*1 & PACIFIC MILWAUKEE, ST. PAUL CHICAGO, CO. UNITED STATES RAILROAD et al. 5, Argued May 2, 1961.* June No. 306. 1961. Decided Secretary Agriculture, * Together Benson, v. United No. with al., appeal from the same Court. et also on States *2 Raymond K. Merrill the cause for in argued appellants him in appellant both cases. on the briefs for With Eckersall, Edwin No. 306 Edwin R. O. Schiewe and were Byron E. Lutterman. appellant On the briefs for No. 307 J. Neil Brooks Stephens, were Carl and Donald A. Campbell.
Robert argued W. Ginnane the cause for the United him States et al. With on the briefs were former Solicitor Rankin, Cox, General Solicitor General Assistant Attor- ney Loevinger, Attorney Bicks, General Assistant General Richard A. Johns, Solomon and H. Charlie Jr.
Fletcher Rockwood argued the cause for the railroad company him appellees. on With the briefs were Mar- Jr., cellas L. Countryman, Anthony Kane, Louis E. Torinus, Jr., Hart, Cassell, Charles A. Martin L. Jordan J. Hillman and Richard Musenbrock. opinion delivered the of the Court.
Mr. Justice Clark These are appeals direct from an order of a three- judge District Court dismissing appellants’ complaint seeking to set aside an Interstate Commerce Commission decision which refused prescribe through routes and joint rates for traffic moving between appellant railroad and the Spokane, Portland and Railway Seattle (the “S. P. S.”) system1 & via Spokane, Washington. The Commission found, contrary to appellants’ contention, that, with limited no exceptions, through routes existed for the movement freight by the P. system S. & S. 1 The system S. P. & composed Spokane, Portland and Railway Seattle wholly Co. and two subsidiaries, owned Oregon Railway Trunk Oregon and the Railway Electric Co. It “Milwaukee”) Spokane. via (the railroad
appellant protection provided the short-haul also held. applied Act2 because Interstate Commerce of the with and under operated conjunction P. was the S. & S. North- parents, the Great common Railway Pacific Co. and the Northern Railway ern Co. owned “Northern each of which (the Lines”), 50% that the refusal of Finally, finding P. S. it entered S. & routes3 and system grant P. the S. & S. against rates4 did not result discrimination requested preference prejudice the Milwaukee or undue be- shippers they tween and localities and further found provide adequate were not “needed order to and more transportation.” efficient or more economic *3 that findings 453. The District Court held supported by substantial evidence and were application (4). affirmed its of 15 ruling Supp. probable jurisdiction. F. noted 81. We 364 U. S. judgment. affirm the We
The factual situation is in in described detail the Com- mission’s and report will, therefore, only we set it out (4) provides pertinent part: U. S. C. in establishing any
“In such route the Commission shall require any by railroad, consent, . . . carrier without substantially length embrace such route less than entire of its any operated conjunction railroad and of intermediate railroad therewith, and under a common or control which lies proposed through between the termini of such route . . . .” 'through arrangement, express “A implied, route’ is an or between connecting carriage goods for the railroads continuous from the originating point on the line of one carrier to destination on the line States, St. Louis Southwestern R. Co. United of another.” v. 136, 139, (1917). U. S. note 2 connecting essential feature of rate is roads
4 “[T]he agreed mutually carry points have consented traffic from bn points aggregate charge one road to on another road for an which is charges points.” less their than sum of local between the same York, Platt, New N. H. & H. B. Co. 7 I. C. C. by P. S. was built It the S. & briefly. appears congestion, purpose relieving Lines for the Northern obtaining low trackage, mountain avoiding double Its lines— road facilities to the West Coast. grade along the Snake approximately length 950 miles —run Spokane, westward between and Columbia Rivers Wash- Oregon. and the Pacific Coast via ington, Portland, parents, Lines, operate lines of its the Northern between Minneapolis-St. Minnesota, and Paul, the head of the Great Lakes on the east and Portland, Oregon, points Washington coastal They on the west. serve larger Idaho, cities northern Montana, North and South Dakota and Minnesota. operates The Milwaukee some 10,600 miles of line from Chicago, Illinois, and West- port, on the east and Longview, Indiana, on Washington, the west. many While serves of the same cities Idaho, Montana, the Dakotas and Minnesota from which the Northern Lines traffic, appellant receive railroad point serves no in Oregon directly. If it could establish through routes and joint rates with the S. P. system, & S. the Milwaukee might secure, on interchange at Spokane, much of the traffic that originates or terminates on S. P. system. & S. On the other hand, the Northern Lines seek to obtain as much of this possible haul as published have joint rates on all important commodi- ties interchanged between S. P. & system and the *4 Northern Lines at Spokane. These rates are lower than the combination of the local rates of the S. P. & S. and appellant the railroad now applicable to traffic which could be interchanged at the same point, Spokane, be- tween these carriers. It appears that the S. P. & S. system and the Northern Lines are not opposed to the publication of rates by the S. P. system & S. and the Milwaukee for traffic to or from points served only by the latter (local points) but refuse to establish line to appellant’s via joint rates routes through Lines. the by Northern also served are points which Court, substantial District as did the find, We Com- findings of the factual support the does evidence a discussion therefore, forego shall, mission. We are findings. on the We based contentions appellants’ the issue, namely, whether principal only with the left railroads of Act extends two (4) §of 15 protection existing relationship here. in the a third owning other but own compete with- each The Lines Northern P. of S. & stock equal shares all of bonds and vice president yearly alternate presidents Their upon prob- pass executive of, personally president however, operating has an S., which, lems the S. P. & of, equipment, As to the Northern president of its own. vice supply the car of amount of Lines furnish substantial traffic of the latter policies system. the S. P. & S. depart- by the traffic jointly are and controlled directed traffic Lines. Transcontinental ments of the Northern of the Northern by representatives are handled matters pol- problems general Lines local traffic but —under P. left to the S. & S. officials. icies aforementioned —are Lines except disagree the Northern be- In when short, entirely control the they operation themselves, tween the S. P. & S. requires (4)1 the Interstate Commerce Act
Section with “to establish reasonable routes” railroads not vol- each Where such routes are established other. (3) 15§ has untarily, power, prescribe them “whenever deemed Act, necessary public or desirable interest.” This be authority against hauling, however, is restricted short provides which the Commission “shall any . railroad to em- require . . carrier ... substantially brace in such route less than the entire any length of its railroad and of intermediate railroad *5 manage- a common conjunction and under operated the termini lies between therewith, which ment or control con- Appellants . . . .” through route proposed of such P. & S. is terminus of the S. tend that since the eastern routes via that through of the the establishment Spokane, however, P. If, haul the S. & S. point would short or con- management the “common P. & S. is under protection and the short-haul Lines trol” of the Northern sought routes them, is available to of § hauled being in the latter short if result would, granted; of this section. contravention approved by the Dis- findings Commission, The of the of the Northern Court, clearly trict indicate neither However, P. it is individually Lines controls the S. & S. jointly they manage do control equally clear if This effectively part as it' were of their own lines. of its traffic which is the heart particularly policy, is true appellants that, contend problem However, of the here. of the factual as a matter of law regardless circumstances, only operate railroad can or control another line single meaning protection within the of the short-haul 15§ exception (4) originated
The short-haul of 15 Mann-Elkins Act of 191Ó. 36 Stat. The crucial words “common or control” were not defined and the subsequent legislative history pro- of the inquiry. vision of little assistance to our However, overriding purpose Congress of the seems to have been protection traffic controlling line. As Elkins, Senator coauthor of the stated measure, to the Senate, exception “is one which always recog- has been transportation nized country. business of the road that initiates freight and starts it on move- ment in interstate commerce should required not be . . . to transfer its business from its own road to that of a com- petitor . . . when the commerce initiated it can be as *6 as ... its road safely transported and promptly Cong. 3475-3476. competitor.” the line Rec. of equally apply More- reasoning The same would here. provision the the over, Report emphasizes the Senate on purpose.5 same in section is the language
While the of the framed appears excep the singular, it to us that reason for this railroads necessary tion is as valid the case of two only as it is a and its owning single third when railroad subsidiary are involved. Louisville & R. Co. v. See N. States,
United Court, U. S. 60 where this (1916), provisions prede construing discrimination of the cessor of 3 if Act, stated, “[tjherefore, either § carrier owned and used this terminal alone it could not be found to discriminate Central against Tennessee for it merely refusing to switch ... . conceive We that what is true of one would be true equally owner of two . . . 73. p. owners .” At . Appellants rely heavily the fact Congress, on enacting Transportation Act of 1940, broadened the definition of the term “control” in many of the sections of the Interstate Commerce Act6 did but do 15 (4), so thereby indicating § an intention to scope restrict the of the exception. definition, This how- ever, was enacted as the result of this holding Court’s Rochester Telephone Corp. States, United 307 U. S. which (1939), gave a broad construction to “control” 2 (b) used in § of the Communications Act. 47 5 “It seem would to be empower unreasonable the commission require company having a railroad a line of its own between two designated only portion termini to allow a of that be line to taken up purpose linked with other creating lines for the another competition it, depriving route with thus it of the natural advantage possessing .” direct line between the . . . termini Rep. 355, Cong., No. 61st 2d 10. Sess. (3)(b).
6 49 U. S. C. § 1 decided Congress (b). appears It S. C. U. sections to certain this broad definition to extend jurisdic- Act to insure Commission Interstate Commerce of carriers. See in indirect .control persons tion over how- If, 3d Cong., No. 76th Sess. Rep. H. R. oppo- applied that definition were ever, power Commission’s result would obtain site exception short-haul would for the restricted, would be an indirect having only afforded to carriers then be Congress this reason, another line. For control of *7 in change make any to the “thought undesirable [it] notably . . . . . . section law, of interpretation present 2832, Cong, H. R. 76th 3d Sess. 63. (4).” Rep. 15 No. “operated conjunction the Apparently phrase or control” has received no management under a common as we been unable prior judicial have to interpretation, point and have been to none any find cases referred decisions of Interstate Com However, the the counsel. the that control of support merce Commission view the of is policy traffic an affiliate sufficient to constitute meaning within “management” “control” or the (4). conception 15 of these terms Commission’s expressed Mfg. first in a rate Co. case, was Blackshear v. Co., I. (1924), Atlantic Coast Line R. 654 C. C. stated that which Commission “the term ‘carriers under the same control’. . . refers to lease, generally ownership, carriers controlled or to controlling policy, otherwise extent even traffic though separate corporate entity maintained.” may be In (Emphasis added.) subsequent At rate cases p. 664. apply Commission continued to this criterion has whether lines are same “man determine or not under the agement” or “control.” Chert, Clay, Sand, Gravel, (1933); Rates on I. C. C. 215 (1930); Co., R. Humbard Construction Co. Southern 161 I. C. C. 38 (1929); v. Holton R. I. C. C. 673 Justice Co. Interurban cases, the rate-making line of Commission In another joint management be and control has held there can gen a railroad.8 In rate cases, third traffic scale of distance rates for erally prescribes higher independent a combination of lines than moving over single does carried line or over a goods parent- for over system. The distinction is subsidiary made because expected latter are result operation economies of To, which be on Livestock passed public. should to the From, Southeast, and Between Points For the same short or lines reason, “weak” i. e., differentially are arbitrarles, higher allowed rates general addition rate scales prescribed application, for - whereas small railroads under “management” larger “control” of lines are not addi permitted the tional rates. Rate Investigation, Salt, Structure Part 197 I. C. 115 (1933). C. the long
Unless
haul of railroads,
joint manage-
ment
interpreted
and control as
by the rate-making cases,
protected
advantages
which the Com-
e.,
i.
mission
existed,
assumed
operation,
economies of
will
be
from
taken
them. The very reasons for
applying
*8
Freight
Raleigh
Co.,
Bureau v. Atlantic Coast Line R.
107
Traffic
To,
I.
From,
(1926);
C. C. 156
Livestock
and Between
in the
Points
Southeast,
To, From,
(1925);
101 I.
Livestock
Between
C. C. 105
and
Southeast,
Points in the
(1924).
91 I. C. C. 292
8
Chicago,
group
This
of cases is bottomed on
M. & St.
R. Co.
P.
Minneapolis
Civic
v.
Assn.,
& Commerce
(1918),
We contrary. management Common appellants, concerned with They were control was not established. and even distinguished control, from ownership, in these nothing There is than two railroads. by more under the cannot exist holding that such control cases carriers. of two and active joint ownership cases appellants’ feel that other Nor do we apposite. are has for find that the Commission
Summarizing, we as to what Blackshear criteria many years followed the not dis provides part that carriers “shall 49 U. S. C. 3§ lines, charges connecting fares, between rates, their criminate in connecting of traffic unduly any line the distribution prejudice in- shipper.” specifically routed is not Ahnapee & W. R. R. Co. v. Manufacturers Switching Charges, Absorption I. C. C. 129 (1931); *10 management” constitutes or “control.” Like- “common it has such and control wise, permitted since jointly by to be exercised more than one railroad. We in Congress believe that the took note of these cases in any change when it not “to make the inter- decided of 15 pretation” provision of the limitation Act. is judgment The therefore
Affirmed. in Mr. the part Justice Stewart took no consideration or decision of this'case. Douglas,
Mr. Justice with Mr. Justice whom Black concurs, dissenting.
Four pass through Spokane gateway lines to the West Coast: The Milwaukee, Pacific, Northern Northern, Puget Great that reach Sound, S. P. S.,& that reaches Portland, Oregon. “triangle” The referred to apex Spokane the Commission has its two base points Portland and Seattle-Tacoma. The S. P. & S. is owned Great Northern and 50% by the Northern Pacific. 50% is at present Milwaukee disadvantage shipments Spokane via gateway. The disadvantage is service or facilities but in service, for the rate structure. When road Milwaukee —a that reaches to Chicago to ship goods to Portland over the —wants shortest route —the S. P. quote & S.—it must combination rates. When the Great Northern and the Northern Pacific make those shipments, they get preferred joint rate on a through route via Spokane. The result is to “close Spokane gateway a commercial sense” far so as the Milwaukee concerned. I. 300 C. C. 453, 457.
The advantage which the S. P. & S. affords the Great Northern and Northern Pacific stated by was the Com mission in Portland Chamber Oregon Commerce v. R. “It is used the Great & N. 265, 283, transportation and Northern Pacific Northern points interior which can all business between coast and existing it than over the cheaply be handled more over That or Northern Pacific.” lines of the Great Northern traffic which advantage; is a it is control over monopolistic *11 the exclusion exploit the lines are not entitled to to two of the Milwaukee. 1 mainte-
“Through rule, (4), routes” are the the § discriminatory rates,” excep- the nance of “combination the is tion. the terms of 15 § Under “necessary former whenever or desirable to establish the an (4) do we have public Only § in the interest.” recog- 1910, Congress has exception policy. to this Since “short-hauled,” right a railroad’s limited not to be nized carry originating over its lines traffic is, that not to have to carriage entire another line when the on, to, or destined taken on its line. the place Here, could as well have own they together jointly with the Northern Lines claim that which the Mil- single system aup owned S. P. & S. make to waukee wants short-haul. meaning concerns the question presented are used they control” as management
words “common in 15 the Act. (4) of § Pacific are
First. If Northern and Northern the Great protection now special monopolistic the granted to be says rewritten. It that extended, (4) needs to be § the any carrier ... to “require Commission shall not embrace substantially length less the entire of such route than railroad con any operated railroad and of intermediate or control and under a common junction singular. The section is framed the When therewith.” amended protection given, the short-haul was first (36 551— referred to “carrier or carriers” seven times Stat. 553). it seems 553) (36 lines” So and “line or twice Stat. plural plural intended, was apparent when Elkins, explaining provision, was used. Senator freight “The spoke singular: in the road that initiates the in interstate commerce and starts it on its movement unreasonably it not required, should be where not line its own of long, to transfer its business road from the commerce initiated competitor, especially when safely transported point from the promptly can be as shipment point of to the of destination its road as competitor.” Cong. (Em- line of its Rec. 3476. added.) phasis Report spoke protection
The Senate of the short-haul- “having a railroad a line of its be extending own designated Rep. 355, tween two termini.” S. No. 61st p. Transportation 2d Act Cong., Sess., 10. While greatly expanded meaning new “control,” was made applicable definition because it thought ,any was “undesirable to make change law” in that interpretation present regard. Rep. H. R. No. 76th 3d Cong., Sess., p. 63.
Second. legislation'the Prior to the 1940 Commission joint ownership had held that by two or more railroads was not sufficient management to create “common or con- trol” meaning (4). within the of Absorption § Switching Charges, I. 129, 157 C. C. 132; Manufacturers R. Co., Co. Ahnapee v. & W. R. 172 I. 554, C. C. 564. Those two cases involved a terminal railroad jointly by owned 15 connecting roads. argument On oral counsel for the Commission conceded that those decisions are out of line present with the If one. by control 15 roads is not “common” control within the meaning of 15 I fail § Congress The Court admits that protection refused to broaden the (4) of 15 in 1940. Yet it seems to think this refusal of no relevance. Congress If protection has refused indirectly “short-haul” con lines, lightly trolled is it to be protection assumed that extends both owners who jointly control a third line? cases The other is. railroads by two how to see control 15§ involve did not the Court upon relied Atlantic Coast Mfg. Co. v. Blackshear such Cases There irrelevant. are Co., 654, I. C.C. Line R. fix that rates to with what concerned was “joint-line.” were what rates that “single-line” weré over applicable as those rates” “single-line It defined lines under or more railway over two or “single lines of it defined control”; management general same the lines “only when applicable rates” as those “joint-line ownership not under common route are embraced “carriers the term Id., It defined 664. control.” as carriers and control” same or other- ownership, lease, through “generally controlled though policy, traffic even controlling to the extent wise Id., maintained.” may be entity separate corporate rate-making pur- for and control” ownership “Common not a statu- an innovation Commission, was poses the other line of is true of The same tory term. rep- refers —the ones to which Court rate-making cases Minneapolis P. R. Chicago, M. & St. Co. resented owning a Assn., 490. There two railroads C. & C. U. charge terminal tracks made no turn owned third which lines moving traffic over its against terminal for use of the Milling R. Helix Co. v. Great Northern In Northern, through shippers routes and rates on the Great wanted gateway. Spokane via the Pacific, and the S. P. & S. the Northern protection objected the basis of the short-haul Northern on Great recognized that the The Commission afforded Act. findings the need for and made the as to short-haul issue was involved through routes would short- assumption that the routes on *13 present analysis objecting But no or discussion haul the road. Chicago, Assn. West Lumbermen’s problem was made. Cf. Coast Co., 363, 364. It should be noted P. R. M. & St. 708, 711, R. I. C. C. Alabama, N. R. Co. v. Southern T. & Court, not involve control does cited This line by competitor. its use a charge for did not but rates —is con- involving “single-line” those of cases—like non-discrimina- rates and rates that are just cerned with merely disappear not operation will tory. Economies monop- a competition. course, has Of because a carrier profit- an affiliated short line more may make oly position reason for I do think that the sole able, but such short lines “arbitraries.” denying highly specialized prob- with the deals Section needs protection The “short-haul” lem of the short-haul. narrowly up lest it too end as device construed, to be them from against competitors and foreclose discriminate Iwhy, think, closely That is it was confined market. Congress put singular plural not the and not such group extended to activities of railroads as are here and the terminal cases. involved judgment I below and would' reverse remand proceedings. case for further