Appendix — Greyhound Corp. v. Mt. Hood Stages, Inc.

Supreme Court brief1978

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Supreme Court, U. $.~

FILED

FEB 22 1978

APPENDIX

MICHAEL RODAK JR., CLERK |

In the Supreme Court of the

United States

Ocroser Term, 1977

No. 77-598

Tae GgerHounp CorPoraTION AND GREYHOUND Lins, INc.,

Petitioners,

Vv.

Mr. Hoop Sraazs, Ivc., doing business

as Pacific Trailways,

Respondent.

On Writ of Certiorari to the United States Court of Appeals

for the Ninth Circuit

Petition for Certiorari Filed October 25, 1977

Certiorari Granted January 9, 1978

SORG PRINTING COMPANY OF CALIFORNIA, 346 FIRST STREET, SAN FRANCISCO 94105

LIST OF CONTENTS

SU I

Petition of Mt. Hood Stages, Inc., for an Order Re-

opening the Above Captioned Cases and Attaching

Certain Terms, Conditions and Limitations to the

Exercise of the Privileges Therein Granted, dated

October 7, 1964 (R. 1410-1429) ..... siiditiesitiasshlepieliade

Amendment to Petition of Mt. Hood Stages, Inc., for

an Order Reopening the Above Captioned Cases and

Attaching Certain Terms, Conditions and Limita-

tions to the Exercise of the Privileges Therein

Granted, dated December 1, 1964 (R. 1402, 962-974) ..

Petition of United States for Leave to Intervene, filed

with ICC December 14, 1964 (R. 2266-2273) 00.

Order of ICC, dated May 27, 1965 (R. 2275-2279) ........

Complaint, filed July 5, 1968 (R. 1-12) oo.

Third Amended Complaint, filed July 27, 1971 (R.

SEIDEN aicshsshccchscnseinionsnadhcabnlll lc etatieneaigataactitesipnsinbthitinateabdanipeisiy:

Answer of Defendant Greyhound Lines, Inc., to Third

Amended Complaint, filed August 23, 1971 (R. 702-

RTE ee” ee ote WELT ee AEM

Answer of Defendant The Greyhound Corporation to

Third Amended Complaint, filed June 29, 1972 (R.

TE 5 eiidcninaneviinianaienecremnatneitiinsinanidlecamnitigesesiiipelitiaaidaiinitn

Letter Opinion dated November 22, 1972, from Judge

Alfred T. Goodwin to counsel (R. 1354-1357) _............

Special Verdict, filed May 2, 1973 (R. 2248-2249)

a ee eee

li List or ConTENTS

Page

Motion for Judgment Notwithstanding the Verdict, for

a New Trial and to Strike Certain Evidence, filed

May 9, 1978 (R. 2266-2256) S4

Judgment, filed May 11, 1973 (R. 2261) .... 86

Memorandum and Order, filed November 30, 1973 (R.

RE RE AEST an eNO a! be ty SIOL Ty Sy Se Re 87

Memorandum of Points and Authorities in Support of

Plaintiff’s Petition for Allowance of Attorneys’ Fees

{without Exhibits], filed December 4, 1973 (R. 2882-

TTI. hcassrciceeiepehieilclirrdiaaiddansecinedbnneiidshccccstai at 94

Testimony of Maxwell Blecher given December 20, 1973

nF EEN Rar NeIV OP AIO ae ROE Ea 103

Portion of Mt. Hood closing argument at hearing re

attorneys’ fees (Tr. 6893-6894) 2.0... eccceccccoeence---.. 103

Memorandum and Order on Attorneys’ Fees, filed

December 21, 1973 (R. 3271-8272) ooo eee ecceeceeeseeeceee 104

Amended Judgment, filed December 21, 1973 (R. 3273) 106

Notice of Appeal by Greyhound Corporation and Grey-

hound Lines, Inc., filed December 26,1973 (R. 3275) 107

Opinion of the Court of Appeals for the Ninth Circuit,

oh te a ye LT AOTEAROA RON 108

Order denying Petition for Rehearing and Rejecting

Suggestion for Rehearing En Bane, filed as of

FS , SERS wteevibliabiodeiiniaiiitiamienanis 141

Order filed January 9, 1978, granting certiorari limited

to Question 3 presented by the petition ............ 142

RELEVAN T DOCKET ENTRIES

In the United States District Court

Date

July 5, 1968

January 23, 1970

April 22, 1970

June 8, 1970

July 27, 1971

August 23, 1971

June 7, 1972

June 29, 1972

July 6, 1972

November 22, 1972

May 2, 1973

for the District of Oregon

Document

Complaint

First Amended Complaint for

Treble Damages and Injunctive

Relief Under the Antitrust Laws

and Unfair Competition Laws

Second Amended Complaint for

Treble Damages Under the Anti-

trust Laws and for Damages Un-

der the Unfair Competition Laws

Answer of Defendant Greyhound

Lines, Inc., to Second Amended

Complaint

Third Amended Complaint for

Treble Damages Under the Anti-

trust Laws and for Damages Un-

der the Unfair Competition Laws

Answer of Defendant Greyhound

Lines, Inc., to Third Amended

Complaint

Plaintiff’s Supplemental

Complaint

Answer of Defendant The Grey-

hound Corporation to Third

Amended Complaint

Answer of Defendant Greyhound

Lines, Inc., to Supplemental

Complaint

Answer of Defendant The Grey-

hound Corporation to

Supplemental Complaint

Letter dated November 22, 1972,

from Judge Alfred T. Goodwin

to counsel

Record of Jury Trial

Special Verdict

439-448

451-456

691-700

702-706

1015-1016

1140-1144

1147-1148

1151-1152

1354-1357

2247

2248-2249

oe + any

Date

May 9, 1973

May 11, 1973

May 15,1973

May 18, 1973

(Received )

May 18, 1973

(Received )

November 30, 1973

December 4, 1973

December 21, 1973

December 26, 1973

Appendix

Document

Motion for Judgment Notwith-

standing the Verdict, for a New

Trial and to Strike Certain

Evidence

Judgment

Renewal of Defendants’ Motions

Petition of United States of

America for Leave to Intervene

(dated December 14, 1964)

Order (dated June 4, 1965) (sic)

Memorandum and Order

Memorandum of Points and

Authorities in Support of Plain-

tiff’s Petition for Allowance of

Attorneys’ Fees

Memorandum and Order on

Attorneys Fees

Amended Judgment

Notice of Appeal by Greyhound

Corporation and Greyhound

Lines, Ine.

Record

Reference

2256-2258

2261

2262

2266-2273

2275-2279

2874-2881

2882-2891

3271-3272

3273

3275

Appendiz

In the United States Court of Appeals

for the Ninth Circwt

Date Document

February 18,1974 Docketed Cause and entered

Appearances of Counsel.

March 19, 1974 Filed 25 Appellants’ Briefs

May 30, 1974 Filed 25 Appellee’s Briefs

July 11, 1974 Filed 25 Appellants’ Reply Briefs

January 6, 1975 Cause Argued and Submitted

June 9, 1977 Filed Opinion—Affirmed

June 9, 1977 Filed and Entered Judgment

June 23, 1977 Filed Appellants’ Petition for

Rehearing with Suggestion for

Rehearing En Bane

August 4, 1977 Filed, as of August 3, Order: The

Petition for Rehearing is denied

and the suggestion for a rehear-

ing in banc is rejected

October 31, 1977 Received from Supreme Court

Notice of Filing Petition for

Certiorari on October 25, 1977,

and assigned No. 77-598

In the Supreme Court of the United States

January 9, 1978 Filed Order granting certiorari

limited to Question 3 presented

by the petition

Record

Reference

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4 Appendix

Before the Interstate Commerce Commission

In Re:

The Greyhound Corporation - Acquisitions:

Union Pacific Stages MCF 5190 58 MCC 809

0.C, & N. Stages, Ine. MCF 3102) |

Yahne, Inc. dba Inland Stages MCF 3003 50 MCC 123

Oregon Motor Stages MCF 5403 50 MCC 657

Washington Motor Coach MCF 3295 45 MCC 821

North Coast Lines MCF 3687 55 MCC 801

B.C. Motor Transportation MCF 5534. 60 MCC 643

Pacific Greyhound Lines MCF 5733 70 MCC 59

PETITION OF MT. HOOD STAGES, INC.,

FOR AN ORDER REOPENING OF THE ABOVE

CAPTIONED CASES AND ,

ATTACHING CERTAIN TERMS, CONDITIONS

AND LIMITATIONS TO

THE EXERCISE OF THE PRIVILEGES

THEREIN GRANTED.

ALTERNATIVE PETITION FOR DIVESTITURE.

Comes now Mt. Hood Stages, Inc., an Oregon corporation,

doing business under the assumed name Pacific Trailways

(hereinafter referred to as Mt. Hood) to respectfully peti-

tion the Commission for an order reopening all of the above

captioned cases for further hearing to consider the necessity

of attaching certain terms, conditions and limitations to the

privileges therein granted, as hereinafter set forth and re-

quested, or, in the alternative, to order The Grevhound Cor-

poration to divest itself of operations acquired in said

proceedings.

In support of its petition, Mt. Hood represents and avers

as follows: [1410]

Mt. Hood is now and for more than 30 years has been a

common carrier of passengers by motor bus, in interstate

and intrastate commerce over regular routes. Its LC.C. au-

_ Appendix 5

thority is held under docket number M.C. 70947. Page 1 of

the 8-page exhibit attached hereto, and by this reference

made a part hereof, shows Mt. Hood’s regular routes. All

of said routes pertinent to this petition are improved high-

ways with relatively easy grades and curves over which

the maximum legal speed for busses can be comfortably

maintained. :

II.

The vendor companies named in the series of cases set

forth in the caption of this petition, supra, and which are

now a part of the Greyhound Corporation system, operated

over principal routes as shown in Exhibit 1, as follows:

Page 2, Pacific Greyhound Lines

Page 3, O.C.&N. Stages and Inland Stages

Page 4, Washington Motor Coach

Page 5, North Coast Transportation Co.

Page 6, Union Pacific Stages

Page 7, Oregon Motor Stages

Page 8 of Exhibit 1 shows the present encirclement of

Mt. Hood by the Greyhound Corporation, resulting from

the acquisitions listed in the caption hereof. The solid black

lines are principal Greyhound routes, including, north of

the U.S.-Canadian boundary, routes of Greyhounds’s wholly

owned Western Canadian Greyhound Lines. The dotted lines

on page 8 show the routes of Mt. Hood. [1411]

Til.

Mt. Hood’s routes between Albany and Eugene, Oregon,

on the one hand, and, on the other, points east of the Oregon-

Idaho line, are shorter by 113 miles than the present all

Greyhound routes via Portland. This mileage savings can

teri = > aepoll

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6 Appendix

be realized by passengers originating at or destined to

Western Cregon points on Greyhound routes such as Cor-

vallis, Newport, Roseburg, Grants Pass, Coos Bay, ete. A

joint-line service via Greyhound connecting with Mt. Hood

at Eugene and Albany in western Oregon and at Ontario

in eastern Oregon would be up to 4 hours faster than the

present all Greyhound route through Portland. Because of -

the shorter mileage, Mt. Hood’s fares are as much as $3.00

cheaper than the all Grevhound fares via Portland between

said points in western Oregon, on the one hand, and, on

the other, points served by both Grevhound and Mt. Hood

east of the Oregon-Tdaho boundary.

IV.

The mileage via a joint-line Grevhound-Mt. Hood route

between Klamath Falls, Oregon and points south thereof,

on the one hand, and, on the other, The Dalles and Biggs,

Oregon and points on Greyhound routes north and east

thereof, is approximately 116 miles shorter than via the

all-Grevhound route through Portland.

Mt. Hood's routes via Bend and Burns, Oregon between

Klamath Falls, on the one hand, and, on the other, Ogden,

Utah and points north thereof on Grevhound’s routes are

approximately [1412] 23 miles less than the all-Grevhound

route via Reno, Nevada and Salt Lake City, Utah.

Mt. Hood’s route between Klamath Falls and Portland

and points north thereof via Bend, Oregon is 19 miles

longer than the Greyhound route via Eugene. Mt. Hood's

route along the east side of the Caseade range of mountains,

coming within ten miles of the perpetually snoweapped peak

of Mt. Hood is very seenie¢ in both summer and winter, Run-

ning time over Mt. Tlood’s route is approximately the same

as Grevhound schedules via Eugene.

Appendix 7

The routes served by Mt. Hood east and west across

Oregon and north and south between Klamath Falls and

The Dalles are not served by any other surface common

carrier of passengers. Greyhound and Mt. Hood have long

followed the practice of honoring each other’s tickets, par-

ticipating in joint through rates and maintaining convenient

connecting schedules. Greyhound has, in the past, showed

Mt. Hood’s service in its schedule folders, showed its routes

upon maps furnished to its agents, and allowed Mt. Hood

representatives to call upon Greyhound agencies to solicit

the routing of passengers over its routes.

Two through schedules were established between San

Francisco and Spokane, using Mt. Hood’s Klamath Falls-

The Dalles route as a “bridge” between Pacific Greyhound

and [1413] Northwest Greyhound, which saved approxi-

mately 116 miles and as much as 5 hours compared with the

all-Grevhound service via Portland. One of the two sched-

ules was operated with a through bus under lease to Mt.

Hood and driven by Mt. Hood drivers between Klamath

Falls and The Dalles.

VI.

In its applications to the L.C.C. for authority to acquire

and/or merge the said predecessor companies, Greyhound

represented that the transactions would have no adverse

effect upon other carriers. In the application to acquire U.P.

Stages dba Overland Greyhound, for example, it was rep-

resented that the proposed transaction would “have no ma-

terial adverse effect upon other carriers as Overland’s

routes will remain open to all other carriers” and that “The

proposed transaction will foster and not impair carrier

competition”. (p. 59 of application, Exh. D)

stn a RE ber 6 ee eat Ce Ae bt Bn le oe eee eee ee

8 Appendix

A hearing was held at Washington, D.C. upon said appli-

cation. Mt. Hood’s manager appeared with counsel in oppo-

sition and expressed the fear that, after consummation, the

Greyhound Corporation would engage in practices detri-

mental to Mt. Hood and the bus riding public. Witnesses

for the applicants represented as follows:

“Tt would have no effect on competition because it

would not change our relations with any of our eon-

nections (R.J.O’Connor, General Traffic Manager,

Overland System, tr 40). Counsel for the applicants

said “You can take that as a commitment, because it

[1414] is the same statement that the executive of the

Greyhound Corporation will make”. (Mr. Turney, tr

43)

“One of the officers of the Greyhound Corporation

who had discussed it with the president of Pacific Grey-

hound stated that he would authorize a witness for the

corporation to state that, insofar as they were con-

cerned, they had no idea of changing the present ar-

rangements which they have with Pacific Trailways”.

He also said that similar assurance applied with respect to

the then present arrangements between Mt. Hood and

Northwest Greyhound (formerly Washington Motor

Coach). (L.H.Ristow, Director of Traffic, The Greyhound

Corp. tr. 84)

Mr. Bogan, Executive Vice President and board member

of the Greyhound Corporation and all of its subsidiaries,

said that he had approved the arrangement for through

busses operating between San Francisco and Spokane over

Mt. Hood’s route between Klamath Falls and The Dalles,

Oregon, and that “It will be maintained”. (tr. 95)

In reliance upon these representations, Mt. Hood with-

drew as a protestant in that case. (tr. 143)

Mt. Hood protested Greyhound-Control-0.C. & N. Stages

(MCF 3102) and Greyhound-Control-Yahne, Ine. dba In-

Appendiz 9

land Stages (MCF 3208). 0.C. & N. operated south of Klam-

ath Falls to Reno and Yahne, between Reno and Los

Angeles. Mt. Hood’s contention was that these acquisitions

would eliminate its only possible non-competitive connection

for California traffic. [1415]

The examiners’ report in the 0.C. & N. case found that

the proposed acquisition would result in “the elimination of

the only independent motorbus company by Pacific Grey-

hound in a territory where they now have a virtual mon-

opoly * * *” “Considering the acquisition by Pacifie Grey-

hound of 0.C. & N. alone, or in conjunction with the opera-

tion of Inland Stages, in which Pacific Grevhound already

has a 3/7th interest, the examiners cannot find the trans-

action to be consistent with the public interest.”

The Greyhound Corporation and its then subsidiary

Pacific Greyhound succeeded in reversing the examiners.

In their exceptions they said:

“The Examiner has failed to review the contraven-

ing testimony of Mr. Fraley, reported upon pages 243

and 244 of the transcript. According to that testimony,

the promise of Pacific Greyhound was that ‘there

would not be discrimination in the sale of transporta-

tion into the eastern Washington territory over the

combined routes of Pacific Greyhound Lines to

Klamath Falls and thence to The Dalles via the Pacific

Trailways, there connecting with other carriers into

the Northwest. In other words, a passenger is to have

his choice of routes.’ This testimony was not thereafter

controverted.”

The two cases were decided in a single report (50 MCC

123). The Division was apparently convinced that Mt.

Hood’s fears were groundless and granted those applica-

tions.

nT TE Ee ee ee Te

10 Appendix

Without going into details petitioner states generally that

the applications to acquire the other companies listed herein

contained similar representations that they would have no

adverse effect upon competition. [1416]

VIL.

Since accomplishing the encirclement of Mt. Hood by

means of said acquisitions and mergers, Greyhound is

employing practices which are the opposite of the repre-

sentations made to the Commission to secure approval, as

follows:

(a) Ceased showing Mt. Hood schedules in Greyhound

folders while continuing to show the service of

numerous other non-Grevhound lines.

(b) Discontinued the through bus operated in connec-

tion with Mt. Hood between San Francisco and

Spokane.

(ec) Changed its schedules between San Francisco and

Klamath Falls and between Biggs, Oregon and

Spokane so as to break connections with Mt. Hood

and force a delay of approximately 3 hours for

any passenger seeking to use the shorter route via

Mt. Hood.

(d) Cause its agents to fail or refuse to quote Mt.

Hood’s service and fares to inquiring prospective

passengers, even when the Mt. Hood route is sub-

stantially shorter, the joint Grevyhound-Mt. Hood

service is substantially faster, and the fares lower

than an all-Grevhound route.

(e) Caused its agents to quote Mt. Hood service in an

unfavorable light, or in an inaccurate manner, to

inquiring prospective passengers who specifically

request information on Mt. Hood service.

(f) Discontinued showing Mt. Hood’s connecting

routes upon its maps while continuing to show the

Appendiz | ll

connecting routes of numerous other non-Grey-

hound carriers.

(g) Requested Mt. Hood to discontinue calling upon

Greyhound agencies.

(h) Refused to establish joint through rates, [1417]

(i) At Greyhound depots also occupied by Mt. Hood it

discriminates against Mt. Hood by refusing to

announce over its speaker systems or to show upon

its schedule boards Mt. Hood’s departures for

points which can be reached via an all-Grevhound

route, or to impartially inform prospective pas-

sengers inquiring, over the phone or over the

counter, of Mt. Hood’s service and fares to such

points.

(j) At commission agencies which sell both Greyhound

and Mt. Hood tickets where, because of its vastly

greater coverage and correspondingly greater

sales possibilities for the agent, Greyhound is in a

position to dictate and exert pressure, it influences

such agents to favor Greyhound in the quoting of

service, display of advertising, and in other

respects.

VIII.

By means of the acquisitions herein listed, and others,

The Greyhound Corporation has attained a position of un-

paralleled dominance in the intercity scheduled motor bus

business in the Pacific Region as shown by the following

figures from the Commissions Bureau of Transport Eco-

12 Appendix

nomics and Statistics on Class 1 Motor Carriers of Pas-

sengers, 1963:

Per Cent of

Pacific Region

Revenues Vote!

a $113,266,659 96.1

EES en 1,294,904 1.1

Las Vegas-Tonopah-Reno ...... 813,539 69

Continental-Pacifie 0000.00.00... 768,051 65

Orange Belt Stages .................. 554,871 AT

Peerless Stages ........................ 490,128 Al

Sun Valley Bus Lines .............. 337,265 .28

Citizen Auto Stage Co. 0.00.0... 223,749 19

MIND TO TI, mccteccenscnceceenenecces 126,622 All

Total Pacifie Region ........ $117,875,788 100.00 [1418]

IX.

The certificates reissued to Greyhound in the herein-

before listed acquisitions are all “subject, however, to such

terms, conditions and limitations as are now, or may here-

after be, attached to the exercise of the privileges herein

granted to the said carrier.”

Part I Section 5(9) of the Act gives the Commission

specific authority to make such supplemental orders “as it

may deem necessary or appropriate” in acquisition cases.

Your petitioner respectfully requests that all of the said

proceedings be reopened and assigned for further hearing

to receive evidence supporting the allegations herein con-

tained and which, your petitioner believes, will justify the

insertion in the said aequired certificates of terms, condi-

tions and limitations which will have the effect of pro-

hibiting the discriminatory and destructive competitive

practices hereinbefore described, requiring restoration of

useable joint-line schedules between points south of Klam-

ath Falls, on the one hand, and, on the other, points north

Appendix 13

and east of The Dalles and Biggs, Oregon, and otherwise

specifically enforcing the promises, representations and

assurances relied upon by the Commission in approving the

said acquisitions.

Your petitioner prays in the alternative that Greyhound

be required to divest itself of self paralleling opera- [1419]

tions operations [sic] acquired by means of said false repre-

sentations, for example:

(a) One of the two routes acquired between The Dalles

and Spokane, Washington.

(b) The Klamath Falls-Los Angeles route acquired

from O.C. & N. and Inland Stages which gave it a

third route between California points and points

in Washington and Oregon.

(ec) The route acquired from B.C. Motors exactly par-

alleling the route acquired from North. Coast

Lines.

Expedited handling of this matter is requested.

Dated at Portland, Oregon

October 7, 1964.

MT. HOOD STAGES, INC.

dba Pacific Trailways

By: Wriuiam A. NISKANEN

William A. Niskanen

Vice President and Manager

1048 Bond Street

Bend, Oregon

/s/ Donavp A. ScHarer

Donald A. Schafer

Attorney at Law

12321 S.E. Evergreen Highway

Vancouver, Washington [1420]

SLURS Sue SORES Bg Sie Wy 4 CR HF iy hh SRR RE EE PEE ee 6. Le

epTEKgy 3

hed

BIBI MAE” \, A OATS LEA aye: >

14 Appendiz Appendix -

VERIFICATION | .! | ie Exhibit |

STATE OF OREGON ” : \ cs Oe (Ce pabes )

County of Multnomah ; je SCATTLE fue sae

WM. A. NISKANEN, being duly sworn, deposes and / al /

Says: that he is Vice President and General Manager of the i i SPOLES, \

petitioner in the above entitled proceedings; that he has / ’

read the foregoing petition and knows the contents thereof :

that the same is true as stated, except as to matters and

things, if any, stated on information and belief, and that as

to those matters and things, he believes them to be true.

/s/ Wm. A. NisKANEN

Subscribed in my presence, and sworn to before me, by

the affiant above named, this 7th day of October, 1964.

/s/ Grace G. Murray

Notary Public for Oregon

Commission expires 8/5/68 [1421]

[Certificate of service omitted in printing]

[EXHIBITS FOLLOW]

See

\_ BEST COPY AVAILABLE

[1422]

[1423]

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Appendiz 7

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20 Appendix

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Appendix 23

Before the Interstate Commerce Commission

In Re:

The Greyhound Corporation—Acquisitions :

Union Pacific Stages ................ MCF 5190 58 MCC 809

O.C. & N. Stages, Ine. .............. MCF 3102

Yahne, Inc., 50 MCC 123

dba Inland Stages ................ MCF 3208

Oregon Motor Stages .............. MCF 5403 50 MCC 657

fms Washington Motor Coach .....MCF 3295 45 MCC 831

North Coast Lines .................... MCF 3687 55 MCC 801

E.C. Motor Transportation ...MCF 5534 60 MCC 643

Pacific Greyhound Lines ........ MCF 5733 70 MCC 59

AMENDMENT TO PETITION

Comes now Mt. Hood Stages, Inc., dba Pacific Trailways

to amend its petition (filed October 7, 1964) to reopen the

above captioned cases for further hearing, as follows:

Substitute the attached amended pages 1, 9, 10, 11, and

12 for the present pages 1, 9, 10, 11 and 12, and add the

attached pages 13 and 14.

Dated at Portland, Oregon

December 1, 1964

Greyho and voutes ———

Pad

Mt Hoed voules cooceeee®

/s/ Donatp A. ScHAFER

Donald A. Schafer

Attorney for Mt. Hood Stages, Inc.

12321 S.E. Evergreen Highway

Vancouver, Washington 98664 [1402]

PETITION OF MT. HOOD STAGES, INC.,

FOR AN ORDER REOPENING OF THE ABOVE

CAPTIONED CASES AND ATTACHING CERTAIN

TERMS, CONDITIONS AND LIMITATIONS TO

re THE EXERCISE OF THE PRIVILEGES

THEREIN GRANTED.

[1429]

24 Appendix

Comes now Mt. Hood Stages, Inc., an Oregon corporation,

doing business under the assumed name Pacific Trailways

(hereinafter referred to as Mt. Hood) to respectfully peti-

tion the Commission for an order reopening all of the

above captioned cases for further hearing to consider the

necessity of attaching certain terms, conditions and limita-

tions to the privileges therein granted, as hereinafter set

forth and requested.

In support of its petition, Mt. Hood represents and avers

as follows: [962] :

Mt. Hood is now and for more than 30 vears has been

a common carrier of passengers by motor bus, in interstate

and intrastate commerce over regular routes. Its L.C.C.

authority is held under docket number M.C. 70947. Page 1

of the 8-page exhibit attached hereto, and by this reference

made a part hereof, shows Mt. Hood’s regular routes. All

of said routes pertinent to this petition are improved

highways with relatively easy grades and curves over

which the maximum legal speed for busses can be com-

fortably maintained.

IL.

The vendor companies named in the series of cases

set forth in the caption of this petition, supra, and which

are now a part of the Greyhound Corporation system,

operated over principal routes as shown in Exhibit 1, as

follows: —

Page 2, Pacific Greyhound Lines

Page 3, O.C.& N. Stages and Inland Stages

Page 4, Washington Motor Coach

Page 5, North Coast Transportation Co.

Page 6, Union Pacifie Stages

Page 7, Oregon Motor Stages

Appendix 25

Page 8 of Exhibit 1 shows the present encirclement of

Mt. Hood by the Greyhound Corporation, resulting from

the acquisitions listed in the caption hereof. The solid black

lines are principal Greyhound routes, including, north of

the U.S.-Canadian boundary, routes of Greyhound’s wholly

owned Western Canadian Greyhound Lines. The dotted

lines on page 8 show the routes of Mt. Hood. [963]

ITT.

Mt. Hood’s routes between Albany and Eugene, Oregon,

on the one hand, and, on the other, points east of the

Oregon-Idaho line, are shorter by 113 miles than the present

all Greyhound routes via Portland. This mileage savings

ean be realized by passengers originating at or destined to

Western Oregon points on Greyhound routes such as

Corvallis, Newport, Roseburg, Grants Pass, Coos Bay,

ete. A joint-line service via Greyhound connecting with Mt.

Hood at Eugene and Albany in western Oregon and at

Ontario in eastern Oregon would be up to 4 hours faster

than the present all Greyhound route through Portland.

Because of the shorter mileage, Mt. Hood’s fares are as

much as $3.00 cheaper than the all Greyhound fares via

Portland between said points in western Oregon, on the

one hand, and, on the other, points served by both Grey-

hound and Mt. Hood east of the Oregon-Idaho houndary.

IV.

The mileage via a joint-line Grevyhound-Mt. Hood route

between Klamath Falls, Oregon and points south thereof,

on the one hand, and, on the other, The Dalles and Biggs,

Oregon and points on Greyhound routes north and east

thereof, is approximately 116 miles shorter than via the

all-Grevhound route through Portland.

26 Appendix

Mt. Hood’s routes via Bend and Burns, Oregon between

Klamath Falls, on the one hand, and, on the other, Ogden,

Utah and points north thereof on Greyhound’s routes are

approximately [964] 23 miles less than the all-Greyhound

route via Reno, Nevada and Salt Lake City, Utah.

Mt. Hood’s route between Klamath Falls and Portland

and points north thereof via Bend, Oregon is 19 miles

longer than the Grevhound route via Eugene. Mt. Hood’s

route along the east side of the Cascade range of mountains,

coming within ten miles of the perpetually snoweapped

peak of Mt. Hood is very scenic in both summer and winter.

Running time over Mt. Hood’s route is approximately the

same as Grevhound schedules via Eugene,

The routes served by Mt. Hood east and west across

Oregon and north and south between Klamath Falls and

The Dalles are not served by any other surface common

earrier of passengers. Greyhound and Mt. Hood have long

followed the practice of honoring each other’s tickets, par-

ticipating in joint through rates and maintaining con-

venient connecting schedules, Greyhound has, in the past,

showed Mt. Hood’s service in its schedule folders, showed

its routes upon maps furnished to its agents, and allowed

Mt. Hood representatives to call upon Grevhound agencies

to solicit the routing of passengers over its routes,

Two through schedules were established between San

Francisco and Spokane, using Mt. Hood’s Klamath Falls-

The Dalles route as a “bridge” between Pacific Grevhound

and [965] Northwest Greyhound, which saved approxi-

mately 116 miles and as much as 5 hours compared with the

all-Greyhound service via Portland. One of the two sched.

Appendiz 27

ules was operated with a through bus under lease to Mt.

Hood and driven by Mt. Hood drivers between Klamath

Falls and The Dalles.

VI.

In its applications to the I.C.C. for authority to acquire

and/or merge the said predecessor companies, Greyhound

represented that the transactions would have no adverse

effect upon other carriers. In the application to acquire

U.P. Stages dba Overland Greyhound, for example, it was

represented that the proposed transaction would “have

no material adverse effect upon other carriers as Over-

land’s routes will remain open to all other carriers” and

that “The proposed transaction will foster and not impair

carrier competition”. (p. 59 of application, Exh. D)

A hearing was held at Washington, D.C. upon said

application. Mt. Hood’s manager appeared with counsel in

opposition and expressed the fear that, after consumma-

tion, the ‘treyhound Corporation would engage in practices

detrimeutal to Mt. Hood and the bus riding public. Wit-

nesses for the applicants represented as follows:

“Tt would have no effect on competition because it

would not change our relations with any of our con-

nections (R.J.O’Connor, General Traffic Manager,

Overland System, tr 40). Counsel for the applicants

said “You can take that as a commitment, because it

[966] is the same statement that the executive of

the Greyhound Corporation will make”. (Mr. Turney,

tr 43)

“One of the officers of the Greyhound Corporation

who had discussed it with the president of Pacific

Grevhound stated that he would authorize a witness

for the corporation to state that, insofar as they were

concerned, they had no idea of changing the present

arrangements which they have with Pacific Trailways”.

28 Appendix

Ife also said that similar assurance applied with respect

to the then present arrangements between Mt. Hood and

Northwest Greyhound (formerly Washington Motor

Coach). (L.H.Ristow, Director of Traffic, The Greyhound

Corp. tr. 84).

Mr. Bogan, Executive Vice President and board member

of the Greyhound Corporation and all of its subsidiaries,

said that he had approved the arrangement for through

busses operating between San Francisco and Spokane over

Mt. Hood’s route between Klamath Falls and The Dalles,

Oregon, and that “It will be maintained”. (tr. 95)

In reliance upon these representations, Mt. Hood with-

drew as a protestant in that case. (tr. 143)

Mt. Hood protested Greyhound-Control-0.C. & N. Stages

(MCF 3102) and Grevhound-Control-Yahne, Ine. dba

Inland Stages (MCF 3208). 0.C. & N. operated south of

Klamath Falls to Reno and Yahne, between Reno and

Los Angeles. Mt. Hood’s contention was that these acquisi-

tions would eliminate its only possible non-competitive con-

nection for California traffic, [967]

The examiners’ report in the 0.C. & N. ease found that

the proposed acquisition would result in “the elimination

of the only independent motorbus company by Pacific

Greyhound in a territory where they now have a virtual

monopoly * * *” “Considering the acquisition by Pacific

Greyhound of 0.C. & N. alone, or in conjunction with the

operation of Inland Stages, in which Pacific Greyhound

already has a 3/7th interest, the examiners cannot find the

transaction to be consistent with the publie interest.”

The Greyhound Corporation and its then subsidiary

Pacifie Greyhound succeeded in reversing the examiners.

Tn their exceptions they said:

Appendix 29

“The Examiner has failed to review the contraven-

ing testimony of Mr. Fraley, reported upon pages 243

and 244 of the transcript. According to that testimony,

the promise of Pacific Greyhound was that ‘there

would not be discrimination in the sale of transporta-

tion into the eastern Washington territory over the

combined routes of Pacific Greyhound Lines to Klam-

ath Falls and thence to The Dalles via the Pacific

Trailways, there connecting with other carriers into

the Northwest. In other words, a passenger is to have

his choice of routes.’ This testimony was not there-

after controverted.”

The two cases were decided in a single report (50 MCC

123). The Division was apparently convinced that Mt.

Hood’s fears were groundless and granted those applica-

tions.

Without going into details petitioner states generally

that the applications to acquire the other companies listed

herein contained similar representations that they would

have no adverse effect upon competition. [968]

VIL.

Since accomplishing the encirclement of Mt. Hood by

means of said acquisitions and mergers, Greyhound is em-

ploying practices which are the opposite of the representa-

tions made to the Commission to secure approval, as

follows:

(a) Ceased showing Mt. Hood schedules in Greyhound

folders while continuing to show the service of

numerous other non-Greyhound lines.

(b) Discontinued the through bus operated in connec-

tion with Mt. Hood between San Francisco and

Spokane.

Klamath Falls and between Biggs, Oregon and

Spokane so as to break connections with Mt. Hood

Appendix

and force a delay of approximately 3 hours for

any passenger seeking to use the shorter route

via Mt. Hood.

(d) Caused its agents to fail or refuse to quote Mt.

Hood’s service and fares to inquiring prospective

passengers, even when the Mt. Hood route is sub-

stantially shorter; the joint Grevhound-Mt. Hood

service is substantially faster, and the fares lower

than an all-Grevhound route.

(e) Caused its agents to quote Mt. Hood service in an

unfavorable light, or in an inaccurate manner, to

inquiring prospective passengers who specifically

request information on Mt. Hood service.

(f) Discontinued showing Mt. Hood's connecting

routes upon its maps while continuing to show the

connecting routes of numerous other non-Grey-

hound carriers,

(g) Requested Mt. Hood to discontinue calling upon

Greyhound agencies,

(h) Refused to establish joint through rates, [969]

(i) At Greyhound depots also occupied by Mt. Hood

it discriminates against Mt. Hood by refusing to

announce over its speaker systems or to show

upon its schedule boards Mt. Hood's departures

for points which can be reached via an all-Grey-

hound route, or to impartially inform prospective

passengers inquiring, over the phone or over the

counter, of Mt. Hood’s service and fares to such

points.

(j) At commission agencies which sell both Grey-

hound and Mt. Hood tickets where, because of its

vastly greater coverage and correspondingly

greater sales possibilities for the agent, Grey-

hound is in a position to dictate and exert pres-

sure, it influences such agents to favor Greyhound

in the quoting of service, display of advertising,

and in other respects.

Appendiz 31

VII.

Your petitioner believes that the practices alleged in sub

paragraphs (a) to (j), paragraph VII, supra, represent in

the aggregate a purpose on the part of Greyhound to either

drive Mt. Hood out of business or to weaken it to a point

where it will be forced to sell at a sacrifice figure far below

what would have been reasonable based upon past earnings.

Contributing reasons for the said Greyhound practices are

ascribed as follows:

(1)

(2)

Greyhound’s then president, Mr. Frailey, in 1961

discussed with Mt. Hood’s management the matter

of Greyhound purchasing Mt. Hood’s north-south

route between Klamath Falls and The Dalles and

Biggs, Oregon. The proposal was rejected by Mt.

Hood’s management for the reason that such a

sale would give Greyhound a route from Portland

into Central Oregon in competition for Mt. Hood’s

passenger, express and charter business in an area

so sparsely populated that it could not support

such compe- [970] tition. The certain result would

be the collapse of the balance of Mt. Hood’s system.

A further probable result of such a sale would be

the loss to Continental Pacific Trailways (for-

merly West Coast Bus Lines) of a substantial

volume of business, interlined at Portland, which

loss would seriously jeopar ‘ze that company’s

already marginal operations and, if that line were

also to be abandoned, there would be no Trailways

service in the entire Pacific Northwest, north of

Sar Francisco and west of Salt Lake City.

On November 29, 1962 Grevhound applied to the

Public Utilities Commissioner of Oregon for au-

thority to abandon service over certain routes in

Oregon and concurrently, by prearrangement with

Greyhound, a Mr. Houck, dba Valley Stages, ap-

plied for the routes which Greyhound wanted to

(3)

Appendix

abandon. On December 14, 1962 Mt. Hood also

applied for that same authority, both to the Inter-

state Commerce Commission and to the Oregon

Commissioner. Greyhound thereupon dismissed its

application to abandon and protested both of Mt.

Hood’s applications. Mr. Houck, at the same time,

dismissed his application. Mt. Hood’s applications,

as amended, were for authority to extend 11 miles

west from Albany, Oregon to Corvallis and north

from Eugene, Oregon to Corvallis.

Grevhound’s then president, Mr. Frailey, by tele-

phone calls and a letter to officers of Mt. Hood,

thereafter urged that Mt. Hood should dismiss its

applications. The president of Western Grevhound

Division, Mr. Thomas of San Francisco, also made

the same request. These requests, as worded, con-

tained the veiled threat that, unless the appli-

cations were dismissed, relations between Mt. Hood

and Greyhound would be adversely affected with

serious consequences for Mt. Hood. Mt. Hood did

not dismiss either application and has been granted

a certificate of public convenience and necessity

for the interstate service. (M.C. 70947, Sub 18).

The Publie Utilities Commissioner of Oregon de-

nied the intrastate application for a permit and

Mt. Hood presently has pending in the Cireuit

Court of Benton County, Oregon a suit to set

aside the Commissioner's order. [971]

Mt. Hood has, in other ways, refused to submit to

dictation by Grevhownd and thereby incurred the

displeasure of Greyhound; for example, by voting

against joint line fare increases proposed by Grey-

hound in numerous cases and by refusing Grey-

hound’s request for an increase from 10% to 15%

commission to Greyhound on interline sales by

Grevhound.

Appendix 33

IX.

Mt. Hood’s revenues from traffic interlined with Grey-

hound are down 70% in October, 1964, as compared with

October, 1963. Mt. Hood, as a result, has been compelled

to reduce service over its routes causing inconvenience to

the communities affected and causing a diversion of pros-

pective passengers to private transportation, both interstate

and intrastate. The loss of both interline and local traffic

is seriously impairing Mt. Hood’s ability to continue ren-

dering a first-class convenient service over its routes. Most

of the communities affected have no other common carrier

passenger service of any kind.

By means of the acquisitions herein listed, and others,

The Greyhound Corporation has attained a position of un-

paralled dominance in the intercity scheduled motor bus

business in the Pacific Region as shown by the following

figures from the Commissions Bureau of Transport Eco-

nomics and Statistics on Class 1 Motor Carriers of Pas-

sengers, 1963: [972]

A. ~ of

Revenues Tot

$113,266,659 96.1

Mt Hood | 1294904 1

Las Vegas-Tonopah-Reno 813,539 69

Continental-Pacific 768,051 65

Orange Belt Stages 554,871 AT

Peeriess Stages 490.128 Al

Sun Valley Bus Lines 337,265 .28

Citizen Auto Stage Co. 223,749 19

Santa Fe Tpn. 126,622 nal

Total Pacific Region, $117,875,788 100.00

34 Appendiz

Greyhound’s monopoly over most of the main routes in

the Pacifie Northwest gives it a traffic originating advantage

which, if unrestrained, and unfairly used, will enable it to

starve out Mt. Hood.

XI.

The certificates reissued to Greyhound in the hereinbe-

fore listed acquisitions are all “subject, however, to such

terms, conditions and limitations as are now, or may here-

after be, attached to the exercise of the privileges herein

granted to the said carrier”, and Part I Section 5(9) of the

Act gives the Commission specific authority to make such

supplemental orders “as it may deem necessary or appro-

priate” in acquisition cases.

Your petitioner respectfully requests that all of the said

proceedings be reopened and assigned for further hearing

to receive evidence supporting the allegations herein con-

tained and which, your petitioner believes, will justify the

issuance of a general supplemental order which will have

the effect of prohibiting the discriminatory and destructive

competitive [973] practices hereinbefore described; re-

quiring restoration of usable joint-line schedules between

points south of Klamath Falls, on the one hand, and, on the

other, points north and east of The Dalles and Biggs, Ore-

Appendix 35

gon ; and otherwise specifically enforcing the promises, rep-

resentations and assurances relied upon by the Commission

in approving the said acquisitions.

Dated at Portland, Oregon

December 1, 1964.

MT. HOOD STAGES, INC.

dba Pacific Trailways

/s/ By: Wri A. NisKaNEN

William A. Niskanen

Vice President and Manager

1048 Bond Street

Bend, Oregon

/s/ Donatp A, ScHarer

Donald A. Schafer

Attorney at Law

12321 S.E. Evergreen Highway

Vancouver, Washington [974]

[Verification, Certificate of Service and Exhibits

omitted in printing] [975]

36 Appendix

Before The

Interstate Commerce Commission

In the Matter of:

Tue GreyHounn Corporation - ConTROL

AND Mercer - INTERSTATE TRANSIT LINEs,

ET AL

Docket No.

MC-F-5190

Tue GreyHounp CorporaTIon - ConTROL;

Paciric GreyHounp Lines - ConTROL AND

Mercer - O. C. anv N, Sraces, Inc.

Tue GreyHounp CorporaTIon - CONTROL;

Paciric GreyHounp Lives - ConTROL AND Docket No,

Mercer - M. C. Yanne, Ivc., d/b/a INtanp MC-F-3208

STAGES

Docket No.

MC-F-3102

THe GreyHounp Corporation - ConTROL; Docket No

Paciric GreyHounp LINEs - CONTROL - MC_F 5403

OreGcon Moror Sracrs ~

THe GreyHounp Corporation - ConTROL Docket No.

WasHincton Motor Coacn Company, Inc. MC-F-3295

Tue GreyHounp Corporation - ConTRor, - Docket No.

NortH Coast Transportation CoMPANy MC-F-3687

THe GreyHounp Corporation - Purcuase -§ Docket No.

B. C. Moror Transportation, Lp, MC-F-5534

THE GreyHouND CorporATION - Mr e

MerGER Docket No.

Paciric GreyHounpD Lines; Contror -

Cauirornia Parton Car Tours CoMPANY

MC-F-5733

PETITION OF UNITED STATES OF AMERICA

FOR LEAVE TO INTERVENE

The United States of America by the undersigned, re-

spectfully represents that it has an interest in the proceed-

ings captioned [2266] above and petitions the Commission

for leave to intervene in said proceedings and to participate

therein as a party thereto. The United States believes it to

be of importance that the Commission set the petition of

Appendix 37

Mt. Hood Stages, Inc. and reply of the Greyhound Corpora-

tion for hearing and that the Commission proceed to deci-

sion thereon as expeditiously as possible. As ground for

this petition the United States states as follows:

1. The allegations of the petition of Mt. Hood Stages,

Ine. make a serious charge: that Greyhound has been per-

mitted through the series of acquisitions the Commission

approved in these proceedings to extend its system in all

directions around Mt. Hood; that Greyhound has now begun

to route around Mt. Hood over all Greyhound routes traffic

which it used to interchange with Mt. Hood or handle in

through buses over shorter and quicker routes and to en-

gage in numerous other acts and practices which as they

are described in Mt. Hood’s petition (pp. 8-9) have in the

aggregate the appearance of a studied effort to force Mt.

Hood out of business; and that such acts and practices are

contrary to assurances given by Greyhound in the acquisi-

tion proceedings that such acquisitions would not adversely

affect the public or other carriers, and specifically Mt. Hood,

because there would be no [2267] change in Greyhound’s

relations with competing carriers.’

Greyhound’s reply (pp. 21-24) in turn, freely admits cer-

tain of Mt. Hood’s allegations but categorically denies

others. We have no way of knowing whether those of Mt.

Hood’s allegations which Greyhound denies are true or

false; resolution of such controversies is a typical function

1. In an amendment to its petition Mt. Hood states that for

October, 1964, the first full month after Greyhound’s termination

of the San Francisco-Spokane through bus service, its revenues

from traffic interlined with Greyhound are down 70 percent by

comparison with October 1963. Depending of course on the relative

importance of interline revenue-to total revenue such a drop could

make the difference between overall profit or loss. But the amend-

ment also states that as a result of this drop Mr. Hood has also had

to curtail local service as well, even though most of the communi-

ties affected have no other common carrier services.

38 Appendix

of a hearing. We do know that when Greyhound asked the

Commission to approve the acquisitions, responsible Grey-

hound officials repeatedly gave the Commission the assur-

ances Mt. Hood details (petition, pp. 5-7) ; those assurances

are not consistent with the various acts Mt. Hood now al-

leges. Mt. Hood’s grave allegations, whether true or false,

as well as Grevhound’s answer raise issues too serious and

important to be disposed of summarily without a full ad-

versary hearing in which allegation and denial can he put

to the test of proof and cross-examination. Certainly Grey-

hound [2268] deserves the opportunity to demonstrate, by

evidence more compelling than mere denial, either that Mt.

Hood’s allegations are false or that the acts and practices

Mt. Hood has alleged are not motivated by a desire to de-

stroy a small competitor and cannot have that effect.

2. Greyhound’s reply characterizes Mt. Hood’s petition

as complaining principally if not exclusively of Grevhound

having discontinued the through bus service Grevhound

maintained for many vears from San Francisco to Spokane

with Mt. Hood as the intermediate or bridge carrier from

Klamath Falls to The Dalles. (Reply, pp. 5, 11-12, 16, 18-19.

21-22). We do not read Mt. Hood’s petition as so limited.

Mt. Hood appears to be complaining of a developing pattern

of hostile and harmful acts on the part of Greyhound over

the recent past, including among numerous others Grev-

hound’s termination of this service.

3. We believe Mt. Hood’s petition raises no problems in

the nature of laches. We have no doubt, for example, that if

Greyhound immediately after the Commission authorized

any particular acquisition had discontinued the San Fran-

cisco-Spokane through bus in the face of explicit assurance

it would not do so, or had taken other steps of the kind Mt.

Hood now alleges, the Commission would have promptly

Appendix 39

canceled or modified its approvals. If anything, the need for

sharp surveillance of any abuse of the power these [2269]

acquisitions have given Greyhound and for prompt action

to correct any such abuse has become more important as

Greyhound’s encirclement of Mt. Hood has become more

complete with each successive acquisition; Mt. Hood, with

each successive loss of an independent connection to Grey-

hound, has necessarily become increasingly vulnerable to

attack by Greyhound and increasingly dependent upon Grey-

hound for survival.?

4. Mt. Hood’s petition, and particularly Greyhound’s

reply, raise issues of primary jurisdiction in the Commis-

sion to grant or withhold at least some of the relief Mt.

Hood seeks, which a decision by the Commission would

assist in defining and clarifying. Greyhound’s reply (p. 17),

for example, quotes a passage from Carolina Coach Co.-

Control and Merger, 59 M.C.C. 681 (at p. 693), for the prop-

osition that the Commission has no power to order restora-

tion of the San Francisco-Spokane through bus service. We

think the Commission did not meet or decide that issue there

and that the issue is still open; indeed the Commission,

immediately after the passage Grevhound’s reply quotes,

intimated that but for the offer of Carolina, the survivor

of the merger, to continue [2270] a through bus service

comparable to that provided by the merged company, it

would have ordered continuation of the through bus. In the

present situation the Commission could make a determina-

tion of the scope of its jurisdiction over through bus serv-

ices, either under its broed powers under section 216 or its

visitorial powers under section 5(9), that would be mean-

2. Certainly the 1947 antitrust decree in United States v. Pacific

Greyhound Lines et al, (C.A. 25267-5; D.C.N.D. Cal.), which is as

old as the oldest of the acquisitions in question here, is open to

amendment despite its age.

40 Appendiz

ingful and not academic; if the evidence supports Mt.

Hood's other allegations of predatory conduct on the part

of Greyhound it could conceivably save an independent ear-

rier from extinction at the hands of an infinitely more pow-

erful rival. Similarly Mt. Hood’s companion complaints,

that Greyhound refuses to establish joint rates and has

revised other schedules so that passengers who desire to

use the shorter and quicker Greyhound-Mt. Hood inter-

change service must wait for three hours for arrival of the

connecting Greyhound or Mt. Hood bus, certainly should

be heard and determined. As Mt. Hood’s petition alleges,

in effect, that these acts by Greyhound are part of a pat-

tern of conduct constituting as a whole the reason why the

acquisition proceedings should be reopened, we think it

would only hamper the process of decision to remit each

Mt. Hood allegation to a separate proceeding under some

particular section [2271] of the Interstate Commerce Act to

which the allegation could be related?

5. Behind the immediate issues before the Commission

are further issues of applicability of the antitrust laws. The

Commission's approvals of the acquisitions relieved Grey-

3. It would appear from current issues of Russell’s Official Bus

Guide that passengers for Spokane on the Mt. Hood bus which

leaves Klamath Falls at 4:00 P.M., 10 minutes after Greyhound’s

arrival at 3:50 P.M., must wait at The Dalles from arrival at 10:50

P.M. until departure of the Greyhound bus for Spokane at 1:49

A.M. Similarly San Franciseo-bound passengers on the Mt. Hood

bus which leaves Biggs at 3:00 P.M., 10 minutes after Greyhound’s

arrival at 2:50 P.M., must wait at Klamath Falls, where it arrives

at 9:10 P.M. until Grevhound’s departure at 11:50 P.M. On other

runs the wait is reversed. Greyhound, southbound, arrives at The

Dalles at 4:15 A.M. Mt. Hood departs at 7:00 A.M. and arrives at

Klamath Falls at 1:55 P.M. to connect with Greyhound’s departure

at 2:10 P.M. Greyhound, northbound, arrives at Klamath Falls at

5:45 A.M. Mt. Hood departs at 8:15 A.M. and arrives at Biggs at

2:50 P.M. to connect with Grevyhound’s departure at 3:05 P.M. Mt.

Hood cannot make up the delay in any of these instances, it ean

only shift the delay to the other end of its run.

Appendiz 41

hound and its officials from accountability under these laws

only to the extent necessary to put the acquisitions into

effect. While actions taken to give effect to the acquisitions

are completely immune, exercise of economic power the ac-

quisitions conferred so as to isolate and destroy a competi-

tor is not. If Mt. Hood can establish its allegations, it is

desirable that it have the [2272] opportunity to do so and

also that the Commission determine its course as promptly

as possible. For if it then appears that the Commission lacks

jurisdiction to dispose of Mt. Hood’s complaint, in whole

or in part, Mt. Hood, remitted to another forum, may find

relief elsewhere illusory if it comes too late to be effective.

Respectfully submitted,

/s/ Wriit1am H. Orrick, Jr.

William H. Orrick, Jr.

Assistant Attorney General

/s/ Josern J. SAUNDERS

Joseph J. Saunders

Attorney, Department of Justice

/s/ Joun H. Dovenerty

John H. Dougherty

Attorney, Department of Justice

December 14, 1964 [2273]

[Certificate of Service omitted in printing] [2274]

42 Appendix

SERVICE DATE

JUNE 4, 1965

ORDER

At a Session of the INTERSTATE COMMERCE COM-

MISSION, Division 3, held at its office in Washington,

D. C., on the 27th day of May, A. D. 1965.

No. MC-F-9136

MT. HOOD STAGES, INC., PETITION FOR

MODIFICATION—GREYHOUND MERGERS

(WESTERN DIVISION)

There being under consideration the following pleadings

in the above-entitled matter:

1. Petition of Mt. Hood Stages, Inc., doing business

as Pacific Trailways, of Bend, Oregon, dated Octo-

ber 7, 1964, as amended December 1, 1964, for an

order reopening certain proceedings under section

5 of the Interstate Commerce Act, involving

The Greyhound Corporation and other companies

which are now a part of Greyhound Lines, Ine. ;

2. Petition of National Trailways Bus System, dated

October 29, 1964, for leave to intervene in support

of petitioner;

3. Replies of The Greyhound Corporation, dated No-

vember 6, 1964, and December 18, 1964, to the

above-described petitions and amendment:

4. Petition by the United States Department of Jus-

tice, dated December 14, 1964, for leave to inter-

vene;

5. Reply of The Greyhound Corporation, dated De-

cember 23, 1964, to the above-described petition;

6. Petition of the Public Utility Commissioner of Ore-

gon, dated January 20, 1965, for leave to intervene

in support of petitioner to reopen proceedings, and

Appendix 43

motion of the said Commissioner to strike a cer-

tain portion of the reply to the amended petition;

7. Petition of the Idaho Public Utilities Commission,

dated February 26, 1965, for leave to oppose or

support said petition of Mt. Hood Stages, Inc.;

and good cause therefor appearing :[ 2275]

It is ordered, That the above-entitled matter be, and it is

hereby, assigned for hearing at a time and place to be

hereafter fixed, for the purpose of determining whether

any supplemental order or orders should be issued under

section 5(9) of the Interstate Commerce Act in any of the

proceedings named in the attached appendix imposing or

modifying conditions therein or an order issued under any

other appropriate section of the Act in this proceeding

with respect to whatever acts or facts involving violation of

the Act, if any, may be proven at the said hearing.

It is further ordered, That the United States Department

of Justice, Public Utility Commissioner of Oregon, Idaho

Publie Utilities Commission, and National Trailways Bus

System, be, and they are hereby, permitted to intervene

and be treated as parties to this proceeding, with the right

to have notice of and to appear at the taking of testimony,

produce and cross-examine witnesses and be heard on brief

and oral argument, if oral argument is heard; provided,

however, that the permission to intervene herein granted

shall not be construed to allow intervenors to introduce

evidence which will unduly broaden the issues raised in this

proceeding.

It is further ordered, That the following portion of the

reply, dated December 18, 1964, to the amended petition be,

and it is hereby, stricken:

Page 6—Lines 5 throngh 9 inclusive

44 Appendiz

It is further ordered, That a copy of this order be served

upon each of the parties named herein, and that a copy be

filed in each of the dockets listed in the appendix hereto.

By the Commission, Division 3.

/s/ Bertrua F. Armes

BERTHA F. ARMES,

Acting Secretary.

(SEAL) [2276]

Docket Nos.

MU-F-3102

MC-F-3203

MC-F-3295

MC-F-3687

MC-F-4024

MC-F-4360

MC-F-5190

MC-F-5403

MC-F-5534

MC-F-5733

MC-F-8531

Appendix

APPENDIX

The Greyhound Corp.—Control ;

Pacifie Greyhound Lines—Control

and Merger—O.C. & N. Stages, Inc.

The Greyhound Corp.—Control ;

Pacific Greyhound Lines—Control

and Merger—M. C. Yahne, Inc.,

doing business as Inland Stages

The Greyhound Corp.—Control—

Washington Motor Coach Co., Ine.

The Greyhound Corp.—Control—

North Coast Transportation Co.

The Greyhound Corp.—Control;

Pacifie Greyhound Lines—Control—

Oregon Motor Stages

The Greyhound Corp.—Merger—

Northwest Greyhound Lines, Inc., and

North Coast Greyhound Lines, Inc.

The Greyhound Corp.—Control and

Merger—Interstate Transit Lines et al

The Greyhound Corp.—Control;

Pacifie Greyhound Lines—Purchase

(Portion )—Oregon Motor Stages

The Greyhound Corp.—Purchase—

R. C. Motor Transportation, Ltd.

The Greyhound Corp.—Merger—

Pacific Greyhound Lines; Control—

California Parlor Car Tours Co.

California Parlor Car Tours Co.—

Pur.—The Greyhound Corp. [2277]

—

50 M.C.C. 123

50 M.C.C, 123

45 M.C.C. 821

55 M.C.C. 801

55 M.C.C, 321

56 M.C.C. 238

58 M.C.C. 809

59 M.C.C. 657

60 M.C.C. 643

70 M.C.C. 59

93 M.C.C, 392

June 4, 1965

[Certificate of Service omitted in printing] [2278] & [2279]

46 Appendiz

In the United States District Court

for the District of Oregon

Civil No. 68-374

Mr. Hoop Sraces, vc. dba Paciric Traitways,

Plaintiff,

THe GreyHounp Corporation and GreyHounD

Lines, Ivc.,

Defendants.

COMPLAIN T FOR TREBLE DAMAGES AND INJUNC-

TIVE RELIEF UNDER THE ANTI-TRUST AND UN-

FAIR COMPETITION LAWS

(JURY DEMANDED)

FIRST CAUSE OF ACTION

JURISDICTION AND VENUE

1. This complaint is filed and these proceedings are in-

stituted against defendants pursuant to Sections 4 and 16

of the Clayton Act (15 U.S.C. $15 and § 26), being a part of

the antitrust laws of the United States, for violations of

such laws. The purpose of this action is to prevent and

restrain continuing violations by the defendants, as herein-

after alleged, and to recover damages, as provided by law,

for injuries to plaintiff's business and property within the

period allowed by law for which injuries proximately re-

sulted from defendants’ violations. Defendants’ violations

are continuing and persist to the date of this complaint.

2. The unlawful acts and violations of law herein [1]

described have been conceived, carried out, made effective

and performed in major part within the above district and

have affected areas in other states of the United States.

3. Plaintiff Mt. Hood Stages, Inc.. doing business under

the assumed name “Pacific Trailways”, is a corporation

Appendix 47

organized under the laws of Oregon, having its principal

place of business in Bend, Oregon. It is primarily engaged

in the operation of scheduled common carrier passenger

motor bus service in both interstate and intrastate com-

merce in the states of Oregon, Idaho and Utah, and specifi-

cally within the District of Oregon.

4. Defendant The Greyhound Corporation (hereinafter

referred to as “Greyhound Corp.”) is a corporation incor-

porated under the laws of the State of Delaware, having

its principal place of business in the City of Chicago, Illinois.

It is at present a holding company, owning, among other

assets, all of the issued and outstanding capital stock of

defendant Greyhound Lines, Inc. From 1959, the exact time

not now being known to plaintiff, until 1964, the exact time

not now being known to plaintiff, Grevhound Corp. was

engaged in the operation of scheduled common carrier pas-

senger motor bus service in interstate and intrastate com-

merce in all states in the United States except Alaska and

Hawaii, and specifically within the District of Oregon..Dur-

ing the vear 1964, the exact time not now being known to

plaintiff, Grevhound Corp. transferred substantially all of

its motor carrier operating rights and properties to its

wholly-owned subsidiary, the defendant Grevhound Lines,

Tne.

5. Defendant Grevhound Lines, Inc., is a corporation

incorporated under the laws of the State of California,

having its principal place of business in the City of Chicago,

Tilinois. Commencing in 1964, the exact time not now being

known to plaintiff, and continuing until the present time,

Greyhound Lines has been engaged in the operation of

scheduled common carrier passenger [2] motor bus service

in interstate and intrastate commerce in all states in the

48 Appendix

United States except Alaska and Hawaii and specifically

within the District of Oregon.

THE MARKET INVOLVED

6. The market with respect to which the violations of

the antitrust laws alleged herein took place is the scheduled

common carrier passenger motor bus service market within

the Western United States. Plaintiff and defendants and

their predecessors have conducted, among other activities,

operations in that market. Tickets for the passenger service

described have been made available to the public through

selling agents and outlets, many of whom are located at bus

terminals. Used in aid of such sales are printed materials

such as schedules and maps showing available service to

prospective travelers. Often, as has been the case here,

joint-line service is made available to the public. Under such

a system two or more passenger carriers interconnect their

routes and establish and publish joint rates, fares and

charges and mutually honor tickets of other carriers in-

volved.

DESCRIPTION OF PLAINTIFF’S BUSINESS

7. Piaintiff has operated daily scheduled service from

and between various points within Oregon, Idaho and Utah,

over approximately 1500 miles, using approximately 46

buses.

DESCRIPTION OF DEFENDANTS’ BUSINESS

8. Defendants constitute the largest company engaged

in passenger motor carriage in the United States. They

control approximately 96% of all revenues earned by all

Class T passenger motor carriers in the Western United

States. They have possessed monopoly power by reason

Appendix 49

of control of main routes, depots and selling agents and

outlets in the Western United States. They have thereby

possessed the power to eliminate or restrain the trade of

plaintiff or any other competitor and have done so by the

means hereinafter pleaded. [3]

INTERSTATE COMMERCE

9. The violations herein alleged have occurred in inter-

state commerce or substantially and directly affect inter-

state commerce. Defendants are interstate instrumentalities

who have unlawfully used their power over interstate com-

merce to restrain and destroy competition in Oregon, Idaho

and Utah.

VIOLATION OF THE ANTITRUST LAWS

10. Plaintiff alleges that beginning before 1947 and con-

tinuously and uninterruptedly to and including the date of

filing this complaint, defendants have combined, contracted

and conspired as between themselves and among their re-

spective officers and directors to restrain and monopolize

trade and commerce in the scheduled common carriage of

passengers and their luggage by motor coach to, from and

between points in the Western United States including Ore-

gon, Idaho and Utah and have jointly and severally at-

tempted to monopolize, monopolized, substantially lessened

competition and tended to create a monopoly therein, all in

violation of 15 U.S.C. §§ 1 and 2 (Sherman Act §§ 1 and 2),

15 U.S.C. §$ 14 and 18 (Clayton Act §§ 3 and 7.)

11. In furtherance of such violations, defendants have,

among other acts, done and performed the following:

(a) Have acquired control of several formerly inde-

pendent bus lines and merged them into their own system.

—~—-—-—@—e

50 Appendir

(b) Have obtained consent of the Interstate Commerce

Commission for such acquisitions or mergers based upon

the following representations and assurances each of

which were not carried out with respect to plaintiff but

were ignored or disregarded when it suited defendants’

anti-competitive purposes:

(1) That the acquisitions or mergers would have

no adverse effect upon plaintiff.

(2) That the acquired or merging companies’ routes

would remain open to plaintiff and other [4] carriers.

(3) That plaintiff’s connections with such acquired

or merging companies would remain the same after the

completion of the transaction.

(4) That joint-line operations in existence at the

time of such acquisitions or mergers would remain

unchanged thereafter.

(5) That defendants’ policy was not to route pas-

sengers circuitously but to sell the most direct route,

even that of a competing line, and that defendants

would not discriminate against plaintiff in the sale of

transportation.

(6) That joint-line operations as well as nondis-

eriminatory selling of plaintiff’s routes was profitable

to defendants and there was no reason for plaintiff to

fear diversion of traffic.

(7) That joint-routes and plaintiff's own routes

would continue to show in defendants’ schedule folders

and maps after the mergers.

(8) That defendants would in no way discriminate

against plaintiff.

such acquisitions and mergers upon assurance by de-

fendants that such representations would be adhered to.

(d) Are possessed of and have acquired facilities for

selling bus service by reason of their over-all economic

power and such acquisitions and mergers. As a result

defendants have effective control of such selling agencies

Appendiz 51

and outlets in the west and throughout the United States.

By use and manipulation of such selling agencies and out-

lets defendants have:

(1) Failed to publicize the joint-line service with

plaintiff in effect prior to [5] September 1964, or to

show such service on defendants’ schedules.

(2) Publicized their own service routes and rates

while in some instances failing to quote plaintiff’s

more advantageous connecting service routes and rates

and in other instances quoting inaccurate and un-

favorable information concerning plaintiff’s connect-

ing service, routes and rates.

(3) Failed to show plaintiff’s routes on route maps.

(4) Discriminated against plaintiff in defendants’

depots and stations by giving inaccurate information

concerning plaintiff’s service routes and rates while

quoting accurately such information with respect to

their own service and the service of other bus lines.

(5) Instructed defendants’ selling agents to sell

tickets to passengers over circuitous and more costly

routes rather than to use the joint-line route or plain-

tiff’s other routes.

(e) Have dismissed a request to abandon service when

upon filing an application for such abandonment, plaintiff

applied for the rights being abandoned. Thereupon, de-

fendants protested plaintiff's application and threatened

plaintiff with retaliation unless its application was dropped.

(f) Have discontinued existing joint-line through bus

operations with plaintiff and have refused to enter into

any such further arrangements.

(g) Have deliberately created long delays in making con-

nections between buses of defendants and plaintiff in order

to induce passengers to refrain from using plaintiff’s

service.

(h) By reason of extensive sales opportunities inherent

[6] in defendants’ extensive operations and the power

52 Appendiz

arising from them, defendants have influenced and coerced

commission agents to refrain from informing the public of

plaintiff's service, to misquote plaintiff’s service, to divert

all passengers to Greyhound routes and to prevent plain-

tiff from advertising in jointly occupied depots.

(i) Have refused, in depots controlled by them, to an-

nounce the arrivals and departures of plaintiff’s buses, to

show schedules of plaintiff or to inform the public of plain-

tiff’s service.

(j) Have controlled sales practices of other passenger

bus lines requiring them to use Greyhound tickets and to

favor Greyhound routings.

(k) Have required plaintiff to spend inordinately large

sums of money in regulatory proceedings which were insti-

tuted or protested as a result of defendants’ anti-

competitive behavior.

EFFECT OF VIOLATIONS

12. As a direct result of the violations alleged, de-

fendants have achieved a nearly complete monopoly in the

scheduled common carrier motor bus service market in

Oregon, Idaho and Utah. They have virtual and complete

control of routes, selling agencies and outlets and depots.

Such control has been used by defendants to encircle plain-

tiffs routes, thus giving them the means to siphon off

customers who would otherwise use plaintiff’s services

because of shorter time, more scenic route and lower

charges. However, the public has not been aware of plain-

tiff's superior service available to them either as a joint-line

operation or as plaintiff's sole operation because of de-

fendants’ virtual and complete control over depots, selling

agencies and outlets and the distribution of printed material

disseminating information concerning routes. [7]

Appendiz 53

Plaintiff’s ability to remain a viable business entity has

been endangered, its revenues have been substantially re-

duced and its capital and other funds have been debilitated.

Plaintiff alleges that its management, equipment and

method of operation are efficient and competitive. However,

the effect of defendants’ overwhelming control of the market

coupled with the exercise of power arising from such con-

trol to plaintiff’s detriment has deprived plaintiff of the

opportunity for the normal growth of its scheduled business

which it would otherwise have experienced and would now

be experiencing.

FRAUDULENT CONCEALMENT

13. Plaintiff suspected prior to July 1964 that it had a

claim under the antitrust or other laws for defendants’

failure to quote plaintiff’s services accurately or at all, to

announce arrivals and departures of plaintiff’s buses, to

include plaintiff’s services on their schedules and maps, or

for defendants’ policy of diversion of traffic away from

plaintiff’s services and to defendants’ circuitous and more

expensive routes and of instructing agents accordingly.

However, prior to July, 1964 defendants denied such actions

to plaintiff and the ICC, which actions were in effect

thereby concealed in the records and minds of defendants

and their officers and directors. From 1947 forward and at

various times continuously until July 1964, defendants’

employees told plaintiff that they were quoting plaintiff's

services and rates accurately whenever such service might

best suit the needs of passengers, that they were announc-

ing plaintiff’s arrivals and departures, that plaintiff's serv-

ices were listed on defendants’ maps and schedules and

that there was no policy to divert traffic from plaintiff to

defendants by not quoting or making plaintiff’s services

i ia

54 Appendix

known to the public. These material representations and

denials were made with intent that plaintiff and the ICC

rely thereon, were known to defendants to be untrue when

made, and plaintiff and the ICC did [8] justifiably rely

thereon.

DAMAGES

14. As a direct and proximate result of the violations

alleged, plaintiff has been damaged in that the present and

future value of its business and property has been sub-

stantially injured, its past and future profits seriously

impaired, and it has suffered an immense loss of good will

and reputation, all to its damage in an amount presently

not known to plaintiff, but which will be proved at trial.

INJUNCTIVE RELIEF

15. Plaintiff alleges that unless this Court denies de-

fendants their position of power and the means to exercise

the same, competition will no longer exist in the relevant

market. The continuing conduct of defendants will cause

irreparable injury, loss and damage to plaintiff unless

enjoined and restrained by the Court.

SECOND CAUSE OF ACTION

FOR UNFAIR COMPETITION

1. Plaintiff is a corporation incorporated under the laws

under the State of Oregon having its principal place of

business in the State of Oregon and defendant The Grey-

hound Corporation is a corporation incorporated under the

laws of the State of Delaware, having its principal place

of business in a state other than the State of Oregon, and

defendant Greyhound Lines, Ine. is a corporation incorpo-

rated under the laws of the State of California, having its

principal place of business in a state other than the State

Appendiz 55

of Oregon. The matter in controversy exceeds, exclusive of

interest and costs, the sum of $10,000.

2. Plaintiff realleges paragraphs 2, 3, 4, 5, 6, 7, 8, 11,

12, 13, 14 and 15 of its First Cause of Action.[9]

3. Defendants acted wilfully and maliciously and with-

out justification for the purpose of injuring plaintiff and

destroying its business. In addition to general damages as

proved, plaintiff is entitled to punitive damages as proved.

THIRD CAUSE OF ACTION

FOR UNFAIR COMPETITION

1. This Court has jurisdiction under 28 U.S.C. 1331 (a),

1338 (a) (b), 15 U.S.C. 1121 and 15 U.S.C. 1126 (b) (h)

and (i), this being a claim for unfair competition under

the laws of the United States.

2. Plaintiff realleges the allegations of paragraphs 2 and

3 of its Second Cause of Action, and 9 of its First Cause of

Action and states that the foregoing conduct has been to

plaintiff’s irreparable damage.

WHEREFORE, plaintiff prays:

A. That the conduct of defendants as alleged to be

adjudged and decreed unlawful.

B. That judgment be entered against defendants, and

each of them, for treble the amount of damages suffered by

plaintiff as a result of violations of the antitrust laws

alleged herein and for attorney’s fees and costs as required

by Section 4 of the Clayton Act.

C. For injunctive relief to the extent justified by the

proof.

D. For damages as proved for unfair competition and

for punitive damages under its Second Cause of Action.

E. For damages as proved for unfair competition under

its Third Cause of Action and costs as required thereunder,

56 Appendix

and for injunctive relief to the extent justified by the

proof. [10]

F. For other relief as the Court shall deem proper.

RIVES & SCHWAB

HERBERT M. SCHWAB

BRUCE M. HALL

DONALD A. SCHAFER

BROAD, BUSTERUD & KHOURTE

MICHAEL N. KHOURTE

J. STANLEY POTTINGER

By /s/ Bruce M. Hat

Of Attorneys for Plaintiff [11]

F. For other relief as the Court shall deem proper.

RIVES & SCHWAB

HERBERT M. SCHWAB

BRUCE M. HALL

DONALD A. SCHAFER

BROAD, BUSTERUD & KHOURIE

MICHAEL N. KHOURTE

J. STANLEY POTTINGER

By /s/ Bruce M. Hat

Of Attorneys for Plaintiff

Plaintiff demands trial by jury of all issues so triable in

the above captioned proceedings.

RIVES & SCHWAB

HERBERT M. SCHWAB

BRUCE M. HALL

DONALD A. SCHAFER

BROAD, BUSTERUD & KHOURIE

MICHAEL N. KHOURTE

J. STANLEY POTTINGER

By /s/ Bruce M. Hawi

Of Attorneys for Plaintiff [12]

Appendiz 57

United States District Court

District of Oregon

[Title omitted in printing]

Civil No. 68-374

THIRD AMENDED COMPLAINT FOR TREBLE

DAMAGES UNVER THE ANTITRUST LAWS

AND FOR DAMAGES UNDER THE UNFAIR

COMPETITION LAWS

(JURY DEMANDED)

FIRST CAUSE OF ACTION

Jurisdiction and Venue

(1) This Third Amended Complaint is filed and these

proceedings are instituted against Defendants pursuant to

sections 4 and 16 of the Clayton Act (15 USC § 26), being a

part of the antitrust laws of the United States for violation

of such laws. The purpose of this action is to prevent and

restrain continuing violations by the Defendants as herein-

after alleged, and to recover damages, as provided by law,

for injuries to Plaintiff’s business and property within the

period allowed by law for which injuries proximately re-

sulted from Defendants’ violations. Defendants’ violations

are continuing and persist to the date of this Complaint.

(2) The unlawful acts and violations of law herein de-

seribed have been conceived, carried out, made effective and

performed [691] in major part within the above district and

have affected areas in other states of the United States.

(3) Plaintiff Mt. Hood Stages, Inc., doing business under

the assumed name “Pacific Trailways”, is a corporation

organized under the laws of Oregon, having its principal

58 Appendiz

place of business in Bend, Oregon. It is primarily engaged

in the operation of scheduled common carrier passenger

motor bus service in both interstate and intrastate com-

merce in the states of Oregon, Idaho and Utah, and specif-

ically within the District of Oregon.

(4) Defendant The Greyhound Corporation (hereinafter

referred to as “Greyhound Corp.”) is a corporation incor-

porated under the laws of the State of Delaware, having its

principal place of business in the City of Chicago, Tlinois.

It is at present a holding company owning, among other

assets, all of the issued and outstanding capital stock of

Defendant Gravhound [sie] Lines, Inc. From 1959, the

exact time not now being known to Plaintiff, Greyhound

Corp. was engaged in the operation of scheduled common

carrier passenger motor bus service in interstate and in-

trastate commerce in all states in the United States except

Alaska and Hawaii, and specifically within the District of

Oregon. During the year 1964, the exact time not now being

known to Plaintiff, Greyhound Corp. transferred substan-

tially all of its motor carrier operating rights and proper-

ties to its wholly-owned subsidiary, the Defendant Grey-

hound Lines, Ine.

(5) Defendant Greyhound Lines, Ine. is a corporation

incorporated under the laws of the State of California, hav-

ing its principal place of business in the City of Chicago,

Illinois. Commencing in 1964, the exact time not now being

known to Plaintiff, and continuing until the present time,

Greyhound Lines, Inc. has been engaged in the operation

of scheduled common earrier passenger motor bus service

in interstate and intrastate commerce in all states in the

United States except Alaska and Hawaii, and specifically

within the District of Oregon. [692]

Appendiz 59

The Market Involved

(6) The market with respect to which the violations of

the antitrust laws alleged herein took place is the scheduled

common carrier passenger motor bus service inarket within

the Western United States. Plaintiff and Defendants and

their predecessors have conducted, among other activities,

operations in that market. Tickets for the passenger serv-

ices described have been made available to the public

through selling agents and outlets, many of whom are

located at bus terminals. Used in aid of such sales are

printed materials such as schedules and maps showing

available service to prospective travelers. Often, as has

been the case here, joint-like [sic] service is made available

to the public. Under such a system, two or inore passenger

carriers interconnect their routes and establish and publish

joint rates, fares and charges and mutually honor tickets

of other carriers involved.

Description of Plaintiff’s Business

(7) Plaintiff has operated daily scheduled service from

and between various points within Oregon, Idaho and Utah,

over approximately 1,500 miles, using approximately 46

buses.

Description of Defendant’s Business

(8) Defendants constitute the largest company engaged

in passenger motor carriage in the United States. They

control approximately 96% of all revenues earned by all

Class I passenger motor carriers in the Western United

States. They have possessed monopoly power by reason of

control of main routes, depots and selling agents and out-

lets in the Western United States. They have thereby pos-

SESS TIN E Se E RCO nde TN Se ee OEE Te

60 Appendix

sessed the power to eliminate or restrain the trade of

Plaintiff or any other competitor and have done so by means

hereinafter pleaded.

Interstate Commerce

(9) The violations herein alleged have occurred in inter-

state commerce or substantially and directly affect inter-

state commerce. Defendants are interstate instrumentalities

who have unlawfully used their power over interstate com-

merce to restrain and destroy [693] competition in Oregon,

Idaho and Utah.

Violation of the Antitrust Laws

(10) Plaintiff alleges that beginning before 1947 and con-

tinuously and uninterruptedly to and including the date of

filing this Complaint, Defendants have combined, contracted

and conspired as between themselves, among their re-

spective officers and directors, and at various times there-

after with certain officials of the Amalgamated Transit

Union and with Defendants’ numerous ticket selling agen-

cies, to restrain and monopolize trade and commerce in the

scheduled common carriage of passengers and their luggage

by motor coach to, from and between points in the Western

United States including Oregon, Idaho and Utah and have

jointly and severally attempted to monopolize, monopolized

substantially lessened competition and tended to create a

monopoly there all in violation of 15 USC §§ 1 and 2 (Sher-

man Act $$ 1 and 2).

(11) In pursuit of said combination, contract and con-

spiracy and with the motive and intent of substantially

lessening competition and achieving monopoly by means

violative of said laws. defendants have, jointly and sever-

ally, beginning before 1947 to and including the date of

Appendiz 61

filing this Third Amended Complaint, among other acts,

done and performed the following.

(a) Have acquired control of several formerly independ-

ent bus lines, selling agents, outlets and depots with which

Plaintiff had enjoyed beneficial economic relationships and

merged them into their own system so as to almost com-

pletely encircle Plaintiff’s operations with operations dom-

inated by Defendant.

(b) Have sought and obtained consent of the Interstate

Commerce Commission for such encircling acquisitions or

mergers based upon the following representations and assur-

ances, each of which relied upon by Plaintiff and each of

which were not carried out with respect to Plaintiff but

were ignored or disregarded when it suited Defendants’

anticompetitive purposes :

(1) That the acquisitions or mergers would have

[694] no adverse effect upon Plaintiff.

(2) That the acquired or merged companies’ routes

would remain open to Plaintiff and other carriers.

(3) That Plaintiff’s connections with such acquired

or merging companies would remain the same after

the completion of the transaction.

(4) That joint-line operations in existence at the

time of such acquisitions or mergers would remain

unchanged thereafter.

(5) That Defendants’ policy was not to route pas-

sengers circuitously but to sell the most direct route,

even that of a competing line, and that Defendants

would not discriminate against Plaintiff in the sale of

transportation.

(6) That joint-line operations as well as nondis-

criminatory selling of Plaintiff’s routes was profitable

to Defendants and there was no reason for Plaintiff to

fear diversion of traffic.

(7) That joint-routes and Plaintiff’s own routes

would continue to show in Defendants’ schedule folders

and maps after the mergers.

62 Appendix

(8) That Defendants would in no way discriminate

or cause selling agents and other outlets to discriminate

against Plaintiff.

to such acquisitions and mergers upon assurance by De-

fendants that such representations would be adhered to.

(d) Are possessed of and have acquired facilities for

selling bus service by reason of their overall economic power

and position of encirclement of Plaintiff resulting from such

acquisitions and mergers. As a result Defendants have

effective control of such [695] selling agencies and outlets

in the west and throughout the United States. By use and

manipulation of such selling agencies and outlets Defend-

ants have:

(1) Failed to publicize the joint-line service with

Plaintiff in effect prior to September, 1964, or to show

such service on Defendants’ schedules.

(2) Publicized their own service routes and rates

while in some instances failing to quote Plaintiff’s more

advantageous connecting service routes and rates and

in other instances quoting inaccurate and unfavorable

information concerning Plaintiff’s connecting service,

routes and rates,

(3) Failed to show Plaintiff’s routes on route maps.

(4) Diseriminated against Plaintiff in Defendants’

depots and stations by giving inaccurate information

concerning Plaintiff’s service routes and rates while

quoting accurately such information with respect to

their own service and the service of other bus lines.

(5) Instructed Defendants’ selling agents to sell

tickets to passengers over circuitous and more costly

routes rather than to use the joint-line route or Plain-

tiff’s other routes.

Appendix 63

(e) Have dismissed a request to abandon service when

upon filing an application for such abandonment, Plaintiff

applied for the rights being abandoned. Thereupon, De-

fendants protested Plaintiff’s application and threatened

Plaintiff with retaliation unless its application was dropped.

(f) Have discontinued existing joint-line through bus

operations with Plaintiff and have refused to enter into any

such further arrangements. [696]

(g) Have deliberately created long delays in making

connections between buses of Defendants and Plaintiff in

order to induce passengers to refrain from using Plaintiff’s

service,

(h) By reason of extensive sales opportunities inherent

in Defendants’ extensive operations and the power arising

from them, Defendants have influenced and coerced com-

mission agents to refrain from informing the public of

Plaintiff’s service, to misquote Plaintiff’s service, to divert

all passengers to Greyhoun: routes and to prevent Plaintiff

from advertising in jointly occupied depots.

(i) Have refused in depots controlled by them to an-

nounce the arrivals and departures of Plaintiff’s buses, to

show schedules of Plaintiff or to inform the publie of Plain-

tiff’s service.

(j) Have controlled sales practices of other passenger

bus lines requiring them to use Greyhound tickets and to

favor Greyhound routings.

(k) Have required Plaintiff to spend inordinately large

sums of money in regulatory proceedings which were insti-

tuted or protested as a result of Defendants’ anticompeti-

tive behavior.

(1) Have collaborated with certain officials of the Amal-

gamated Transit Union to induce said union to make arbi-

trary and oppressive wage demands upon Plaintif’, thereby

64 Appendiz

causing a strike and work stoppage of Plaintiff’s operations

from May 15 to July 6, 1964.

Effect of Violations

(12) Asa direct result of the violations alleged, Defend-

ants have achieved a nearly complete monopoly in the

scheduled common carrier motor bus service market in

Oregon, Idaho and Utah. They have virtual and complete

control of routes, selling agencies and outlets and depots.

Such control has been used by Defendants.

Fraudulent Concealment

(13) Plaintiff suspected prior to July, 1964 that it had

a claim under the antitrust or other laws for Defendants’

failure to quote Plaintiff’s services accurately or at all, to

announce arrivals [697] and departures of Plaintiff’s buses,

to include Plaintiff’s services on their schedules and maps,

or for Defendants’ policy of diversion of traffic away from

Plaintiff's services and to Defendants’ circuitous and more

expensive routes and of instructing agents accordingly.

However, Defendants have persistently denied such prac-

tices to Plaintiff and the ICC and have concealed from

Plaintiff the fact that they had actively colluded and col-

laborated with their ticket selling agencies to engage in

those practices and have concealed from Plaintiff their col-

lusion with officials of the Amalgamated Transit Union as

alleged herein, which collusive practices were in effect there-

by concealed in the records and minds of Defendants and

their officers and directors, At all times since the inception

of the conspiracy alleged herein, Defendants’ employees told

Plaintiff that Defendants and their ticket agents were

quoting Plaintiff's services and rates aceurately whenever

a”

Appendiz 65

such service might best suit the needs of passengers; that

they were announcing Plaintiff’s arrivals and departures;

that Plaintiff’s services were listed on Defendants’ maps

and schedules; that there was no policy to divert traffic

from Plaintiff to Defendants by not quoting or making

Plaintiff’s services known to the public; and that instruc-

tions had been given by Defendants to their ticket agents

to sell passenger tickets via the most direct route even

though it was via the more direct route of another carrier.

These material representations and denials were made with

the intention that Plaintiff and the ICC rely thereon, were

known to Defendants to be untrue when made, and Plaintiff

and the ICC did justifiably rely thereon. Defendants thus

deliberately and fradulently [sic] concealed from Plain-

tiff their collusive and conspiratorial activities as alleged

herein. :

Damages

(14) As a direct and proximate result of the violations

alleged, Plaintiff has been damaged in that the present and

future value of its business and property has been sub-

stantially injured, its past and future profits seriously im-

paired, and it has suffered an immense [698] loss of good-

will and reputation, all to its damage in an amount pres-

ently not known to Plaintiff, but which will be proved at

trial.

SECOND CAUSE OF ACTION

FOR UNFAIR COMPETITION

(1) Plaintiff is a corporation incorporated under the laws

under the State of Oregon having its principal place of

business in the State of Oregon and Defendant The Grey-

hound Corporation is a corporation incorporated under the

66 Appendiz

laws of the State of Delaware, having its principal place of

business in a state other than the State of Oregon, and

Defendant Greyhound Lines, Ine. is a corporation incor-

porated under the laws of the State of California, having

its principal place of business in a state other than the State

of Oregon. The matter in controversy exceeds, exclusive of

interest and costs, the sum of $10,000.

(2) Plaintiff realleges paragraphs 2, 3, 4, 5, 6, 7, 8, 11, 12,

13 and 14 of its First Cause of Action.

(3) Defendants acted willfully and maliciously and with-

out justification for the purpose of injuring Plaintiff and de-

stroving its business. In addition to general damages as

proved, Plaintiff is entitled to punitive damages as proved.

THIRD CAUSE OF ACTION

FOR UNFAIR COMPETITION

(1) This Court has jurisdiction under 28 USC 1331 (a),

1338(a)(b), 15 USC 1121 and 15 USC 1126(b), (h) and (i),

this being a claim for unfair competition under the laws of

the United States.

(2) Plaintiff realleges the allegations of paragraphs 2

and 3 of its Second Cause of Action, and 9 of its First Cause

of Action.

WHEREFORE, Plaintiff prays:

(A) That the conduct of Defendants as alleged ve ad-

judged and decreed unlawful.

(B) That judgment be entered against Defendants, and

each [699] of them. for treble the amount of damages

suffered by Plaintiff as a result of violations of the antitrust

laws alleged herein and for attorney’s fees and costs as

required by Section 4 of the Clayton Act.

for punitive damages under its Second Cause of Action.

Appendiz 67

(D) For damages as proved for unfair competition under

its Third Cause of Action and costs as required thereunder.

(E) For other relief as the Court shall deem proper.

RIVES, BONYHADI, HALL &

EPSTEIN

BRUCE M. HALL

GEORGE K. MEIER III

BROAD, KHOURIE & SCHULZ

MICHAEL N. KHOURIE

EUGENE C. CREW

By /s/ Bruce M. Hatt

Of Attorneys for Plaintiff

Plaintiff demands trial by jury of all issues so triable in

the above-captioned proceedings.

RIVES, BONYHADI, HALL &

EPSTEIN

BRUCE M. HALL

GEORGE K. MEIER III

BROAD, KHOURIE & SCHULZ

MICHAEL N. KHOURIE

EUGENE C. CREW

By /s/ Bruce M. Hari

Of Attorneys for Plaintiff [700]

[Certificate of service omitted in printing] [701]

68 Appendix

United States District Court

for the District of Oregon

[ Title omitted in printing]

Civil No. 68-374

ANSWER OF DEFENDANT GREYHOUND LINES,

INC. TO THIRD AMENDED COMPLAINT

Defendant Greyhound Lines, Ine. answers plaintiff's third

amended complaint as follows:

DEFENSES TO FIRST CAUSE OF ACTION

FIRST DEFENSE TO FIRST CAUSE OF ACTION

Plaintiff’s first cause of action does not state a claim

against this answering defendant on which relief can be

granted.

SECOND DEFENSE TO FIRST CAUSE OF ACTION

1. Answering paragraph 1, defendant Greyhound Lines,

Ine. admits that this action is instituted under § 4 of the

Clayton Act (15 USC § 15). Defendant denies the remzinder

of paragraph 1.

2. Defendant denies paragraph 2.

3. Defendant admits paragraph 3. [702]

4. Defendant admits paragraph 4, except it avers that

defendant The Greyhound Corporation discontinued the

operation of scheduled common carrier passenger motor

bus service on December 31, 1963, at which time it trans-

ferred its motor carrier operating rights and properties to

this defendant.

5. Defendant admits paragraph 5, except it avers that

it has engaged in the operation of scheduled common carrier

passenger motor bus service since January 1, 1964.

Appendiz 69

6. Defendant admits paragraph 6, except it denies that

it has violated the antitrust laws and further denies that

the market to which plaintiff’s allegations refer is the

scheduled common carrier passenger motor bus service

market within the Western United States.

7. Defendant avers that it is without knowledge or

information sufficient to form a belief as to the truth of

averments contained in paragraph 7, except that defendant

admits that plaintiff has held itself out to provide scheduled

service from and between various points within Oregon,

Idaho and Utah.

8. Answering paragraph 8, defendant admits it is the

largest company engaged in passenger motor carriage in

the United States. Defendant denies the remainder of para-

graph 8.

9. Defendant denies paragraph 9.

10. Defendant denies paragraph 10.

11. Defendant denies paragraph 11, except: Defendant

admits defendant The Greyhound Corporation acquired

control of several formerly independent bus lines and

merged them into its system and obtained the consent of

the Interstate Commerce Commission for such acquisitions

and mergers; defendant admits it has facilities for selling

bus service; as to allegation (e), defendant admits that

defendant The Grevhound Corporation dismissed a request

to abandon service, that plaintiff applied for the rights

being abandoned, and that defendant The Greyhound Cor-

poration filed a protest against [703] plaintiff’s application ,

and defendant admits it discontinued existing joint-line

through bus operations with plaintiff for a period of time

but has reinstituted the same.

12. Defendant denies paragraph 12.

70 Appendix

13. Defendant denies paragraph 13, except that defend-

ant admits and avers that plaintiff had knowledge and

information with respect to the activities, actions, practices

and policies of Defendant, and of Greyhound agents, to

the extent applicable concerning the quoting of Plaintiff’s

services, inclusion of Plaintiff’s services on schedules and

maps, routing of traffic and instructions to agents,

14. Defendant denies paragraph 14.

THIRD DEFENSE TO FIRST CAUSE OF ACTION

All or part of plaintiff’s first cause of action is barred

by § 4B of the Clayton Act, 15 USC § 15B.

FOURTH DEFENSE TO FIRST CAUSE OF ACTION

The acquisitions of control and mergers of bus lines,

selling agents, outlets and depots referred to in plaintiff's

third amended complaint were authorized and approved

by the Interstate Commerce Commission under § 5(2) of

the Interstate Commerce Act, 49 USC $5(2), and this

answering defendant is relieved from the operation of the

antitrust laws and all state laws insofar as necessary to

carry the same into effect and to hold, maintain and oper-

ate said properties and to exercise any control] and fran-

chises thereby acquired under $5(11) of the Interstate

Commerce Act, 49 USC § 5(11).

DEFENSES TO PLAINTIFF’S SECOND

CAUSE OF ACTION

FIRST DEFENSE TO SECOND CAUSE OF ACTION

Plaintiff’s second cause of action does not state a claim

against this answering defendant on which relief can be

granted.

Appendix 71

SECOND DEFENSE TO SECOND CAUSE OF ACTION

1. Defendant Greyhound Lines, Inc. admits paragraph 1.

2. Answering paragraph 2, defendant realleges the ad-

missions, denials and averments in its Second Defense to

First Cause of Action [704] as to paragraphs 2, 3, 4, 5, 6,

7, 8, 11, 12, 13 and 14 of plaintiff’s first cause of action.

3. Defendant denies paragraph 3.

THIRD DEFENSE TO SECOND CAUSE OF ACTION

Part or all of plaintiff’s second cause of action is barred

by the applicable statute of limitations.

FOURTH DEFENSE TO SECOND CAUSE OF ACTION

Defendant realleges its fourth defense to plaintiff's first

cause of action.

DEFENSES TO PLAINTIFF’S THIRD

CAUSE OF ACTION

FIRST DEFENSE TO THIRD CAUSE OF ACTION

Plaintiff’s third cause of action does not state a claim

against this answering defendant on which relief can be

granted.

SECOND DEFENSE TO THIRD CAUSE OF ACTION

1. Answering paragraph 1, defendant Grevhound Lines,

Ine. denies that this court has jurisdiction or that plaintiff's

third cause of action presents a Federal question or that

any cause of action exists for unfair competition under the

laws of the United States.

2. Answering paragraph 2, defendant realleges the ad-

missions, denials and averments in its Second Defense to

72 Appendix

First Cause of Action and in paragraphs 2 and 3 of its

Second Defense to Second Cause of Action insofar as the

same respond to averments incorporated by reference in

plaintiff’s Third Cause of Action. Defendant denies that

any conduct of defendant has caused plaintiff irreparable

damage.

THIRD DEFENSE TO THIRD CAUSE OF ACTION

Part or all of plaintiff’s second cause of action is barred

by the applicable statute of limitations.

FOURTH DEFENSE TO THIRD CAUSE OF ACTION

Defendant realleges its fourth defense to plaintiff's [705]

first cause of action.

WHEREFORE, defendant Greyhound Lines, Inc. prays

for judgment against plaintiff and for its costs.

MeCOLLOCH, DEZENDORF, SPEARS &

LUBERSKY

James C. Dezendorf

James H, Clarke

MeCUTCHEN, DOYLE, BROWN &

ENERSEN

William W. Schwarzer

John R. Reese

By /s/ Joun R. Reese

Attorneys for Defendants [706]

[Certificate of service omitted in printing] [707]

Appendiz 73

United States District Court

for the District of Oregon

[Title omitted in printing]

Civil No. 68-374

ANSWER OF DEFENDANT

THE GREYHOUND CORPORATION

TO THIRD AMENDED COMPLAINT

Defendant The Greyhound Corporation answers plain-

tiff’s third amended complaint as follows:

DEFENSES TO FIRST CAUSE OF ACTION

FIRST DEFENSE TO FIRST CAUSE OF ACTION

Plaintiff's first cause of action does not state a claim

against this answering defendant on which relief can be

granted.

SECOND DEFENSE TO FIRST CAUSE OF ACTION

1. Answering paragraph 1, defendant The Greyhound

Corporation admits that this action is instituted under § 4

of the Clayton Act (15 USC $15). Defendant denies the

remainder of paragraph 1.

2. Defendant denies paragraph 2. [1140]

3. Defendant admits paragraph 3.

4. Defendant admits paragraph 4, except it avers that

its principal place of business is in Phoenix, Arizona, and

that on December 31, 1963, it discontinued the operation of

scheduled common carrier passenger motor bus service and

transferred its motor carrier operating rights and prop-

erties to defendant Greyhound Lines, Inc., which came into

existence and commenced operations at that time.

——— ————————————LL sll

74 Appendix

5. Defendant admits paragraph 5, except it avers that

defendant Greyhound Lines, Inc., has its principal place

of business in Phoenix, Arizona and has engaged in the

operation of scheduled common carrier passenger motor

bus service since January 1, 1964.

6. Defendant admits paragraph 6, except it denies that

it has violated the antitrust laws and further denies that

the market to which plaintiff’s allegations refer is the

scheduled common carrier passenger motor bus service

market within the Western United States.

7. Defendant avers that it is without knowledge or

information sufficient to form a belief as to the truth of

averments contained in paragraph 7, except that defendant

admits that plaintiff has held itself out to provide scheduled

service from and between various points within Oregon,

Idaho and Utah.

8. Answering paragraph 8, defendant admits that de-

fendant Greyhound Lines, Inc. is the largest company

engaged in passenger motor carriage in the United States.

Defendant denies the remainder of paragraph 8.

9. Defendant denies paragraph 9.

10. Defendant denies paragraph 10.

11. Defendant denies paragraph 11, except: Defendant

[1141] admits that it acquired control of several formerly

independent bus lines and merged them into its system

and obtained the consent of the Interstate Commerce Com-

mission for such acquisitions and mergers; defendant ad-

mits that defendant Greyhound Lines, Inc., has facilities

for selling bus service: as to allegation (e), defendant

admits that it dismissed a request to abandon service, that

plaintiff applied for the rights being abandoned, and that

it filed a protest against plaintiff's application: and de-

fendant admits that defendant Grevhound Lines, Ine.,

Appendiz 75

discontinued existing joint-line through bus operations with

plaintiff for a period of time but has reinstituted the same.

12. Defendant denies paragraph 12.

13. Defendant denies paragraph 13, except that de-

fendant admits and avers that plaintiff had knowledge and

information with respect to the activities, actions, practices

and policies of defendant and of Greyhound agents, to the

extent applicable concerning the quoting of plaintiff's ser-

vices, inclusion of plaintiff’s services on schedules and maps,

routing of traffic and instructions to agents.

14. Defendant denies paragraph 14.

THIRD DEFENSE TO FIRST CAUSE OF ACTION

All or part of plaintiff's first cause of action is barred by

$4B of the Clayton Act, 15 USC § 15B.

FOURTH DEFENSE TO FIRST CAUSE OF ACTION

The acquisitions of control and mergers of bus lines,

selling agents, outlets and depots referred to in plaintiff’s

third amended complaint were authorized and approved

by the Interstate Commerce Commission under § 5(2) of

the Interst te Commerce Act, 49 USC §5(2), and this

answering defendant is relieved from the operation of the

antitrust laws and all state [1142] laws insofar as neces-

sary to carry the same into effect and to hold, maintain

and operate said properties and to exercise any control

and franchises thereby acquired under § 5(11) of the Inter-

state Commerce Act, 49 USC § 5(11).

DEFENSES TO PLAINTIFF'S

SECOND CAUSE OF ACTION

FIRST DEFENSE TO SECOND CAUSE OF ACTION

Plaintiff’s second cause of action does not state a claim

against this answering defendant on which relief can be

granted.

76 Appendix

SECOND DEFENSE TO SECOND CAUSE OF ACTION

1. Defendant The Greyhound Corporation admits para-

graph 1.

2. Answering paragraph 2, defendant realleges the ad-

missions, denials and averments in its Second Defense to

First Cause of Action as to paragraphs 2, 3, 4, 5, 6, 7, 8, 11,

12, 13 and 14 of plaintiff's first cause of action.

3. Defendant denies paragraph 3.

THIRD DEFENSE

TO SECOND CAUSE OF ACTION

Part or all of plaintiff’s second cause of action is barred

by the applicable statute of limitations.

FOURTH DEFENSE

TO SECOND CAUSE OF ACTION

Defendant realleges its fourth defense to plaintiff’s first

cause of action.

DEFENSES TO PLAINTIFF'S

THIRD CAUSE OF ACTION

FIRST DEFENSE TO THIRD CAUSE OF ACTION

Plaintiff’s third cause of action does not state a claim

against this answering defendant on which relief can be

granted.

SECOND DEFENSE TO THIRD CAUSE OF ACTION

1. Answering paragraph 1, defendant The Greyhound

[1143] Corporation denies that this court has jurisdiction

or that plaintiff’s third cause of action presents a Federal

question or that any cause of action exists for unfair com-

petition under the laws of the United States.

SO ees Oe et, ae eee

Appendiz 717

2. Answering paragraph 2, defendant realleges the

admissions, denials and averments in its Second Defense

to First Cause of Action and in paragraph 2 and 3 of its

Second Defense to Second Canse of Action insofar as the

same respond to averments incorporated by reference in

plaintiff’s Third Cause of Action. Defendant denies that

any conduct of defendant has caused plaintiff irreparable

damage.

THIRD DEFENSE TO THIRD CAUSE OF ACTION

Part or all of plaintiff’s second cause of action is barred

by the applicable statute of limitations.

FOURTH DEFENSE TO THIRD CAUSE OF ACTION

Defendant realleges its fourth defense to plaintiff's first

cause of action.

Wuenrerorg, defendant The Greyhound Corporation prays

for judgment against plaintiff and for its costs.

Dated: June 27, 1972.

McCottocu, Dezenporr, Spears &

LuUBERSKY

James C. Dezendorf

James H. Clarke

McCutcuen, Doyie, Brown &

ENERSEN

William W. Schwarzer

John R. Reese

/s/ By Joxnn R. Reese

Attorneys for Defendants [1144]

| Certificate and acknowledgement of service omitted

in printing] [1145] & [1146]

78 Appendix

ALFRED T. GOODWIN [Letterhead]

UNITED STATES COURT HOUSE

PORTLAND, OREGON 97205

November 22, 1972

Messrs. Bruce M. Hall, George Meier, ITI

Rives, Bonyladi, Hall & Epstein

1400 Public Service Building

Portland, Oregon 97204

Messrs. Michael N. Khourie, Eugene C. Crew

Broad, Khourie & Schulz

425 California Street, Suite 2404

San Francisco, California 94104

Messrs. James C. Dezendorf, James H. Clarke

McColloch, Dezendorf, Spears & Lubersky

8th Floor Pacific Building

Portland, Oregon 97204

Messrs. William W. Schwarzer, John R. Reese,

Kenneth Drexler

McCutchen, Doyle, Brown & Enersen

601 California Street

San Francisco, California 94108

Gentlemen:

Re: MT. HOOD STAGES, INC. ete. vy.

THE GREYHOUND CORPORATION et al.

D. Or. Civ. No. 68-374

T have been unable to resolve scheduling conflicts caused

hy a change in date of the Ninth Cireuit Symposium from

Appendix 79

April to January, and accordingly must reschedule your

trial to begin March 26, 1973,

Both sides have preserved in the record a request for

jury trial, but both have expressed doubt about persisting

in the request. The Clerk will need to know not later than

February 1, 1973, whether there will be a jury. It will be

helpful if you ean advise me by January 1.

I indicated on October 19, 1972, that I would advise

counsel of a number of rulings previously reserved for

various reasons. In the interest of obtaining a pretrial

[1354] order in final form, I now want to advise counsel of

my rulings on the reserved questions. Most are self-ex-

planatory; for convenience, I will follow the order in which

the questions are listed in Mr. Clarke’s proposed issues of

law (page 25 of his proposed pretrial order).

A. The opinions and orders of the ICC and the Dis-

trict Court in Mt. Hood Stages, Inc., Petition for

Modification—Greyhound Mergers, No. MC-F-

9136:

1. Do not give rise to collateral estoppel with

respect to any issue of fact or law in this action;

2. Are not admissible in evidence for any purpose.

B. Representations and testimony in earlier proceed-

ings may have probative value on one or more

issues, and will be received to the extent that they

are relevant and not excludable as hearsay.

C. Evidence of consent decrees, or opinions, com-

plaints, orders, or judgments in other cases will

not be received.

D. T ean conceive of no injunctive relief in this court

that could not have been had in proper adminis-

trative proceedings, and, accordingly, request the

plaintiff to omit such relief from the pretrial

order.

Appendiz

EK. I have concluded that the plaintiff’s claim for

damages for unfair competition is probably re-

dundant, but I will allow the issue to remain in

the case for the time being. If the plaintiff can

present a factual situation within the pleadings

that give rise to common-law damages and does

not amount to anticompetitive conduct in viola-

tion of the antitrust laws, I am willing to submit

it, but I see nothing in the proposed pretrial order

to date that presents a triable issue on that theory.

Clayton Act statute of limitations.

1. Fraudulent concealment. I do not believe that

sufficient facts appear at this time [1355] to

say that fraudulent concealment is not in dis-

pute and that Mt. Hood had reason on a

specifie date in history to know of facts that

constituted a claim under the antitrust laws.

After plaintiff rests, such a date, if any, prob-

ably can be determined.

2. The 5(b) exception. I believe the Congressional

intent behind 5(b) is better served by treating

intervention by Antitrust Division lawyers as

the functional equivalent of a direct action by

them.

Accordingly, both parties should plan on the plain-

tiff’s trying to prove, and the defendants’ meeting,

damages running back to the time Greyhound

began to route passengers around Mt. Hood, if it

did. If the case is tried to a jury, I will submit

interrogatories based upon appropriate alternative

dates, and if a jury is waived the segregation can

be handled by findings so that, if the Cireuit takes

a different view, the matter can he remedied with-

out a new trial on the damages issues.

LP OE Es SO A CN CR yt Meg mee! i ma et

Appendiz 81

G. If the pretrial order in its final form contains a

viable pendente claim for common-law damages

under Oregon law, I will treat it as controlled by

the local law on limitations.

Hf. I have concluded that there can be no claim made

on the theory of an intramural conspiracy. If

separate corporations conspired, that is another

matter. (A claim that officers of the holding com-

pany conspired with officers of the operating com-

pany does not appear to have support in the

discovery to date.) As of now, I will order stricken

any claims of Sherman Act violations by Grey-

hound Lines’ officers conspiring among them-

selves. Claims of improper conduct between

Greyhound and its independent agents, however,

are presently a major part of the case.

I trust that the foregoing covers the pending questions

upon which rulings are needed prior to the lodging of the

[1356] pretrial order. If further matters require rulings

prior to completion of the pretrial order, I will expect

counsel to call them to my attention at an early date.

Yours very truly,

/s/ A .rrep T. Goopwiy

Alfred T. Goodwin

United States District Judge,

sitting as District Judge

by designation

ATG hm

Original to be filed with Clerk of the United States District

Court for the District of Oregon [1357]

82 Appendiz

United States District Court

District of Oregon

[Title omitted in printing]

Civil No. 68-374

SPECIAL VERDICT

We, the jury, answer the interrogatories as follows:

1. Do you find from the evidence that defendants or

either of them violated Section 1 of the Sherman Act?

midge) 2 seen

YE NO

2. Do you find from the evidence that defendants or

either of them violated Section 2 of the Sherman Act?

ne A er eee

YES NO

If the answers to Nos. 1 and 2 are both “no”, you need

not answer any further questions.

3. If the answer to Nos. 1 or 2 is “yes”, do you find that

such violations were fraudulently concealed [2248] by de-

fendants, from plaintiff :

(a) during the period January 1, 1953, to December 14,

1960?

a eae re

YES NO

(b) during the period December 15, 1960 to July 4, 1964?

dak alee

YES NO

4. Ifthe answer to No. 3 (a) or (b) is “yes”, please state

the date prior to July 5, 1964, which, under the instructions

T have given you, you find was the time plaintiff knew or

should have known of this violation:

Dee. 14,1960 (DATE)

Appendiz 83

d. If the answer to Nos. 1 or 2 is “yes”, do you find that

plaintiff was injured by such violations of the antitrust

laws?

a eee 8 Pore

YES NO

6. If you answer question 5 “yes”, then fill in for each

of the following periods the amount of damages if any

sustained in that period:

July 5, 1964, to March 25, 1973 _........ Amount $2,650,491

December 15, 1960 to July 5, 1964 ..... Amount $ 626,482

January 1, 1953, to December 15,

BID cibicehiihlthcliaciekitaeedatea sas Amount $1,105,057

Dated this 2nd day of May, 1973.

/s/ Nora O. Pirrte

Foreman of the Jury [2249]

84 Appendix

United States District Court

District of Oregon

[Title omitted in printing]

CIVIL NO. 68-374

MOTION FOR JUDGMENT NOTWITHSTANDING

THE VERDICT, FOR A NEW TRIAL AND TO

STRIKE CERTAIN EVIDENCE

Defendants The Greyhound Corporation and Greyhound

Lines, Inc., hereby move this Court for judgment notwith-

standing the verdict or, alternatively, for a new trial, and

to strike certain evidence.

Defendants move the Court for an order setting aside the

verdict heretofore entered in this action and for judgment

in favor of the defendants in accordance with defendants’

previous motion for directed verdict on each of the follow-

ing grounds: [2256]

1. The conduct complained of herein by plaintiff, is im-

mune from the operation of the antitrust laws by reason

of Section 5(11) of the Interstate Commerce Act (49 U.S.C.

§5(11)).

2. The jurisdiction of this Court over the conduct com-

plained of, is preempted by the Interstate Commerce Com-

mission’s jurisdiction over this same conduct.

3. There is no evidence from which the jury could prop-

erly find a violation of Section 1 of the Sherman Act.

4. There is no evidence from which the jury could prop-

erly find a violation of Section 2 of the Sherman Act.

5. There is no evidence from which the jury could prop-

erly find that plaintiff was injured in its business or prop-

erty by reason of a violation of Sections 1 or 2 of the Sher-

man Act.

Appendix 85

6. There is no evidence from which the jury could prop-

erly find that defendants’ violations, if any, had been fraud-

ulently concealed from plaintiff at any time relevant herein.

7. That all claims arising prior to July 5, 1964 are

barred by the provisions of Section 4B of the Clayton Act

(15 U.S.C. § 15b).

In the alternative, defendants move this Court for an

order setting aside the verdict herein and granting a new

trial of this action for the reasons set forth above and for

the further reason that prejudicial error was committed by

the admission of certain evidence, by the giving of certain

instructions and by the refusal to give certain other instruc-

tions.

Defendants further move to strike certain exhibits offered

by plaintiff and received in evidence on the ground that

they are prejudicial and are not supported by the evidence.

The above motions are based upon Rules 50(b) and

59 [2257] of the Federal Rules of Civil Procedure, the

memorandum of points and authorities to be filed hereafter

and on the files and records in this action.

Dated: May 8, 1973.

Dezenporr, Spears, Luspersky &

CAMPBELL

McCurtcuHen, Doyte, Brown &

E\NERSEN

By /s/ Joun R. Reese

Attorneys for Defendants [2258]

[Certificate and acknowledgement of service omitted

in printing] [2259] & [2260]

86 Appendix

In the United States District Court

for the District of Oregon

Civ. No. 68-374

Mt. Hood Stages, Inc., doing

business as Pacific Trailways,

Plaintiff,

The Greyhound Corporation and

Greyhound Lines, Inc.,

Defendants.

JUDGMENT

This action came on for trial before the Court and a jury,

Honorable Alfred T. Goodwin presiding, and the issues

having been duly tried and the jury having duly rendered

its verdict,

IT IS ORDERED AND ADJUDGED that plaintiff, Mt.

Hood Stages, Inc., doing business as Pacific Trailways, re-

cover of the defendants, The Greyhound Corporation and

Grevhound Lines, Inc., the sum of $13,146,090 with interest

thereon at the rate of six per cent as provided by law, and

for its costs, and for its reasonable attorneys’ fees to be

set after a hearing upon the conclusion of all posttrial

motions in this court.

DATED at Portland, Oregon, this 11th day of May, 1973.

/s/ A.rrep T. Goopwin

United States Cireuit Judge sitting

as District Judge by Designation

[2261]

Appendiz 87

In the United States District Court

for the District of Oregon

Civ. No. 68-374

Mt. Hood Stages, Inc., doing

business as Pacific Trailways,

Plaintiff,

The Greyhound Corporation

and Greyhound Lines, Inc.,

Defendants.

[Filed November 30, 1973] [2874]

GOODWIN, Judge :*

Grevhound has moved for a judgment notwithstanding

the verdict and for a new trial in this treble-damage anti-

trust action which resulted in a verdict and judgment for

Mt. Hood Stages. The principal issue is whether Hughes

Tool Co. v. Trans World Airlines, 409 U.S. 363 (1973),

compels a judgment n.o.v.

Grevhound asserts:

(1) The action is barred by Section 5(11) of the Inter-

state Commerce Act, 49 U.S.C. §5(11);

(2) There was insufficient evidence (of conspiracy and of

monopolization) to sustain the verdict;

(3) A new trial should be granted because of the numer-

ous errors of law in the taking of evidence and in the

instructions to the jury.

*The Honorable Alfred T. Goodwin, United States Cireuit Judge.

sitting as District Judge by designation.

88 Appendiz

All of these contentions rehearse issues which were

briefed and argued extensively at trial and in hearings be-

fore trial. Now, as then, the law and the facts of this case

are such that the issues must be resolved against the de-

fendants. If there was error here or there in an evidentiary

ruling, none was so prejudicial as to warrant the abortion

of a lengthy trial. See Fed. R. Civ. P. 61.

The evidence revealed long-standing, calculated, and dam-

aging conduct which, but for Section 5(11) of the Interstate

Commerce Act, plainly would have violated Sections 1 and

2 of the Sherman Act, 15 U.S.C. §§ 1, 2.

Mt. Hood proved, inter alia, that Greyhound had: (1)

directed independent and joint ticket agents to long-haul

traffic around Mt. Hood; (2) interfered with the distribu-

tion of Mt. Hood’s schedules; (3) scheduled connecting

service so as to preclude reasonable connections [2875]

with Mt. Hood; and (4) discontinued through bus service

important to Mt. Hood’s scheduled routes.

The I.C.C. and reviewing courts have found that Grey-

hound willfully breached earlier representations made to

the Commission in acquisition proceedings and engaged

in destructive competition.’ The destructive practices estab-

lished by the record before the Commission were enjoined

by a three-judge panel of a district court,? and Greyhound

was subsequently held in criminal contempt for violating

that injunction.’ I mention these collateral cases, not be-

1. See, e.g., Petition for Modifieation—Greyhound Mergers

(Western Div.), 104 M.C.C. 449 (Div. 3, 1968); L.C.C. Affirmance

of the Order of Division 3, No. MC-F-9136 (Dee. 11, 1968; April

14, 1969); Greyhound Lines, Inc. v. United States, 301 F. Supp.

356 (N.D. Ill. 1969) (denying motion for temporary restraining

order).

2. Greyhound Lines, Inc. v. United States, 308 F. Supp. 1033

(N.D. Til. 1970).

3. United States v. Greyhound Corp., No. 71-CR-924 (N.D. TIL,

June 27, 1973).

Appendix 89

cause I relied upon them in this case, but because they

establish two points that do have some relevance to policy

considerations that bear upon this case.

In the first place, the litigation before the Commission

has proceeded for approximately a decade with no apparent

impact upon Greyhound’s conduct. If Congress intended

the Interstate Commerce Act to provide a remedy for com-

petitors injured by predatory behavior on the part of

regulated carriers, then the legislation is woefully inefficient.

Second, if proof outside the abundant proof in this record

were needed, the collateral cases strip away any pretense

that Greyhound’s conduct toward its competitors was simply

the result of good-faith aggressive management. The costs

to Greyhound of the prolonged litigation before the Com-

mission apparently have been more than offset by the

profits Greyhound has derived by flouting the Commission’s

cease-and-desist orders. If there was ever a case in which

a private action for damages is demonstrably necessary to

earry out national antitrust policy, this is it.

Section 5(11) of the Interstate Commerce Act obviously

is the key issue. That section provides, in relevant part:

[2876]

«“* * * 1 A)ny carriers or other corporations, and their

officers and employees and any other persons, parti-

cipating in a transaction approved or authorized under

the provisions of this section shall be and they are

relieved from the operation of the antitrust laws and

of all other restraints, limitations, and prohibitions of

law, Federal, State, or municipal, insofar as may be

necessary to enable them to carry into effect the trans-

action so approved or provided for in accordance with

the terms and conditions, if any, imposed by the Com-

mission, and to hold, maintain, and operate anv prop-

erties and exercise any control or franchises acquired

through such transaction * * *.” 49 U.S.C. § 5(11).

90 Appendiz

The effect of a similar statute on the antitrust liability

of a supplier of airline equipment was recently decided by

the Supreme Court in Hughes Tool Co. v. Trans World Air-

lines, supra. When an agency, with the authority to immun-

ize transactions from the operation of the antitrust laws,

necessarily considers the public interest and approves con-

duct explicitly or implicitly before the agency as part of a

proposed transaction, such conduct is thereby made immune

from antitrust liability.

Mt. Hood poses the “flip side” of the Hughes Tool ques-

tion: where a regulating agency with the authority to im-

munize conduct from the operation of the antitrust laws

has not approved the conduct complained of, and indeed

has ordered it stopped, does the approval by the agency

of related transactions and the existence of a pervasive

regulatory scheme, including the availabality of some

remedy, adequate or not, under that scheme preclude anti-

trust liability? I hold that it does not. See Hughes Tool Co.

v. Trans World Airlines, 409 U.S. at 387:

“We repeat, however, what we said in the Pan Amer-

ican case that the Federal Aviation Act does not com-

pletely displace the antitrust laws.” [2877]

The Supreme Court has repeatedly made it clear that

repeal of the antitrust laws is not to be lightly assumed. See,

e.g., Ricci v. Chicago Mercantile Exchange, 409 U.S. 289

(1973) ; United States v. Philadelphia Nat’l Bank, 374 U.S.

321, 350 (1963): Georgia v. Pennsylvania R.R., 324 US.

439, 456-57 (1945). See also Price v. Trans World Airlines,

481 F.2d 844 (9th Cir. 1973) (post-Hughes Tool Co. anti-

trust action stayed pending resort to Civil Aeronautics

Board).

Appendix 91

Mt. Hood is not here seeking the kind of relief that could

be provided by the I.C.C.t That kind of relief has been

sought, and for nearly ten years has proven to be illusory.

Here Mt. Hood is seeking only the antitrust remedy of

treble damages, relief that can be granted only in court

and which is supplemental to those administrative remedies

which could be ordered by the I.C.C.

The antitrust issues raised by Greyhound’s conduct were

not considered or passed upon by the Commission in the

initial acquisition proceedings. Were this court to hold that

merely because the I.C.C. has authority to approve acquisi-

tions, routes and schedules and order some relief with re-

spect to some of the conduct complained of Congress had

thereby placed exclusive jurisdiction in the I.C.C. over all

conduct related to the approved transactions, this would

amount to an almost total exemption of a carrier’s conduct

from the antitrust laws. Rather, all that Hughes Tool teaches

is that the substantive exemptions from the antitrust laws

created by Congress or required by the structure of the

regulatory scheme are not destroyed through by-passing

or overriding the forum chiefly entrusted with the regula-

tion of the industry in question. See REA [2878] Express

v. Alabama Great So. Ry., 412 U.S. 934 (1973) (affirming

a three-judge court’s stay of an antitrust suit pending [.C.C.

reconsideration of a prior financing arrangement order on

the issue of possible antitrust immunity).

A eourt’s antitrust jurisdiction is ousted only when the

specified agency, pursuant to its statutory authority, ap-

proves the challenged actions, If an agency thus grants an

4. See 49 U.S.C. §§ 9, 16. Though the I.C.C. has jurisdiction to

award damages, this power is limited to eases in which damages

result from activity which can be classified as a violation of the

Interstate Commerce Act. National Trucking & Storage Co. v.

Pennsylvania R.R., 228 F.2d 23, 30 (D.C. Cir. 1955).

92 Appendiz

exemption from the antitrust laws, that determination is

binding uniess a court should set it aside for one of the

reasons enumerated in Section 10(e) of the Administrative

Procedure Act.® By the same token, however, conduct which

not only has not been expressly approved but which has

been expressly disapproved by the agency ought then to

be subject to antitrust remedies supplemental to those which

could have been granted by the agency.

A contrary decision would not only be an unsound reading

of legislative intent, but would also be impractical. It would

foreclose from the courts the option of utilizing primary

jurisdiction, a technique which does not preclude a later

judicial antitrust proceeding should the agency first deter-

mine that the complained-of acts were not immunized. Cf.

Ricci v. Chicago Mercantile Exchange, 409 U.S. at 305-06;

Federal Maritime Board v. Isbrandtsen Co., 356 U.S. 481,

498-99 (1958). Greyhound’s reading of Section 5(11) would

place upon the I.C.C. the impossible burden of anticipating

and ruling upon all the possible antitrust implications of

all conduct conceivably related to any transaction subject

to I.C.C. approval at the risk of subsequently being held to

have conferred a blanket antitrust immunity.

In my other rulings, and in rejecting various proposed

instructions, I tried to state my reasons as the case [2879]

progressed, Accordingly, I will not extend this Memo-

randum by repeating those reasons here.

IT IS ORDERED:

(1) The motion for judgment notwithstanding the ver-

dict is denied ;

5. E.g.,5 U.S.C. § 706(2) :

“(A) arbitrary, capricious, an abuse of discretion * * *;

“(B) contrary to constitutional right * * *;

“(C) in excess of statutory jurisdiction * * *;

“(D) without observance of procedure required by law;

“(E) unsupported by substantial evidence * * *;

Appendiz 93

(2) The motion for a new trial is denied;

(3) The court will hear counsel on the matter of at-

torney’s fees at 10:00 a.m., December 14, 1973.

DATED this 29th day of November, 1973.

/s/ Aurrep T. Goopwin

Alfred T. Goodwin

United States Circuit Judge,

sitting as District Judge

by designation. [2880] & [2881]

Peet

94 Appendix

In the United States District Court

for the District of Oregon

[Title omitted in printing]

Civil No. 68-374

MEMORANDUM OF POINTS AND AUTHORITIES

IN SUPPORT OF PLAINTIFF’S PETITION

FOR ALLOWANCE OF ATTORNEYS’ FEES [2882]

INTRODUCTION

Plaintiff on May 17, 1973 filed its Petition for Allowance

of Attorneys’ Fees in the amount of $1,971,900, and in

accordance with the Court’s direction, for such additional

attorneys’ fees as the Court would award following post-

trial motions. This request represents approximately 15%

of the face amount of the judgment of $13,146,090, and ap-

proximately 45% of the jury verdict of $4,382,030. Plaintiff

has now supported its Petition with the filing of (1) affi-

davits narrating time spent by plaintiff’s counsel in pre-

paring and presenting the case; (2) time sheets and time

summaries; (3) biographical data regarding plaintiff’s

counsel; and (4) the files and records in the case.

APPLICABLE LAW

Section 4 of the Clayton Act provides in pertinent part:

“Any person injured in his business or property by

reason of anything forbidden in the antitrust laws may

sue therefor in any district court of the United States

.,. and shall recover threefold the damages by him

sustained, and the cost of suit, including a reasonable

Appendix 95

While the basis of attorney’s fee awards for any case must

ultimately rest within the sound discretion of the trial court,’

these criteria have been applied with consistency within this

Circuit 2

“(1) whether plaintiff’s counsel had the benefit of

a prior judgment or decree in a case brought by the

Government; (2) the standing of the counsel at bar;

(3) time and labor spent; (4) magnitude and com-

plexity of the litigation; (5) responsibility undertaken ;

(6) the amount recovered; (7) the knowledge the court

has of the conferences, arguments that were presented

and of work shown by the record to have been done

by attorneys for the plaintiff prior to trial; (8) what

it would be reasonable for counsel to charge a victori-

ous plaintiff; and (9) what contribution shall be made

by the defendant toward the fees of plaintiff’s counsel.”

[2884]

STATISTICAL FRAME OF REFERENCE

These proceedings were commenced by the filing of Plain-

tiff’s Complaint on July 5, 1968. Through November 30,

1973 plaintiff’s counsel has expended in the prosecution of

this action in excess of 10,190 hours (See Exhibit A). The

docket sheets (Exhibit C) reflect at least twenty court ap-

pearances before this Court and The Honorable Gus J.

Solomon. During discovery at least 41 depositions were

taken in various of the Western states, some of considerable

length. The deposition of William A. Niskanen took ten

1. This Cireuit has recently noted the “special competence” of

the trial judge in the award of attorneys’ fees at the trial court

level. Perkins v. Standard Oil of California, CA-9, 1973 Trade

Cases, 93,765, 93,767.

2. Twentieth Century Fox Film Corp. v. Goldwyn, {1964 Trade

Cases § 71,010], 328 F.2d 190, 221 (9th Cir. 1964), cert. denied,

379 U.S. 880; cited in Clyde A. Perkins v. Standard Oil Company

of California, supra.

96 Appendix

days alone, and is evidenced by nine volumes of deposition

transcript. The deposition of Harry Drew covered seven

volumes. Over 23,000 documents were examined by plain-

tiff’s counsel in defendants’ offices in San Francisco, Oak-

land, Seattle, Chicago, Evanston, Eugene and Medford from

which some 500 were winnowed out for presentation in a

jury trial. Because of the incompleteness of defendants’

records (See Defendants’ Objection to Interrogatory No. 2,

Answers to Plaintiff’s Second Set of Interrogatories which

are attached hereto as Exhibit D) plaintiff was obliged to

undertake, with outside expert assistance, difficult and com-

plex traffic studies. These included monitoring, pursuant to

Court Order, of defendant’s driver’s envelopes and ticket

stubs through key gateways for a period of 12 months. The

damage study submitted to the jury (Exhibit 476), itself

the product of detailed sub-schedules, contained 62 pages.

Trial was, at defendants’ insistence,’ by jury, and took 28

trial days, 6807 pages of transcript. The briefs of the parties

in Defendants’ Motion for Judgment Notwithstanding the

Verdict or, in the alternative, for New Trial are the most

recent indication of the magnitude of this [2885] case. De-

fendants’ opening brief encompassed 139 pages; plaintiff’s

answering brief 288 pages, plus two detailed exhibits; and

defendants’ reply brief 112 pages.

ARGUMENT

We would now apply the foregoing recognized criteria to

these proceedings:

(1) Whether plaintiff’s counsel had the benefit of a prior

judgment or decree ina case brought by the Government.

1. Defendants’ letter to the Court filed December 19, 1972;

plaintiff’s Waiver of Jury trial filed December 11, 1972.

Appendiz 97

Although many decisions have been rendered by the I.C.C.

and the U. 8. District Court in Chicago against these de-

fendants, nevertheless, and as a direct result of their com-

pletely successful opposition to plaintiff’s continuing efforts

to obtain collateral estoppel or even an effect as limited ad-

missions of fact as to matters directly determined in those

cases, defendants must be the first to admit that plaintiff’s

counsel obtained no benefits therefrom.

(2) The standing of counsel at bar.

The standing and experience of plaintiff’s counsel has,

at least as to the appellate proceedings, been subject in this

Cireuit to careful scrutiny. Perkins v. Standard Ou Com-

pany of California, 474 F.2d 549, (1973). For this reason,

there is appended hereto as Exhibit EF, a summation of the

background and experience of plaintiff’s principal attorneys

in this highly specialized area of practice. As to their in-

dustry and perseverance, plaintiff’s attorneys are nopeful

that the docket sheet in this case, attached hereto as Exhibit

C, may serve as a reminder of the unrelenting skirmishes

and battles on the way to the ultimate jury verdict.

As to opposing counsel, although modesty in this instance

may forbid, the firms of McCutchen, Doyle, Brown & Ener-

sen of San Francisco, California and Dezendorf, Spears,

Lubersky & Campbell [2886] of Portland, are preeminent

amongst antitrust defense counsel in their respective areas

of service. Each firm is large, resourceful, determined and

experienced, as this Court has had occasion to observe on

numerous occasions,

(3) Time and labor spent.

The time fairly spent on this case is as set forth in

Exhibit B. We would only note herein that both parties

98 Appendix

have undergone the same difficulty in having the place of

trial in Portland, separated by considerable distance from

the principal location of much of the evidence and of lead

counsel in San Francisco. Plaintiff’s counsel have, as in-

dicated by the affidavits attached hereto, following the

pledge of Herbert M. Schwab in the letter of engagement

of July 1, 1968’ taken the greatest pains to husband their

limited time and resources against far larger opponents in

order to most effectively prepare and present their claims

before a jury.

(4) Magnitude and complexity of the litigation.

This Court has had occasion to remark upon the com-

plexity and magnitude of the issues at bar.? These issues,

while not possessing the novelty claimed for them by defend-

ants in dramatizing their defense, nonetheless, particularly

as to the Section 2 monopolization charges, have required

the most careful consideration.

(5) Responsibility undertaken.

Plaintiff’s counsel undertook a grave responsibility in

this case. Mt. Hood Stages has been under a virtual state

of seige by these defendants, and the evidence rather dra-

matically supports the thesis that the survival of this

company has been very much [2887] intertwined with the

continuing viability of the Central Oregon region as an

economic entity. Mt. Hood Stages is the principal public

transportation bridge for this region into the outside world.

This company represented the last, and perhaps the only,

1. “We will of course work together closely, and avoid unneces-

sary duplication of effort.”

2. Exhibit K, at Tr. 6796.

Appendiz 99

contestant in the Pacific Northwest with the will to fight

and to win against Greyhound’s monopoly power. The reali-

zation of the importance of Mt. Hood’s stubborn stand pro-

vided impetus to the vigorous prosecution by the Interstate

Commerce Commission and the Department of Justice of

enforcement proceedings against Grevhound following the

Chicago’s Court’s determination in the Modification case.

The foregoing considerations bring to mind the observa-

tion of the Ninth Cireuit in Flintkote Company v. Lysfiord,

246 F.2d 268 (9th Cir. 1956), cert.den, 256 U.S. 835 (1959)

in considering the contribution of the private litigant to the

antitrust enforcement scheme:

“The private antitrust action is an important and

effective method of combatting unlawful and destruc-

tive business practices. The private suitor complements

the government in enforcing the antitrust laws.”

6. The amount recovered.

The trebled award of $13,146,090 was based upon a jury

verdict of $4,382,030. As has been previously pointed out

the attorneys’ fees requested of $1,971,900 represents ap-

proximately 15% of the face amount of the judgment and

approximately 45% of the jury verdict. As likewise earlier

noted, these percentages may be compared to the attorneys’

fee award of $289,000 in Clyde A. Perkins v. Standard Oil

Company of California, Civil No. 369-59 on May 14, 1964

which award amounted to 86% of the single damages jury

verdict and more than 28-12% of the treble damage judg-

ment. Such award was confirmed in Perkins v. Standard

Oil Company of California, (1969 Trade Cases {[ 72,822),

395 U.S. 642 (1969). The present request, making allowance

for the larger award in this case, is therefore well within

the experience of this District. [2888]

100 Appendix

(7) The knowledge the court has of the conferences, argu-

ments that were presented and of work shown by the record

to have been done by attorneys for the plaintiff prior to

trial.

This criterion is one upon which plaintiff beliéves it can

fairly rely. The work required to attain success in this case

was certainly of epic proportions, at least from plaintiff’s

point of view, and plaintiff’s burden was not eased by de-

fendants’ insistence upon a jury trial. The record is “in

evidence”, and, we submit, speaks for itself. If defendants

sincerely hold that this was “a case that should never have

been tried”, then they particularly will not gainsay plaintiff

its claim to a singular accomplishment.

(8) What it would be reasonable for counsel to charge a

victorious plaintiff.

This Court is well aware of the contingent fee schedules

in the States of Oregon and California, each of which, ab-

sent some contribution by plaintiff to its attorneys’ over-

head and expenses, would command fee percentages of two

or three times that requested here, See Exhibit G. Plaintiff

has, in its view, liberally discounted the effect of a partial

retainer upon the normal contingent fee percentage re-

ceived in civil cases. Plaintiff is prepared, if necessary, to

present expert testimony as to this criterion.

(9) What contribution shall be made by the defendant

toward the fees of plaintiff’s counsel.

The Court now has before it as Exhibit F, plaintiff’s fee

arrangement with its counsel. The amount requested there

is less that one-half the payment plaintiff will make to its

counsel in the event it is ultimately successful. As Judge

Wyzanski stated in Cape Cod Food Products v. National

Cranberry Association, 119 F.Supp 242, 244 (D.Mass. 1954).

[2889]

Appendix 101

“{A] losing defendant must pay what it would be

reasonable for counsel to charge a victorious plaintiff.

The rate is the free market price, the figure which a

willing, successful client would pay a willing, success-

ful lawyer. Sometimes the figure may seem high but

so far as price is determined by unique excellence or

by social usefulness, the advocate is especially worthy

of larger recompense.”

CONCLUSION

It is universally recognized that the award of a reasonable

attorneys’ fee at the conclusion of a successful prosecution

of a private antitrust treble damage action must rest ulti-

mately in the discretion of the trial court,’ with due con-

sideration given to the various factors enunciated for

guidance’ within this Cireuit in 20th Century Fox v. Gold-

wyn, supra, as noted with approval this year in Perkins v.

Standard Oil Company of California, supra.[2890] This

Court has stated in its opinion of November 30, 1973: “If

there was ever a case in which a private action for damages

1. While the applicable standards have been consistently ob-

served, the award itself must necessarily vary with the degree of

prominence of one or more criteria. In Alpine Pharmacy, Inc., et al

v. Chas. Pfizer & Co., Inc., et al, 481 F.2d 1045 (1973), the Second

Cireuit commented :

“In the end, no mathematical formula, or precise weighing

of specific factors is necessary, nor often desirable. In fact,

there is no requirement that each of the listed criteria be taken

into account, only that the final award be reasonable under the

circumstances of the case.

“As one commentator has noted, ‘there are nearly as many

notions of what is reasonable as there are judges.’ Clark, The

Treble Damage Bonanza: New Doctrines of Damages in Pri-

vate Antitrust Suits, 52 Mich. L.Rev. 363, 412 (1954).”

To the same effect is “Attorneys’ Fees in Individual and Class

Action Antitrust Litigation”, 60 California Law Review 1656

(1972), wherein the writer has collected and analyzed numerous

attorneys’ fees awards, and has observed: “Indeed it seems there

are almost as many notions of what is reasonable as there are

judges.”

102 Appendix

is demonstrably necessary to carry out national antitrust

policy, this is it.” Plaintiff submits that upon considerations

of public policy and of the effort expended herein its re-

quest for its attorneys’ fees for the trial of this cause is

reasonable.

Respectfully submitted,

Hatt & Novack

Broap, Kuovurre & Scxuvuiz

/s/ By Bruce M. Hat

BRUCE M. HALL [2891]

[Certificate of service omitted in printing] [2892]

Appendiz 103

TESTIMONY OF MAXWELL BLECHER GIVEN

DECEMBER 20, 1973 (Tr. 6818-6819)

“Q. ... I ask you as to the first criteria: Whether plain-

tiff’s coined had the benefit of a prior judgment or decree

in a case brought by the Government?

A. The question is whether I have considered that?

Q. Yes, and what weight did you give to it, if any?

A. Yes, I have considered it... .[Tr. 6818]

My review of the record in this case indicates that not

only did the plaintiff not have the benefit of any prior

Government adjudication, but, in fact, this record formed

the basis of a concomitent proceeding before the Interstate

Commerce Commission in which the anti-trust division

convened, and in which it secured a contempt citation for

the conduct involved.

So that I think actually, here, you had no benefit from

what the Government did, but you were simultane-

ously preparing the Government case in the private

ease.[ Tr. 6819]

PORTION OF MT. HOOD CLOSING ARGUMENT AT HEARING

RE ATTORNEYS’

December 20, 1973 (Tr. 6893-6894)

. this private action did a tremendous job of enforce-

ment and, in fact, has caused the Government to act rather

than the reverse and the Government has acted and a

erimina [Tr. 6893] conviction has been obtained.” [Tr.

6894]

104 Appendix

In the United States District Court

for the District of Oregon

Civ. No. 68-374

Mt. Hood Stages, Inc., doing

business as Pacific Trailways,

Plaintiff,

Vv.

The Greyhound Corporation

and Greyhound Lines, Inc.,

Defendants.

MEMORANDUM AND ORDER

ON ATTORNEY FEES [3271]

After reviewing the file, the exhibits offered in support

of the claim for attorney fees, and all the evidence offered

by both parties on the question of a reasonable attorney

fee, I have concluded that compensation at an hourly rate

would be inadequate in a case of this kind.

I have considered all of the factors Judge Hamley enum-

erated in Twentieth Century Fox Film Corp. v. Goldwyn,

328 F.2d 190 (9th Cir.), cert. denied, 379 U.S. 880 (1964),

and have given weight to all of them. I believe that this

case is, in many ways, unusual, and that its complexity and

difficulty set it somewhat apart from the common run of

antitrust cases, if such a category in fact exists.

I will not attempt to go through the figures, or the evalu-

ation process, by assigning cash value to the various ele-

ments. Rather, I have decided to give substantial effect to

the result achieved, and to the other factors in the per-

spective of the four vears I have known the case in all its

details. I have concluded that a reasonable fee to be assessed

Appendiz 105

against the defendant is the-sum of $1,250,000. The attor-

ney’s fee is to bear interest at the statutory rate for judg-

ments until paid.

The Clerk will draw and submit for my signature a final

judgment, accordingly in the total sum of $14,396,090.00,

plus costs to be taxed.

/8/ Awrrep T, Goopwix

United States Circuit Judge,

sitting as District Judge

by designation. [3272]

106 Appendix

In the United States District Court

for the District of Oregon

Civil No. 68-374

Mt. Hood Stages, Inc., doing

business as Pacific Trailways,

Plaintiff,

vs.

The Greyhound Corporation

and Greyhound Lines, Inc.,

Defendants.

AMENDED JUDGMENT

Based upon the court’s order entered contemporaneously

herewith,

IT IS CONSIDERED AND ORDERED that the plaintiff

MT. HOOD STAGES, INC. have and recover judgment

against the defendants THE GREYHOUND CORPORA-

TION and GREYHOUND LINES, INC., and each of

them, in the amount of $14,396,090.00, together with interest

at the rate of six percent on the sum of $13,146,090.00, from

May 11, 1973 to this date, plus costs to be taxed.

IT IS FURTHER ORDERED that this judgment super-

sede and replace the judgment herein entered on May 11,

1973, and that the sum of $14,396,090.00 will bear interest

at the rate of six per cent as provided by law from the date

hereof until paid.

DATED this 21st day of December, 1973.

/s/ Awrrep T, Goopwin

United States Cireuit Judge,

sitting as District Judge

by Designation [3273]

Appendix 107

United States District Court

for the District of Oregon

(Title omitted in printing]

Civil No. 68-374

NOTICE OF APPEAL

Notice is hereby given that defendants The Greyhound

Corporation and Greyhound Lines, Inc., appeal to the United

States Court of Appeals for the Ninth Circuit from the

judgment in favor of plaintiff entered herein on May 14,

1973, and from the amended judgment entered herein on

December 21, 1973, and from all pretrial, interlocutory and

post-trial orders herein.

Dated: December 26, 1973.

Dezenporr, Spears, Luspersky &

CAMPBELL

James C. Dezendorf

James H. Clarke

McCutcuen, Doyie, Brown &

E\NERSEN

William W. Schwarzer

John R. Reese

By /s/ James H. Clarke

Of Attornevs for Defendants [3275]

108 Appendix

| United States Court of Appeals,

Ninth Circuit.

Mt. Hood Stages, Inc., dba Pacific

Trailways, Plaintiff-Appellee,

The Greyhound Corporation and

Greyhound Lines, Inc.,

Defendants-Appellants.

No. 74-1282.

June 9, 1977.

Appeal from the United States District Court for the

District of Oregon.

Before BROWNING and WRIGHT, Circuit Judges, and

LINDBERG,* District Judge.

BROWNING, Circuit Judge:

Greyhound Corporation and Greyhound Lines, Inc., ap-

peal from a judgment entered on a jury verdict awarding

damages to Mt. Hood Stages, Inc., for injnries resulting

from violations of sections 1 and 2 of the Sherman Act, 15

U.S.C. §$1, 2.2 We affirm. s

Immunity

Greyhound is the largest common carrier by bus of pas-

sengers and package express in the United States, moving

more than 80 percent of this traffic in the western states

*Honorable William J. Lindberg, Senior United States District

Judge, Western District of Washington, sitting by designation.

1. The judgment was for $13,146,090 (after trebling) and attor-

neys’ fees of $1,250,000, plus costs.

Appendiz 109

and operating over routes throughout the country. Mt.

Hood is one of Greyhound’s small competitors, operating

over routes in Oregon, Idaho, and Utah. The essence of

Mt. Hood’s antitrust claim is that Greyhound acquired bus

companies whose routes circled those of Mt. Hood and

thereafter deprived Mt. Hood of connecting or “bridge”

traffic with the purpose and effect of eliminating Mt. Hood

as a substantial competitor.

Greyhound does not deny the sufficiency of the evidence

to establish a violation of sections 1 and 2 of the Sherman

Act, assuming that statute applies. Its principal contention

is that Mt. Hood bases its claim upon acquisitions approved

by the Interstate Commerce Commission and implementa-

tion by Greyhound of control] over the acquired companies,

and that such activities are immune from antitrust attack

by virtue of section 5(11) of the Interstate Commerce Act,

49 U.S.C. $5(11), applied in light of the Supreme Court’s

analysis in Hughes Tool Co. v. Trans World Airlines, Inc.,

409 U.S. 363, 93 S.Ct. 647, 34 L.Ed.2d 577 (1973).

Section 5(2) of the Interstate Commerce Act, 49 U.S.C.

§$5(2), provides that one carrier may acquire another with

Commission approval: the Commission is required to grant

such approval, subject to anv terms and conditions it deems

reasonable, if the acquisition “will be consistent with the

public interest,” id. Section 5(11) provides that carriers

participating in transactions approved by the Commission

are “relieved from the operation of the antitrust laws .. .

insofar as may be necessary to enable them to carry into

effect the transaction so approved or provided for in ac-

cordance with the terms and conditions, if any, imposed by

the Commission, and to hold. maintain, and operate any

properties and exercise any control or franchises acquired

through such transaction.”

110 Appendix

From 1947 to 1956 Greyhound acquired eight bus com-

panies operating in the area relevant here. Each acquisition

was approved by the Commission pursuant to section 5(2).

Mt. Hood opposed four of the acquisitions. It argued that

if the acquisitions were approved, Mt. Hood would be en-

circled and Greyhound could route traffic around it, de-

priving the public of the most convenient service and Mt.

Hood of revenues necessary to its survival. Mt. Hood’s

argument to the Commission thus foreshadowed its present

antitrust claim.

Greyhound responded by representing to the Commission

that the acquisitions “would not adversely affect connecting

carriers; that arrangements with such carriers, including

interchange of traffic and open gateways, would be main-

tained; that it was not the policy of Greyhound to route

passengers over circuitous routes; that its agents were in-

structed to quote the direct route as well as the Greyhound

route and give passengers their choice; and that Greyhound

had always carried [Mt. Hood’s] schedules in its folders

and cooperated in every way to acquaint the public with

its service and thus promote additional traffic and business

for their lines.’ Greyhound also represented to the Com-

mission that Grevhound would continue a joint through-bus

arrangement with Mt. Hood.* As the Commission later

2. The quotation is from the Commission’s opinion in the section

5(9) proceedings, described later. Mt. Hood Stages, Inc., 104 M.C.C.

449, 452 (1968).

3. This agreement, initiated in 1949, provided for a through-bus

from San Francisco, California, to Spokane, Washington, using Mt.

Hood’s bridge route between Klamath Falls and Biggs, Oregon.

Revenue. and expenses were shared according to the miles traveled

over each company’s route. The arrangement shortened the San

Franciseo-Spokane trip by 110 miles and several hours as compared

with the all-Greyhound route via Portland. It provided better serv-

ice to travelers and was profitable for both companies.

Appendix 111

found, Greyhound intended the Commission to rely upon

these representations in determining whether the proposed

acquisitions were in the public interest, and the Commission

did in fact rely upon them in approving the acquisitions.

In 1964 Mt. Hood filed a petition with the Commission pur-

suant to section 5(9) of the Act, 49 U.S.C. § 5(9),* asking it

to reopen the acquisition proceedings and enter a supple-

mental order requiring Greyhound to live up to its repre-

sentations. The allegations in Mt. Hood’s petition to the

Commission were essentially the same as those Mt. Hood

later made in this antitrust suit—namely, that Greyhound

had cancelled the through-bus connection, had scheduled

connecting service so as to preclude reasonable connections

with Mt. Hood, had directed Greyhound’s agents and inde-

pendent joint ticket agents to send traffic by longer routes

around those of Mt. Hood, and has interfered in various

ways with the distribution of Mt. Hood’s schedules and the

quotation of Mt. Hood's rates and services, all with the

intent of injuring Mt. Hood. The United States intervened

in support of Mt. Hood.

After an extensive evidentiary hearing, a hearing ex-

aminer resolved all issues against Grevhound and recom-

mended entry of the order sought by Mt. Hood. In April,

1968, the Commission issued an opinion sustaining the

examiner’s findings that Grevhound had made the repre-

sentations alleged, that Greyhound had intended the Com-

mission to rely on them, that the Commission had relied

on them in approving the acquisitions, that Grevhound had

4. Section 5(9) reads:

Supplemental orders by Commissions—The Commission

may from time to time, for good cause shown, make such

orders, supplemental to any order made under paragraph (1).

(2), or (7) of this section, as it may deem necessary or appro-

priate.

112 Appendix

not fulfilled the representations, and that Greyhound’s ac-

tions “were inspired by a desire to stiffle competition” and

“injure or destroy” Mt. Hood. Mt. Hood Stages, Inc., 104

M.C.C. 449, 459-63 (1968). The Commission concluded that

Greyhound’s failure to abide by its commitment “constitutes

destructive competition in contravention of the national

transportation policy, is not consistent with the public

interest, and provides good cause” for a supplemental order

under section 5(9) of the Act. The Commission deferred

entry of a supplemental order to allow voluntary negotia-

tions between the parties. Jd. at 462-63.

Two months later, in July, 1968, Mt. Hood filed this suit

alleging violations of the antitrust laws and common law

and statutory unfair competition. With respect to the anti-

trust violations the complaint alleged that, beginning in

1947 and continuing to the date of the complaint, Grey-

hound had restrained and monopolized commerce in the

carriage of passengers and their luggage between points

in Oregon, Idaho, and Utah by means essentially the same

as those that were the subject of the Commission’s pro-

ceeding; that is, the acquisition of independent bus lines

with Commission consent obtained by the misrepresenta-

tions outlined by the Commission and thereafter engaging

in the destructive competitive tactics found by the Com-

mission. Greyhound sought, unsuccessfully, to eliminate

these issues from the litigation on the ground that they fell

within the exclusive jurisdiction of the Commission.

In the Commission proceedings, meanwhile, the efforts

of the parties to agree upon an order failed. The Commis-

sion entered its own order requiring Greyhound to restore

the practices and traffic patterns existing when the acquisi-

tions at issue were authorized, and, specifically, to restore

the joint through-bus service, to revise Greyhound’s sched-

Appendix 113

ules to permit reasonable connections with Mt. Hood, to see

that through routes and fares were quoted and quoted

accurately, and to eliminate other destructive practices.

Greyhound Lines, Inc. v. United States, 308 F.Supp. 1033,

1037 (N.D. Til. 1970). A three-judge district court affirmed

the Commission and issued its own order in similar terms.

Td. at 1040-41. Following entry of the district court order

enforcing the Commission decision, Mt. Hood amended the

complaint in this antitrust proceeding to eliminate the

prayer for injunctive relief.

In June, 1971, the United States and the Commission

filed petitions with the district court in the enforcement

proceeding, asking that Greyhound be held in contempt for

failing to comply with the court’s order enforcing the

Commission’s decision. The court found Greyhound had

willfully failed to comply with portions of the order and

held Greyhound in criminal and civil contempt. United

States v. Greyhound Corp., 363 F.Supp. 525 (N.D.Tll. 1973).

The court imposed fines totaling $600,000, United States

v. Greyhound Corp., 370 F.Supp. 881, 883-85 (N.D.Tll. 1974),

ordered Greyhound to file semiannual reports of compliance

efforts for five years, and granted members of the Depart-

ment of Justice staff “visitorial and document examination

rights so that they may further monitor Greyhound’s com-

pliance efforts,” id. at 886. Because Greyhound ap

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