# Petition for Writ of Certiorari — Lone Star Steel Co. v. McGee > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385603_0922%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1967 - **Citation:** 389 U.S. 977 ## Text OCTOBER TERM 1967 | - —_— | PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT - \ Spencer C. Retyza, III, 1511 Fidelity Union Life Bldg., Dallas, Texas, | _Counsel for Petitioner. RoserT E. Burns, . Burrorp, Rysurn & Foro, | Of Counsel . NN AI SE LOE STI LIE ITS ‘WARLICK PRESS, INC.-——P. O. BOX 10543—2263 VALDINA STREET—DALLAS—ME 1-3130 Supreme Court of the United | States 2 ___Lonz Star — Company, — Moe dt ‘ee tg P, a ’ | v. ay p-oupreme Court. et ae xe FILED FN, CIBRARY*.. s . ! ales EP 26 1967 - SUPREME COURT, U. & Peedi & a ial IS, @LERKE wae | % -4 . , ‘ a . > é J . _ which involved the’ activities of the Pittsburgh Steel Com- pany and its wholly owned subsidiary, Monessen South- western Ry. Co., which two conipanies had operations al- most identical with those of Lone Star and the T&N: In refusing to apply the FELA to the over-all rail qperations, . the’ Court stated, P. 844: lg nd AE ae eer | be alert to: avoid inter-company arrangements . drawn _ to avoid federal jurisdiction..We accept that but see no evidence of such an arrangement here. We, on the shee. ak should be alert to avoid the extension of . an act applicable. to employees in interstate transpor- — tation to cover those who are engaged in other occupa- tions in industrial plants. Such an extension might well, in many instances, deprive an injured workman of his: — rights under a state compensation act where his right ee een ee CONCLU SION : Lone Star is a steel-making company, not a common cai tier. A writ of certiorari should’ be granted. Respectfully submitted, Spencer C. Rena, III, 1511 Fidelity Union Life Bidg., Dallas, Texas, . : Counsel for Petitioner. -Rozert E. Burns, 3 BurrorpD, RYBURN & Forp, | Of Counsel | oh nt il tan pitch nl oN. aii nas dha! eo Jia Al sein UNITED STATES: COURT OF APPEALS For The Fifth Circuit / / Sn ato | _ No. 23671 Lone Star Stee, Company, : e Appellant, versus ; Lois MoGr, 2 aia Appellee. — from the United States District Court for the Benen District of Texas. | | ~ 23, — ee, Before GEWIN, COLEMAN and GOLDBERG, Circuit | J udges. GEWIN, Circuit Judge: This appeal is from a bias rendered in an action brought in the United States District. . Court for the Eastern District of Texas against Lone Star "Steel Company (Lone Star) and Texas & Northern Rail- way Company (T & N) by Lois McGee to recover damages for personal injuries under the Federal Employers’ Liability Act, 45 U.S.C. §§ 51-60, and the Safety Appliance Act, 45 U.S.C. §§ 1-16. Before trial McGee’s motion to dismiss — A-2 T & N as a party defendant was granted. The district court held as a matter of.law that the above federal statutes were - applicable and that Lone Star was a common carrier by rail. The jury returned a verdict in favor of McGee for $56, 000, and judgment was entered thereon. ~~ 7, McGee alleged i in his complaint’ that he ¥ was employed by Lone Star as a railroad switchman. While acting within the . course and scope of his employment, McGee alleged that on August 6, 1963, he received injuries to his body which re- sulted from the negligence of Lone Star. He claimed that . Lone Star was negligent in permitting a rail car to be used on its tracks,with a defective coupler which could not be uncoupled without the necessity of going between the cars in violation of the Safety Appliance Act and that Lone Star _was negligent in failing to furnish him a safe place to work and a safe means and method of work. He alleged that as a result of Lone Star’s negligence he received severe, crippling gp i and permanent injuries to his back and other. portions of his body and that such injuries had totally destroyed or greatly diminished his earning capacity. He further con-. tended that Lone Star is a common carrier by rail and there- fore is subject to the provisions of the Safety Appliance Act and the Federal Employers’ Liability Act and is liable to ‘him for his injuries. sustained through its re . - ee Lone Star admits that it is engaged in interstate com- merce and that it is a carrier by rail, It strenuously denies that it is a common carrier by railroad, and therefore claims ~ *We have omitted from our discussion the allegations in the — against T & N in view of the fact that the suit was _ later dismissed as to it. . —_ . LD MAR DEIR os a le Saba PANE te ae a Pa ] . on as ee . SS Sg eh Het aa et A i AC EB ACI aii ii ni sn 9 a hae 7 . . . e A-3 ~ 4 that the provisions of the Safety Appliance Act and the 4 Federal Employers’ Liability Act do not apply to it: aaa Lone Star’s activities were the subject of a pretrial stipu- | lation which will be discussed later. From the facts detailed . in the stipulation and from a consideration of the law ap-_ _ «plicable to such facts, the district court in a pre-trial order - held Lone Star to be a common carrier by rail. The i issues . of whether Lone Star: was guilty of negligence or had vio- lated the Safety Appliance Act and the nature and extent of McGee’s injuries were submitted to the Jury which re- turned the verdict mentioned earlier. The sole i issue on this appeal is whether the,court erred in holding asa matter of law that Lone Star was a common carrier by rail and thus subject to the Federal Employers’ Liability Act and the Safety |Appliance Act. After a care- ful study of the record and a consideration of the argu- ments of both parties, we ne the judgment of the district court, The stipulation of the parties as to the activities of Lone Star and T & N in connection with their rail operations contains the following pertinent data: The T & N is a com- mon carrier by rail in interstate commerce. The T & N - main line extends from a point inside the Lone Star plant complex to an interchange yard near the junction of its rail . facilities with those of the Louisiana and Arkansas Railway - Company. T & N performs rail service for Lone Star, for companies located within the Lone Star Plant area, and for companies outside the Lone Star Plant at various locations along its line. . — . ee ee | semhiae, Sears A4 Lone Star owns extensive properties near Lone Star, Texas, within which it operates its main plant for the pro- cessing and production of steel and steel products from raw materials. Lone Star produces plate steel with a rolling mill to roll it into pipe. In addition, it produces and ships semi- finished products including coils, slabs, ingots pig iron and other products such as ammonium sulphate and benzol. Within its plant proper _— Star has a complex system of rail trackage covering several miles. As of August 6, 1963, it owned 8 diesel electric locomotives, 94 cars of railroad | rolling stock and 6 railroad cranes. On the same date it.had 57 employees: performing duties in connection with its rail / facilities such as switchmen, brakemen, engineers, firemen and maintenance personnel. In 1963 Lone Star’s railroad equipment and crews made 205,248 rail car movements in- sidé the plant. The Interstate Commerce Commission does not check any railroad equipment belonging to Lone Star with the exception of Lone Star’s locomotives No. 3 and No. 4. None of the Lone Star equipment operates on TE&N’s track except these two locomotives. | Lone Star owns 3,308 shares of the 3,313 ‘iainie of com- mon capital stock issued by T & N and from October 1, 1955, to September 30, 1965, T & N. paid to Lone Star $2,000,000 in dividends. From 1950 to the present the par- ties have entered into numerous agreements concerning land, cars, rails, locomotives, rail equipment, safety equip- _ ment, and the interchange between the parties as to out- - bound and inbound cars. I as a eB, A-5 Various initustries maintain facilities within the Lone | _ Star plant area, and their operations are integrated with the . ‘overall operation of Lone Star such as coating and wrap- ping Lone Star Steel pipe, using Lone Star slag to produce gravel or separating metals from ore thereby reclaiming what would otherwise be a waste product of the Lone Star - Steel mill operation. During the past ten years some four- teen entities, independent of ownership or control .by Lone Star have maintained facilities within the plant. At. least seven of these have shipped and/or ‘received commodities ° . _. by rail during this period. Three subcontractors engaged in - construction work for Lone Star in its plant received ma- terial furnished by Lone Star in part by rail. Other entities supplied material and equipment to Lone Star which were received in part by rail and furnished service representa- tives for installation. Additionally, 66 prime contractors who furnished their own labor, wn equipment, etc., re- ‘ ceived their supplies i in part by rail. | The primary point of interchange between the Lone Star > and T & N rail systems is. the classification yard located . . just inside Lone Star’s boundary line. The only traek in . ' the classification yard not owned by Lone Star is the T & N main line which runs the length of the yard. T & N oper- ates with respect to shipments for Lone Star and the com- panies located within its plant area’in what is known as a “line haul freight movement by rail.” In such an operation . T &N is obligated to deliver rail cars to the consignee’s sid- ee A ing or industry track and to pick up outbound shipments at the consignor’s siding. Therefore rail service between the T & N track in the classification yard and the siding of in- dustries involved is provided and this service is included i in. the line haul freight rate charged by T&N. This rail service between the classification yard and the shipper industry is performed by both T & N and Lone Star. Lone Star has handled inbound shipments for one industry, C. A. Hackett, Inc., operating within its plant area and has handled all its own inbound and outbound shipments -as well as handled. all inbound and outbound shipments for Linde Gas Co., Texstar, Inc., and Southwestern Electric Power Co. Also Lone Star has handled the switching move- ments involving equipment or material of -a construction contractor on the plant premises, Lone Star makes no direct charge by way of tariffs and receives no direct freight revenues for any rail services per- _ formed by it, and publishes no tariffs regarding mail move- ments. However, T & N’s freight charge includes a charge for the rail services involved in picking up and delivering ; cars to a particular industry, as mentioned above, and this charge is made regardless of whether T & N handles the en-. - tire rail movement or Lone Star handles a —* of such movement. ° It is contended by McGee that under the various agree- _ ments between Lone Star and T & N, esis the opera- e AT ne _ tion of their respective rail systems, the parties are engaged in a joint undertaking, that of providing public rail trans- _ portation. Additionally, Lone Star actively participates in _ the operation by actually performing rail services paid for _ by the industries involved, albeit to T & N, and from which Lone Star. receives the payment as dividends ‘from T & N. _ Therefore, according to McGee, Lone Star is a common car- rier under the Federal Employers’ Liability Act. Lone Star | ‘contends that its intraplant rail operations are plant facili- ties and do not constitute common Carrier operations. Also, Lone Star argues that since it makes no direct charge for "its services and does not hold itself out to the general pub- lic as one engaged i in the business of transportation for hire, but moves rail cars solely as an accommodation to T & N . and the various industries located within its plant and for its own convenience, it is not a common carrier. The Federal ‘Employers’ Liability Act by its terms ‘ap- plies to “every common carrier. by railroad while engaging in commerce between any of the several States,” 45 U.S.C. § 51, and the safety Appliance Act by its terms is applicable to “any common carrier engaged in interstate commerce by railroad,” 45 U.S.C. § 1. 3 . The common carrier concept has long been in usage. At an early date the term as used in the FELA was held in Wells Fargo & Co. v. Taylor, 254 U.S. 175, 187, 65 L. Ed. 205, 213 (1920) to mean, “one who operates a railroad as a . As means of carrying for the:public.[and] ... this ew... is - in accord with the ordinary acceptation of the words ee A more recent discussion of the term is found in Kelly v. i General Elec. Co., 110 F. Supp. .4, 6(E.D. Pa.), aff'd. 204 F, 2d 692 (3 Cir.) cert deng346 U.S. 868, 74 S. Ct. 137, 98 L, Ed. 390 (1953) where the district court stated: “A common carrier-has been defined generally as one who holds himself out to the public as engaged in the business of transportation of person or property from - place to plage for compensation, offering his services to the public generally. The distinctive characteristic of a common carrier is that he undertakes to carry for all people indifferently, and hence is regarded in some respects as a-public servant.” — | Neither of the parties questions the fact that T & N isa | _, common carrier and it has been so stipulated: Lone Star _ admits that it is virtually the sole stockholder of T & N, and. that their rail systems are the subject of numerous agree- ments such as (1) T & N would maintain safety signal — equipment on Lene Star rails and maintain various turn- outs in the Lone Star plant, (2) the rental of locomotive equipment, (3) certain tracks would be used for the inter- _ Change between the parties of outbound and inbound: cars, _and (4) T & N could use Lone Star’s classification yard for switching purposes in order to serve customers other than - Lone Star. Lone Star also admits that it performs rail ser- _ vice between its classification. yard and. various: locations _ ‘within its plant which T & N is obligated to perform and i) ak. A-9 for which charges are included in the T & N freight tariff.” However, Lone Star points out that these rait movements constitute only a small part of the overall in-plant rail movements made by Lone Star which according to the stip- ulation totaled more than 200,000 per year. In addition, Lone Star submits that it performed this rail service pri- ‘marily for. its own benefit.in that Lone Star was actually a-customer of these industries for which it rendered rail service and that it, would seriously hinder the effective and efficient operation of its steel mill to‘allow T & N to use Lone Star’s complex intra-plant rail facilities. Therefore Lone Star contends that despite its ownership of and contractual relationship with T & N and ‘despite the fact that it has occasionally rformed rail service for other parties, it is merely maintaining a railroad system for its own use and — therefore its rail operations are plant. facilities and not those of a common carrier. — iy .** The following is from the brief of Lone Star: “Most of 'T&N’s freight movements involve line haul move- ments, which means that the delivering carrier’s duty includes ‘the delivery of the rail car in question to the consignee’s siding or industry track, and this service is included in’ the line haul rate charged by the connecting carriers. ’Conversely, the initiating. common carrier ordinarily picks up the car at the consignor’s siding, and his‘service is incl in the rate charged.” - sf - eae ‘ - “From time. to time ‘the above entities ‘shipped or received materials by rail. Movements.of such rail cars to and from - Appellant’s classification yard were made by T&N for Gen- eral Dynamics, Gifford-Hill, Inc.; Gulf Coast and Reilly Tar, utilizing T&N crews and equipment ‘but operating over Ap- pellant’s tracks from the classification yard to the particular industry location. es rit “On the other hand, Appellant’s crews and equipment made such movements to and: from its classification yard within the plant for C. A. Hackett, Inc., Linde, Gas, Texstar, Inc. (all located in the south part of the plant), and Southwestern - Power Co. (located on the wést-side of the plant).” / \ % i Ado Courts have ii recognized the distinction sities plant facilities and “true agencies of transportation.” In New York | Cent. & H.R.R. Co. v. General Elec. Co., 219 N.Y. 227, 114 N.E. 115 (1916) cert.-den. 343 U.S. 636, 37 S. Ct. 400, 61 L. Ed. 941, the court held that where an. industry main- tains a complicated intra-plant railroad system, ‘such rail operations will be regarded as plant facilities rather than those of a common carrier. The movement of freight. within the Plant ie not common carriage but rather industrial plant | usage.’ .” | The rail operations of the defendant in Duffy v. Armco Steel Corp., 225 F. Supp. 737. (W. D. Pa. 1964) were also } held to be plant facilities. Armco was engaged in the manu- ." facture of steel products and owned and operated railroad — equipment within its manufacturing plant. This equipment was used to transport material and equipment from place to . Place in the plant and to Armeco’s other nearby plant. In- 3 bound railroad cars were delivered by the Bessemer & Lake Erie Railroad to a track within the plant, and the cars-were then distributed to various parts of the plant by Armco. This. procedure was reversed on outbound shipments. The | court held that Armco was not a common carrier under the FELA because its railroad equipment had not been used to ". transport goods of others, nor had Armco offered their use to the public. ; * See also ‘Malvern Gravel Co: ‘v. Mitchell, et al., 238 Ark. . * 852, 385 S.W. 2d 144, cert. den. 382 U.S. 828, 15 L.’Ed. 2d 73 (1965); Powell v. Pacific Naval Air Base Contractors, et al.> 21 Ca.R. 355, 209 P..2d 631 (1949); Legislative Comm. of 848). Bhds, v. P.U.C.,.149 Ohio St. 511, 80 N.E. 2d 159 ( . ; A-11 The court in Kelly v. General Elec. Co., 110 F. Supp. 4 © (E.D. Pa. 1953) aff'd. 204 F. 2d 692 (3 Cir.) cert. den. 346 U.S. 868, 74 S. Ct. 137, 98 -L. Ed.'390 also dealt with the . question of whether an industry’s. operation. of its internal — rail system constituted such industry a common carrier under . the FELA. General Electric was engaged in the business of manufacturing, rebuilding and repairing electrical equip- ment and other products. As part of its plant equipment it : had a system of internal trackage some 2.17 miles in length, . 2 switching engines, 9 cars which it rented to rail carriers, and 10 cars which it used for its own purposes. Its tracks were connectéd to a siding of the Pennsylvania Railroad lo- cated within its plant. The railroad delivered cars to the siding and thereafter the cars were removed and distributed | throughout the plant by General Electric's switching engines. Occasionally cars containing G. E.’s goods as well as goods of others were removed by General Electric to its buildings where ‘it unloaded its goods and then returned the cars to _ the siding for delivery by the railroad to the other consignees. It was contended that General Electric was.a common car- rier because, inter alia, it moved, property of others when it - movéd less-than-carload shipments and when it moved its © _ outbound ‘shipments to the siding, since goods were shipped | FOB plant and title to the goods passed as soon as they were placed in the cars. General Electric contended that it ‘maintained its railroad system for its own convenience and necessity in the conduct of its business, The court held that | General Electric was not a common cairier under the FELA - - ee eee eee SiR IE Re RSA hate AS a as sn Ba Ae EDTA os A-12 in that it did not hold itself out generally to the public as offering services of transportation for hire, nor was it em- ployed to carry goods of others for hire. The court found that there was nothing to indicate that the public could de- mand service of General Electric with respect to its rail facilities. The court concluded that moving less-than-carload shipments was for General Electric’s own ‘convenience and for the service. In addition, the court stated that carrying goods inbound and outbound to and from the siding was a ~.. common feature ‘in every plant facility, and whether the ship- mént. was inbound or outbound, it still comprised General Electric’s products that it had sold or bought, and therefore _ General Electric was engaged solely ‘in rail service for itself. ‘In other instances lumber companies which operated rail- roads primarily for their own use were found by the court _ to be private carriers, as opposed to common carriers, where the lumber companies engaged in some transportation of ‘persons or property for hire. Dawkins Lumber Co. v. L. Carpenter & Co., 213 Ky. 795, 281 S.W. 1013 (1926); State ex rel Silver Lake Ry. & Lumber Co. v. Public Service Comm., 201 P. 765 (1921). The Court found them to be _ private carriers in that they did not hold themselves out _ to the pyblic as being engaged in the business of transporta- tion for any who wished to avail themselves of their serv- ADDN hag eGo Wig SF me A - added nothing to the service contracted by Pennsylvania — | Railroad and the other conSignees and no charge was miade A-13 e ; ice but’ merely rendered rail service for certain people or . certain businesses usually pursuant to contract.‘ In comparing the railroad operations described in Armco — ‘and Kelly with those of Lone Star, we immediately find im- portant differences. Although the principle use of Lone ‘Star’s intra-plant railroad, to move its own goods, equip- ment, etc., is identical to the rail operations in the above cases, Lone Star is, engaged in a method of operation not -found. in those cases. It is regularly shuttling the goods of other business concerns located within its plant and there- by is performing a part of the total rail services which an- _ other railroad, T & N ‘has obligated itself to perform. We find that these services which Lone Star has undertaken ~ to perform clearly distinguish Lone Star’s intra-plant rail- road from those in Armco and Kelly. Additionally, Lone Star’s operations are markedly different from those in Dawkins and Silver Lake, supra. In neither of‘ those cases did the entity involved perform its rail services in conneg- tion with an interstate common carrier, whereas Lone Star’s services are a necessary part of T & N’s total rai) opera- tion. As a consequence, Lone Star cannot claim to be a private carrier because by undertaking the obligations of * The following from Ward Transport, Inc., et al. v. Public Utilities Comm., 151 Colo. 76, 376 P. 2d 166, 169 (1962) aptly differentiates private carriers from common carriers. “... a private carrier is one who, without making it a vocation, or holding himself out to the public as ready to act for all who ' desire his services,’ undertakes, by special a ent ina. particular: instance only,.to transport property n one place to another either gratuitously or for hire. He carries only for persons with whom he has an initial contract, and assumes no obligation to carry for others; and in this lies the chief distinc- tion between a private carrier and a common carrier : . . ~ S ‘ a ete A AER oR ik aC AS a ti EN eer PEAR Dh Bisbee as Svs siktens i Sait A-14 | a common carrier, T & N, it holds itself out to the public as_ being engaged in the business of public transportation. - Moreover, since T & N holds itself out to the public as performing all the duties of a common carrier, Lone ‘Star - cannot claim that the duties it performs for T & N are not offered indiscriminately to the public. In deciding whether Lone Star is a common carrier, its : railroad, operations can be compared to the-operation of terminal facilities, Southern Pacific Terminal Co., et al. v. ICC, et al., 219 U.S. 498, 55 L. Ed. 310 (1911) ; United States v. Brooklyn Eastern Dist. Terminal, 249 USS. 296, 63 L. Ed. 613 (1919), stockyards, United States v. Union Stock Yard © & Transit Co., et al., 226 U.S. 286, 57 L, Ed. 226 (1912); Union Stockyards ‘Co. v. United States, 169 Fed. 404 (8 ‘Cir. 1909), and short line railroads, United States v. Cali- fornia, 297 U.S. 175, 80 L. Ed. 567 (1936). Although the business entities in these cases are in a general sense pri- marily engagéd in aspects of rail transportation, while Lone Star is mainly a steel industry and engaged in railroading - only as an incident to its business, the criteria used by the courts to determine whether these entities were common carriers are just as applicable in our determination of wheth- _er Lone Star is a common carrier. ‘In Southern Pacific Terminal Co. and Brooklyn Eastern ‘Dist. Terminal, supra, the terminal companies were found ' to be common carriers. The Southern Pacific Terminal main- tained wharves and docks for the accommodation of im- . port and export traffic and it charged a fixed ‘wharfage for all freight passing over its track facilities which were con- A-15 nected ‘to tracks of the Southern Pacific system. The court found that the Terminal and the railroads comprising the. Southern Pacific System which were commonly owned by the Southern Pacific Co., a holding company, had been united into a system of which all were necessary parts; and since the Terminal formed a vital link in the chain of transpor- . tation, it was a common carrier and subject to regulation by the ICC. The operation of the Brooklyn Terminal in- cluded the transportation of freight from the Terminal to its docks and for these services it was paid by the railroad or steamship company. The Terminal, in contending that _ it was not a common carrier, argued primarily that it per- formed solely under contract with the railroads and there-. fore did not perform services rendered. by the Terminal were public in their nature and of a kind ordinarly performed by a common carrier. The court stated that one-is not pre- cluded from being a common carrier merely because the rail transportation services which it renders to the public . are performed as agent for another. The stockyards in Union Stockyards Co., supra, presented essentially the same argument. While admittedly the stock- ms yards were rendering a service which the railroads were bound to perform, they insisted that they were not a com- mon carrier because the rail transportation services were performed for the railroad pursuant to contract’ under which the stockyards received a fixed charge per car and there- fore the services were not performed for the public. The court found that the stockyard operation included the car- Souci PAE oe eS to eter MTD oes ee A-16 riage of livestock. for hire destined to or from its sheds or pens which in effect were the ‘depot of the railroad’ companies, It was of little significance to the court that the stockyards did not hold themselves out to the public to carry livestock. It was sufficient that the railroad did so hold. itself out to the public and the’ stockyards were willing to perform and _ actually did so perform a part of the service which the rail- road companies had agreed to perform when the livestock . were accepted for carriage. Therefore the stockyards were . held to be a common carrier engaged in interstate commerce under the Safety Appliance Law.” Similarly, the stockyard in Stock Yard and Transit Co., supra, was fourid to be a common carrier. Although it had divested itself of its rail facilities by leasing them to the Junction Railroad, it loaded, fed, watered and cared for livestock in transit and received two-thirds of the profit of © _the Junction Railroad. The Investment Co., a holding Com- pany, owned both the stockyard and the railroad. The court held that these companies, the stockyard and the Junction Railroad, engaged in carrier rail services when they loaded freight at the stockyard on cars, transported it for a dis- tance under a through rate and bill-furnished by the trunk | line carrier, or received freight while in commerce upon a through ‘rate which included terminal service rendered by the two, and ‘completed its delivery to the consignee. Likewise, the California owned State Belt Railroad was held in’ United States v. California, supra, to be a common carrier engaged in transportation by rail under the Safety. Appliance Act because it transported freight back and forth A-17 | from industeien to the railvoads from which it received a flat charge. per car. The court found: that the services per- formed by the Railroad were of a public character for hire and held that all the essential elements of a common car- rier were present, that i is, the receipt and transportation for the public for’ hire of cars moving in interstate commerce, According to these cases various considerations are of prime importance i in determining whether a particular en- tity. is a common carrier. First—actual performance of ‘rail . Service, second—the service being performed is part of the total rail service contracted for by a member of the public, . third—the entity is performing as part of a system of inter- state rail transportation by virtue of common ownership be- tween itself and a railroad or by a contractual relationship with a railroad, and hence such entity is deemed to be hold- ' ing itself out to the public, and fourth—remuneration for the services performed is received in some manner, such a8 a fixed charge from a railroad or by a percent of the profits from a railroad. The stockyards, the terminals and the Cali- . fornia short line met these conditions and so also does Lone Star. . st Unquestionably, Lone Star performs rail services and - such services are a part of the total rail transportation con- _ tracted for and required by the industries located on its plant site. While it does: not perform these services under contract with T & N, it certainly is an integral part of the T & N system of interstate rail transportation. And finally, , even though it does not receive money in the form of direct _transportation charges from T & N or from the industries “A-18 serviced, it is for all. practical purposes the sil owner of TEN. It is closely allied with T & N, their operations are interwoven, and therefore it receives in the form of divi- dends a part of the rate charged the industries by T & N. It has been suggested that we cannot ignore the legal’ in- dividuality of Lone Star and T & N and therefore, we are precluded from attaching any significance to the fact that - Lone Star is essentially the sole stockholder of T & N and consequently receives dividends therefrom. It is contended that stock ownership does not make the two companies one. While we agree with this proposition, we do not think it is — controlling because the record does not present a case of mere stock ownership. Instead the record reflects that the - operations of the two are highly integrated and mutually dependent. In a similar fashion the court in Southern Pa- cific Terminal ‘Co., supra, was faced with substantially the same problem and it found the Terminal Co., although a legally separate business entity, to be part of a railroad sys- tem. In Southern Pacific Terminal the court stated at page —. | “The record does not present a case of stock owner- ship merely, or of a holding company which was con- tent to hold. It presents a case, as we have already _ said, of one actively managing and uniting the railroads and the terminal company into an organized system. And it is with the system that the law must deal, not. .~ with its elements’. Such elements may, indeed, be re- _ garded from some standpoints as legal entities; may have, in a sense, separate corporate operation; but they are directed by the same. paramount and combining . power and made single by it.” 219 US. 498, 523 (1911) . / / / / / eee I Las ae Se eee A-19 Stock ownership also played a part in the court’s decision in the Union Stock Yard case, supra, where it stated at page 306: “We think that thedd companies, nee dévdein. ter of the Service rendered by them, their joint opera- See oe aiding company, are to be ‘deemed a rail road * * *” 296°U.S. 286, 306 (1922) | Also courts have specifically rejected" as. a controlling cri- terion the status which the entity declares itself to be in ' determining whether the entity %s a common carrier. “Whether a transportation. agency is a common carrier de- pends not upon its corporate character or declared purposes, ' but upon what it does.” United States v. California, supra, 297 U.S. at 181, The answer to-the question of whether an entity is a common carrier “does not depend upon whether its charter declares it to be a common carrier, nor upon ‘whether the state-of incorporation considers it such; but upon what it does.” Brooklyn Eastern Dist. Terminal, supra, 249 US. at 304. The fact that Lone Star’s carriage for other industries comprises only a minor portion of its rail movements also - does not prevent it from being a common carrier. The court ; stated in the Tap Line cases:* “But this conclusion [that one is not a common car- rier if only a small part of the ‘traffic cartied is the property of others] loses sight of the principle that the extent to which a railroad is in fact used does not determine the fact whether it is or is not a common * United States v. Louisiana & P.R. Co., 234 U.S. 1, 58 L. Ed. 1185, 1194 (1913). See also Washington Univ. v. United States, 157 F.2d 112 (8 Cir. 1946). « A-20 carrier. It is the right of the public to:wse the tendo facilities and to demand service of it, rather than the extent of its business, which is the real criterion: de- terminative of its character.” _. em Accordingly we conclude that Lone Star has gone beyond the permissible bounds of what is allowed in operating an. intra-plant rail system as a plant facility. It has not re- . stricted its use to the operation of its steel mill but has _ adopted the regular practice of transporting for others. In light of the rail services Lone Star has performed, the-fact that such services are actually rendered in fulfillment of T &-N’s obligations as a ‘carrier, and giving consideration to the facts disclosed in the record revealing the close con- nection between the two companies and their mutual de- pendence on each other, we conclude that both Lone Star . and T & N are operating, jointly, a railroad system which constitutes each of them a common carrier. > - | JUDGMENT AFFIRMED. APPENDIX B . j . “ . ’ . . - . ‘ . . . ee ‘ . . ’ - P . tht bth i Mes Paes fe a . aa . A B-1 ‘ UNITED STATES COURT OF APPEALS - _. For the Fifth Cireuit October Term, 1966 ; No. 23671 . D. C. Docket No. CA 1057-65 Lone STAR STEEL ‘Company, 5 Appellant, versus , Lor MoGur, | . Appellee. Appeal from the United States District Court for the | Eastern District of Texas * Before. GEWIN, COLEMAN and GOLDBERG, Circuit JUDGMENT’ ‘TNA sini ies the ni Ue Geet is Mab es Ge record from the United States District Court for the East- ern District of Texas, and was argued by counsel; ON CONSIDERATION WHEREOPF, It is now here or- dered and adjudged by this Court that the judgment of the faid District Court in this cause be, and the same is hereby, ~=Be It is further ordered and adjudged that the appellant,’ Lone Star Steel Company, be condemned to pay the costs of this cause in this Court for which execution may be is- _ bea oe : oi June 23, 1967 . Issued as Mandate: — Sa “a — C1 U. S. Court of Appeals _ Filed Pe July 25, 1967 Edward Wadsworth, Clerk | In the © UNITED STATES COURT OF APPEALS F or The Fifth Circuit No. 23,671 LONE Star STEEL Company, =e Appellant, a Lois McGee, ot | Appellee. aeael from the United States District Court for the Eastern District of Texas — (July 26, 1967) “ON PETITION FOR REHEARING Before GEWIN, COLEMAN and GOLDBERG, Circuit Judges PER CURIAM: 7 _ IT IS ORDERED that the petition for rehearing in the a entitled and numbered cause be and the same is hereby DENIED. D-1 § 51. Liability of common carriers by railroad, in inter- Ae EN state or foreign commerce, for. injuries to em- _ ployees from negligence; definition of employees | Every common carrier by railroad while engaging in com- merce between any of the several States ‘or Territories, or between any of the States and Territories, or between the District of Columbia and any of the States or Territories, _ or between the District of Columbia or any of the States or. Territories and any foreign nation or nations, shall be liable in damages to any person suffering injury while he is em- -Ployed by such carrier in such commerce, or, in case of the | death of such employee, to his or her personal representa- tive, for the benefit of the surviving widow or husband and children of such employee; and, if none, then of such ‘em- ployee’s parents; and, if none, then of the next of kin de- pendent upon such employee, for such injury or death re- sulting in whole or in part from the negligence of any of the Officers, agents, or employees of such carrier, or by reason of any defect or insufficiency, due to its negligence, in its — | Cars, engines, appliances, machinery, track, roadbed, works, boats, wharves, or other equipment. _Any employee of a carrier, any part of whose duties as such employee shall be the furtherance of interstate or _ foreign commerce; or shall, in any way directly or. closely and substantially, affect such commerce as above set forth shall, for the purposes of this chapter, be considered as be- ing employed by such carrier in such commerce and shall be considered as entitled to the benefits of this chapter, Apre- 22, 1908, c. 149, § 1, 35 Stat. 65; Aug. 11, 1989, c: 685, § 1, 53 Stat. 1404, , : | chahicmss anid, nae vudetes . 1967. D-2- CERTIFICATE _ The undersigned hereby certifies that copies of. the above. and foregoing Petition for Writ of Certiorari to the United States Court of Appeals for the Fifth Circuit have this date been served upon counsel for Respondent by deposit- ing same in the United States mail, with sufficient postage affixed, properly’ addressed, as follows: Mr. Franklin Jones, Jr. -Jones, Jones & Baldwin Post Office Box 1249, Marshall, Texas — DATED at Dallas, Texas, this ...... day of .............. "esa a eel ‘ja C. Relyea III --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385603_0922%3A1. Public record. Not legal advice.