All relevant evidence bearing on the issues for the Interstate Commerce Commission should be submitted to it in the first instance and should not be received by a district court as though it were conducting a trial de novo.
In order to eliminate territorial rate differences not justified by territorial conditions, the Interstate Commerce Commission increased class freight rates in the northeast by 10 percent and reduced those elsewhere east of the Rocky Mountains by 10% pursuant to § 15(1) of the Interstate Commerce Act, 49 U.S.C.S. § 15(1). Northern and New England States and western railroads filed a case, contending that the rates were improperly increased class freight rates in the northeast and reduced those elsewhere east of the Rocky Mountains in violation of § 1 of the Act unless they were either non-compensatory or otherwise threatened harmful effects upon the revenues and transportation efficiency of the carriers in question, or of their competitors. The district court sustained the order. The case was appealed to the Supreme Court of the United States.
Did the actions of the ICC violate the Interstate Commerce Act?
The Court concluded that a 10 percent reduction of rates in the southern and western portions would remove only part of the discrimination. Thus, it was necessary for the ICC to increase rates in the northeast to a reasonable minimum in order to eliminate the unlawful discrimination. The Court concluded that if the ICC could not increase the rates in the northeast unless the current rates were shown to be non-compensatory or unless ruinous competition would result, then the ICC would in some cases be powerless to prescribe a remedy for unlawful practices.