Scott and IP have submitted evidence which shows there is a widespread practice of absorption of switching charges for other papermills in the South. The pulpwood and woodchips traffic receiving the benefit of this absorption generally moves under a uniform mileage scale of rates. The study indicates that there are few instances of extra charges for delivery at plants off the rails of the line-haul carrier, and that those charges are generally negotiated to avoid extra line-haul charges.

In addition to showing the existence of a widespread practice of absorption at plants off the rails of the line-haul carrier, Scott and IP have shown that the only charges in switching zones 2 and 3 which are not fully absorbed by the line-haul carriers are those charges on pulpwood and woodchips for Scott and IP. Defendants absorb charges for all of Scott and IP's other inbound and outbound traffic. The defendants claim that competitive conditions require full absorption of the charges in zones 2 and 3 because certain railroads have direct service to industries in those zones. This does not explain the disparate treatment for Scott and IP, which are located in zone 2.

Therefore, in light of the widespread absorption practices for papermills in the South and the practice of absorbing charges on all other traffic in zones 2 and 3, we find the defendant's refusal to absorb the full amount of TRASD's switching charges for Scott and IP is an unreasonable practice.

We will now consider allegations that defendants' refusal to absorb the switching charges violate section 2. Courts have suggested that it is possible to find a violation of section 1(6) independent of a violation of section 2. Scott Paper Company v. United States, 372 F. Supp. 721 (E. D. Pa. 1974), affirmed 419 U.S. 807 (1974). We need not address this point, however, because we also find that defendants' refusal to absorb is a violation of section 2.

Section 2 issue.-Section 2 prohibits discrimination among shippers where the carrier performs like and contemporaneous service on like kinds of traffic under substantially similar circumstances and conditions. Several complainants argue that discrimination exists against industries in zone 1 of Mobile's switching district because the carriers refuse to absorb charges. which they fully absorb in zones 2 and 3. However, beyond this mere assertion no evidence of discrimination has been offered for shippers in zone 1. Several complainants have attacked as inaccurate the review board's finding on section 2 because the

board stated that there must be evidence of differing treatment of shippers of the same commodities. These complainants argue that the applicable law looks only to similar commodities. Even assuming they are correct, there has been no showing here that there is any difference in absorption practices among shippers of similar commodities. Conditions may justify differing treatment for shippers in the same switching district. See United States Department of Defense v. Southern Ry. Co., 309 I.C.C. 699, 700-1, (1960). Defendants here note that the presence of direct service by other railroads in zones 2 and 3 accounts for the differences in absorption practices between zone 1 and zones 2 and 3.

In the absence of any showing of dissimilar treatment of zone 1 shippers of similar commodities under substantially the same circumstances and conditions, we affirm the review board's finding of no section 2 violation.

We believe, however, that a different result must be reached for pulpwood and woodchips moving to zone 2. As previously discussed, the record demonstrates that the prevailing line-haul rates reflect a uniform mileage scale for traffic moving throughout the territory. Additionally, absorption is the prevailing practice of the line-haul carriers participating in this traffic. In the absence of any indication that the traffic of Scott or IP is dissimilar to that of its competitors within the territory, we conclude that defendant's failure to extend comparable absorption practices unlawfully discriminates against Scott and IP.

Section 3(1) issue.-The review board correctly stated that the record indicates no violation of section 3(1) of the act. While complainants DOD, Scott and IP except to the board's finding, they do so primarily on the ground that the board inaccurately stated that only a locality could establish section 3(1) violation with respect to a locality.

However, the review board based its finding on the absence of any showing of competitive injury. It is axiomatic that a mere claim of preference and prejudice is not sufficient to sustain the complainants' burden of proof. There is no evidence on this record that shipments are made or prevented because of a difference in absorption treatment. Therefore, we affirm the review board's finding that there is no showing of a section 3(1) violation.

Conclusion.-After examining the record in light of the complaints exception and the defendants' reply, we find that complainants in docket No. 36433, Scott Paper Company and International Paper Company, have shown that the failure of

defendants to absorb fully the switching charges of TRASD on shipments to and from the Scott and IP plants in zone 2 violates sections 1(6) and 2 of the act.

In all other respects, we find that the review board correctly decided that complainants in docket No. 36413 and docket No. 36479 have not shown that the failure of the defendant railroads to absorb the full amount of the switching charges of Terminal Railway Alabama State Docks is unjust, unreasonable, or otherwise unlawful, and that the requested relief should be denied.

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

It is ordered:

1. Defendants Illinois Central Gulf Railroad Company, Louisville and Nashville Railroad Company, Southern Railway Company, Southern Railway Company and St. Louis-San Francisco Railway Company shall revise their schedules in conformity with the conclusions reached in this decision on or before 35 days from the service date. Publication shall be made on not less than 5 days' notice.

2. The proceedings in dockets Nos. 36413, 36479, and 36433 are dismissed.

357 I.C.C.

No. 354041

GENERAL AMERICAN TRANSPORTATION CORPORATION, UNION TANK CAR COMPANY, AND NORTH AMERICAN CAR CORPORATION v. INDIANA HARBOR BELT RAILROAD COMPANY

Decided June 10, 1977

Separate charges for switching of empty privately owned railcars for repairs after they have entered national car fleet found unlawful, except in limited instances. Basis for compensating rail carriers with an excess of such empty mileage over loaded revenue mileage set forth.

Robert H. Bierma, Charles W. Chapman, Anna M. Kelly, and Richard O. Olson for interested rail carriers.

Harvey J. Barnett, Richard J. Hardy, Kirk B. Johnson, Martin M. Lucente, Thomas F. McFarland, Jr., Harold E. Spencer, Robert R. Tepper, and A. C. White, Jr., for private car owner and shipper interests.

Dellon E. Coker for the Department of the Army, Office of Judge Advocate General.

REPORT AND ORDER OF THE COMMISSION

DIVISION 2, COMMISSIONERS HARDIN, MURPHY, AND CLAPP

BY THE DIVISION:

This proceeding encompasses four separate dockets, all of which deal with the issue of the lawfulness of any separate charge for the switching of empty privately owned railcars for ordinary repairs. Because of the common questions of law and fact, these proceedings were consolidated for disposition by order of the Commission, on November 10, 1976.

'Embraces also dockets No. 36116, Charges for Movement of Empty Cars, East Camden and Highland Railroad Company; No. 36269, U.S. Railway Mfg. Co. v. Indiana Harbor Belt Railroad Company; and No. 36379, Charges for Moving Empty Private Tank Cars on Own Wheels.

BACKGROUND

a. Docket No. 35404.-By complaint filed April 14, 1971, complainants General American Transportation Corporation (GATCO), Union Tank Car Company (Union), and North American Car Corporation (NACC) argued that charges collected by defendant Indiana Harbor Belt Railroad Company (IHB), during the period from January 1, 1971, to March 31, 1971, for the empty movement of privately owned cars to and from repair facilities on the IHB's lines3 were inapplicable or otherwise unlawful.

IHB is a common-carrier belt line operating in the Chicago, Ill., switching district. It connects with approximately 28 line-haul carriers, and its primary operations consist of the switching of loaded and empty cars between these line-haul carriers (“overhead traffic"), to and from its on-line industries, and to and from seven car repair facilities on its line. Complainants are carline companies which manufacture and lease freight cars, including tank cars. They own and operate four of the seven car repair plants on the IHB's line. Cars switched to and from these plants by the IHB may originate either on its line or on the lines of other carriers. Such cars may be carrier-owned, owned by the car companies operating the plants, or otherwise privately owned.

The initial decision of the Administrative Law Judge, served May 11, 1973, found that charges assessed by the IHB under its local switching tariff were inapplicable, and that the applicable provisions of the Maurer Mileage Tariff provided that switching of empty privately owned cars to and from repair facilities should be performed without charge. Exceptions to the initial decision were denied in the report and order of the Commission, Review Board Number 4, decided October 2, 1975. A petition for reconsideration of said report and order was filed by IHB on November 6, 1975, and a reply was filed by complainants on November 25, 1975. The 'Charges of $21,268 (from GATCO), $390 (from Union), and $3,195.50 (from NACC) were collected by IHB. All of the charges were borne by complainants except for 46 cars by GATCO (whose charges total $1,196). GATCO paid the charges for the 46 cars and was reimbursed by foreign car owners. Upon recovery of the charges on these cars, GATCO would distribute them to the foreign car owners.

"By order of April 9, 1974, complainants were permitted to file an amended complaint which requested that any damage award included the charges assessed and collected by defendant pendente lite between the filing date of the original complaint and the effective date of the final order in this proceeding. Complainants would file a rule 100 statement at the close of the proceeding to ascertain the amount of such charges.