payment of money within the time limit in such order, the complainant, or any person for whose benefit such order was made, may file in the district court of the United States for the district in which he resides or in which is located the principal operating office of the carrier, or through which the road of the carrier runs, or in any State court of general jurisdiction having jurisdiction of the parties, a complaint setting forth briefly the causes for which he claims damages, and the order of the Commission in the premises. Such suit in the district court of the United States shall proceed in all respects like other civil suits for damages, except that on the trial of such suit the findings and order of the Commission shall be prima facie evidence of the facts therein stated, and except that the plaintiff shall not be liable for costs in the district court nor for costs at any subsequent stage of the proceedings unless they accrue upon his appeal. If the plaintiff shall finally prevail he shall be allowed a reasonable attorney’s fee, to be taxed and collected as a part of the costs of the suit.

      . 49 U.S.C. § 305(g) provides:
      (g) Any final order made under this chapter shall be subject to the same right of relief in court by any party in interest as is now provided in respect to orders of the Commission made under chapter 1 of this title: Provided, That where the Commission, in respect of any matter arising under this chapter, shall have issued a negative order solely because of a supposed lack of power, any such party in interest may file a bill of complaint with the appropriate District Court of the United States, convened under section 2284 of Title 28, and such court, if it determines that the Commission has such power, may enforce by writ of mandatory injunction the Commission’s taking of jurisdiction.

      . Although § 16(2) is part of the reparations scheme of Part I of the Act, the language found therein is broad enough to encompass an action to enforce the instant refund order. The Sixth and Seventh Circuits have also decided this issue in favor of the shippers. S. S. Kresge Company v. A & B Transfer, Inc., supra; Aluminum Co. of Amer. v. Admiral Merchants M. Frgt., Inc., 486 F.2d 717 (7th Cir.), cert. denied, 414 U. S. 1113, 94 S.Ct. 843, 38 L.Ed.2d 739 (1973).

      . The demand date is significant because the Commission’s August 29, 1969, order directed the carriers to “ * * * make refunds to shippers presenting their claims to the carriers. * * * ”. (Emphasis added.) Increased Rates and Charges, From, To and Between Middlewest Territory, I.C.C. No. 34971 (Order of August 29, 1969).

      . In Proctor and Gamble and in Western Electric Co., Inc. v. Burlington Truck Lines, Civil No. 18471 — 4 (W.D.Mo. March 6, 1973), the court set the interest rate at six percent per annum, and in United States v. Burlington Truck Line; Inc., 356 F.Supp. 582 (W. D.Mo.1973), the court set the rate at four percent per annum.

      . 49 U.S.O. § 16(3) (i) provides in part:
      * * * That with respect to such transportation of property or passengers for or on behalf of the United States, the periods of limitation herein provided shall be extended to include three years from the date of (A) payment of charges for the transportation involved, or (B) subsequent refund for overpayment of such charges, or (C) deduction made under section 66 of this title, whichever is later.


text:
    AMANA REFRIGERATION, INC., Appellee, v. A. W. SCHMIDT TRANSFER, Appellant. AMANA REFRIGERATION, INC., Appellee, v. BRUCE MOTOR FREIGHT, INC., Appellant. PENICK & FORD, LIMITED, Appellee, v. ADMIRAL MERCHANTS MOTOR FREIGHT, INC., et al., Appellants. LeFEBURE CORPORATION, Appellee, v. BRUCE MOTOR FREIGHT, INCORPORATED, et al., Appellants. PENICK & FORD, LIMITED, Appellee, v. PACIFIC INTERMOUNTAIN EXPRESS CO., Appellant.
    Nos. 73-1507 to 73-1510, and 73-1683.
    United States Court of Appeals, Eighth Circuit.
    Submitted Feb. 11, 1974.
    Decided July 29, 1974.
    Rehearings Denied Aug. 21, 1974.
    Arthur R. Hauver, Denver, Colo., for appellants.
    Edwin E. Huddleson, Atty., Dept, of Justice, Appellate Section, Washington, D.C., for United States.
    Robert B. Ward, Cedar Rapids, Iowa, for Amana.
    John C. Noonan, Kansas City, Mo., for Western Electric.
    James F. McGovern, St. Paul, Minn., for Land O’Lakes.
    Don M. Jackson, Kansas City, Mo., for Proctor & Gamble.
    Before HEANEY and BRIGHT, Circuit Judges, and WANGELIN, District Judge.

       H. KENNETH WANGEUN, District Judge, Eastern District of Missouri, sitting by designation.

   HEANEY, Circuit Judge.

These are consolidated appeals by the defendant motor carriers from summary judgments entered in favor of the plaintiff shippers.

The carriers in these cases raise substantially the same issues as were raised in Proctor and Gamble Distributing Co. v. Ideal Truck Lines, Inc., 501 F.2d 928 (8 Cir., filed this date). We affirm the judgments of the District Court for the reasons set forth in that opinion. Although the District Court awarded interest from October 12, 1971, a date later than was approved in Proctor and Gamble, the shippers have not raised this issue on appeal, and we affirm the District Court.

Costs on appeal shall be taxed to the appellants.

The appellees’ request for attorneys’ fees on appeal is denied.

Affirmed.


text:
    AMERICAN CRYSTAL SUGAR CO., Appellee, v. INDIANHEAD TRUCK LINES et al., Appellants. LAND O’LAKES, INC., Appellee, v. UNITED-BUCKINGHAM FREIGHT LINES, INC., et al., Appellants. UNITED STATES of America, Appellee, v. ADMIRAL-MERCHANTS MOTOR FREIGHT, INC., et al., Appellants. CONTAINER CORPORATION OF AMERICA et al., Appellees, v. HART MOTOR EXPRESS, INC., et al., Appellants.
    Nos. 73-1580, 73-1581, 73-1670 and 73-1682.
    United States Court of Appeals, Eighth Circuit.
    Submitted Feb. 11, 1974.
    Decided July 29, 1974.
    Arthur R. Hauver, Denver, Colo., for appellants.
    Edwin E. Huddleson, Atty., Dept, of Justice, Appellate Section, Washington, D.C., for United States.
    Robert B. Ward, Cedar Rapids, Iowa, for Amana.
    John C. Noonan, Kansas City, Mo., for Western Electric.
    James F. McGovern, St. Paul, Minn., for Land O’Lakes.
    Don M. Jackson, Kansas City., Mo., for Proctor & Gamble.
    Before HEANEY and BRIGHT, Circuit Judges, and WANGELIN, District Judge.

       H. KENNETH WANGELIN, District Judge, Eastern District of Missouri, sitting by designation.

   HEANEY, Circuit Judge.

These are consolidated appeals by-the defendant motor carriers from summary judgments entered in favor of the plaintiff shippers.

The carriers in these cases raise substantially the same issues as were raised in Proctor and Gamble Distributing Co. v. Ideal Truck Lines, Inc., 501 F.2d 928 (8 Cir., filed this date). We affirm the judgments of the District Court on the principál issues for the reasons set forth in that opinion. In addition, we direct the District Court to modify its judgments and set the rate of interest in each case at four percent per annum. Interest, in each instance, shall run from the earlier of two dates: (1) the date on which the shipper made a demand on the carrier, or (2) the date the shipper filed its complaint.

Costs on appeal shall be taxed to the appellants.

Affirmed with modifications and remanded for action consistent with this opinion.


author: PER CURIAM;

text:
    John William MILLS, Plaintiff-Appellant, v. L. B. SULLIVAN, etc., Defendant-Appellee.
    No. 74-2358
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Oct. 4, 1974.
    Wilson M. Hawkins, Jr., Mobile, Ala. (Court-appointed not under Act), for plaintiff-appellant.
    William J. Baxley, Atty. Gen., William M. Bowen, Jr., Thomas W. Sorrells, Asst. Atty. Gen., Montgomery, Ala., for defendant-appellee.
    Before GEWIN, GODBOLD and CLARK, Circuit Judges.

       Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5 Cir. 1970, 431 F.2d 409, Part I.

   PER CURIAM;

John William Mills, an inmate of the Atmore Prison Farm in Alabama, appeals an order of the district court dismissing his 42 U.S.C. § 1983 action for declaratory and injunctive relief, for damages against the prison authorities for alleged obstruction of his mail, and for damages against his appointed counsel for failure to protect his appeal rights. Mills contends that he was deprived of his constitutional right of access to the courts since: (1) correspondence from his out-of-state, A.C.L.U. attorney had been opened outside his presence ; and (2) an official letter from the clerk of court notifying him of the entry of an order denying his eoram nobis petition had been negligently delayed for a period of over three months, a delay which he claims was particularly onerous in view of his appointed counsel’s default and the fact that there was no law library at Atmore. Mills concludes that the defendants thereby violated the injunction entered by the United States District Court for the Southern District of Alabama in Lake v. Lee, 329 F.Supp. 196 (1971).

The district court dismissed the suit on the grounds that it presented no question cognizable under section 1983. Looking first at the complaint concerning tampering with the letter from Mills’ attorney, the court concluded that the injunction entered in Lake v. Lee, supra, did not cover this action since it did not pertain to out-of-state attorneys. Shifting its attention to Mills’ allegation of negligent processing of the notice of judgment, the court held both that such negligence was outside the ambit of the Lake injunction and that the allegation did not reach constitutional proportion.

In view of the fact that the court did not have the benefit of two recent Supreme Court decisions (Wolff v. McDonnell, 418 U.S. 539, 94 S.Ct. 2963, 41 L.Ed.2d 935 (1974) and Procunier v. Martinez, 416 U.S. 396, 94 S.Ct. 1800, 40 L.Ed.2d 224 (1974)) delineating the constitutional mínimums for procedures employed in the processing of prisoner mail, the judgment of dismissal must be vacated and remanded for further consideration in light of these decisions. In the course of its actions upon remand and after permitting such factual development as it may deem necessary, the court should specifically resolve Mills’ allegation that defendants’ negligent processing of his mail impaired his right of appeal from the denial of coram nobis. Similarly, the court should dispose of Mills’ alternative, inconsistent claim of entitlement to punitive damages against his appointed counsel for counsel’s alleged failure to perfect that appeal.

Vacated and remanded.


author: MOORE, Circuit Judge:

text:
    NATIONAL MARINE SERVICE, INC., Plaintiff-Appellee, v. C. J. THIBODEAUX AND COMPANY, Individually and as partner of the Prairie Co., D. J. Glenney, III and J. Franklin Morris, Defendants-Appellants.
    No. 73-3584.
    United States Court of Appeals, Fifth Circuit.
    Sept. 20, 1974.

      L. Glen Kratochvil, T. G. Schirmeyer, Houston, Tex., for defendants-appellants.
    Larry D. Knippa, Houston, Tex., for plaintiff-appellee.
    Before MOORE, AINSWORTH and RONEY, Circuit Judges.

       Hon. Leonard P. Moore, Senior Circuit Judge for the Second Circuit, sitting by designation.

   MOORE, Circuit Judge:

This is an appeal from a judgment of the United States District Court for the Southern District of Texas, Houston Division, by Hon. Woodrow B. Seals, District Judge, finding for the plaintiff-ap-pellee, National Marine Service, Inc., in the amount of $18,683.76 plus interest, that sum representing the fair value of repairs performed by National Marine Service, Inc., upon the vessel GRAND LAKE owned by defendants-appellants. The theory of recovery advanced by the District Court and disputed by appellants was that, although the GRAND LAKE was nominally chartered to River Gulf Corporation (hereafter “River Gulf”), a corporate entity allegedly separate from appellants, appellants in fact ordered the repairs, the charterer being a mere corporate shell created by appellants. Looking beyond the corporate form and finding that the repairs were, in reality, ordered and performed for the benefit of appellants, the court required them to pay the fair cost in order to prevent a substantial injustice.

We affirm.

National Marine Service, Inc. (hereafter sometimes referred to as “Shipyard”), is a Delaware corporation having its principal place of business in St. Louis, Missouri, and with a portion of its operations, a shipyard, in Illinois, The three defendants-appellants are a corporation, C. J. Thibodeaux and Company (hereinafter “Thibodeaux”), individually and as a partner of The Prairie Company, and two individuals, D. J. Glenney III and J. Franklin Morris, also partners of The Prairie Company.

Thibodeaux wished to expand its business by starting a ship owning and operating subsidiary. However, it hesitated to do so openly since such an operation would have been in competition with Thibodeaux’s ordinary customers. Therefore, The Prairie Company was incorporated to shield the parent company and act as its ship owning instrumentality. As part of The Prairie Company’s operations, the GRAND LAKE, a tug boat, was purchased. Eventually, and prior to the events relevant to this case, The Prairie Company was dissolved as a corporation but, at all times relevant to this case, its activities were continued and its name assumed by a partnership (hereafter “Prairie”), of which the three appellants are partners.

The GRAND LAKE was chartered, along with four barges also owned by appellants, to Coastal Barge Lines. However, in January, 1969, when Coastal failed to pay the charter hire, Prairie reclaimed the vessels. Thus, at that time, Thibodeaux and its partners were faced with the task of finding new employment for these assets.

Somewhat prior to this time, an employee of Thibodeaux, one Fred Thompson, had formed a corporation, River Gulf, with the intention of eventually using it to manage marine freight operations. However, for some time River Gulf was left uncapitalized and inactive. At the same time, when appellants found themselves forced to reclaim the GRAND LAKE and the barges from Coastal Barge Line, Thompson capitalized River Gulf at the minimum $1,000 required by Texas law, and offered River Gulf to James H. Chadwick, Jr., the president of Thibodeaux, as a potential medium for the operation of the GRAND LAKE.

This was agreed to, and the vessel and the barges were turned over to River Gulf. As part of the agreement, Thompson, who managed River Gulf from Thibodeaux’s offices, hired one Mark Shurden, a long-time acquaintance of the president of Thibodeaux, to run the GRAND LAKE as an independent contractor. A six-months bareboat charter was prepared between The Prairie Company, the owner of the GRAND LAKE and River Gulf, requiring a monthly prepayment of the charter hire of $50 per day. This charter, however, was never signed by River Gulf. However, it was claimed that there was an oral agreement to this effect which, upon the expiration of the six months, was continued in force. According to the terms of the charter River Gulf and its operatives were not empowered to incur liens against the vessel except for crew’s wages and salvage, and a notice to this effect was posted in the wheelhouse of the GRAND LAKE.

In December, 1969, the GRAND LAKE put into the Shipyard and repairs on her crankshaft were ordered by Mark Shurden. These repairs were completed in February, 1970. One hundred days thereafter, Shipyard, still being unpaid, contacted Thompson the president of River Gulf. Thompson stated that he was expecting insurance payments in connection with the GRAND LAKE and asked Shipyard to write a letter concerning the repairs performed to the insurance carrier. After such a letter proved to be without effect, Shipyard on November 3, 1970, instituted a Texas state court suit against River Gulf. However, by this time a series of reverses had left River Gulf financially defunct and the default judgment eventually entered proved to be worthless. On February 17, 1971, Shipyard brought a libel against the vessel itself, but that action too was fruitless as the GRAND LAKE had burned and sunk the year before. Both of these actions were brought before Shipyard learned of the relationship between Prairie and River Gulf. However, upon discovering the connection, the present action was brought against the Prairie partnership on the twin bases of 28 U.S.C. § 1332 (diversity) and 28 U.S.C. § 1333 (admiralty), and it is from the decision of the District Court in favor of plaintiff, National Marine, that this appeal is taken.

In its opinion, the district court addressed itself primarily to the relationship between Prairie and River Gulf and concluded “that River Gulf was a mere alter ego of Prairie Company; that the bareboat charter was a fiction; and that the repairs were performed for the benefit of Prairie Company with its actual and constructive knowledge.”

Our appellate function is limited to an examination of the record to ascertain whether these conclusions rest on a solid factual foundation. We find that they do and that the court’s appraisal of the credibility of the key witnesses before it was more than justified.

Appellants contend that any finding of liability against them as an “alter ego” of River Gulf requires a showing of fraud on their part. Such fraud concededly not being present in this case, it is argued that the decision of the district court must be reversed and the action against them dismissed. However, this assertion does not represent the applicable law. Although there is no doubt that fraud is a proper matter of concern in suits to disregard corporate fictions, it is not a prerequisite to such a result, especially where there is gross undercapitalization or complete domination of the corporate entity under scrutiny. Consolidated Rock Products Co. v. Du Bois, 312 U.S. 510, 61 S.Ct. 675, 85 L.Ed. 982 (1941); Taylor v. Standard Gas & Electric Co., 306 U.S. 307, 618, 59 S.Ct. 543, 83 L.Ed. 669 (1939); 2 G. Hornstein, Corporation Law and Practice § 756 (1959); see generally W. Cary, Corporations, 109-112, 128-143 (4th ed. 1969).

The district court found that:

While never intended to be such River Gulf became an operating arm of Prairie Company and C. J. Thibo-deaux and Company. Upon these facts, it' appears to this Court that River Gulf was a mere alter ego of Prairie Company; that the bareboat charter was a fiction; and that the repairs were performed for the benefit of Prairie Company with its actual or constructive knowledge.

The corporate veil, with which appellants would enrobe River Gulf to. give it the semblance of being attired in corporate clothing, was so diaphanous that the district court was well able to see through it. Thus, its conclusions of liability were properly drawn.

Another argument raised by appellants is based on section 973 of the Merchant Marine Act, 46 U.S.C. § 973 (1970). That section prevents the creation of a shipyard’s lien against a vessel for repairs or supplies where the shipyard could reasonably have ascertained that the person ordering the repairs or supplies lacked the authority to bind the vessel. The gist of this contention is that Shipyard should have discovered the relationship between River Gulf and Prairie before starting on the repairs and presently should not be allowed to recover their cost because they were not authorized by the owner. The district court found that although this omission might have prevented the creation of lien against the vessel, it did not affect any in personam rights the Shipyard acquired. With this conclusion we agree.

There remains appellants’ argument that the state court proceedings resulting in a judgment against River Gulf (uncollectible though it be) precluded the bringing of this action. The district court disposed of this argument upon the facts stating: “There is nothing in the record to indicate that National Marine was even remotely aware of what had transpired between River Gulf and Prairie Company until after an attempt had been made to collect the judgment against River Gulf.” Once this discovery was made, Shipyard was entitled to institute this action upon the theory that the recovery is based upon “a contract for the repair of a vessel.” Principles of equity were also called upon “to prevent a substantial injustice” because “The vessel owner [Prairie] was the real beneficiary of the Plaintiff’s acts.” (District Court’s opinion).

The judgment of the District Court is affirmed.