B. & O. R. Co. v. Aberdeen & Rockfish R. Co., 393 U.S. 87 (1968)

Baltimore & Ohio Railroad Co. v.

Aberdeen & Rockfish Railroad Co.
No. 13

Argued October 17, 1968
Decided November 12, 1968. *
393 U.S. 87

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF LOUISIANA

Syllabus

The Interstate Commerce Commission (ICC), pursuant to § 15(6) of the Interstate Commerce Act, ordered new divisions for North-South joint rail rates, finding that the Northern lines’ costs warranted an increased share of the revenues. The North-South traffic, the costs for which were not isolated in the ICC’s findings, represents 6% of the total North traffic and 21.4% of the total South traffic. The average costs used by the ICC relate to all Northern and all Southern traffic, although 80% of all Northern traffic is intra-territorial. The District Court ruled that territorial average costs did not meet the statutory requirements for precise and relevant findings absent evidence relating the territorial average to North-South traffic, and held that the ICC’s order was not supported by substantial evidence and reasoned findings, and remanded for further proceedings.

Held:

1. While mathematical precision and exactitude are not required, the nature and volume of the traffic must be known and exposed if costs are to govern rate divisions. Pp. 91-92.

2. If average territorial costs are shown to be a distortion when applied to particular North-South traffic, reliance on administrative "expertise" is not sufficient, but it must be shown that there is, in fact, no basic material difference, or there must be an adjustment which fairly reflects the difference in costs. Pp. 92-93.

3. On remand, the ICC must make specific findings to adjust average territorial costs with respect to commuter deficits, interchange of cars in North-South traffic at territorial border points, and empty freight car return ratios. Pp. 93-95.

270 F.Supp. 695, affirmed as modified.