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5. The establishment of the increases in intrastate rates and charges sought in this proceeding will remove the unlawfulness of present intrastate rates and will not result in unreasonable rates and charges or in rates and charges that are unreasonable in relation to interstate rates or charges. The increases will substantially increase respondents' revenues.

6. The unlawfulness found to exist should be removed by applying the same respective increases to Montana intrastate rates and charges as are maintained by respondents on like interstate traffic between points in Montana and points in adjoining States, as authorized by Ex Parte Nos. 310 and 313.

7. This decision is not a major Federal action significantly affecting the quality of the human environment within the meaning of the National Environmental Policy Act of 1969.

These findings are without prejudice to the right of the authorities of Montana, or any other interested party, including any of the respondents, to apply for modification of these findings as to any individual rate or charge on the ground that the rate or charge is not related to the interstate rates or charges on like traffic in a way which violates the provisions of the Interstate Commerce Act.

It is ordered: 1. Respondents are notified to cease and desist from practicing unjust discrimination against, and undue burden on, interstate commerce by 60 days from the service date of this order. Respondents shall give notice of their actions to this Commission and the general public in the manner required by section 6 of the Interstate Commerce Act.

2. Respondents shall establish and maintain rates and charges for intrastate transportation from and to points in the State of Montana within 60 days from the service date of this order. The rates established shall not exceed the rates and charges found reasonable in this report. Respondents shall give notice of their actions to this Commission and to the general public in the manner required by section 6 of the Interstate Commerce Act.

3. If the Montana Public Service Commission notifies the Interstate Commerce Commission, within 30 days of the date of service of this decision, that it will promptly permit the increase allowed by this order, this order will be void.

355 I.C.C.

No. 31888

WASHINGTON POTATO & ONION SHIPPERS ASSN., INC. v. UNION PACIFIC RAILROAD COMPANY, ET AL.

Decided October 4, 1977

Assailed rates on potatoes, other than sweet, in carloads, from eastern and western Washington origins found not shown to be in violation of the Commission's order in Washington Potato & Onion Shippers Assn., Inc., v. U.P.R. Co., 300 I.C.C. 537 (1957). Proceeding discontinued.

Fred H. Tolan for complainant.

William F. Cottrell, Peter W. Hohenhaus, and Peter M. Lee for defendants.

REPORT AND ORDER OF THE COMMISSION

DIVISION 2, Commissioners MURPHY, MACFARLAND, AND CLAPP

BY THE DIVISION:

By complaint filed June 25, 1976, Washington Potato & Onion Shippers Association, Inc. (complainant), alleges that rates' on carloads of potatoes, other than sweet, are in violation of the Commission's order in Washington Potato & Onion Shippers Assn., Inc., v. U.P.R. Co., 300 I.C.C. 537 (1957) (hereinafter cited as Washington Potato or docket No. 31888). Reparations of an unspecified amount were sought. Burlington Northern, Inc. (Burlington), replied to the petition on July 15, 1976. On the same day, the Chicago, Milwaukee, St. Paul, and Pacific Railroad Company (CMSPP) and the Union Pacific Railroad Company (UP) jointly filed a motion to dismiss the complaint.

On May 11, 1977, the Commission dismissed the complaint insofar as reparations were sought on the grounds that rule 29 of the Commission's General Rules of Practice (49 CFR 1100.29) had not been complied with, but ordered defendant carriers to show cause why they should not be ordered to publish and contemporaneously maintain rates which do not exceed the differentials prescribed in Washington Potato. Burlington, CMSPP, and UP, which originate 'Rates are stated in cents per 100 pounds, unless otherwise indicated.

the majority of tonnage from this locality, responded to that order on June 27, 1977, to which complainant filed a rebuttal statement. The complainant rests principally upon the allegation that the defendants have violated the Commission's order in Washington Potato & Onion Shippers Assn., Inc. v. U.P.R. Co., supra, wherein the Commission rendered a finding that rates on potatoes for 36,000- and 40,000-pound minima were unduly preferential of the competitors in southern Idaho and eastern Oregon (Nampa-Ontario District) to the extent that rates were higher by more than 7 cents from eastern Washington and 11 cents from western Washington than the rates contemporaneously applicable from the NampaOntario District to the same destinations.

Because of ex parte general increases in rates, the differentials between the Nampa-Ontario District and eastern and western Washington have widened, in some situations, substantially. An exhibit submitted by the railroads shows current rates on 36,000and 40,000-pound minima from western Idaho, eastern and western Washington to eastern and midwestern United States destinations from Ex Parte No. 196 through Ex Parte No. 336 levels. At the Ex Parte No. 196 level, rates from eastern and western Washington origins are 7 and 11 cents higher, respectively, than rates from Nampa-Ontario District. The exhibit shows that this relationship was maintained through Ex Parte No. 256. Ex Parte No. 259 authorized a percentage increase with no limitation as to maximum. increase. This is the first general increase on the involved rates where the prescribed rate differentials broaden. At the Ex Parte No. 336 level, for example, the rate from eastern Washington to New York exceeds the rate from Nampa-Ontario District by 16 cents. The rate from western Washington exceeds the rate from NampaOntario District by 22 cents.

The railroads argue that the increased spread in prescribed differentials does not violate the original Commission order where that increased spread is, as here, the result of application of authorized increases. Anderson-Prichard Oil Corp. v. Alton & S. R., 315 I.C.C. 59 (1961) is cited in support. Moreover, the railroads argue that orders authorizing a general increase in freight rates and charges have modified all previous outstanding orders to the extent necessary for the general increases to become effective. They conclude, therefore, that rate differentials may permissively be widened through the application of general rate increases authorized by the Commission.

In rebuttal, complainant argues that defendant railroads have not complied with the original order of this Commission. It states that

the original order in docket No. 31888 had a complete review in Fresh Fruits & Vegetables, Transcon. & W. Points, 350 I.C.C. 228 (1974), affirmed 403 F. Supp. 1327 (E.D. Pa. 1975), 426 U.S. 943 (1976), and that proposed rates on fresh potatoes were found not to be in compliance with the rate relationship prescribed in the original order. The complainant states that the rate relationships have changed substantially and represent from 64- to 127-percent increases over the ordered differentials.

Complainant also stresses that potatoes do not move at the 36,000- and 40,000-pound minimum weights and that the rates in the exhibit offered by defendant railroads in their response to the show-cause order are mere "paper" rates. The current rates being used for potato shipments are based on 70,000- and 80,000-pound minimum weights. The following table shows differentials based on rates charged by Burlington and UP requiring 80,000- or 85,000pound minimum weights.

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Complainant stresses that rate relationships complying with the original Commission order are necessary in order for Washington potatoes to remain competitive with Nampa-Ontario potatoes.

DISCUSSION AND CONCLUSIONS

The principal allegation of complainant is that the defendant railroads are not in compliance with the original order in docket No. 31888 which prescribed certain rate relationships for potatoes originating in the Nampa-Ontario District and eastern and western Washington. Through the application of ex parte increases, the spread in rates between Nampa-Ontario origins and eastern and western Washington origins exceeds those prescribed in the original order served in 1957.

The sole issue for our determination is whether present or future rates on potatoes, other than sweet, in carloads, from eastern and western Washington which exceed rates from the Nampa-Ontario District by more than the differentials prescribed in Washington Potato are unlawful.

Complainant stresses that the order in docket No. 31888 had a complete review in Fresh Fruits & Vegetables, Transcontinental & Western Points, supra, and prevailing and proposed rates on potatoes at the time were found to violate the rate relationships prescribed in docket No. 31888. However, we believe complainant has misconstrued the decision in I.&S. docket No. 8944.

Briefly summarized, the railroads in that proceeding filed a series of tariffs and rate schedules in May 1974, which were to replace existing tariffs covering the transportation of perishable food products, including fresh potatoes. Protests were lodged by shippers

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