Louisville & Nashville Railroad v. United States
Opinion of the Court
delivered the opinion of the' court.
This is an appeal from a decree, made by three judges^ sitting in the District Court, which denied a preliminary injunction against the enforcement of an order of the Interstate Commerce Commission and dismissed the appellants’ petition. 227 Fed. Rep. 258, id. 273. See 33 I. C. C. 76, for the report of the Interstate Commerce Commission. The order complained of required the appellants, the Louisville & Nashville Railroad Company, the Nashville, Chattanooga & St. Louis Railway and the Louisville & Nashville Terminal Company to desist and abstain “from maintaining a practice whereby they refuse to switch interstate competitive traffic to and from the tracks of the Tennessee Central Railroad Company at Nashville, Tenn., on the same terms as interstate noncompetitive traffic, while interchanging both kinds of. said traffic on the same terms with each other, as said practice is found by the Commission in its said report to be unjustly discriminatory.” It was further ordered, that “The Louisville & Nashville Railroad Company, Nashville, Chattanooga & St. Louis Railway, and Louisville &. Nashville Terminal Company be, and they are hereby notified and required to establish, on or before May 1, 1915, fipon notice to the Interstate Commerce Commission and to the general public by not less than 30 days’ filing and posting in the manner prescribed in section 6 of the act to regulate commerce, and thereafter to maintain and apply to the switching of interstate traffic to and from the
■The order is based upon discrimination and is limited by the duration of the interchange between the appellants found to be discriminatory,' and the question argued by the ■ appellants is the only question in the case. Therefore it is- necessary to consider relations between the appealing railroads that were left on one side in Louisville & Nashville R. R. Co. v. United States, 238 U. S. 1, 18.
The Louisville & Nashville traverses Nashville from-north to south, the Nashville & Chattanooga from west to southeast,. the Tennessee Central from porthwest to east. They all are competitors for Nashville traffic. In .1872, contemplating a possible Union Station, the Louisville •& Nashville acquired trackage rights from the Nashville & Chattanooga that connected its northern and southern terminals in the city (previously separate), and the terminal of the Nashville & Chattanooga. It now owns seventy-one per cent, of the stock of the latter. In, 1893 these two roads caused the appellant Terminal Company to be organized under the géneral laws of Ténnessee, with the right to let its prbperty. The Louisville & Nashville owns all the stock of this company. In 1896 the two roads respectively let to the Terminal Company their several properties in the neighborhood of the original depot grounds of the Nashville & Chattanooga for 999 years, and shortly afterwards the Terminal made what is termed
On August 15, 1900, the two roads, at that time being the only two roads entering Nashville, made the arrangement -under which they since have operated. They made an unincorporated organization called the Nashville Terminals which was to maintain and operate the ¡property let to the two roads jointly by the Nashville Terminal Company and also 8.10 miles of main track and 23.80 miles of side track contributed by the Louisville & Nashville and 12.15 miles of main and 26.37 miles of side track contributed by the Nashville & Chattanooga. The agreement between the roads provided a board of control consisting of. a superintendent and the general managers of the two roads, the superintendent having the immediate' control and appointing under officers, &c. The total expense of maintenance and operation is apportioned monthly between the two roads on the basis of the total number of cars and locomotives handled for each. There is no switching charge to or from locations on tracks’of the Nashville terminals within the switching limits on freight from or to Nashville over either road. The Ten
It should be added that in December, 1902, a further agreement was made purporting to modify the lease to the railroads jointly by excluding from it the property that came from them respectively, and remitting the roads to their several titles as they stood before the lease, subject only to the mortgage, with some other changes that need not be mentioned. This partial change from joint tenancy back to several titles does not affect the substantial equality of the contribution of the two roads, and the joint tenure of the considerable property purchased by the Terminal Company was left unchanged.
Another matter that seems immaterial'to the case before us is that since the connection between the Tennessee Central and the appellant roads the latter have interchanged noncompetitive traffic with the former, but the Louisville & Nashville has refused to switch competitive traffic and'coal except at its local rates and the Nashville & Chattanooga has refused to switch it at all. The switching of coal was dealt with by this court in Louisville & Nashville R. R. Co. v. United States, 238 U. S. 1. But the case now before us is not concerned with the effect of the carriers having thrown the terminals open to many branches of traffic. 238 U. S. 18. It arises only upon the - question of the discrimination supposed to arise from the appellants’ relations to each other, as we have explained— a question grazed but not hit by the decision in 238 U. S. See p. 19.
If the intent of the parties or purpose of the arrangement was material in a case like this, obviously there was none to discriminate against the Tennessee Central road. That
The fact principally relied 'upon to uphold the order of the Commission is that instead of each road doing its own switching over the terminals used in common they switch jointly, and it is said that therefore each is doing for the • other a service that it cannot refuse to a third. We cannot believe that the rights to their own terminals reserved by
Decree reversed. Injunction to issue, without prejudice to further orders by the Interstate Commerce Commission as stated in the .opinion.
Concurring Opinion
with whom concurred Mr. Justice Day, ■ Mr. Justice Brandéis, and Mr. Justice Clarke, dissenting.
• I am unable to concur in the opinion of the court, and, in view of the far-reaching effect of the decision upon the commercial interests of the country, deem it a duty to set forth the grounds of my dissent.
The Interstate Commerce Commission found as matter of fact (33 I. C. C. 76, 84): “Defendants [the two railroad companies, now ¿ppellants] unquestionably interchange traffic with each other and without distinction between competitive and noncompetitive traffic'. The cars of both roads are moved over the individually owned terminal tracks of the other to and from'industries on the other, and both lines are rendered equally available to industries located exclusively on one. The movement, it is true, is not performed immediately by the road over whose terminal tracks it is performed, but neither is it performed immediately by the road whose cars are . moved. It is performed by a joint agent for both roads, and that being so, we are of the opinion that the arrangement is essentially the same as a reciprocal switching arrangement and accordingly- constitutes a. facility for the interchange of traffic between, and for receiving, forwarding, and delivering property to and from defendants’ respective lines, within the meaning of the second paragraph of section 3 of the, act. [Interstate Commerce -Act.] . . . We can not agree with defendants’ contention that they have merely exchanged trackage rights. But even if they have, we think the term ‘facility,’ as used in section 3 of the act, also includes reciprocal trackage rights over terminal tracks, the consequences and advantages to shippers being identical with those accruing from reciprocal switching arrangements.”
The District Court, three judges sitting (227 Fed. Rep.
With these views I agree. Elaborate argument is made in behalf of appellants in the effort to show that the method of operating the Nashville Terminals is not “re
The section reads as follows: “Sec. 3. That it shall be unlawful for any common carrier subject to the provisions of this act to make or give any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, or locality, or any particular description of traffic, in any respect whatsoever, or to subject any particular person, company, firm, corporation, or locality, or any particular description of traffic, to any undue or -unreasonable prejudice or disadvantage in any respect whatsoever.
“Every common carrier subject to the provisions of. this act shall, according to their respective powers, afford all reasonable, proper, and equal facilities for the interchange of traffic between their respective lines, and for the receiving, forwarding, and delivering of passengers and property to and from their several lines and those connecting therewith, and shall not discriminate in their rates and charges between such connecting lines; but this shall not be construed as requiring any such common carrier to give the use of its tracks or terminal facilities to another carrier engaged in like business.”
It is clear, I think, that in the second paragraph of this section the word “facilities” is employed in two meanings. Where it first occurs, it means those acts or operations that facilitate or render easy the interchange of traffic;
There is nothing in the order of the Commission now under review that requires appellants or either of them,, or their agency, the Nashville Terminals, to give.the use of tracks or terminal facilities to the Tennessee Central, either physically or in any other sense, within the meaning of the final clause of § 3. It requires them merely to inter- • change interstate; competitive traffic to and from the tracks of the Tennessee Central on the same terms as interstate noncompetitive traffic so long as they interchange both kinds of traffic with each other on the same terms; and also to establish and apply to the switching of interstate traffic to.and from the Tennessee Central rates and charges not different from those that they contemporaneously maintain with respect to similar shipments as between themselves. Undoubtedly the expenditures made by appellants in the construction of the joint terminal property, so far as that property is used in interchange switching, is an element to be taken into consideration in fixing the amount of the switching charges. And the same is true with respect to the value of the separately owned tracks of appellants, so far as necessarily used in mutual interchanges.
The practice of the Louisville & Nashville and the Nash-, ville & Chattanooga in refusing to interchange competí
The . tracks included in the joint terminal arrangement of appellants include 8.10 miles of main and 23.80 miles of side tracks separately owned by the Louisville & Nashville, 12.15 mijes of main and 26.37 miles of side tracks-separately owned by the Nashville & Chattanooga, and some yard tracks owned by the Louisville & Nashville Terminal Company, whose entire stock is owned by the Louisville & Nashville R. R. Co. It may be conceded that by virtue of the lease from the Terminal Company to the appellant railroads, even as modified in December, 1902, there-remains in some sense a joint tenure of the property of the Terminal Company. But, m my view, the question of the ownership of the property is entirely aside from'the real point. The discrimination charged and found by the Commission is not so much in the use of terminal property as in the performance of interchange services; and for such discrimination a community óf interest in the property affords neither justification nor excuse.
So far as the non-discriminatory performance of those services requires that cars from the Tennessee Central shall be admitted to the terminal tracks of the Louisville & Nashville and the Nashville & Chattanooga and to tracks in which these' companies have a joint interest, this is so only because appellants have, as between themselves, and also as regards traffic from the Tennessee Central, thrown their terminals open to thé public use. The argument for appellants rests upon the essential fallacy that the terminal facilities are, in an absolute sense, and for ali purposes, private property. But they, like all
It is said that if either of the appellants were the sole owner of the terminal properties in question and used them alone, it could not be deemed to discriminate against the Tennessee Central because of a mere refusal to switch for it in the interchange of traffic. Of course if it refused all connecting carriers alike it could not be held for discrimination. But whether it would be at liberty to refuse to switch for the Tennessee Central would depend upon circumstances; for instance, upon whether the Interstate Commerce Commission, pursuant to its authority under § 15 of the Act as amended in 1910 (c. 309; 36 Stat, 552), should establish the two lines as a through route, or (without that) should determine upon adequate evidence that the refusal of switching privileges was a failure to afford reasonable and proper facilities for the interchange of traffic between the connecting lines under § 3. Car interchange between connecting lines was made by the 1910 amendment of § 1 of the Act a positive duty on the part of the. carrier, even without action by the Commission. 36. Stat. 545.
I deem it a most material fact that the appellants already interchange noncompetitive traffic with the Tennessee Central, upon terms like those upon, which they ' interchange- both competitive and noncompetitive traffic
The present system of interchanging traffic between appellants was established in August, 1900, a year or two before the line of the Tennessee Central was constructed
But were it otherwise, the result should be the same. The obligation to avoid discrimination and to afford “all reasonable, proper, and equal facilities for the interchange of traffic” is not qualified by any rights of priority. The new road is a servant of the public, equally with the others; subject to the same duty and entitled, for its patrons, to demand reasonable and impartial performance of the reciprocal duty from carriers that preceded it in the field.
In my opinion the present case is controlled by our decisions in the .former case between the same parties (Louis. & Nash. R. R. v. United States, 238 U. S. 1, 18, 19), and the earlier case of Pennsylvania Co. v. United States, 236 U. S. 351, 366 et seq. In these cases many of the same arguments that are here advanced were considered and overruled by the court. The latter case concerned the
In the former case between the present parties (Louis. & Nash. R. R. v. United States, 238 U. S. 1), we sustained
If the decision reached in the present case is adhered to, and remains uficorrected by remedial legislation, it will opeü. a wide door to discriminatory practices repugnant alike to the letter and the spirit of. the Act to Regulate Commerce.
Reference
- Full Case Name
- Louisville & Nashville Railroad Company Et Al. v. United States of America Et Al.
- Cited By
- 28 cases
- Status
- Published
- Syllabus
- Under circumstances which induce the court to say that there could have been no purpose to discriminate against the Tennessee Central, ■ the two appellant railroad companies planned and matured an arrangement for the interchange of traffic at Nashville which, stated generally, took the following form, viz: The terminal, connecting their main lines and consisting of tracks, yards, depots and other railroad property, owned in part by the appellant railroad companies in severalty, and in part held as to title by appellant Terminal Company, but leased by it to them in joint tenure, was placed un-. der the management of an unincorporated organization called the “Nashville Terminals,” along with additional connecting trackage contributed by the two railroads from their respective main and side tracks. 'The “Nashville Terminals,” under control of the two appellant railroad companies, maintained and operated this collective property and thus served, within the .switching limits so constituted, to interchange the traffic of the two roads at Nashville. The total expense of maintenance and operation was ^apportioned between the two constituent railroad companies on the basis of the total number of cars and locomotives handled for each, and no - switching charges were made against either. The appellant Terminal Company was, in origin, a creature of the other two appellants; the property which it held in and about the terminal was obtained directly or indirectly through their financial aid, and the Louisville & Nashville owned all its stock, as well as 71% of the stock of the Nashville & Chattanooga. The Interstate Commerce Commission directed appellants to abstain froin refusing to switch interstate competitive traffic for the Tennessee Central on the same terms as noncompetitive, while exchanging both kinds on the same terms for each other, and ordered them to establish rates for the switching of all interstate traffic for the Tennessee Central the same as they contemporaneously maintained between themselves. Held, under these circumstances, as more fully developed in the opinion: (1) That for all practical purposes the effect of the arrangement was to make the two appellant railroad companies the joint owners of the terminal. (2) That by § 3 of the Interstate Commerce Act they were as such joint owners protected in the same degree as would be an owner in severalty from being required to give the use of their terminal facilities to another carrier engaged in like business. (3) That their mere refusal to switch for the Tennessee Central would not be an unlawful discrimination. (4) That the method of switching through a single agency, as described, did not involve unlawful discrimination against that railroad. (5) That, consequently; the order of the Commission was erroneous and must be enjoined. (6) But that appellants might not lawfully discriminate between competitive and noncompetitive goods; and, so long as they received the latter the Commission could require them to receive the former upon being paid reasonable compensation, taking into account their pecuniary outlay on the terminal.