Document: 366 U.S. 745 81 S.Ct. 1630 6 L.Ed.2d 772 CHICAGO, MILWAUKEE, ST. PAUL AND PACIFIC RAILROAD COMPANY, Appellant,v.UNITED STATES et al. Ezra Taft BENSON, Secretary of Agriculture the United States, Appellant, v. UNITED Nos. 306 and 307. Argued May 2, 1961. Decided June 5, Mr. Raymond K. Merrill, Chicago, Ill., for appellant in both cases. Robert W. Ginnane, Washington, D.C., appellees, The States I.C.C. Fletcher Rockwood, Portland, Or., appellee, R.R. Companies, Justice CLARK delivered opinionn Court. 1 These are direct appeals from an order a three-judge District Court dismissing appellants' complaint seeking to set aside Interstate Commerce Commission decision which refused prescribe through routes joint rates traffic moving between railroad Spokane, Portland Seattle Railway (the 'S.P. & S.') system1 via Washington. found, contrary contention, that, with limited exceptions, no existed movement freight by S.P. S. system 'Milwaukee') Spokane. It also held that short-haul protection provided § 15(4) Act2 applied because was operated conjunction under common management its parents, Great Northern Co. Pacific 'Northern Lines'), each owned 50% Finally, it entered finding refusal grant routes3 rates4 requested did not result discrimination against Milwaukee or undue preference prejudice shippers localities further found they were 'needed provide adequate more efficient economic transportation.' 300 453. findings supported substantial evidence affirmed ruling as application 15(4). 182 F.Supp. 81. We noted probable jurisdiction. 364 860, 106, 5 84. affirm judgment. 2 factual situation is described detail Commission's report we will, therefore, out only briefly. appears built Lines purpose relieving congestion, avoiding double mountain trackage, obtaining low grade road facilities West Coast. Its lines—approximately 950 miles length—run along Snake Columbia Rivers westward Coast Oregon. lines Lines, operate Minneapolis-St. Paul, Minnesota, head Lakes on east Oregon, coastal points Washington west. They serve larger cities northern Idaho, Montana, North South Dakota Minnesota. operates some 10,600 line Illinois, Westport, Indiana, Longview, While serves many same Dakotas Minnesota receive traffic, point Oregon directly. If could establish system, might secure, interchange at much Traffic originates terminates system. On other hand, seek obtain this haul possible have published all important commodities interchanged lower than combination local now applicable be point, these carriers. opposed publication served latter (local points) but refuse appellant's Lines. 3 find, Court, does support Commission. shall, forego discussion contentions based findings. left principal issue, namely, whether Act extends two railroads owning third relationship existing here. 4 compete own equal shares bonds stock Their presidents alternate yearly president vice of, personally pass upon executive problems S., which, however, has operating own. As equipment, furnish amount car supply policies directed controlled jointly departments Transcontinental matters handled representatives problems—under general aforementioned officials. In short, except when disagree themselves, entirely control operation Sectio 1(4) requires 'to reasonable routes' other. Where such established voluntarily, power, 15(3) Act, them 'whenever deemed necessary desirable public interest.' This authority restricted short hauling, provides 'shall * require any carrier embrace route substantially less entire length intermediate therewith, lies termini proposed *.' Appellants contend since eastern terminus establishment would If, 'common control' available them, sought would, if granted, being hauled contravention section. Commission, approved indicate clearly neither individually controls However, equally clear do manage effectively part their lines. particularly true policy, heart problem appellants regardless circumstances, matter law single can another within meaning 7 exception originated Mann-Elkins 1910. 36 Stat. 539, 552. crucial words defined subsequent legislative history provision little assistance our inquiry. overriding Congress seems been controlling line. Senator Elkins, coauthor measure, stated Senate, 'is one always recognized transportation business country. initiates starts interstate commerce should required transfer competitor initiated promptly safely transported competitor.' 45 Cong.Rec. 3475—3476. reasoning apply Moreover, Senate Report emphasizes purpose.5 8 language section framed singular, us reason valid case subsidiary involved. See Lousiville N.R. 1916, 242 60, page 73, 37 61, 63, 61 L.Ed. 152, where construing provisions predecessor 3(4) stated, '(t)herefore, either used terminal alone discriminate Tennessee Central merely refusing switch conceive what owner owners 9 rely heavily fc t Congress, enacting Transportation 1940, broadened definition term 'control' sections Act6 so 15(4), thereby indicating intention restrict scope exception. definition, enacted Court's holding Rochester Telephone Corp. 1939, 307 125, 59 754, 83 1147, gave broad construction 2(b) Communications Act. 47 U.S.C. 152(b), U.S.C.A. 152(b). decided extend certain insure jurisdiction over persons indirect H.R.Rep. No. 2016, 76th Cong., 3d Sess. 58. opposite power restricted, shorthaul then afforded carriers having For reason, 'thought (it) undesirable make change interpretation present law, notably 15(4).' 2832, 63. 10 Apparently phrase 'operated received prior judicial interpretation, unable find cases referred none counsel. decisions view policy affiliate sufficient constitute 'management' conception terms first expressed rate case, Blackshear Mfg. Atlantic Line R. Co., 87 654 (1924), 'the 'carriers refers generally ownership, lease, otherwise extent even though separate corporate entity may maintained.' At p. 664. (Emphasis added.) continued criterion determine 'control.'7 11 rate-making cases, there railroad.8 prescribes higher scale distance independent goods carried parent-subsidiary distinction made expected economies passed public. Livestock To, From, Between Points Southeast, 101 105 (1925). 'weak' allowed arbitraries, i.e., differentially addition scales prescribed application, whereas small permitted additional rates. Rate Structure Investigation, Part 13, Salt, 197 115 (1933). 12 Unless long railroads, interpreted protected advantages assumed existed, operation, will taken them. very reasons applying denying arbitraries cease exist. Such result, flowing failure construe including control, inconsistent Therefore, relied criteria Alabama, T. Southern 148 708 (1928), specifically Blackshear, supra, limitation three roads Georgia F.R. 191 489 fact, seven proceedings involving S.,9 purposes must considered proceedings, Lumbermen's Assn. M. St. P.R. 129 363 (1927), Canada destinations urged rates, prescribed, secure railroads. Canadian routes, holding, inter alia, Northern.' 364. 13 Likewise, Seaboard Air Carolina 204 416 (1934), s Act.10 3(3), 3(4), involved control. Northwestern officials 'determine adopted regard carrier, interest Northwestern, determined prevails. apparent, control.' 420. Although significant, pointed test and, retain interrelationship indicates necessity use each. 14 consider cases,11 appellants, contrary. Common established. concerned distinguished There nothing cannot exist ownership active Nor feel apposite. 15 Summarizing, years followed §§ constitutes management' 'control.' exercised railroad. believed took note 1940 interpretation' judgment therefore affirmed. 16 Affirmed. 17 STEWART consideration case. 18 DOUGLAS, whom BLACK concurs, dissenting. 19 Four Spokane gateway Coast: Milwaukee, Pacific, Northern, reach Puget Sound, reaches 'triangle' apex base Seattle-Tacoma. Pacific. 20 disadvantage shipments gateway. service service, structure. When Milwaukee—a Chicago—wants ship shortest route—the S.—it quote those shipments, get preferred 'close commercial sense' far concerned. 453, 457. advantage affords Chamber N. 265, 283, 'It coast interior cheaply Pacific.' That monopolistic advantage; entitled exploit exclusion Milwaukee. 21 'Through rule, 1(4), maintenance discriminatory 'combination rates,' Under 15(3), former whenever 'necessary Only policy. Since 1910, railroad's right 'short-hauled,' is, carry originating on, destined to, carriage well place Here, claim together up wants short-haul. 22 question presented concerns 23 First. granted special extended, needs rewritten. says shall 'require intermediat conjection therewith.' singular. given, amended 'carrier carriers' times (36 551—553) 'line lines' twice 553). So apparent plural intended, used. explaining provision, spoke singular: 'The required, unreasonably long, competitor, especially shipment destination 3476. 24 extending 'having designated termini.' S.Rep. 355, 61st 2d Sess., 10. greatly expanded 'control,' new thought 'undesirable law' regard.1 25 Second. Prior legislation had create Absorption Switching Charges, 157 129, 132; Manufacturers Ahnapee W.R. 172 554, 564. 'Those connecting roads. oral argument counsel conceded one. 'common' I fail see how is.2 involve 26 Cases 654, irrelevant. fix 'single-line' 'joint-line.' 'single-line rates' 'single railway control'; 'joint-line 'only embraced Id., 'generally 'Common innovation statutory term. refers—the ones represented Minneapolis Civic Ass'n, 247 490, 38 553, 62 1229. turn tracks charge competitor. like rates—is just non-discriminatory. Economies disappear competition. Of course, monopoly position affiliated profitable, think sole 'arbitraries.' 27 Section deals highly specialized 'short-haul' narrowly construed, lest too end device competitors foreclose market. why, think, closely confined put singular extended group activities here 28 reverse below remand proceedings. composed wholly subsidiaries, Trunk Electric 49 pertinent part: 'In establishing railroad, without consent, 'A 'throughr oute' arrangement, express implied, continuous carrier—to another.' Louis Southwestern 1917, 245 136, 139, 49, 50, 199. '(T)he essential feature agreed mutually consented aggregate sum charges points.' New York, N.H. H.R. Platt, 323, 333 (1897). seem unreasonable empower commission company allow portion linked creating competition it, thus depriving natural possessing S.Rep.No. 1(3)(b), 1(3)(b). Rates Chert, Clay, Sand, Gravel, 215 (1933); Humbard Construction 161 (1930); Holton Interurban 153 673 (1929); Raleigh Freight Bureau 107 156 (1926); (1925); 91 292 (1924). bottomed 1918, 1229, wherein competitive coequally did, pup oses, 'directly operate' treated Des Monies Union Ry. Switching, 231 631 (1939); Blum Packing 93 (1934); Russ Market 171 117 Eriksen Ann Arbor 102 374 Lumber North-western 51 738 (1918). Helix Milling 287 77 (1952); Pillsbury-Astoria Flour Mills 198 642 P. S.R. 41 Valuation Reports (1932); (1927); Inland Empire Shippers League Director General, 321 (1920); Astoria (1916); Railroad Navigation 265 (1910). fares, lines, unduly distributio routed shipper.' 554 (1931); (1929). admits broaden 1940. Yet relevance. indirectly lightly who line? 77, wanted objected basis issue need assumption objecting road. But analysis made. Cf. 363, 708, 711, cited

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