author: Mr. Justice Stewart Mr. Justice White,

text:
    ALL STATES FREIGHT, INC., et al. v. NEW YORK, NEW HAVEN & HARTFORD RAILROAD CO. et al.
    No. 22.
    Argued October 21, 1964.
    Decided December 14, 1964.

      Homer S. Carpenter argued the cause for appellants. With him on the brief was John S. Fessenden.

      Edward A. Kaier and Eugene E. Hunt argued the cause for appellees. With them on the brief were Margaret P. Allen and John A. Daily.

      Robert W. Ginnane argued the cause for the United States and the Interstate Commerce Commission, urging reversal. With him on the brief were Solicitor General Cox, Assistant Attorney General Orrick, Frank. Goodman, Lionel Kestenbaum and Fritz R. Kahn.

   Mr. Justice Stewart

delivered the opinion of the Court.

This is an appeal from the judgment of a three-judge district court setting aside an order of the Interstate Commerce Commission which had disallowed certain freight rates filed by the New York, New Haven & Hartford Railroad Company (hereafter “the New Haven”) and other rail carriers. The issue presented is whether § 1 (6) of the Interstate Commerce Act, as amended, which requires carriers “to establish, observe, and enforce just and reasonable classifications of property for transportation, with reference to which,rates, tariffs, regulations, or practices are or may be made or prescribed,” is applicable to so-called all-commodity freight rates. The Commission, with three members dissenting, held that § 1 (6) does apply to such rates, and that the section was violated by the rate schedules here in question. . 315 I. C. C. 419. The District Court held that' § 1 (6) requires “the maintenance in being of class rates” but does not prohibit “competitively compelled departures from classifications, within the established maxima, absent some other violation of the Act than the mere departure from the classification.” 221 F. Supp.' 370, 374. We agree with the District Court and affirm the judgment before us.

A general word as to the basic distinction between class rates and commodity rates may be appropriate before proceeding to the specifics of the present case. Class rates were at the foundation of the railroad rate structure at the time of the enactment of the Interstate Commerce Act in 1887. Such rates are applied to traffic through two separate tariffs. One tariff, the “classification,” assigns each of the many thousand commodities carried by rail to one of presently some 30 categories or classes, based upon the commodity’s particular characteristics.. A companion tariff specifies the rate at which each class of freight will be carried. By contrast, commodity rates, which were also in existence at the time of the original passage of the Interstate Commerce Act, are rates made specifically applicable for the carriage of a particular commodity or group of commodities from one designated point to another. The original function of commodity rates, which are generally lower than class rates, was to encourage the movement of bulk commodities, such as coal and grain. With the onset and rapid growth of intermodal competition, the railroads increasingly turned to commodity rates in an effort to prevent diversion of traffic to other modes of transportation. Since 1932, numerous all-commodity or all-freight rail rates have been established between various points throughout the country. Typically, such rates have not literally applied to all commodities, but to a broad number, and they have often applied only to mixed carload shipments. Today only a small fraction of rail carload tonnage moves on class rates; by far the major portion moves on commodity rates of some kind.

In the summer of 1958 the rail carriers competing with the New Haven established a trailer-on-flatcar service.. Under this system truck-trailers loaded with various commodities are brought to the railroad’s loading ramp for carriage on freight cars to destination for delivery to the consignee at the railroad’s unloading ramp. . This type' of service was instituted in an effort to meet motor carrier competition. Eastern Central Motor Carriers Assn. v. Baltimore & O. R. Co., 314 I. C. C. 5. The New Haven had physical clearance problems and equipment shortages which prevented its participation in this type of freight transportation, and during the first two months that the trailer-on-flatcar rates were in effect bn competing railroads, the New Haven lost the equivalent of more than 350 cars of traffic from Boston to St. Louis, and suffered substantial further losses of traffic westward from othdr New England points.

In order to compete with the trailer-on-flatcar rates, and in an effort to cope with a significant imbalance between eastbound and westbound traffic over its lines, the New Haven filed with, the Commission the all-commodity rates which have become the subject of the present litigation. These rates applied to traffic between specified New England points and Chicago and St. Louis. Restricted to boxcar freight moving westward, in straight or mixed carloads, the rates were graduated according to minimum weight per car. They did not apply to certain designated kinds of traffic.

The Commission initially suspended the rates, but allowed them to become effective on July 6, 1959, and they have remained in effect since that date. Various motor carrier associations and some of their individual members protested the rates, but in February 1961, Division 2 of the Commission filed a report approving them. 313 I. C. C. 275. On reconsideration later that year, the full Commission held by a divided vote that the rates violated § 1 (6) of the Act. 315 I. C. C. 419. The District Court set aside the Commission’s order and enjoined its enforcement, holding that the order rested on an erroneous interpretation of § 1 (6) of the Act. The intervening protestants brought this appeal here, and we noted probable jurisdiction. 376 U. S. 961.

It is clear that § 1 (6) gives the Commission power to require that carriers maintain just and reasonable classifications in conjunction with the setting of class rates. The question here posed is whether that section applies to commodity rates as well, and specifically whether it applies to all-commodity rates. No doubt the language of the statute, “just and reasonable classifications of property” and “just and reasonable regulations and practices affecting classifications” is susceptible of a construction which would embrace the rates in issue here. The rates do not apply to a single, uniquely identifiable article but to a large group of commodities, which could be described as a classification of property. But the fact that the terms of the statute can be interpreted broadly enough to encompass these rates without doing violence to the English language does not settle the problem. It remains to inquire whether the legislative history warrants or the statutory structure supports such a broad interpretation.

At the time of the enactment of the Interstate Commerce Act the vast preponderance of rail freight traffic moved pn class rates. These classes as well as the rates applicable to them varied greatly among different railroads and different sections of the country. When the Interstate Commerce Act was formulated, consideration was given to empowering the Commission to prescribe classifications, but it was finally concluded that the provisions of the bill which required publication of rates and classifications, together with the provisions regulating unreasonable rates, would ultimately prove adequate to achieve the desired uniformity of classifications. Beginning with its First Annual Report, however, the Commission expressed its concern with the continuing lack of uniformity in freight classifications, and seven years later recommended that it be empowered to make a uniform classification. In 1906 the Hepburn Act gave the Commission power for the first time to prescribe maximum reasonable rates, but transportation charges could still be increased by changes in the classification of any commodity.

The Commission had succeeded in exercising power over classifications in proceedings under §§ 1, 2, and 3 of the Act, and in many cases had declared classifications of particular commodities to be unreasonable. However, the power of the Commission to halt manipulation of the classification rate system had been thrown into serious doubt by a case decided in 1905.

It was against this background that § 1 (6) was enacted in 1910 as part of the Mann-Elkins Act, which also gave the Commission power to find classifications unreasonable and to. prescribe reasonable classifications for the future. The immediate genesis of these provisions seems to have been a special message to Congress by President Taft recommending “. . . that the commission shall be fully empowered, beyond any question, to pass upon the classifications of commodities for purposes of fixing rates, in like manner as it may now do with respect to the maximum rate applicable to any transportation.”

During the course of the debate on the proposed bill in the House of Representatives, Congressman Russell, a member of the Committee on Interstate and Foreign Commerce, said

“[T]he shipper can be extorted from; he can be made to pay an unjust rate just as well through classification as he can through the fixing of a rate. The . carriers can put an article in one classification, subject to a given rate, and if the Interstate Commerce Commission sees fit to declare that rate unreasonable, and reduce it, declaring what shall be a reasonable rate to take its place, the carrying corporation can obtain the same benefit and put the shipper under the same disadvantages by simply changing the classification of the article;”

Chairman Mann stated that “classification of freight is just as "important as rates, because by. moving a particular article from one class to another you affect the rates.” He added that “in the course of time undoubtedly the power of the commission to have control of classifications will lead to greater uniformity and possibly to complete uniformity of classifications.” The Senate Report alluded only to the doubt which had been recently cast upon the Commission’s power to deal, with classifications.

This legislative history makes it apparent that the object of § 1 (6) was to give the Commission clear power to deal with the twin problems which had arisen in the administration of class rates — the possibility of their manipulation to avoid maximum rate regulation and their lack ,qf uniformity. Those problems never affected commodity rates, because those rates were competitively compelled reductions from whatever class rates , would otherwise be applicable, and because standardization of commodity rates would have been completely inconsistent with their basic function of accommodating specific particularized competitive . conditions. The legislative history thus fully supports the conclusion that the reach of § 1 (6) of the Act was confined to class rates.

This conclusion is amply confirmed by the pattern of the Commission’s decisions since § 1 (6) was enacted. The course of those decisions makes clear that the Commission has given full consideration to the question of whether § 1 (6) applies to all-commodity rates, and has squarely decided that the section is inapplicable. All-commodity rates first came under scrutiny of the Commission more than 25 years ago. In 1937 and 1938, the Commission approved all-commodity rates on four different occasions without the slightest suggestion that the rates were subject to the provisions of § 1 (6). The principal concern of the Commission’s inquiry in these cases was to ascertain whether the rates were prejudicial to any person, locality, or déscription of traffic. In a similar case decided in 1939, Commissioner Alldredge filed a dissent expressing the view that § 1 (6) did apply to all-commodity rates, and that the rates in question violated that section by lumping into a single category articles which had traditionally been assigned to different categories under the customary classification criteria.' With Commissioner Alldredge’s dissent putting in issue the applicability of § 1 (6), it is clear that the Commission consciously rejected his position. Two years later, however, the view taken by Commissioner Alldredge prevailed in a two-to-one order by Division 3, which struck down all-commodity rates as violative of § 1 (6). With the decisions thus in conflict, the problem received consideration by the full Commission a year later in All Freight to Pacific Coast, 248 I. C. C. 73. There the Commission squarely held that § 1 (6) does not apply to all-commodity rates. Its report stated:

“Respondents now maintain a full line of class rates . governed by the western classification from and to all of the points involved in this proceeding, as required by section 1 (6) of the Interstate Commerce Act. They also maintain hundreds of lower rates as exceptions to the classification,. including commodity rates, that are not subject to the classification ratings nor to rules as to mixing of commodities in carloads.
“Class rates normally reflect the maximum of reasonableness on goods falling within the various classes of traffic. Commodity rates are established, and necessary or desirable exceptions to the classification are made, when circumstances and conditions suggest that the class basis is too high for application on the traffic. We have approved this basis of rate making, and have never required commodity rates to conform to the ratings of the classification.” 248 I. C. C., at 86-87,

In a separate concurrence, Commissioner Eastman said:

“As is well known, the classifications; of freight which the railroads publish are for the purpose of governing the application of their class rates. The latter are used when no . rate has been published applying specifically to the movement in question, such specific rates being called commodity rates. The railroads carry, of course, a vast multitude of separate and distinct commodities, and the class rates are a convenient device for avoiding the publication of a like multitude of separate and distinct rates. . . .” 248 I. C. C., at 88.

Thereafter, the Commission rejected other challenges to all-commodity rates based on § 1 (6) upon the authority of the Pacific Freight decision, and the two-to-one decision based on § 1 (6) which Division 3 had previously rendered was recalled and decided upon another ground. In the years that followed, the Pacific Freight case was regarded as controlling, and all-commodity rate cases were decided without reference to the provisions of § 1 (6). Finally, it is significant that in approving the trailer-on-flatcar service instituted by the New Haven’s rail competitors in 1958, the Commission did not discern any problem created by § 1 (6).

Thus both the legislative history and the course of the Commission’s decisions clearly impel the conclusion that § 1 (6) does not apply to all-commodity rates. In reaching this conclusion, we hardly need add that, as the Act is structured, these rates are subject to full policing by the Commission under other provisions. If a commodity rate is too high, the Commission may reduce it. If a commodity rate unjustly discriminates against a shipper, the Commission may order the discrimination removed. If a commodity rate results in an undue preference in favor of or an unreasonable prejudice against any person, locality, or description of traffic, the Commission may require that appropriate adjustments be made. If a commodity rate is unreasonably low, the Commission may order that it be increased.

The District Court’s opinion contains, by way of dicta, considerable discussion concerning the continuing validity of the concept of value of service as a factor in the setting of railroad freight rates, and that subject was also discussed in' the briefs and oral arguments in this Court. But the extent to which value of service may continue as a valid element in assessing thé lawfulness, of rates under the sections of the Act applicable to commodity rates is a question we need not and dó not decide. We decide only that the District Court was correct in holding that the issues in this case, “should never have been framed under §1 (6).”

Affirmed.

Mr. Justice White,

with whom The Chief Justice, Mr. Justice Black and Mr. Justice Brennan join,

dissenting.

In my view, the record in this case is inadequate to support the action taken by the Commission and I would vacate the judgment below and remand to . the Commission for further proceedings. I dissent, however, from the Court’s categorical ruling which in any and all circumstances bars the application of § 1 (6) to any set of rates which bears a cómmodity rate label.

Section 1 (6) imposes upon carriers the “duty : . . to. establish, observe, and enforce just and reasonable classifications of property for transportation.” The Court seems to accept the act of excluding. commodity rates from this broad imperative as well within the mainstream of Commission functions. I have great difficulty coming to any different answer concerning the Commission’s task with respect to §1 (6) now that the" Commission has changed its mind, or modified its views,- and believes it best serves transportation policy and the goal, of just and. reasonable rates to subject at least some commodity rates to scrutiny under § 1(6).

It is no answer to say that Congress intended § 1 (6) to regulate only class rates, for the Commission at this point obviously thinks some commodity rates are in fact class rates, particularly a rate which, as in this case, applies to an enormpus range of traffic but at the same time excludes many specific commodities and groups thereof.

Nor will it do to say that if the past decisions of the Commission are to be changed, the job should be left to Congress. This is an erroneous view. If there is a task for Congress, it is the one the Court has itself performed. The dissenting commissioners, with whom the Court essentially agrees, felt constrained to acknowledge that further erosion of the principles of classification might well be in the province of Congress but defended their views as vigorous and wise transportation policy within the realm of proper administrative action. Their difference with the majority of the Commission was over policy, and it is precisely this area which it seems to me the Court invades. Our task on review is a far more limited one. With all due respect, I dissent.

       “It is made the duty of all common carriers subject to the provisions of this chapter to establish, observe, and enforce just and reasonable classifications of property for transportation, with reference to which rates, tariffs, regulations, or practices are or may be made or prescribed, and just and reasonable regulations and practices affecting classifications, rates, or tariffs, the issuance, form, and substance of tickets, receipts, and bills of lading, the manner and method of presenting, marking, packing, and delivering property for transportation, the facilitiés for transportation, the carrying of personal, sample, and excess baggage, and all other matters relating to or connected with the receiving,'handling, transporting, storing, and delivery of property subject to the provisions of this chapter which may be necessary or proper to. secure the safe and prompt-receipt, handling, transportation, and delivery of property subject to the provisions of this chapter upon just and reasonable terms, and every unjust and unreasonable classification, regulation, and practice is prohibited and declared to be unlawful.” 49 U. S. C. § 1 (6) (1958 ed.).

       The characteristics of a commodity which are generally considered in determining the classification to which it should be assigned are:
      1. Shipping weight per cubic foot.
      2. Liability to damage.
      3. Liability to damage other commodities with which it is transported.
      4. Perishability.
      5. Liability to spontaneous combustion or explosion.
      6. Susceptibility to theft.
      7. Value per pound in comparison with other articles.
      8. Ease or difficulty in loading or unloading.
      9. Stowability.
      10. Excessive weight.
      11. Excessive length.
      12. Care or attention necessary in loading and transporting;
      13. Trade conditions.
      14. Value of service.
      15. Competition with other commodities transported. Motor Carrier Rates in New England, 47 M. C. C.. 657, 660-661; Class Rate Investigation, 1939, 262 I. C. C. 447, 508; Investigation and Suspension Docket No. 76, 25 I. C. C. 442, 472-473.

       Every day the New Haven was dispatching approximately 150 émpty boxcars to Chicago and St. Louis, with' an annual carrying capacity of 3,000,000 tons.

       The rates did not apply to import, export, or ex-water traffic. In addition, certain commodities were excluded, such as livestock, explosives, scientific equipment, and easily damaged goods.

       The Commission’s report also spoke of the rates as “constituting a destructive competitive practice in contravention, of the national transportation policy,” but in a brief filed here the Commission has pointed out that this statement was “merely an adjunct to the Commission’s ruling that the rates violated Section 1 (6),” and that this conclusion “cannot be sustained as an independent basis for disallowing the rates, in the absence of additional findings.”

       The Commission and the United States did not appeal. • Instead, the Commission reopened the case for further hearings, since it entertained doubt as.;to the adequacy of its findings. Those further hearings have been postponed pending resolution of this' appeal. . The Commission has filed a brief on the merits, however, agreeing,-as do . all the parties, that the § 1 (6) issue is necessarily presented by "this appeal. We agree, and further agree with the Commission that there is nothing in the District Court’s judgment or in our disposition of this appeal to prevent.further Commission proceedings with respect to these rates.

       S. Rep. No. 46,49th Cong., 1st Sess., 188.

       1 I. C. C. Ann. Rep. 30-32 (1887).

       8 I. C. C. Ann. Rep. 38-39. See also 5 I. C. C. Ann. Rep. 33.

       34 Stat. 589, 49.U. S. C. § 15 (1) (1958 ed.).

        James Pyle & Sons v. East Tennessee, Virginia & Georgia R. Co., 1 I. C. C. 465 (1888); Thurber v. New York Central & H. R. Co., 3 I. C. C. 473 (1890); see National Hay Assn. v. Lake Shore & M. S. R. Co., 9 I. C. C. 264 (1902).

         Interstate Commerce Commission v. Lake Shore & M. S. R. Co., 134 F. 942, aff’d by an equally divided Court, 202 U. S. 613. In this case the court struck down a Commission order commanding the reclassification of hay and straw to a lower-rated class.

       36 Stat. 546, 551, 552; 49 U. S. C. §§ 1 (6), 15 (1), 15 (7) (1958. ed.).

       H. R. Rep. No. 923, 61st Cong., 2d Sess., 3.

       45 Cong. Rec. 5142.

       45 Cong. Rec. 4578.

        Ibid.

       The Senate Report stated:
      “Some doubt has been raised as to whether, under the provisions of section 15 of the existing act, the commission is empowered to review classifications of freight as well as rates, and to make orders dealing with improper classifications. (Judson on Interstate Com-' merce, Ed. of 1908, secs. 209, 210.) By section 9 of the bill, this doubt is removed and the power is expressly vested in the commission.” S. Rep. No. 355, 61st Cong., 2d Sess., 8 (1910). The authority primarily relied on by the Judson treatise was the Lake Shore casa, note 12, supra.

        Freight from Boston to East Hartford, 223 I. C. C. 421 (Div. 4, 1937); Commodities between Chicago, Ill., and Twin Cities, 226 I. C. C. 356 (Div. 3, 1938); All Freight between Boston & Maine Railroad Points, 226 I. C. C. 387 (Div. 4, 1938); All Freight from Chicago and St. Louis to Birmingham, 226 I. C. C. 455 (Div. 3, 1938).

        All Freight between Harlem River, N. Y., and Boston, 234 I. C. C. 673 (Div. 3, 1939). See also Commissioner Alldredge’s dissents in the following cases: All Freight from Chicago and St. Louis to Santa Rosa, N. Mex., 243 I. C. C. 517 (Div. 2, 1941); All Freight between Los Angeles and Albuquerque, 28 M. C. C. 161 (Div. 3, 1941).

        All Freight from Eastern Ports to the South, 245 I. C. C. 207 (Div. 3, 1941). See also the decision under §216 (b) of the Interstate- Commerce Act by Commissioners Alldredge and Johnson in AU Freight from Chicago and St. Louis to El Paso, Tex., 28 M. C. C. 727 (Div. 2, 1941).

         All Freight from Butte, Mont., to Spokane, Wash., 251 I. C. C. 291 (Div. 2, 1942); All Freight Rates to Points in Southern Territory, 253 I. C. C. 623 (1942).

        All Freight from Eastern Ports to the South, 251 I. C. C. 361 (1942).

       See All Freight, Straight Carloads, to and from the South, 258 I. C. C. 579 (Div. 2, 1944); All-Commodity Rates between Calif. and Ore., Wash., 293 I. C. C. 327 (Div. 3, 1954).

        Eastern Central Motor Carriers Assn. v. Baltimore & O. R. Co., 314 I. C. C. 5, 48-49. The trailer-on-flatcar rates, unlike the all-commodity rates involved in the present case-, are subject to a mixing rule requiring that the lading consist of at least two commodities, no one of which shall exceed 60% of- the total volume of the lading. But the New.Hayen points out that this mixing-rule is satisfied whenever two straight trailerloads, each containing a different commodity, are tendered at the same loading platform under a single bill of lading, even though they may be consigned by different shippers and destined for different consignees.

       49 U. 8. C. §§ 1 (5) and 15 (Í) (1958 ed.).

       49 U. S. C. §§ 2 and 15 (1) (1958 ed.).

       49 U. S. C. §§3 (1) and 15 (1) (1958 ed.).

       49 U. 8. C. §§ 1 (5), 15a (2), 15a (3), and 15 (1) (1958 ed.).


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    PIANO & MUSICAL INSTRUMENT WORKERS UNION, LOCAL NO. 2549, UNITED BROTHERHOOD OF CARPENTERS & JOINERS OF AMERICA, AFL-CIO v. W. W. KIMBALL CO.
    No. 535.
    Decided December 14, 1964.

      Bernard M. Mamet for petitioner.

      Thbmas R. Mulroy for respondent.
   Per Curiam.

The petition for a writ of certiorari is granted and the judgment is reversed. Steelworkers v. American Manufacturing Co., 363 U. S. 564, and Wiley & Sons, Inc. v. Livingston, 376 U. S. 543.


author: Per. Curiam.

text:
    GREEN v. BOMAR, WARDEN.
    No. 87,
    Misc.
    Decided December 14, 1964.
    Petitioner pro se.

      George F. McCanless, Attorney General of Tennessee, and Henry C. Foutch, Assistant Attorney General, for respondent.
   Per. Curiam.

The motion for leave to proceed in forma pauperis and the petition for a writ of certiorari are granted. The judgment is vacated , and the case is remanded to the United States District Court for the Middle District of Tennessee for a hearing in light of Townsend v. Sain, 372 U. S. 293.


text:
    PARSONS, TOWN CLERK OF THE TOWN OF HUBBARDTON, et al. v. BUCKLEY et al.
    No. 624.
    Decided January 12, 1965.

      George D. Webster for appellants in No. 624. Charles E. Gibson, Jr., Attorney General of Vermont, and Chester S. Ketcham, Deputy Attorney General, for appellants in No. 625.

      Joseph A. McNamara for appellees.

       Together with No. 625, Hoff, Governor of Vermont, et al. v. Buckley et al., also on appeal from the same court.

   Per Curiam.

The District Court on August 3, 1964, entered a judgment holding invalid under the Fourteenth Amendment to the United States Constitution, §§13 and 18 of Chapter II of the Constitution of Vermont relating to apportionment of the General Assembly of the State of Vermont. 234 F. Supp. 191. Paragraph (3) of the judgment of the District Court is as follows:

“(3) Therefore, subject to the provisions hereinafter appearing, the injunction that plaintiffs have requested restraining the officers of the State and those of the counties, towns and cities charged with the conduct of the elections of members of the General Assembly from proceeding with elections pursuant to the present method, of apportionment is granted; and the defendants Philip H. Hoff, Governor of Vermont, Howard E. Armstrong, Secretary of State, the Town Clerks of the Towns of Vermont, and the County Clerks of the Counties of Vermont, and their respective successors in office, are perpetually enjoined from doing any act or taking any steps in furtherance of nominating or holding elections of senators or representatives to the Senate or House of Representatives of the State of Vermont pursuant to said method, and said defendants are further enjoined from certifying or in any other manner declaring .that the results of such nominations or elections are valid or that the General Assembly of the State of Vermont which, if constitutionally elected, would be convened on January 6, 1965, is properly or legally constituted, unless by some other authorized lawful and constitutional method Senators and Representatives are nominated and elected to the Senate and House of Representatives of the State of Vermont pursuant'to a reap-portionmént or redistricting of the Senate and a reapportionment or redistricting of the House of Representatives to be effected promptly, such reapportionment or redistricting of the Senate and reapportionment or redistricting of the House of Representatives haying been done in such manner as to achieve substantially equal weighting of the votes of all voters in the choice of members of the General Assembly as guaranteed by the equal protection clause of the Fourteenth Amendment of the United States Constitution. It is, however, permissible for the September 1964 primary elections for nominees for the offices of Senators and Representatives and for the general elections to be held on November 3, 1964 to be conducted as presently scheduled to be conducted, and if, in the meantime, no members shall have been chosen by a constitutionally valid method, the members of the General Assembly chosen as heretofore may convene on January 6, 1965, provided that legislation shall be limited to the devising of a constitutional method of reapportionment and redistricting, and that the terms of said members shall expire on March 31; 1965.” 234 F. Supp., at 200.

Appellants appealed to this Court from Paragraph (3) of the judgment of the District Court. On December 14, 1964, we noted probable jurisdiction of both appeals, stáyed that portion of the judgment which is the subject of these appeals, and set these cases for oral argument on January 18, 1965. 379 U. S. 942.

All of the parties to and intervenors in these cases have now moved that this Court modify the District Court’s judgment to conform to a Stipulation signed by them and affirm the judgment of the District Court as so modified.

The parties stipulate that Paragraph (3) of the judgment be deleted and in lieu thereof the order include the following:

“Therefore, subject to the provisions hereinafter appearing, the injunction that plaintiffs have requested restraining the officers of the State and those of the counties, towns and cities charged with the conduct of the elections of members of the General Assembly from proceeding with elections pursuant to the present method of apportionment is granted; and the defendants Philip H. Hoff, Governor of Vermont, Howard E. Armstrong, Secretary of State, the Town Clerks of the • Towns of Vermont, and the County Clerks of the Counties of Vermont, and their respective successors in office, are perpetually enjoined from doing any act ,or taking any steps in furtherance of nominating or holding elections, of senators or representatives to the Senate or House of Representatives of the State of Vermont pursuant to said method, and said defendants are further enjoined from certifying or in any other manner declaring that the results of such nominations or elections are valid or that the General Assembly of the State of Vermont which, if constitutionally elected, would be convened on January 6,1965, is properly or legally constituted,- unless by some other authorized lawful and constitutional method Senators and Representatives are nominated and elected- to the Senate and House of Representatives of the State of Vermont pursuant to a reapportionment or redistricting of the House of Representatives to be effected promptly, such reapportionment or redistricting of the Senate and reapportionment or redistricting of the House of Representatives having been done in such manner as to achieve substantial equality in the choice of members of the Generai Assembly as guaranteed by the equal protection clause of the Fourteenth Amendment of the United States Constitution. It is, however, permissible for the September 1964 primary elections for nominees for the offices .of Senators and Representatives and for the general elections to be held on November 3, 1964 to be conducted as presently scheduled to be conducted, and if, in the meantime, no members shall have been chosen by a constitutionally valid method, the members of the General Assembly chosen as heretofore may convene on January 6,1965, provided that:
“(a) A reapportionment bill or bills be introduced in at least one House of the General Assembly by February 1, 1965.
“(b) Should the General Assembly desire to submit the matter of reapportionment to a constitutional convention, legislation shall be enacted on or before March 1, 1965 tó provide for the convening of a constitutional convention on or before June 1, 1965.
“(c) Should legislation be enacted setting up a constitutional convention, said convention shall finish its deliberations by September 1, 1965.
“(d) If the matter of reapportionment is not referred to a constitutional convention, reapportionment legislation shall be enacted so as to comply with the mandate of the Court on or before July 1, 1965.
“(e) The General Assembly shall be empowered to enact all legislation as usual for the operation of state, town and county governments between January 6, 1965 and July 1, 1965.
“(f) If reapportionment legislation is not enacted by July 1, 1965, and if a constitutional convention shall fail to reapportion the General Assembly by September 1, 1965, the Court shall reapportion the General Assembly so as to comply with the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution.
“(g) In any event, a reapportioned General Assembly shall have been elected and ready to serve by the first Wednesday after the first Monday in January, 1966.
“(h) The terms of office of the members to the 1965 General Assembly shall expire on July 1, 1965, except that their offices may continue if called into special session by the Governor of the State of Vermont to act upon a State emergency not pertaining to reapportionment.”

The cases are removed from the argument list, the Stipulation is approved, and, in accordance therewith, the judgment of the District Court is modified by vacating Paragraph (3) and substituting in lieu thereof the quoted language of the Stipulation. As so modified, the judgment of the District Court dated August 3, 1964, is affirmed. The judgment of this Court shall issue forthwith.

Memorandum of Mr. Justice Harlan.

I would approve the Stipulation submitted by the parties except for subparagraph (f). That provision envisages a reapportionment of the Vermont Legislature by the District Court itself if an apportionment of that body, satisfying the requirements of Reynolds v. Sims, 377 U. S. 533, is not accomplished by the other means, and within the timetable, set forth in the Stipulation. The prospect of the federal courts engaging in such a political undertaking is for me a spectacle not easy to contemplate. Whether such a course may be an inevitable ultimate consequence of Reynolds v. Sims is a matter which should be determined only after the fullest and most deliberate consideration on the part of this Court. Cf. Brown v. Board of Education, 347 U. S. 483, 495-496, and 349 U. S. 294. I do not believe that any of the summary dispositions made in reapportionment cases following Reynolds v. Sims, see, e. g., Williams v. Moss, 378 U. S. 558, forecloses or obviates the need for such a consideration of this far-reaching question. The parties to a particular litigation should not be permitted by stipulation to thrust a federal court into this foreign activity.

Except in the foregoing respects, I join in the Court’s, disposition of the matter.

       “(f) If reapportionment legislation is not enacted by July 1,1965, and if a constitutional convention shall fail to reapportion the General Assembly by September 1, 1965, the Court shall reapportion the General Assembly so as to comply with the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution.”

       The District Court in its order of August 3,1964, declined to pass on this question. Paragraph (4) of the order read:
      “(4) No action is taken now upon the alternative request of plaintiffs that this court order that elections of Senators and Representatives be on a state-wide basis; and jurisdiction is retained for the entry of such further orders as may be necessary and proper hereafter.” 234 F. Supp. 191, 201.


author: Mr. Justice Douglas Mr. Justice Hablan,

text:
    CALIFORNIA et al. v. LO-VACA GATHERING CO. et al.
    No. 46.
    Argued November 17-18, 1964.
    Decided January 18, 1965.

      Richard E. Tuttle argued the cause for petitioners in No. 46. With him on the briefs were J. Calvin Simpson and John T. Murphy.

      John Ormasa argued the cause for petitioners in No. 47. With him on the brief was Milford Springer.

      Richard A. Solomon argued the cause for petitioner in No. 67. With him op the brief were Solicitor General

      Cox, Ralph S. Spritzer, Frank I. Goodman, Howard E. Wahrenbrock, Robert L. Russell and Peter H. Schiff.

      Sherman S. Poland argued the cause for respondents. With him on the brief were Bradford Ross, C. Frank Reifsnyder and Hugh Q. Buck.

      Harry L. Albrecht filed a brief for the Independent Natural Gas Association of America, as amicus curiae, urging affirmance.

      Together with No. 47, Southern California Gas Co. et al. v. Lo-Vaca Gathering Co. et al., and No. 57, Federal Power Commission v. Lo-Vaca Gathering Co. et al., also on certiorari to the same court.

   Mr. Justice Douglas

delivered the opinion of the Court.

El Paso Natural Gas Co. is an interstate natural gas pipeline company that delivers gas at the Arizona-California border to three California distribution companies. The present controversy concerns gas to be purchased by it in Texas from Lo-Vaca Gathering Co. and Houston Pipe Line Co. Under Lo-Vaca’& contract gas produced in Texas is to be delivered to a subsidiary of El Paso’S at a Texas point for delivery, into its pipeline. The contract contains the following two clauses:

“All of the gas to be purchased by El Paso from Gatherer [Lo-Vaca] under this agreement shall be used by El Paso solely as fuel in El Paso’s compressors, treating plants, boilers, camps and other facilities locátéd outside of the State of Texas. It is understood, however, that said gas will be commingled with other gas being transported in El Paso’s pipe fine system.”
“It is the intent and understanding of the parties hereto that the sale of natural gas hereof is not subject to the jurisdiction of the Federal Power Commission because this sale is not for resale.”

This “restricted use” agreement provides for a Separate metering of the contract volumes prior to their delivery info El Paso’s system. El Paso will meter the. gas used for fuel purposes in its New Mexico and Arizona facilities to make certain this amount invariably exceeds the volumes of gas taken from Lo-Vaca under this agreement.

El Paso and Houston made a similar contract containing a similar “restricted use” provision by which El Paso covenants that this Houston gas will be consumed by El Paso solely as fuel in its Texas operations or in another Texas plant. This contract, like the other one, also provides for metering the volume of gas delivered in Texas; and it includes a covenant by El Paso that the Texas uses will &t all times exceed the amounts supplied by Houston.

In spite of these "restricted use” covenants it is conceded that the gas sold by Lo-Vaca and Houston to El Paso will flow in a commingled stream with gas from other sources and that at least a portion of the gas will in fact be resold out of Texas.

The Federal Power Commission asserted jurisdiction over these sales as sales in interstate commerce “for resale,” as that term is used in § 1 (b) of the Natural Gas Act, 52 Stat. 821, 15 U. S. C. § 717 (1958 ed.). 26 F. P. C. 606, rehearing denied, id., at 840. The Court of

Appeals reversed, one judge dissenting. 323 F. 2d 190. The case is here on a writ of certiorari. 377 U. S. 951.

We said in Connecticut Co. v. Federal Power Comm’n, 324 U. S. 515, 529, “Federal jurisdiction was to follow the flow of electric energy, an engineering and scientific, rather than a legalistic or governmental, test.” And that is the test we have followed under both the Federal Power Act and the Natural Gas Act, except as Congress itself has substituted a so-called legal Standard for the technological one. Id., at 530-531. In Interstate Natural Gas Co. v. Federal Power Comm’n, 331 U. S. 682, 687, we considered the anatomy of the pipeline system to discover the channel of the constant flow; again in Federal Power Comm’n v. East Ohio Gas Co., 338 U. S. 464, 467; and most recently in Federal Power Comm’n v. Southern Cal. Edison Co., 376 U. S. 205, 209, n. 5. The result of our decisions is to make the sale of gas which crosses a state line at any stage of its movement from wellhead to ultimate consumption “in interstate commerce” within the meaning of the Act.

Attempts have been made by one convention or another to convert a local transaction into one of interstate commerce (Sprout v. South Bend, 277 U. S. 163; Superior Oil Co. v. Mississippi, 280 U. S. 390) or to make a segment of interstate commerce appear to be only intrastate (Baltimore & Ohio R. Co. v. Settle, 260 U. S. 166). But those attempts have failed. Similarly, we conclude that when it comes to the question what gas is for “resale” the present contracts should not be able to change the jurisdictional result.

The fact that a substantial part of the gas will be resold, in our view, invokes federal jurisdiction at the outset over the entire transaction. Were suppliers of gas and pipeline companies free to allocate by contract gas from a particular source to a particular use, havoc would be raised with the federal regulatory scheme, as it was construed arid applied in Phillips Petroleum Co. v. Wisconsin, 347 U. S. 672. A pipeline would then be able to discriminate in favor of its “nonjurisdictional” customers. Moreover, a pipeline compariy by a contract clause could immunize a particular supplier from the reach of federal regulation as defined by Phillips Petroleum Co. v. Wisconsin, supra. There would be created in those and in other ways an “attractive gap” in the federal regulatory scheme (Federal Power Comm’n v. Transcontinental Gas Pipe Line Corp., 365 U. S. 1, 28) which the producing States might have little incentive to close, since the gap would often involve either lower costs to intrastate customers or else merely higher pipeline costs which ultimately would be reflected in rates paid by consumers in other States. Whether cases could be conjured up where in spite of original commingling there might be a separate so-called nonjurisdictional transaction of a precise amount of gas not-for-resale within the meaning of the Act is a question we need not reach.

Finally it is said that the Commission should draw the appropriate lines between “jurisdictional'’ and “nonjuris-dictional” sales through the use of its rule-making power. But we cannot say. that the ádjüdicatory process is not an appropriate method, for drawing the line case-by-case (United States v. Public Utilities Comm’n, 345 U. S. 295) as in a,''host of other administrative determinations. The Commission has acted responsibly in this situation and its decision must be upheld.

Reversed.

Mr. Justice White took no part in the consideration or decision of these cases.

Mr. Justice Hablan,

dissenting.

Today’s decision furnishes a too-ready answer to an intricate, problem of administrative regulation. It re7 fleets the sort of decision that is to be expected when the Court is willing to make a bare choice between two unrefined points of view as to regulatory method, without first being informed by the regulating agency concerned as to its evaluation of the competing factors — something that is indispensable to achieving a well-balanced solution of a problem such as this. The respective positions of the parties here each possesses the capacity to frustrate the scope of natural gas regulation ordained by the Congress. The Commission’s molecular theory, accepted by the Court with undefined reservations, results in expanding the regulatory scheme by sweeping within the Commission’s authority gas that has not been supplied or used for interstate resale (“nonjurisdictional” gas). The respondents’ contract-allocation position, on the other hand, might serve to contract the legitimate scope of regulation by interfering with the ability of the Commission to deal with gas restricted under a supply contract to “not-for-sale,” but which has been actually used by the pipeline-purchaser for interstate resale (“jurisdictional” gas).

Whether or not there is a middle ground that would more closely fulfill the purposes of the Natural Gas Act than either of the proposals now before us is something that this Court, is not competent to assess without expert guidance from the Commission, and we have been given none. Lacking this, I am unwilling to accept at this juncture the position of either party to this litigation. I think the Court should decline to pass upon these cases until the Commission has first illumined the regulatory problems involved through an appropriate exercise of its rule-making powers.

The complexity and elusiveness of the matters with which we are asked to deal are best exposed from the vantage point of this Court by considering some of the questions to which allocation contracts in varying contexts give rise.

The Commission has, at least until this case, accepted the proposition that a single supplier to a pipeline may allocate by contract between the amount of gas used for jurisdictional purposes and the amount used nonjurisdic-tionally. For example, in City of Hastings v. Federal Power Comm’n, 221 F. 2d 31, a pipeline company sold gas to the city through one pipeline under two contracts, one covering the gas to be resold by the city, and the. other gas to be used by the city in its own plants. Although the gas was mingled in the common pipeline, the allocation was approved, and the latter gas was, without more, considered not spbject to Commission regulá-tión. A similar situation was presented in United States v. Public Utilities Comm’n of California, 345 U. S. 295, where a power company sold electricity to the Navy for use in its power plants and also for resale to dependent families.^- The absence of any allocation was fatal in that case, but the Court recognized that a different question would be presented if there had been two separate transactions. 345 U. S., at 316-318.

The result does not change when two or more suppliers are involved, provided that the allocation of nonjurisdic-tional gas is prorated among all of the suppliers. For example, if a pipeline company consumed 30% of its total volume of gas in its own plants, and sold 10% of the total volume in the State of production, each supplier could allocate 40% of its gas supply to nonjurisdictional use. Such was essentially the case in North Dakota v. Federal Power Comm’n, 247 F. 2d 173, where the allocation was upheld with Commission approval. If these cases are accepted by the Court, two corollaries follow: since gas is a fungible commodity, the mingling of gas does not alone render ineffective for purposes of Commission jurisdic.tion the allocation contracts, although the molecular identification of the nonjurisdictional gas is destroyed; and the fact that the prices paid for nonjurisdictional gas may affect the rate base for the jurisdictional gas, is also not a critical factor at this stage.

The issue now before the Court arises only when some suppliers are allocating part or all of their gas to nonjuris-dictional use* but others are not. This issue could arise commonly in two contexts: if existing suppliers were allocating pro rata, and new suppliers were added which did not allocate, the addition of the new suppliers might be thought not to destroy the validity of the existing allocation contracts since the new suppliers might be satisfying an increase in the demand for jurisdictional gas. The converse situation is presented in this casé, where the new suppliers are attempting to allocate, and existing suppliers are not. One possible test in such cases might be to determine the source of the demand for the gas supplied to El Paso by Houston and Lo-Vaca. To modify the argument used by respondents, if a separate pipeline were constructed from the Coquat station (at which the gas enters the El Paso system) to the point along El Paso’s system where the outflow will increase, would the sale' be jurisdictional or not? If in fact El Paso has formerly been using the same amount of gas in its compressors that it intends to use in the future, then the purpose of the Lo-Vaca allocation will be merely to release for interstate sale — to satisfy, the interstate demand— gas from other suppliers which formerly was used for non-jurisdictional purposes.

The record before us does not answer the question put. There is some indication that El Paso intends to construct new compressor plants, and may have to use more non-jurisdictional gas at its existing plants to handle the added gas received from Lo-Vaca under the unrestricted contract. Such a use would satisfy a nonjurisdictional demand. However, there is also evidence that in fact El Paso’s consumption for nonjurisdictional purposes will remain constant, and that Lo-Vaca’s supplies will be used to satisfy an increased demand from interstate consumers. The fact that Lo-Vaca gas purportedly replaces the compressor gas supplies formerly furnished by other suppliers, thus releasing that gas. for interstate resale, should not defeat Commission jurisdiction under this analysis.

Another possible standard which suggests itself would, be to determine the probable percentages of gas from each supplier which will be used for nonjurisdictional purposes, and only permit each supplier to allocate by contract to nonjurisdictional use his pro rata share of the. total estimated nonjurisdictional gas. For example, if we suppose a pipeline running from the Gulf coast of Texas through New Mexico into California, as does the El Paso system, then each supplier should determine what percentage of the total volume of gas. flowing west from the point of its input will be ultimately used for a¡ nonjurisdictional purpose: It would then be mathematically probable that his gas would be used for nonjurisdictional purposes in the same percentage, and he could allocate that amount by contract, subject to change should new supplies be added to the system.

I recognize, of course, that there may be pitfalls in both of these possible methods,, and that there may be other, formulae that are preferable to either. I have ventured them only as support for my belief that the Commission’s molecular theory, which in the name of protecting the Commission’s jurisdiction in reality involves a judicial expansion of its authority, should not be accepted until the Commission, after due exploration in a rule-making proceeding, is able to satisfy this Court that no other feasible method — more particularly no modification of the respondents’ contract-allocation theory — exists that would better fit the boundaries of the Commission’s jurisdiction as fixed by Congress.

It is undoubtedly true that normally an administrative agency may decide for itself whether to proceed in a.given field of its regulatory functions through the promulgation of general rules or by the process of case-by-case adjudication. This Commission from the outset has usually proceeded, with the Court’s approval, in developing its procedures by the adjudicatory process. Nevertheless, there are good reasons why the rule-making power appears to be the more promising avenue of approach in this instance. First, the adjudicatory process has not yielded any satisfactory basic principle to serve as a point of departure for judicial assessment of cases of this kind, or indeed for a consistent administrative approach; even in this litigation the Commission’s position is far from clear as to what room, if any, there may be for restrictive allocation contracts. Second, the gas industry is entitled to know the fundamental ground rules by which it should conduct itself in this regard with some degree of predictability, as witness the situation of these respondents whose good faith in the transactions giving rise to this litigation has not been impugned in any way. Third, that unlike the line of cases in which agency jurisdiction is conceded, here the Commission should not be permitted to adopt a theory which expands its jurisdiction beyond statutory limits without full hearings and the formulation of a rule interpreting its jurisdiction in this area which conforms to the jurisdictional limits of § 1 (b) of the Natural Gas Act. Fourth, because these matters are fraught with technical “perplexities, both geological and economic,” Railroad Comm’n of Texas v. Rowan & Nichols Oil Co., 311 U. S. 570, 574, the informed expertise of the Commission is a necessary adjunct to satisfactory judicial resolution of particular cases. “Had the Commission, acting upon its experience and peculiar competence, promulgated a general rule of which its order here was a particular application, the problem for our consideration would be very different.” Securities & Exchange Comm’n v. Chenery Corp., 318 U. S. 80, 92. The courts have a right to the informed judgment of the Commission before acting further in this presently opaque area.

I would vacate the judgment of the Court of Appeals and remand the case to the Commission for further proceedings after the promulgation of interpretive rules to. cover this, and like cases.

       Section 1 (b) of the Act provides:
      “The provisions of this Act shall apply to the transportation of natural gas in interstate commerce, to the sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use, and to natural-gas companies engaged in such transportation or sale, but shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas.”
      Section 2 (7) of the Act reads as follows:
      “When used in this Act, unless the context otherwise requires—
      “(7) ‘Interstate commerce’ means commerce between any point in a State and any point outside thereof, or between points within the same State but through any place outside thereof, but only insofar as such commerce takes place within the United States.”

       The Commission’s Report, .Statistics of Natural Gas Companies— 1962, shows that the 40 major natural gas pipeline companies consumed more than $85,000,000 worth of gas in operating their facilities (principally compressor stations), p. xviii. This represents almost 4% of the total gas-purcháse-costs of those companies. The Commission therefore points out in its brief that pipeline companies, merely by using “restricted use” controls, could without changing their actual operations create a substantial unregulated market for the benefit of particular producers. .

       Our reference in Federal Power Comm’n v. Transcontinental Gas Pipe Line Corp., 365 U. S. 1, 4, to “direct” sales of gas to industrial users as nonjurisdictional sales is not dispositive of the present issue. For the Commission had refused a certificate for transportation of the gas because from the standpoint of conservation it considered the end use as boiler fuel to be inferior. Whether the Commissi on had authority to assert jurisdiction over .the so-called “direct” sale because it was “for resale” as a result of its commingling with other gas was not in issue.

       Cf. United States v. Public Utilities Comm’n, 345 U. S. 295, 317-318; City of Hastings v. Federal Power Comm’n, 221 F. 2d 31.

       See Elman, Comment, Rulemaking Procedures in the FTC’s Enforcement of the Merger Law, 78 Harv. L. Rev. 385 (1964).

       See Court’s opinion, ante, p. 370. In fact, the price charged by Lo-Vaca for its nonjurisdictional gas is exactly the same as the price established for its concededly jurisdictional sale, and the Houston sale is for a price lower than either of the Lo-Vaca sales.

       Both Lo-Vaca and El Paso are constructing pipelines to connect with the' El Paso system at its Coquat station, and both must obtain Commission certification under § 7 of the Natural Gas Act in order to construct such pipelines. The Commission could take many of ,the factors presented in this case into account when ruling on the applications, see Federal Power Comm’n v. Transcontinental Gas Pipe Line Corp., 365 U. S. 1. The Commission could also take into account the reasonableness of the prices charged for nonjurisdic-tional gas should El Paso apply for a rate increase on its jurisdictional sales.

       See Amerada Petroleum Corp. v. Federal Power Comm’n, 334 F. 2d 404 (C. A. 8th Cir. 1964), cert. pending, No. 585, this Term, where the suppliers in the North Dakota case, supra, had been allocating, and the pipeline then added new suppliers which did not allocate. The Court, of Appeals upheld-the allocation contracts.

       Corrections would have to be made, of course, where gas is withdrawn for intrastate consumption from a trunk line before the gas is mingled with the interstate system. Such gas would all be attributed to the suppliers feeding the trunk line, and this gas would not be used in computing the total percentages. Cf. Peoples Natural Gas Co. v. Public Service Comm’n of Pennsylvania, 270 U. S. 550. This method of allocation would only operate with' natural gas, which flows in one direction only; different considerations would be applicable were we dealing with electric power, which can flow in both directions along a system.

       See United States v. Storer Broadcasting Co., 351 U. S. 192. See generally 1 Davis, Administrative Law Treatise, §5.01 (1958).

       See Securities & Exchange Comm’n v. Chenery Corp., 332 U. S. 194.

       See, e. g., United States v. Public Utilities Comm’n of California, supra, at 318, n. 28.

       See Lo-Vaca Gathering Co., 26 F. P. C. 606, 615:
      “To the extent that North Dakota may be inconsistent with the action we take here, we believe it was erroneously decided.” Compare, supra, p. 373.

       As for example, in rate-making proceedings.

       Natural Gas Act, §1 (b), quoted in the Court’s opinion, ante, p. 368, n. 1.

       See Addison v. Holly Hill Fruit Prods., Inc., 322 U. S. 607, 619.