S. W. SUGAR CO. v. RIVER TERMINALS
Argument of Amos L. Ponder, Jr.
Chief Justice Earl Warren: Number 155, Southwestern Sugar & Molasses Company, Petitioner, versus River Terminals Corporation.
Mr. Amos L. Ponder, Jr.: Mr. Chief Justice, and may it please the Court.
This matter before the Court today involves a suit that was filed by Southwestern Sugar-Molasses Company who is the petitioner in this matter against the River Terminals Corporation who is the respondent in this matter in the Eastern District of Louisiana at New Orleans.
Essentially, the suit alleged that Southwestern Sugar & Molasses Company was the charterer of a molasses barge.
And this particular molasses barge was towed with a cargo of molasses to Texas City, Texas where the barge sank and as a result, damage was sustained not only to the barge but the cargo was just about a complete lost.
Libellant alleged a certain acts of negligence on behalf of River Terminals Corporation who towed this particular barge on the decent question.
In one, that they failed to pump in sound -- sound the barge while it was en route that the barge lost tram en route and was taking on water and that they left the barge unattended, it appear in the Texas City knowing it to be in a dangerous and sinking condition without notifying libellant.
The respondent in his answer alleged that it was not negligent that the barge was towed properly from the terminal at Reserve, Louisiana to Texas City, Louisiana that the barge was not left in a dangerous condition.
And in addition to that, respondent further in his answer raised a defense in respect to its tariff.
River Terminals Corporation is certified by the Interstate Commerce Commission as a water carrier, and they did file a tariff with the Interstate Commerce Commission as to the rates and so forth.
But in addition to that, that they filed with the Interstate Commerce Commission, they also filed with the tariff the following, “When shipments are transported in barges furnished by owners, shippers, consignees or parties other than the carrier such barges and or cargos will be handled at owner's risk only whether or not -- whether the loss or damage is caused by negligence or otherwise.”
The present --
Justice Potter Stewart: Now, you -- excuse me.
You said that they filed a tariff and in addition, they filed with the tariff --
Mr. Amos L. Ponder, Jr.: This part of the tariff.
Justice Potter Stewart: -- the statements you just read, but that is part of the tariff, isn't it?
Mr. Amos L. Ponder, Jr.: That's part of the tariff.
Justice Potter Stewart: Yes.
Mr. Amos L. Ponder, Jr.: But what I said in addition to the rates set forth, the tariff also contained --
Justice Potter Stewart: Contained that.
Mr. Amos L. Ponder, Jr.: -- this provision.
And this provision is an exculpatory clause in respect to negligence on their part.
The case was tried on the question of liability only before the District Court.
And the District Judge, after hearing the case, entered an -- entered an interlocutory decree on behalf of the libellant holding River Terminals Corporation liable for the loss of the cargo as well as for the damage occasion to the barge.
And at the same time, the District Court held that this particular clause that was embodied in the tariff was against public policy and null and void in view of the Bisso decision.
From this interlocutory decree, the respondent appealed.
The Fifth Circuit Court of Appeals did not go into the merits of the case because they held that there was a defense that was urged by the respondent.
And if this was a valid defense, we were out of court.
In other words, if this exculpatory clause was good whether or not there was negligence or not, they would be -- have to be -- it could not be held for damages.
About or a very short time before this particular case came up before the Fifth Circuit Court of Appeals, there was another case that came before the Fifth Circuit Court of Appeals, the Mississippi Valley case.
And in that particular case, the identical exculpatory clause was in the tariff in that particular case.
And in that case, it was also raised -- raised as a defense.
And in the Mississippi Valley case, the same Fifth Circuit Court of Appeals held this exculpatory clause invalid and of no effect and cited the Bisso case decided by this Honorable Court as its authority for so holding.
In the Mississippi Valley case, writs were applied for -- to this Court and writs were denied.
And then afterwards, when this case -- the present case came up, the Fifth Circuit Court of Appeals said that if they had made an error in the Mississippi Valley case that it was their duty to rectify it, and they proceeded to reverse the decision of the lower -- reverse the decision of the lower court and remanded the case back to the lower court and afforded your petitioner here the opportunity to go before the Interstate Commerce Commission so that they could pay us on the validity of this clause.
And that was the effect of the decision.
And from that, we applied for -- petitioner applied for writs which were granted by this Honorable Court.
The difference between this particular case and the Bisso case is that in this particular case, River Terminals Corporation has filed its tariff, and it is certified by the Interstate Commerce Commission, and the Bisso case, which was decided by this Court, Bisso had filed no certificate or no tariff.
He was merely a private tower but the -- otherwise, the case was the same.
In other words, it involved a barge that was damaged that was towed by Bisso.
Justice Felix Frankfurter: Was the private -- was the tower in Bisso subject to the Interstate Commerce Commission's Administration?
Mr. Amos L. Ponder, Jr.: Well, imagine he -- Your Honor, he could have filed a certificate but he did not.
Justice Felix Frankfurter: Well, I mean, would he have to?
Mr. Amos L. Ponder, Jr.: That was not raised in the case.
Justice Felix Frankfurter: But this tower couldn't do business without filling tariff, could he?
Mr. Amos L. Ponder, Jr.: It's not necessarily that they file tariff.
Justice Felix Frankfurter: I'm just asking.
Mr. Amos L. Ponder, Jr.: That's correct, sir.
It's not necessary.
It's not mandatory that they file the tariffs and become certificated.
Bisso did not.
And the Bisso --
Justice Felix Frankfurter: I understand Bisso.
Mr. Amos L. Ponder, Jr.: -- case was same tonnage.
Justice Felix Frankfurter: But -- well, then -- then the jurisdiction over a carrier like this by the Interstate Commerce Commission as a matter of discretion for the carrier.
Mr. Amos L. Ponder, Jr.: Yes, that's my understanding, sir.
Justice Potter Stewart: If it's going to act as a common carrier on navigable waters the Interstate Commerce doesn't have to file the tariff under what is Part III of the Act?
Mr. Amos L. Ponder, Jr.: Well, I might be wrong on that, but the -- the only two distinguishing --
Justice Potter Stewart: (Voice Overlap) information too.
What surprises me --
Mr. Amos L. Ponder, Jr.: -- the only two distinguishing features --
Justice Potter Stewart: (Voice Overlap) --
Mr. Amos L. Ponder, Jr.: -- I know that the -- well, personally, I know that the -- both of these cases came out of New Orleans.
The Bisso case came out of New Orleans too, and it was of the tonnage that would -- that could be -- you know, would come under the -- another certificate.
Justice Felix Frankfurter: But there's (Inaudible) Justice Stewart suggest.
There is still a difference in the law between a private and a common carrier.
Mr. Amos L. Ponder, Jr.: Yes, sir.
But in -- in other words, in the Bisso case, they had written in to the contract itself that the tower would not be responsible and contracted away the tower, his negligence in the case.
And in that particular case, this Court held that you could not contract away your negligence.
Now, after that decision and wherein this Court specifically held that you could not contract away your negligence, these towers who are certificated by the Interstate Commerce Commission instead of putting that in some contract which is invalid, they turned around and put it in the tariff.
In other words, to me, it's just a means of circumventing the decision in the Bisso case because if you can't put it in the contract, how can you take the same exculpatory clause and put it in a tariff and make it legal?
Justice Felix Frankfurter: That may -- the answer to that -- to your question may turn on what the scope of regulatory authority or responsibility of the Commission is.
But if you're right, then this common carrier can charge one rate to one shipper to one tug and another rate to another tug and it would be surprising indeed if that is so.
Mr. Amos L. Ponder, Jr.: Well, it's our position that the only thing the Interstate Commerce Commission has anything to do about --
Justice Felix Frankfurter: I'm not reaching your exculpatory clause.
Mr. Amos L. Ponder, Jr.: Oh --
Justice Felix Frankfurter: I'm not addressing myself with that.
I'm asking in the corporate of our questions were whether this tariff had to be filed and live up to him the service done by the tower.
Mr. Amos L. Ponder, Jr.: The tariff had to be filed but --
Justice Felix Frankfurter: No.
Mr. Amos L. Ponder, Jr.: -- there's -- there's nothing that -- pardon?
There's nothing that requires any [Laughs] exculpatory clause in it.
Justice Felix Frankfurter: That's a different question --
Mr. Amos L. Ponder, Jr.: That's right, sir.
Justice Felix Frankfurter: -- because the tariff has to be filed.
Mr. Amos L. Ponder, Jr.: Yes.
It has to be filed.
And here's exactly what he's -- has to show.
The tariff has to be filed with the Interstate Commerce Commission showing all rates, fares, charges, classifications, rules, regulations and practices for the transportation of interstate or foreign commerce between places on each route.
In another words, what they filed -- what is required by law for them to file is in that tariff, it has to show all rates, fares, charges, classifications, rules, regulations and practices.
Justice Felix Frankfurter: But do the rates which they filed, the tariff which they filed differentiate between the kind of responsibility they assume for collisions or for injury?
Mr. Amos L. Ponder, Jr.: Well, that's the position taken by the respondent is that --
Justice Felix Frankfurter: I'm not asking what the respondent --
Mr. Amos L. Ponder, Jr.: No.
Justice Felix Frankfurter: -- under the law, may they file different rates for different services?
Mr. Amos L. Ponder, Jr.: They can file different rates between -- between the various points and for the various services but -- that -- that are performed.
But under the Act, the Act merely said that they have to file their rates, fares, charges and so forth, classifications of the type of rate and so forth.
Justice Felix Frankfurter: Now, in this case, do they file one rate for non-liability and another rate for liability situation?
Mr. Amos L. Ponder, Jr.: That I do not know.
In other words, the -- in -- it was not offered in the evidence.The only -- this part of it was offered in evidence by the respondent on this particular rate between these particular places, in other words, between Reserve and Texas City.
They had a rate.
And in this rate was this clause.
But our position is that the Interstate Commerce Commission does not require anything other than the rates.
And then, of course, if someone complains about the rates and they think the rates are too high, of course, you have the administrative relief.
But what the Fifth Circuit Court of Appeals has done in this case, here is a question that is strictly a legal question whether or not this clause is valid or invalid.
But the Fifth Circuit Court of Appeals has now sent petitioner back to the Interstate Commerce Commission for the Interstate Commerce Commission to pass on the validity of this clause.
Now, the Interstate Commerce Commission does not pay us on the validity of any matter, they pay us upon the reasonableness of rates and whether or not a rate is fare rate and whether or not it is sort of discrimination and so forth.
They do not sit as a court of law.
Justice John M. Harlan: The -- the exculpatory clause might have a bearing, might it not, if you went back to the Interstate Commerce Commission as to whether the rate was a reasonable rate or not?
Mr. Amos L. Ponder, Jr.: Well, if -- you can do away with your own negligence, whether about contract or otherwise.
If that's permissible, then, of course, that would have a bearing on rates.
In other words, it would have a bearing on the rate if I could enter into a written contract like in the Bisso case.
If I could reenter into a contract with the Bisso -- like in the Bisso case, if that contract was valid that, of course, would've had a bearing on the rate because in the Bisso case, Bisso said, “Well, I can do this job.
If I don't have to carry any insurance at all, I can do this job cheaper.
And if I'm not responsible for this man's barge, then all of that goes into the picture and he could've charge a cheaper rate.”
But this Court held that irrespective of what that had to do on how much was charged and how much wasn't charged, that you just can't contract away your negligence.
Justice John M. Harlan: In -- in the case of a non-common carrier.
Mr. Amos L. Ponder, Jr.: Yes, sir.
But the thing is I can't see where it should -- you could take -- see, a number of these vessels cannot become common carriers because of the tonnage.
They can't come on to the Interstate Commerce Commission.
Now, why should you say, “Now, here is one group of vessels, they can't contract away their liability.
In other words, they are responsible for their negligence, but because this class of vessels who can become certificated, well, it's all right for you.
You can just put that in your tariff and you can do away with your negligence”?
Justice Felix Frankfurter: Your right, what you say it's all right, your right is contingent.
In the case of the smaller tonnage tows, the dealing is entirely between the party.
Mr. Amos L. Ponder, Jr.: Well --
Justice Felix Frankfurter: In the case of the vessel, the tow is subject to the Interstate Commerce Commission.
The Interstate Commerce Commission is there to say this is an unfair rate if you let your sales out for liability, but if the fellow wants to have your service and take the risk, which mathematically, is a limited risk, that comes to happen.
You know what to get the cheaper rate of the towage, why, that's all right because if you don't like that, you can get a higher rate to take care of the insurance against those -- against collision or injury.
In other words, the Commission is supposed to represent a public, does represent legally the public interest of saying whether the rate and all that relates to rates is a fare or reasonable rate whereas a non-commissioned controlled tow has no such oversight.
Mr. Amos L. Ponder, Jr.: Well, if you -- the -- they, of course, have the right to fix the rates and the reasonableness of the rates and so forth, but -- but can they, that administrative body, allow a tower to put in its tariff this exculpatory clause?
In other words, if you're going to have people towing barges, if they're towing my barge and they have this in the tariff where they're not responsible for the negligence, what -- what happens?
They can go on all and leave your barge sinking not notifying anyone as happened in this case and let your barge sink and you come to them, they ask about it, they just lay barges and say, “Well, we're not responsible for our negligence.”
So it puts -- it puts the -- the person who has to obtain the services of these tugs -- these towers, at the tower's mercy.
In other words, he -- that fellow has to move his cargo of molasses.
Justice Felix Frankfurter: I'm suggesting it is not at his mercy because you can get a -- you can be free from that mercy or to -- not to be subjected to that mercy by paying a different rate.
Look what Congress has done in limiting the liability of the carrier or regular carriers.
They can limit their liability almost to nothing.
But they must offer a higher, they must offer an unlimited liability provided they get a higher rate.
Mr. Amos L. Ponder, Jr.: Well, there's no showing in this record by respondent that he charges one rate for one and one rate for the other.
The only thing in this record is that he -- for the movement of a barge from that particular place at Reserve, Louisiana to Texas City, that he charged a certain rate and that he was not responsible for any negligence, period.
Justice Charles E. Whittaker: So how do you not messed up one (Inaudible)
Mr. Amos L. Ponder, Jr.: What is that?
Justice Charles E. Whittaker: Do you mean that as barge be owned by the shipper in the case where the barge is owned by the shipper.
Mr. Amos L. Ponder, Jr.: That's right.
In other words, if the common -- if the towboat is -- if they furnished the barge, in other words, it is all part of the same part and parcel.
In other words, I want to ship some cargo and I go to the tower and the tower furnishes the -- not only the tug but he furnishes the barge, too, then they see his barge and his tug is all part of the flotilla and this does not apply to it.
In other words, in its tariff, it only -- it limits it to where shipments are transported in barges furnished by the owners, shippers, or consignees.
In other words, if I have my barge and I furnished the barge and I want to move this cargo, I'll go to the tower and ask him to -- what's his price to tow my -- if I furnished the barge to move my cargo.
And he charges me two rates, one rate for the towage service, and another rate for the cargo.
In other words, in respect to the cargo, the issue of bill of lading as it was done in this instance.
Now, in this instance, the bill of lading that cover the cargo of molasses, there is no provision in there nor exculpatory clause.
The bill of lading was issued in this for the molasses.
Then the tower charges you two different fees, he charges you a fee for moving your cargo and he charges you a fee for moving your barge.
In other words, he forms -- he charges you for two services, one for moving your barge, and one for the bill of lading.
Justice Charles E. Whittaker: (Inaudible)
Mr. Amos L. Ponder, Jr.: That's my -- my understanding.
A bill of lading was issued in this particular case and the bill of lading is part of the -- is in the transcript.
And I believe it's an appendix of respondent's brief.
I beg your pardon.
The bill of lading was sent up as an original document for this Court.
In other words, it went up as an original document before the Fifth Circuit Court of Appeals and it was sent up as an original document before this Court.
Justice Felix Frankfurter: May I ask you whether --
Mr. Amos L. Ponder, Jr.: Yes.
Justice Felix Frankfurter: -- you would agree that the question before us is whether under its regulatory power, the Interstate Commerce Commission would be prohibited from a allowing a tariff, would be prohibited from legalizing of tariff which contained the exculpatory clause.
(Voice Overlap) --
Mr. Amos L. Ponder, Jr.: That -- that's the entire question.
Justice Felix Frankfurter: All right.
Mr. Amos L. Ponder, Jr.: And that's what our position is, may it please Your Honor, that -- in other words, with the Bisso case and where it was decided as a matter of public policy, that if I turned my barge over to someone, they just can't haphazardly take that barge and let it sink or damage it or say damage it on -- on purpose, they wouldn't be responsible.
In other words, they are under a degree of care with something that belongs to me.
And is the Court now going to allow the same exact situation to exist merely by the subterfuge of taking the same provision and instead of making the person you're dealing would sign a contract to tow your barge, to turn around and put it in your tariff and accomplish the same thing that was accomplished prior to the Bisso Case.
Now, this Court thought enough of that proposition back at the time that writs were granted the Bisso case.
Of course, at that time, different circuits held different ways.
And in the Bisso case, this Court thought of -- that it was not a matter of public interest that they granted writs in the case and after hearing the case, held that that was against public policy.
It's the same thing as if I go to a garage, and up on the garage they have a sign of, “Pay parking 25 cents.
We are not responsible for any negligence.”
You leave your car there and they knock all the fenders off of it.
You come back, get your automobile and they'll say, “Well, we are sorry that your fenders are all banged up, but didn't you read our tariff up there, didn't you see our rate?”
And if this thing starts about people contracting away their negligence or doing away with that negligence by tariffs, everyone is going to be irresponsible of other people's property.
In other words, it will be a pretty sad state of affairs if people that owned barges and want their barges moved, they have to have a move and the person who takes the barge, he doesn't care anything about looking after your barge or seeing if it's sinking or what's happening to it and he takes it off.
It might be -- have sprung a leak and he leaves it tied up to a wall and -- and doesn't notify anyone that -- so it could be pumped out or saved or whatnot.
What does he care?
He has it in his tariff, he's not responsible for his negligence, so he can do any sort of flagrant act of negligence he wants and get away with it.
Now, it's our argument that we have the same proposition here as we had in the Bisso case.
It's just a different rankle to it.
In other words, it's approaching -- the tower is approaching it from a different position.
They didn't like the Bisso case and want to get around the Bisso Case.
So when the Bisso case went against them, what did they do?
They turned around and instead of having the same carriers who were operating under the I.C.C., the Interstate Commerce Commission, they used to rely upon that contract with the tower, the same particular people.
But what did they do when your contract was held invalid?
The same identical people, the towers, they turned around after this Court held it invalid to put it in the contract.
And they did away with the contract as illegal, and they turned that around to stick it in their tariff, the same identical people who are towing other people's barges who had contracted away their liability accomplishing exactly the same thing this Court tried to stop by just merely turning around and putting that particular provision; the exculpatory clause in the tariff.
So -- insofar as the public policy is concerned, and it being against public policy, this Court -- I mean, it's -- it's the same thing right now before the Court as it was in the other instance because the same thing -- as -- as a practical matter, the same thing is happening, it was happening before.
Justice Hugo L. Black: If this is under the I.C.C., do you have a right to file a suit to the Court --
Mr. Amos L. Ponder, Jr.: Well, of course --
Justice Hugo L. Black: (Voice Overlap) the I.C.C. and subject to reparation?
Justice Hugo L. Black: Well, of course, I had -- I think, Your Honor, I had a right to file a suit in court because after all, this particular person was a charterer of the barge and after all, he owned the cargo and he came in and alleged negligence.
Now, as a defense, they raised the proposition of this particular clause in the tariff.
Now, it comes down to the proposition, is this a legal clause or is it illegal?
Justice Felix Frankfurter: You still --
Justice Hugo L. Black: Do you think -- excuse me.
Do you think if they're right that it's referring it -- to all they confess on is the reasonableness of the --
Mr. Amos L. Ponder, Jr.: That -- that's correct.
Justice Hugo L. Black: -- of the regulation or the tariff?
Mr. Amos L. Ponder, Jr.: That's correct.
They can -- the only thing --
Justice Hugo L. Black: And then -- then if they held that it was unreasonable, leave open the question of negligence, you take it back to try it in the Court.
Mr. Amos L. Ponder, Jr.: Well, I just have to start all over again.
And this case had been going on 15 years now and --
Justice Felix Frankfurter: Why --
Mr. Amos L. Ponder, Jr.: [Laughs]
Justice Felix Frankfurter: -- why is that?
Mr. Amos L. Ponder, Jr.: What's that, sir?
Justice Felix Frankfurter: Why is it taking 15 years?
Mr. Amos L. Ponder, Jr.: Well, the attorney who filed the suit passed away and then there's another attorney who took the suit over, he passed away.
In the meantime, several of the survey has -- what's that?
Unknown Speaker: (Inaudible)
Mr. Amos L. Ponder, Jr.: In the meantime, the Texas City disaster occurred and destroyed all of the records.
And finally, I got in the case [Laughs] Your Honor, but it's -- the case has been going on because of the death of other counsel in the case.
But in respect --
Justice Hugo L. Black: How much is involved in this case, just a matter of interest?
Mr. Amos L. Ponder, Jr.: About $44,000, the cargo and the -- but Your Honors held in the Cornell case, which is cited in our brief on page -- starting at 32, it gives the history of the Cornell case.
And in the Cornell case -- well, even starting off in the -- on District Court level on page 35, they go on to state that the Interstate Commerce Commission is that of regulation and not the question of liability.
In other words, the Interstate Commerce Commission has nothing -- the Interstate Commerce Commission -- the Interstate Commerce Commission has nothing to do about liability.
They are strictly just a rate-fixing body.
And for the Fifth Circuit Court of Appeals to send this back to -- send this back to the Interstate Commerce Commission, for them to pass on the validity of this provision is sending it back to them as if they were court of law to pass on the legality and the validity of such a clause.
They didn't send it back to them about rates or fixing rates.
Here's the exact language, “The judgment is reversed in order to afford the appellee reasonable opportunity to seek administrative action before the Commission to test the validity of the challenged provision, otherwise, to give full effect.”
In other words, they are sending us back to the Interstate Commerce Commission to let them pay us upon the validity of this provision.
Justice Hugo L. Black: Well --
Mr. Amos L. Ponder, Jr.: Now, where, under the Act --
Justice Hugo L. Black: (Voice Overlap) little different to that.
Mr. Amos L. Ponder, Jr.: What's that?
Justice Hugo L. Black: Assuming if they're right that this clause is within the power of the Commission to determine the reasonableness, assuming they're right, there are plenty of cases, aren't there, that is old?
They're the ones that are passed on (Voice Overlap) --
Mr. Amos L. Ponder, Jr.: Well, we have no --
Justice Hugo L. Black: (Inaudible)
Mr. Amos L. Ponder, Jr.: We have no quarrel at all with that.
In fact, respondent decided a number of cases in his brief that the Interstate Commerce Commission is the proper party if you have some complaint about the reasonableness of rates or -- and so forth.
Justice Charles E. Whittaker: You're saying this is not to do with reasonableness.
Mr. Amos L. Ponder, Jr.: This is not to do with reasonableness.
It's sent back to them to pass upon whether or not this provision is legal or not.
Now, the Interstate Commerce Commission, they are not empowered to pass upon the legality of various things, they are strictly passed on rates, but the Fifth Circuit sent it back in their exact language for them to test the validity of the challenged provision.
Justice Felix Frankfurter: But --
Justice Hugo L. Black: They're saying before that on page 77 of your -- the -- the reasonableness and legality.
Mr. Amos L. Ponder, Jr.: The -- the -- well, what I'm -- my -- my point, may it please the Court, is that whether this rate -- I mean, whether this provision, exculpatory clause, it's not a question of whether or not that's reasonable or not, it's a question of whether that's legal or not.
Justice Hugo L. Black: Well, you're taking your position that the formal opinion that's decided that --
Mr. Amos L. Ponder, Jr.: Yes, sir, in the -- in the --
Justice Hugo L. Black: -- in the case of this kind or at least where it was not a common carrier, the case of this kind that laws couldn't fix and the Commission don't have a right to change.
Mr. Amos L. Ponder, Jr.: Well, the --
Justice Hugo L. Black: But assuming they're right that it comes within the jurisdiction of the Commission to determine the reasonableness, they've taken the proper course, I think.
Mr. Amos L. Ponder, Jr.: Well, if -- if a person can contract away their negligence, if they can do away with their negligence, if that, as a principle of law, is right, then, of course, Interstate Commerce Commission can very well take that into consideration of fixing rates with this clause and fixing rates without this clause if that's -- as a legal proposition is sound.
But the Court in the Bisso case said that that is not a sound legal proposition, that is against public policy to let anyone contract away their negligence.
And because -- and we'd have the exact same situation.
In other words, it'd be doing exactly what they were doing before the Bisso decision if this is allowed.
In other words, the only thing they have to do now is whether it's a private tower or whether it's one that's certified or whatnot, what type of tower, they used to make you sign that little contract that they weren't responsible for your barge.
Now, if they can turn rather -- pardon?
Justice John M. Harlan: They might have to do one additional thing, namely --
Mr. Amos L. Ponder, Jr.: Sir?
Justice John M. Harlan: They might have to do one additional thing, namely, to offer you a rate -- transportation with a higher rate without an exculpatory clause.
Mr. Amos L. Ponder, Jr.: Well, they might do that but it would still allow them to -- in other words, the Interstate Commerce Commission can't force them to -- to do anything other than file their tariffs.
Now, they're not going to file any tariff where they assume any responsibility or any liability.
All of the tariffs they're going to file are going to be the ones without exculpatory clause in it.
So where is the tower -- I mean, the person who has the barge then?
Justice Felix Frankfurter: But the Commission -- they refused to let them file just one rate with an exculpatory clause.
They would say -- the Commission may well say as it does in the case of railroads.
You must give a shipper an opportunity to pay a higher rate for greater protection.
Mr. Amos L. Ponder, Jr.: Well, if it's not against public policy for a person to do away with their liability, I'll get back to the same proposition that --
Justice Felix Frankfurter: Do your -- I'll get back to what you said (Inaudible) whether in light of the Bisso case, it's beyond the power of the interstate commerce to authorize that the tariffs to include no matter how low the rate is.
Mr. Amos L. Ponder, Jr.: That's correct.
Justice Felix Frankfurter: Now, how differential -- how great the differential to include an exculpatory clause.
Mr. Amos L. Ponder, Jr.: That's --
Justice Felix Frankfurter: That is your position.
Mr. Amos L. Ponder, Jr.: That's my position entirely, sir.
I see my time has expired.
Chief Justice Earl Warren: Mr. Lemle.
Argument of Selim B. Lemle
Mr. Selim B. Lemle: If Your Honors please.
Initially, I would like to see where I can put this case in what I deem to be the proper focus that is as I see it.
I've heard a lot of talk about towage.
And I say to Your Honors that this is not a towage case.
It's an affreightment case.
Unknown Speaker: (Inaudible)
Mr. Selim B. Lemle: An affreightment case.
Towage is the transporting of an object from one place to another, it puts getting there.
Affreightment is carrying a cargo it has for its basic intent, the carriage of cargo aboard the vessel and Your Honors so held in the Sacramento Navigation Company versus Salz, which was a case on all force with this except for one point, in that case, the towboat and the barge were commonly owned.
And Your Honor has said that in that case although towage was performed to the barge, the object was to get to destination the cargo that was lading onboard the barge and it was an affreightment and not a towage case.
Justice William O. Douglas: What case was that?
Mr. Selim B. Lemle: Sacramento Navigation Company versus Salz.
Sacramento Navigation Company versus Salz --
Justice William O. Douglas: I found it, thank you.
Mr. Selim B. Lemle: -- 273 U.S. 326.
Now, the River Terminals Corporation is a certificated common carrier of freight for hire, not a tower.
Under the Act, Part III is regulated on the Part III of the Commerce Act, Interstate Commerce Act and under Part III, a shipper is permitted to furnish a vessel as a part of the facility.
That is specifically permitted under the Act.
In this case, there was no reason to tow the barge, Peter B, from Reserve to Texas.
Nobody wanted the barge, Peter B, in Texas.
What they wanted was a cargo of molasses from Reserve, Louisiana to the port of Texas.
And the River Terminals Corporation undertook to carry that barge with the cargo on it to port from Reserve to port off for the purpose of delivering the cargo, then after the barge would come back right to New Orleans and pick another cargo, so forth and so on.
There isn't any difference, if Your Honor please, in principle in this case between the transportation of a cargo in a shipper's barge and the transportation by railroad subject to Part I of the Act of a cargo or a lading in a shipper's freight car.
The object is not to take the freight car from point A to point B, the object is to deliver the cargo or the lading in the freight car from point A to point B.
To talk about towage in the case like this, if I may use a simile, would be if the -- a -- if a box tow, refrigerator tow or bananas or a tank of molasses in the shipper's car had to be transported from New Orleans to Washington to ring up the railroad company and say, “Send your locomotive around to tow at Ford, Washington.”
They're not in towage.
It's purely and simply an affreightment.
The fact that towage is involved is purely incidental and was not the purpose of this movement.
Justice William O. Douglas: That was the question that the Court of Appeals refused to decide.
Mr. Selim B. Lemle: That we don't have to.
The Court of Appeals sidestepped it.
Justice William O. Douglas: Yes.
Mr. Selim B. Lemle: And if Your Honor will permit me, I think it's a point that should've been decided that these are important points.
It goes to the very basis of this case.
The Court of Appeals does not make any difference whether this was a towage or an affreightment because so far as the tariff is concerned, the same rules apply to affreightment as applied to towage, so far as the exculpatory provision to the tariff is concerned.
Justice Potter Stewart: Now, it's implicit in your argument that you don't agree with that, is it not?
Mr. Selim B. Lemle: Correct.
Justice Potter Stewart: Yes.
Mr. Selim B. Lemle: -- do not agree with it but I have not raised it except incidentally, it becomes -- it becomes necessary to the decision of this case.
It will have to be decided but on the basis on which the Court of Appeals decided this case.
It makes no difference whether it's a towage or affreightment because the Court of Appeals said that tariff controls whether it'd be affreightment or whether it'd be towage.
Justice Potter Stewart: By emphasizing as you have to us that this was affreightment, you're implying, are you not, pretty clearly that you made the -- this way as in that in order to uphold the Court of Appeals' decision.
Is that right?
Mr. Selim B. Lemle: If Your Honor please, another point where it become most important.
If this be affreightment and this be a common carrier, then Section 3 of the Harter Act applies and Section 3 of the Harter Act doesn't do anything with this, the exculpatory clause doesn't too.
Justice Felix Frankfurter: (Inaudible)
Mr. Selim B. Lemle: Any --
Justice Felix Frankfurter: -- the Harter Act itself is an exculpatory provision.
Mr. Selim B. Lemle: The -- the -- yes, sir.
This is a common carrier and if the -- if it's -- if it's affreightment, Section 3 of the Harter Act applies per se.
But we will have to go back to the question of this tariff.
Justice Felix Frankfurter: (Voice Overlap) You wouldn't get a complete exculpation under the Harter Act, would you?
Mr. Selim B. Lemle: No, you would get a --
Justice Felix Frankfurter: (Inaudible)
Mr. Selim B. Lemle: -- you would get a complete exculpation so far as this cargo molasses is concerned --
Justice Felix Frankfurter: Yes.
Mr. Selim B. Lemle: -- Mr. Justice Frankfurter.
So far as that -- the cargo molasses is concerned, you get complete exculpation.
Now, that leaves one answer to the question of whether or not the barge, which is the vehicle in which the molasses was transported, is subject to Section 3 of the Harter Act.
And I must admit candidly to the Court that that causes me some pause because the bill of lading which was issued in this case was issued for cargo molasses and said nothing about the container, the barge, which was furnished by the shipper.
And so that if -- and there are three cases decided, they are cited in brief, In re O'Donnell, by the Second Circuit, the (Inaudible) and other cases in which lower federal courts have drawn a distinction between the cargo and the vehicle.
And I'm saying so far as the cargo is concerned, a common carrier is entitled to the benefit of Section 3 of the Harter Act, but as to the vehicle -- no, they're tower as the vehicle, so three of the lower courts have split.
Justice Felix Frankfurter: Do you mean, they said that the tower as to the vehicle but a -- but a carrier as to the effect of the (Voice Overlap) --
Mr. Selim B. Lemle: Well, the common carrier is to boat, if Your Honor please -- Your Honors in -- in the Cornell Steamboat case --
Justice Felix Frankfurter: I understand that.
Mr. Selim B. Lemle: -- said that your common carrier whether you're a tower or whether you're a freight.
Justice Felix Frankfurter: Yes, but for purposes of the Harter Act, had these lower courts held that it's carrying freight to wit the molasses here but it's not carrying the barge and therefore it's not a -- it's not (Voice Overlap) --
Mr. Selim B. Lemle: Correct, Mr. Justice Frankfurter.
Justice Felix Frankfurter: Is that the line you're taking?
Is that the line you're taking?
Mr. Selim B. Lemle: Yes, sir.
That's the line those three lower courts state.
Just those three cases cited in the brief.
So that I have to argue the point of the validity of this clause so far as towage is concerned because if there was a distinction, I want out, if I may use that expression, both as to barge and as to the cargo.
Now, turning for one minute to the interstate --
Justice Felix Frankfurter: Before you -- before you turn, may I ask whether on the record on the basis of what -- what is before the District Court and what is before the Court of Appeals, is it open to us on the basis -- is it open to us to sustain the judgment below or rather to -- to direct that at least the Harter Act applies to the molasses?
I'm not now saying --
Mr. Selim B. Lemle: Well --
Justice Felix Frankfurter: -- you're right or wrong but I mean, does the record permits an adjudication of that issue on the (Inaudible) of the Harter Act?
Mr. Selim B. Lemle: Mr. Justice Frankfurter, that case has two ways.
Yes, the record does permit it.
Yes, it is permissible because (Inaudible) case, trial de novo and I --
Justice Felix Frankfurter: (Voice Overlap) --
Mr. Selim B. Lemle: -- except for questions --
Justice Felix Frankfurter: No longer, no longer.
Mr. Selim B. Lemle: -- except the questions of fact in -- in McAllister, you held that there are questions of facts before close, but McAllister goes no further than question of fact.
I respectfully submitted that that was all that McAllister go.
Justice Felix Frankfurter: All I'm saying is that -- is the -- was the issue opened by the pleading --q
Mr. Selim B. Lemle: Yes.
Justice Felix Frankfurter: -- (Voice Overlap) they were in the District Court and were they before the Court of Appeals?
Mr. Selim B. Lemle: Yes, sir.
The issue is -- the issue is open in both courts.
Justice Felix Frankfurter: (Inaudible) passed on it, doesn't considered it.
Mr. Selim B. Lemle: The District Court did not consider the question at all of whether it was affreightment or whether it was a towage.
Justice Felix Frankfurter: But it was before it.
Mr. Selim B. Lemle: The -- it was before it and it is raised squarely in the District Court and by brief in the Court of Appeals.
And Mr. Justice Tuttle who -- Judge Tuttle who decided the case in the Fifth Circuit says it doesn't make any difference.
Justice Felix Frankfurter: I understand that.
But what I want to know is whether we are not barred by the fact that he said it makes no difference if one concludes that it may make a difference and that questions may have to be answered under the Harter Act.
Mr. Selim B. Lemle: Correct.
Justice Felix Frankfurter: All right.
Mr. Selim B. Lemle: It's open.
Now, if Your Honor please, come permit the Interstate Commerce Act.
I thought I was very familiar with the Act, maybe I'm not.
I know of nothing in the Interstate Commerce Act that has any reference to tonnage.
There's no question of tow in Part III, there's no question of tonnages at all under Part III of the Interstate Commerce Act that I know.
A certificated common carrier, certificated under the Interstate Commerce Act, can use vessels of any tonnage that he chooses from the largest to the smallest.
What it said the other day, that the Interstate Commerce Commission has the power over rates, no power over practices.
I submit that specifically given to Interstate Commerce Commission by Section (f) -- subsection (f) of Section 307 of Part III, were it said, “In the exercise of its power to prescribe just and reasonable rates, fares and charges of common carriers by water and classifications, regulations and practices relating thereto, the Commission shall give due consideration among other factors to the effect of the rates upon the movement of traffic by the carrier or carriers for which the rates are prescribed to the need in the public interest of adequate and efficient water transportation service at the lowest cost consistent with the furnishing of said service and the need of revenues sufficient to enable water carriers, under honest, economical and efficient management to provide its service.”
That is not cited in my brief but that little point is coming up.
Now, turning point in the Bisso case.
The Bisso case was a case of an unregulated tower whether or not he was moving the said cargo and had a right to be an unregulated tower.
I'm not going to argue before this Court, I'm not arguing the Bisso case.
I'll simply point out that the Bisso case does not in any way affect the control of this case in my conception of its interpretation.
In that case, Mr. Justice Black was all with the Court, visualized the possibility of monopolistic practice if a tower were allowed -- all the towers were allowed to hold a shotgun to a shipper's head and say, “We won't go of you unless you release my liability.”
Of course, that goes out, the monopolistic feature goes out automatically by this and the control of the Interstate Commerce Commission.
Mr. Justice Douglas wrote a concurring opinion in which he simply said that it didn't -- and Mr. Justice Frankfurter to say opinions of the same thing in a little different language that we simply don't know enough about the economics of the towboat business to formulate a different rule, an old rule in Syracuse for which I say that's correct.
But here, the -- the Fifth Circuit proposed us to do is to refer this matter to the Interstate Commerce Commission to conduct a hearing and to determine what the economics of this situation require.
Now, if Your Honor please, if Your Honor please, I submit that it is inherent in this situation that no carrier, I reiterate, no carrier can transport whether the transportation consists of towage or whether it consists of a freight, no court can -- no carrier can tow or affreight as cheaply, offer as cheap a rate if he's going to take the liability of the loss and damage as it canopies he's going to not take -- if he's not going to not take that risk.
If here we have a rate prescribed in a tariff published with the Interstate Commerce Commission in which the shipper takes the risk of loss and injury, there's nothing in that rate, the marine insurance, if you require the carrier to take that risk, then this rate becomes confiscatory because erroneous close up to a point where you can't afford to do it.
This Court recognized that situation in a case which, unfortunately, I did not put in my brief because I didn't foresee the turn that this argument was going to take, but in the case of the Consumers Import Company against Kaisha, something relevant, to me unpronounceable Japanese name, in the 320 U.S. 249, page 249.
In that case, there was under attack the Fire Statute of the United States which will leave a shipowner of liability for damage which occurred to cargo by reason of fire and that's the default and privilege of the owner.
In that case, Mr. Justice Jackson, speaking for the Court, said there was the obvious intent of Congress, and that far -- that's -- by the way, was 100 years old roughly, said there was an intent of Congress to divorce the insurance risk with transportation rate.
That if they did not -- the Congress had that intention to -- in order to secure for the public the cheapest transportation rate which was possible that it was obvious that if you loaded the cost of the marine insurance in the transportation rate, the transportation rate would thereby be higher and you would be penalizing the -- those who use capital carriers as against those who use carriers.
And that it was entirely permissible and proper to divorce the two rates.
I say that is the situation here that this is a matter for a study by the Interstate Commerce Commission.
There is no reason in public policy or otherwise why the Interstate Commerce Commission should not determine the rates and the practices and prescribed rates commensurate with the practices and commence -- and prescribe rates which will afford a reasonable profit to a carrier.
Justice John M. Harlan: What do you conceive would be the issue with this case going back to the I.C.C?
Mr. Selim B. Lemle: The issue of the I.C.C is the reasonableness of this rate taking into consideration the fact that the risk of loss and damage is on the shipper.
Justice John M. Harlan: The reexamination of the original tariff in effect?
Mr. Selim B. Lemle: Yes, sir.
This -- this particular rate -- this -- under the -- and the rate making before the Interstate Commerce Commission, Mr. Justice Harlan, the -- you've filed a tariff.
The Commission can either let the tariff go into effect for accounts of its motion examine into the reasonableness of rates and practices.
Justice Felix Frankfurter: They don't -- they don't have to prove a rate.
Mr. Selim B. Lemle: No, sir.
Justice Felix Frankfurter: A rate -- rate is determined valid if nobody objects to it or if the State don't object to it in an open proceeding.
Mr. Selim B. Lemle: Correct.
A shipper may at any time even at the rate initially goes into effect, a shipper may complain of a rating, may complain of a practice and he may have it suspended pending termination of its correctness.
But here is a rate that was in effect for years, nobody ever complained, the carrier had moved hundreds, I'm counting, to say thousands of barges under the tariff that -- which its rate was published, no one complains about it until this shipper undertakes the complaint because his -- because he let his barge stand at the wall for more than 24 hours after it was delivered knowing that the barge was leaking and the tugboat had left, he let the barge sit there until it sank.
Chief Justice Earl Warren: When was this rate filed, Mr. Lemle?
Mr. Selim B. Lemle: I'm sorry, I can't answer that question, but years before.
Chief Justice Earl Warren: Many years?
Mr. Selim B. Lemle: Well, I'm guessing 10 to 15 years at least.
Chief Justice Earl Warren: It was before Bisso?
Mr. Selim B. Lemle: Yes.
I'll answer -- yes.
This case took place -- this -- this happened in 19 -- this actually happened in 1944.
Chief Justice Earl Warren: Yes, but I understood from counsel, I may have misunderstood him, but I understood from counsel that this rate was filed after the Bisso case in order to get around it.
Mr. Selim B. Lemle: I'm unable to definitely take issue with that.
It is my impression that this rate for many years and it dated for many years the Bisso decision.
I cannot make that as a firm statement of fact because I just don't know when it was put into effect.
I do not have a definite one.
Justice Felix Frankfurter: We have no copy of this agreement, Mr. Lemle.
Mr. Selim B. Lemle: I beg your pardon?
Justice Felix Frankfurter: We have not a copy of the tariff in any of the records here.
Mr. Selim B. Lemle: No.
The -- the pertinent provisions of tariff was stipulated.
Perhaps unforced leave was done in an attempt to keep down printing cost for records and the tariff has not been filed in the record.
I do not have a copy in front of me.
And as a matter of fact, I would -- perhaps the I.C.C. would have one but no one place could be gotten because the --
Justice Felix Frankfurter: They must have one.
Mr. Selim B. Lemle: They must have one on for --
Justice William J. Brennan: (Inaudible)
Mr. Selim B. Lemle: 1944.
Justice William J. Brennan: This tariff (Inaudible)
Mr. Selim B. Lemle: I would say that -- I would say that this tariff have been in the --
Justice William J. Brennan: (Inaudible) 10 years before.
Mr. Selim B. Lemle: I would estimate.
I would guess.
I don't -- I don't use the word guess advisedly that this tariff had been effective 10 years before this action happened.
Justice William J. Brennan: At least 10 years before Bisso.
Mr. Selim B. Lemle: Well, 20 years before Bisso.
Justice William J. Brennan: Oh, no, I mean (Voice Overlap) --
Mr. Selim B. Lemle: Yes, 20 years before Bisso.
Bisso was in 1954.
That -- that happened in 1944.
That's 10 years.
And my impression is that they have already been effective 10 years exactly that will be 20 years.
This isn't anything new.
This is as -- this is old.
This is old as the Hill.
These tariffs -- these tariffs were put into effect as soon as possible with Interstate Commerce Act was passed.
Justice Potter Stewart: Now, do you -- do you say that it's clear that -- that a shipper at any time under Part III of the Interstate Commerce Act, can go to the Commission and complain of the reasonableness of any rate or any -- any provision of a filed tariff?
The -- the least so far it says as the future is concerned?
Mr. Selim B. Lemle: Yes, yes.
And they can do more than that but then under the following section, under Section 307 (g) of the --
Justice Potter Stewart: (Voice Overlap) --
Mr. Selim B. Lemle: -- Interstate Commerce Act or Part III of the Interstate Commerce Act, if the Commission finds that any rate or any practice is illegal or unreasonable, the Court can prescribe a reasonable rate and practice and force it on the tariff.
Justice Potter Stewart: That's under Part III of the Act.
Mr. Selim B. Lemle: That's on Part III of the Act, that's under Section 307 (g).
Justice Felix Frankfurter: You can get reparations for the tariffs from (Inaudible)
Mr. Selim B. Lemle: Correct.
Justice Potter Stewart: From the Commission or from the District Court?
Justice Felix Frankfurter: From the Commission.
Mr. Selim B. Lemle: From the Commission?
Justice Potter Stewart: From the Commission directly.
Justice Charles E. Whittaker: Might I ask you, sir?
In the Bisso case (Inaudible) and what could be the purpose (Inaudible) the Commission determined whether or not a void contract (Inaudible)
Mr. Selim B. Lemle: Well, Mr. Justice Whittaker, I -- I answer that -- I question this why.
The Bisso case did not involve a certificated carrier.The basis of the Bisso case, as I interpret it, well, as Mr. Justice Black who decided the Bisso case said that if you permit a -- an unregulated tower to require a shipper to release you from liability of the condition precedent for towing his barge will give rise to monopolistic practices because they all do it.
The bill of -- the rationale of the Bisso case, as I understand it, was principally the possibility of this monopolistic practice.
You don't have it under the Interstate Commerce Act, unless the Interstate Commerce Commission can require a carrier to put in a series of rates.
And most of the carrier were having the series of rates able to put on A, B and C rates.
A, B rate is a legal liability rate, an A rate is a rate under which the water carrier waives the Harter Act, acts of God and everything else to get on -- and makes the liability the same or even stronger than the real carrier.
And a C rate -- and a C rate is a rate applicable only to a shipper's barge.
Now, those C rates stand in the special category.
The C rate was put in, if you pardon me, through necessity, regarding the matter for the ship -- for the Interstate Commerce Commission for putting those matters of necessity because under Part III of the Interstate Commerce Act, a shipper is permitted to furnish the barge.
Carriers don't want them, they got their own barges.
Chief Justice Earl Warren: We'll recess now, Mr. Lemle.
Argument of Selim B. Lemle
Mr. Selim B. Lemle: This thing I'm talking about, the sea rates in the Folsom background.
I said sea rate, a special rated commodity.
This is the rate put in where a shipper insists on using his own barges and is a particular kind of carriage, one in which the carriage would prefer not to engage.
They have to because the shipper permitted to furnish his barges and there's a reason for that, any real reason.
The carriers maintain many of them, fleets and barges, 400 to 600 barges and those barges are sitting there empty and available for use, they're not tank barges in this case because the general rule with shippers -- carriers in a -- furnish special purpose barges.
And a shipper gives you a barge.
It gives you a barge under load.
You have to take it.
Literally, you're getting a periodic boat, many of these barges, are really many of them are literally fugitive from a junk pile.
Barges which some of them have been bought from carriers.
Carriers retiring from service many years before and you get a barge, you get it on to load, you can't see it.
The standard barge is 11 feet deep.
You got to put in there, a free board with 9.5 feet of the barge under water, you can't look at it.
You don't know whether it's loaded, rusted, scaly, leaking, rusted, scaly or what it is.
You can't go under the cargo compartments because they're for cargo.
You can't go to direct compartments because they're not gas free.
And you have to take that barge and you have to tour it.So the carrier does the best thing he can.
He said two things.
He says, one, “Yes, I'll take your barge, but it's your risk because I don't know what it is and I can't see what it is when you give it to me under load.”
And number two, “You'll warrant me to me that this barge which you overloaded is properly loaded and is fit and proper for the transportation that we're about to undertake.”
He puts both loads of barges down.
That second clause is quite material, the warranty of seaworthiness and proper load, I submit that it is not at all forbidden by Section 1 of the Harter Act or Section -- or Section 2 of one of the Harter Act says that a carrier owns the vessel (Inaudible) to make it seaworthiness carried over into Section 3.
The carrier is in this instance is not the owner of the barge, the shipper is the owner of the barge.
Justice Potter Stewart: Mr. Lemle, this is the -- we call it the sea rate A, B and C, and this is the sea rate.
Mr. Selim B. Lemle: Yes.
The sea rate, as I say, is a special low rate.
Justice Potter Stewart: Now, cover -- covering barges owned by the shipper.
Mr. Selim B. Lemle: Only.
Justice Potter Stewart: Only.
Mr. Selim B. Lemle: In barges only.
Justice Potter Stewart: Now is there an -- an alternative rate available for the towage of a -- of a barge owned by the shipper -- a higher rate not containing these clauses?
Is there any such rate as that?
Mr. Selim B. Lemle: Not in this case.
In all of the cases of ordinary commodities which are carried in standard barges, the answer is yes.
This was a tank barge and the carriers do not supply tank barges.So in this -- North Railroad, supply of tank car, supplied by the tank corporation.
In this case, there was no alternative rate because the carrier did not afford any of the service in transportation in the shipper's barge in this particular case, where it might be, again, use assembly that this case is a very short tail of a long dog and should not be permitted to wag the dog.
We're talking here about one of the biggest transportation features in this country which would go in by leaps and bounds.
There's the Mississippi Valley Barge Line Company in 19 -- which I happen to know, 18 billion tons of revenue traffic in one year, revenues of more than $20 million.
That's only one of the four big river carriers.
So, that this is the principle which will come out of this case goes far beyond what is involved in this case, far beyond the case.
Justice Potter Stewart: One other question, Mr. Lemle, if I may.
If the -- if the shipper should go to the Interstate Commerce Commission under, whatever it is, Section 308, I've been told, and asked for reparations, of course the reparations wouldn't at all be measurable by the -- by the loss that he suffered of his molasses and of his barge, wouldn't he?
Mr. Selim B. Lemle: That's true.
Justice Potter Stewart: How would that be measured?
What -- what would the reparations be if -- if -- if this clause --
Mr. Selim B. Lemle: If --
Justice Potter Stewart: -- if assuming ICC decided this clause was -- was unreasonable.
Mr. Selim B. Lemle: If the ICC --
Justice Potter Stewart: Unreasonable part of term.
Mr. Selim B. Lemle: If the ICC -- well, if Your Honor please, I -- I'm frank to say I had not gone that far in my -- even in my old mind.
I'm going real quickly and I'm making -- making a bad guess, and I'll come to this just in a minute.
I would say that if the ICC said that this rate was unreasonable and that we had required the shipper to do something that he couldn't be required to do, he could then start an action of the law where you can't --
Justice Felix Frankfurter: This -- this suit is still pending, as I read this final (Inaudible)
Mr. Selim B. Lemle: Your Honor, it's correct.
I stand corrected.
Justice Potter Stewart: So the ICC would just -- would just expunge that provision and they can --
Mr. Selim B. Lemle: I think it expunged (Voice Overlap) --
Justice Potter Stewart: -- they -- and the lawsuit would proceed to the District Court.
Mr. Selim B. Lemle: (Inaudible)
That's absolutely correct.
Justice Felix Frankfurter: Reparations merely go -- rep --
Mr. Selim B. Lemle: That is --
Justice Felix Frankfurter: -- reparations as to rate.
Justice Potter Stewart: That's correct.
That's absolutely correct, if Your Honor please.
And -- while I'm -- Mr. Justice Stewart, while I'm talking to you, I made a bad guess a while ago.
You asked me how many years it's been in effect and I guess it's been in effect for 10 years before this action -- the fourth year, the Interstate Commerce Act didn't come effect until 1940.
But this does necessarily must have been filed sometime between 1940 and 1944 but it was still in effect 15 years before this.
Now, as I -- as I -- this -- that brings you back to the question as we go to the ICC, I assume that the ICC will have to conduct a cost study.
They conducted a cost study in the El Dorado Oil Company cases, quite a lengthy one, and -- as Mr. -- I think Mr. Justice Harlan was the author of the Court, in the -- in United States against the Western Pacific Railroad Companies said, "There, the tariff was not an obstruction and that the Interstate Commerce Commission would have to look at the rates and would have to determine the rate."
Any rate that they would determine, I'd say would have to include the insurance if they decided to make the carrier insure, otherwise, it would be confiscatory.
If Your Honor please, my time has elapsed.
I've only touched on one point.
Point one, I've never touched on the merits of this case.
Justice Hugo L. Black: Suppose they held the rates unreasonable, what effects would that have on this case, in this lawsuit?
Mr. Selim B. Lemle: If they hold the rates unreasonable, it will go back to the Court of Appeals, pass on other features of this case.
The Court of Appeals passed on one point in this case, passed on one assignment area out of four.
The three assignments the Railroad passed pending before the Court of Appeals, the Court of Appeals never touched.
Justice Hugo L. Black: Well, would it -- would the finding of unreasonable rates settle the question of liability?
Mr. Selim B. Lemle: No.
Justice Hugo L. Black: It would have nothing to do with it.
Mr. Selim B. Lemle: Correct.
Because I envision this case, had nothing to do with it.
Chief Justice Earl Warren: Thank you.