Opinion ID: 108614
Heading Depth: 2
Heading Rank: 4

Heading: Milwaukee and Southern Pacific Pleadings Before the Commission

Text: By petition filed August 23, 1967, Milwaukee sought inclusion in the proposed purchase of Peninsula by Burlington Northern (then SP&S) and UP. Section 5 (2) (d) of the Interstate Commerce Act authorizes the Commission to require such inclusion as a prerequisite to its approval of the purchase upon a finding that such inclusion is consistent with the public interest. After first setting out its impending access to Portland over SP&S lines because of the Northern Lines merger, Milwaukee alleged: The instant transaction, if approved by the Commission without inclusion of Milwaukee upon the terms stated below, would have the effect of foreclosing Milwaukee direct service to all the industries now or in the future to be located on the lines of Peninsula Terminal Company. With fifty per cent of Peninsula Terminal Company stock in the hands of Union Pacific Railroad Company, not a party to the contract referred to above, Milwaukee will not have any right similar to that sought by applicants herein . . . to operate over or obtain trackage rights in the lines of Peninsula Terminal Company. Industries on the lines of Peninsula Terminal Company will thus be denied the single-line service of Milwaukee to such points as [various western and midwestern rail centers served by Milwaukee], contrary to the public interest. [13] App. 165. Accordingly, the Milwaukee sought equal inclusion with SP&S and UP in the purchase of Peninsula and, in addition, asked [t]hat Milwaukee be granted the right to acquire trackage rights over intervening connecting trackage jointly owned by applicants, from SP&S main line to Peninsula Terminal Company's lines upon such reasonable terms and conditions, and for such considerations, as Milwaukee and applicants may negotiate, or, failing such negotiations, upon such terms and conditions and for such consideration as the Commission may find just and reasonable. [14] App. 166. On December 29, 1967, SP&S and the UP filed replies, arguing, inter alia: (1) that even if Condition 24 (a) were implemented, Milwaukee would still not connect with Peninsula because of the intervening North Portland interchange tracks, jointly owned by SP&S, UP, and Peninsula, and trackage rights over these tracks could not be granted to the Milwaukee in this proceeding; and (2) that joint ownership of Peninsula with the Milwaukee could lead to a cumbersome, confused and divided management with resulting policy stalemates and serious deterioration of service. Milwaukee thereupon filed a supplement to its petition for inclusion, stating that in light of the replies of applicants herein to the Milwaukee's petition for inclusion, the Milwaukee alleges that the joint application herein is for the purpose of bottling up the Milwaukee at Portland and impair [ sic ] its ability to provide a competitive service to industries served or to be served by Peninsula Terminal Company contrary to the public interest and the plain intent of the Commission's [report and order in the Northern Lines Merger Case ]. App. 182. Accordingly, the Milwaukee added to its earlier petition by requesting: That applicants be required to grant Milwaukee trackage rights over intervening trackage at North Portland connecting with the yards of Peninsula Terminal Company, both as a condition to participation in ownership of Peninsula Terminal Company and also under Section 3 ( 5 ) of the Interstate Commerce Act.  App. 183. (Emphasis added.) Whether intentionally or not, by requesting trackage rights under § 3 (5), the text of which appears in the margin, [15] Milwaukee divorced the question of access to Peninsula from the question of inclusion in the ownership of Peninsula. Any trackage rights granted in connection with the petition for inclusion under § 5 (2) would be contingent upon SP&S' and UP's deciding to consummate the purchase; trackage rights granted under § 3 (5), however, would be independent of the purchase. In the meantime, by an amended petition filed November 29, 1967, SP joined with the Milwaukee in seeking inclusion under § 5 (2) (d) as an equal owner of Peninsula. It further requested that UP be required to grant petitioner bridge trackage rights over [the Union Pacific] main line and terminal trackage between Peninsula Terminal Company and the Southern Pacific-Union Pacific track connection at East Portland, Ore. [16] App. 168. In response to replies that trackage rights to East Portland could not be granted in a § 5 (2) proceeding, SP, unlike Milwaukee, initiated separate proceedings under § 3 (5) (Dec. 19, 1967). It sought orders requiring SP&S and UP to allow the common use of Peninsula Terminal Company, together with bridge trackage rights over UP lines to East Portland; additionally (or, presumably, alternatively), it sought the common use of the terminal facilities of Union Pacific between Peninsula Terminal Company and . . . East Portland, Oregon. [17]