DISCUSSION AND CONCLUSIONS

Although the parties advance arguments on broader issues, this proceeding is limited to the lawfulness of proposed rules for bus express service which prohibit the acceptance for shipment of jewelry, magazines, and watches, and prohibit the acceptance of any other shipment exceeding $500 in actual value. As proponents, respondents have the burden of proving the rules to be just and reasonable. They have failed to meet that burden.

Respondents' arguments rest completely on the contention that the prohibitory rules merely describe the class of traffic which motor carriers of passengers have historically held themselves out to transport in bus service. Opposing parties contend that the rules at issue constitute an unauthorized limitation of liability. For the purpose of this discussion we will accept respondents' statement that they are intended only as a description of the express property which buslines held themselves out to transport.

There is no record support for respondents' position that high value traffic historically has not been accepted for transportation in bus service. Although NBTA has for many years served as tariff publishing agent for the bus industry, respondents do not even aver, much less show, that they have ever before prohibited the acceptance of shipments because of their actual value. To the contrary, their evidence shows that rules 5 and 15 which have been in effect since 1967 actually permit acceptance of the very class of traffic that respondents now seek to prohibit. Consequently, the fact that tariff provisions have for many years placed limitations on the declared or released values of shipments raises no presumption that the proposed rules are just and reasonable. We need not here decide whether such longstanding unapproved tariff provisions raises any presumption with respect to the reasonableness of the present rules.

We recognize that the operation of express bus service, although incidental to the transportation of passengers, has become an increasingly important factor in maintaining the viability of such

"Although the initial express tariff of one of respondents did prohibit the shipment of "money, jewelry, private papers, and articles of extraordinary value when value is in excess of $200," such prohibition apparently was soon discontinued by that carrier. In any event no similar prohibition appears in any other individual or agency tariff submitted by respondents as evidence of the historical nature of the claimed holding out as to the scope of bus express service.

"Although the present rules limit traffic according to certain declared or released values, they do not place any limit upon the actual value of shipments that may be accepted for transportation.

passenger service, and is therefore, in the public interest. However, we see little merit in respondents' contention that disapproval of the proposed rules would so change the character of bus express service that it could no longer be profitably operated as an incidental service. That argument proceeds from self-serving declarations that such a value limitation is necessary to minimize the risk to respondents and their passengers. The weakness of that position lies in the fact that it completely disregards the existence of and reason for the released excess value rates provided by rule 4. Such rates contemplate the shipment of high value freight; their very purpose is to protect the carriers against the sort of financial risk that suddenly now gives them so much concern. Furthermore, despite the recognized fact that express traffic normally consists of relatively high value property (see Coordination of Motor Transportation, 182 I.C.C. 263), respondents have handled such traffic for many years with no apparent harm to either themselves or their passengers. In short, the record is devoid of evidence which would show that the proposed rules are in response to or serve, any real financial or safety need."

Even if respondents had been able to show some need for the rule to limit acceptability to property under $500 in value, they fail to establish that such a rule could be uniformly applied and enforced. Although the value limitation of rule 5 is fixed and definite insofar as the dollar amount is concerned, it is vague and indefinite as to the articles that would be accepted or prohibited. No provision is made as to how value is to be determined. Conceivably, it could be based on manufacturers cost, wholesale price, retail price, invoice price, or even upon agreed value. Such uncertainty could create à breeding ground for abuse. Moreover, the rule makes no allowance for changes in value of the various commodities that are susceptible of transportation in express service. Thus, it is highly likely that

9

"It is interesting to note that in its application of December 16, 1947 for authority to publish excess value rates which, except for amount, are identical to those set forth in rule 4 of the tariff supplement at issue, the chairman of NBTA stated that there is "a demand from the general public to carry express packages of a considerable value," that "bus lines generally publish charges for excess value," and that such charges permit the carriers "to perform a service at a reasonable charge that is demanded by the general public without incurring a possible extraordinary liability."

"We do not mean to imply that "value" does not affect an article's susceptibility to theft. However, common sense compels a recognition that value factors in the mind of a thief are often so distorted and diverse that they bear little, if any relationship to actual (or released) value. "For example, computers that may have been valued in the hundreds of dollars a few years ago, can be purchased for a small fraction of that amount today. Conversely, other commodities that may be valued at less than $500 today, may in a few more years be valued at much more than that

amount.

shipments which at one time were within the $500 value limitation would continue to find their way into bus express service after their value increased beyond that amount. In such a situation there would be an unauthorized limitation of liability even under respondents' interpretation of the proposed rules as being but a description of the property the carriers hold themselves out to transport. We also question the practicality of describing a class of acceptable traffic solely in terms of fixed dollar value, particularly in light of today's climate of rapid inflationary and technological change. This is hardly the way to increase the volume of express traffic whose revenues respondents claim to so desperately need.

Neither are such rules a satisfactory response to the show cause order issued in docket No. 36490, supra. As stated, that order is aimed at the carrier practice of limiting liability by means of unauthorized rules which condition the acceptability of shipments to those of certain declared or released valuation. It stands to reason that if the acceptance of property is lawfully refused there can be no transportation and hence no limitation of liability. However, while a common carrier need not undertake to carry every species of property, it cannot pick and choose its traffic at will. Refusal is appropriate only where there has been a holding out not to transport such property and such holding out is based upon an operating restriction or a specifically authorized exception to the common carrier duty to accept all property susceptible of transportation in the equipment ordinarily used (see Transportation Activities of Arrowhead Freight Lines, 63 M.C.C. 573). Here respondents have not shown that they have previously held themselves out to refuse goods in excess of $500 actual value, and they do not now contend that the sought rule is based upon an operating restriction or a specifically authorized exception. Obviously the proposed rules are as lacking in authority as the present ones. Respondents may not avoid their obligation to justify one unauthorized practice by replacing it with another unauthorized practice.

Finally, the proposed rules find no support in legal precedent. Not one of the cases cited by respondents supports the proposition that property which respondents transport in express service as incidental to their primary authority to transport passengers may be defined solely in terms of value. To the contrary, such cases define the incidental nature of bus express service in terms of quantity, size, volume or weight, but never in terms of value except insofar as it might relate to particular commodities. The case closest in point, the Emporium case, supra, relates to carrier's refusal to accept

specific commodities (silverware and goldware) recognized to be of extraordinary value, a situation wholly unlike the proposed refusal to accept any and all shipments because they exceed a certain value. It would serve no useful purpose at this point to discuss the details of other less relevant cases.

Accordingly, we find that the proposed rules are unjust and unreasonable.

Commissioner MacFarland did not participate.

IT IS ORDERED:

The respondents shall cancel the schedules described in the order entered in this proceeding on February 11, 1977, on or before 35 days from the date of service of this report and order upon not less than 1 day's notice to this Commission and the general public by filing and posting in the manner prescribed by the Commission under section 217 of the Interstate Commerce Act.

This proceeding is discontinued.

355 I.C.C.

No. 36448

HALLIBURTON COMPANY v. THE ALASKA RAILROAD

Decided October 20, 1977

Charges assessed by defendant based on erroneous description of the commodities transported found inapplicable. Corrected rates and charges ordered. Proceeding discontinued.

Allan Parker for complainant.

J. Glen Cossity and T. E. Williams for defendants.

REPORT AND ORDER OF THE COMMISSION

DIVISION 2, Commissioners MURPHY, MacFarland, and Clapp

BY THE DIVISION:

Appeals to the initial decision of the Administrative Law Judge were filed by both complainant and defendant. Included in complainant's pleadings was a reply statement. Our conclusions differ somewhat from those recommended. Requested findings not specifically discussed in this report or reflected in our conclusions or findings have been considered and found not justified.

By complaint filed September 2, 1976, the complainant, Halliburton Services (Halliburton), alleges that the defendant, The Alaska Railroad, assessed a charge of $52,697.70 on complainant's shipments, described as "mud," from Anchorage to Fairbanks, Alaska, which is in violation of sections 1(4) and 1(5) of the Interstate Commerce Act in that the total assessed charges are unjust and unreasonably high for the transportation service performed. The complaint also alleges violation of the Alaska Railroad Act requiring that rates be equal and uniform.' The complaint was handled under the modified procedure.

'This act, which is codified at 43 U.S.C. 975, empowers the President of the United States to locate, construct, and operate Alaskan railroads. Persuant to this statute, section 3 of Executive Order 11107, dated April 26, 1963 (reprinted in 43 U.S.C. 975(f)) ordered the Interstate Commerce Commission to treat The Alaska Railroad in the same way as any other railroad subject to Commission jurisdiction when rates are challenged.