Court Opinion

ID: 8802164
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:35:58.714078+00
Date Added: 2024-06-11T17:03:56.894390
License: Public Domain

CARLAND, Circuit Judge
(dissenting). It is difficult 'to determine from the opinion of the majority exactly upon what ground or grounds the bill in this case is dismissed. The opinion states that:
“Prior to the stock acquisition in 1899 and since there never was a time, in our opinion, when there was in any real substantial sense ‘a natural and existing competition in interstate commerce’ between the Southern Pacific and the Central Pacific within' the intent of the Anti-Trust Act. * * * That competition of the kind mentioned might now result from an enforced independence of the two companies and a separation of.their railroads may be true, but we do not think the statute was intended to create competition by destroying a proprietary relation formed long before its passage and by the very means of which a railroad system has been brought into existence.”
If the language first quoted means natural and existing competition in fact, then it is entirely consistent with the claim of counsel for the United States, which is that no such competition existed or could exist by reason of the common control since 1899 of the Central Pacific by the Southern Pacific. If the language means that there could be no competition between the two railroad systems, then.the language is inconsistent with the language which follows, wherein it seems to be conceded that but for the common control there would be competition. As the breaking up of an unlawful combination does not create natural competition, but simply removes the barriers which prevent the free flow of interstate commerce, the concession that there might be competition if the combination was broken is also a concession that there is natural competition which is suppressed by reason of the control of the Central Pacific by the Southern Pacific.
The combination which is complained of in this case is alleged to have originated in 1899 in the acquirement of all the stock of the Central Pacific by the Southern Pacific. The fact that prior to the passage of the Anti-Trust Law there had been a practical control of the Central Pacific by the Southern Pacific through a leasing arrangement in no way validates the present combination, if it be unlawful. Standard Oil Co. v. United States, 221 U. S. 1, 31 Sup. Ct. 502, 55 L. Ed. 619, 34 L. R. A. (N. S.) 834, Ann. Cas. 1912D, 734; United States v. American Tobacco Co., 221 U. S. 106, 31 Sup. Ct. 632, 55 L. Ed. 663; United States v. Trans-Missouri Freight Association, 166 U. S. 290, 17 Sup, Ct. 540, 41 L. Ed. 1007; United States v. Delaware & Hudson Co., 213 U. S. 366, 29 Sup. Ct. 527, 53 L. Ed. 836; Philadelphia, Baltimore & Washington R. R. Co. v. Schubert, 224 U. S. 603, 32 Sup. Ct. 589, 56 L. Ed. 911; Waters-Pierce Oil Co. v. Texas, 212 U. S. 86, 29 Sup. Ct. 220, 53 L. Ed. 417; United *1008States v. Kissel, 218 U. S. 601, 31 Sup. Ct. 124, 54 L. Ed. 1168; Armour Packing Co. v. United States, 209 U. S. 56, 28 Sup. Ct. 428, 52 L. Ed. 681.
There does not seem to be any conflict in the authorities upon this proposition. The evidence in the record in my opinion establishes beyond question that the Southern Pacific, extending from San Francisco Bay to New Orleans, with its steamship connection with New York, is a natural competitor of the Central Pacific, both as to California-Atlantic Seaboard freight and central and western United States freight to and from California. A mere inspection of the different routes over which interstate commerce is moved through the El Paso and Ogden gateways would seem to show that the two roads are natural competitors. If they are competitors, and the Southern Pacific, as it is admitted, controls the Central Pacific, it follows that the free flow of interstate commerce is restrained. United States v. Union Pacific Railroad Co., 226 U. S. 61, 33 Sup. Ct. 53, 57 L. Ed. 124; Northern Securities Co. v. United States, 193 U. S. 197, 24 Sup. Ct. 436, 48 L. Ed. 679.
I do not think the evidence shows that the Central Pacific and the Southern Pacific were created originally and have always continued to be one system. They have always been and are now operated as separate systems. The settlement by the United States of the debt of the Central Pacific in 1899 cannot be held to estop the United States from insisting at this time that the combination between the two roads is in violation of the Anti-Trust Act. It is not remarkable that in the proceedings resulting in the settlement, so far as they, appear of record, the Anti-Trust Law was not referred to, as little attention was given in those days to the Antitrust Law of July 2, 1890.
Finally, I am unable to reconcile the decision of the Supreme Court in the case of United States v. Union Pacific Railroad Co., 226 U. S. 61, 33 Sup. Ct. 53, 57 L. Ed. 124, with the conclusion reached by the majority in this case. The Union Pacific and the Central Pacific constitute one transcontinental line from Omaha, Neb., to the Pacific Coast. Of course, it would not be objectionable for the Union Pacific to control the Central Pacific, so far as anything in the record in this case is concerned, because it would simply be the same through line, with no competition involved as between these two roads; but the Supreme Court held in the case cited that the control of the Southern Pacific by the Union Pacific was a combination in restraint of commerce that should be broken up.
In this case the Southern Pacific, which the Supreme Court held was in competition with the Union Pacific, controls the Central Pacific, or another section of the through line from Omaha to the Coast. How is the decree of the Supreme Court in the Union Pacific Case to become effective, with the competitor of the Union Pacific controlling the Central Pacific? If it was unlawful for the Union Pacific, being one section of the through line, to control the Southern Pacific, why is it not unlawful for the Southern Pacific to control the other section of the through line. It is said in the opinion that there is no *1009evidence of complaint by shippers of the alleged unlawful combination. The Attorney General, in instituting this action, represents the public, including shippers.
For these reasons, briefly stated, I dissent from the conclusion reached by the majority.