# Opposition Brief — Central Transfer Co. v. Terminal Railroad Assn. of St. Louis

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1933
- **Citation:** 288 U.S. 469

## Text

FILE COPY
SUPREME COURT OF THE UNITED

OCTOBER TERM, 1932.

CENTRAL TRANSFER COMPANY,

] Ghee upreme-veury»

FLL&ED

DEC 12 193

No.

S
3
:

523,

Petitioner,

v

TERMINAL RAILROAD ASSOCIATION OF ST. LOUIS et al.,
Respondents,

BRIEF IN OPPOSITION TO PETITION FOR WRIT

OF CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE EIGHTH CIRCUIT AND
BRIEF IN SUPPORT THEREOF.

EDWARD J. WHITE,
J, M. BRYSON,
E. T. MILLER,
N. S. BROWN,
T. M. PIERCE,
Of Counsel.

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. HAROLD R. SMALL,

BURG,
CONNELL,
DAVIS,
KISKADDON,
LARIMORE,
ROBERTS,

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_L. H. STRASSER,
- GUY A. THOMPSON,
. THOS. W. WHITE,

Counsel for Respondents.

AO ee

INDEX.
PPT ere rer err eri fri ri iy ie ec.
Summary of the argument... 1... 6.5. + eeeee seen eens e
Argument ..........0 cece ee cece eee eee eeeeeceesres 18 «
Petitioner’s right to sue....... 6.6 e cece eee eee ees 18 e
Illegal combination ... 2.2.6... 66 eee eee eee eee 38 Z
Other rulings of the Court of Appeals...........++- 67
Disposition of the case... 0.2.6.6... eee eterna 69
Celene. . occ cccdnskcsessvanvaeusteses seceanenes 72
Cases Cited.
Atchison, T. & S. F. R. R. Co. v. Denver & N. O. R. Co.,
| Cie & | Seepeperermorrrererr rrr rrr he ers oe 16
Baltimore & Ohio R. R. v. Pitcairn Coal Co., 215 U.S.
PLES Re POE er ery S Oe Et ree Ss Ce to 14
B. & W. Taxi Co. v. B. & Y. Taxi Co., 276 U.S. 518... 16
California v. Deseret Water Co., 248 U.S. 415........ 14

Chicago ete. R. R. Co. v. Pullman Car Co., 139 U.S. 79 16
Co-Ordination of Motor Transportation, 182 I. C. C.

ee ere eee eee 14, 28
Diamond Alkali Company v. Tomson & Co., 35 Fed.

be: ere Tree Tee Cay Cr 69
Discontinuance of Inland or Off-Track Stations in

New York City, 173 1. C. C. 727... 2.2.2... 00-0 14, 27
Donovan v. Pennsylvania Company, 199 U. 5. 280. .16, 47
Express Cases, LIT U.S. 1.2.6... eee ee eee eee ees 16

General Investment Company v. New York Central
ie ie Gig ae WO ORE) ORE... 8. cee ee eaeee 15, 37
General Investment Company v. New York Central R.
MS oy sc new ceap cease nedkdwnecescnse 15,18
In the Matter of Legality of Tariffs Embracing Motor
wee eee oe 6. Oo. ©. OD... oo oss. ooo dy ae
Keogh v. C. & N. W. Ry. Co., 260 U.S. 156... 15, 17, 29, 72
Liberty Oil Company y. Condon National Bank ct al.,

I errs Biche hae as VG hk oh se 86 Sok www ae 17,71
Little Rock & M. R. Co. v. St. L. L. M. & S. Ry. Co.,

er trina tan gis eben penis odhakee xk ms 16
Merchants Warehouse Company v. United States, 44

Fed. (2d) 379, 283 U.S., 1. . 006.................. 16, 45
Midland Valley R. R. v. Barkley, 276 U.S. 483......15, 23
Missouri Pacific R. R. Co. v. Reynolds-Davis Grocery

OR ry ee ee 16, 26
Moore v. New York Cotton Exchange et al., 270 U.S.

a, EEDA D SSE 5 mer pi? op ea Re 31
eee 34
Morrisdale Coal Company v. Pennsylvania R. R. Co.,

cue i Ee eee 15
Motor Bus and Motor Truck Operation, 140 1. C. €.

NA EI a o's Wie asda iors, Sky ashen edn ewe anos cc 14, 27
New York ete. R. Co. v. Interstate Commerce Com-

II lS sad eben eccuascwas. 14

Northern Pacifie Rwy. Co. v. Solum, 247 U.S. 477... 14
Oregon Short Line & U. N. Ry. Co. v. Northern Pacific
MIR EI ao abs vk doe ee ou face, 1
Palmer v. Doull-Miller Company, 2323 Fed. 309... ... 17,7
Perego v. Dodge, 163 U. S. 160.................... 17,7
Pennsylvania Co. v. United States, 236 U.S. 351..... 12, 2
6

———————————=—_ 3

co ary S- EP . ETE LE LEE EOS OPI LE LS OAS —

ia
: oe

ili
Procter and Gamble v. U.S., 225 U.S. 282......... cy.
Shapiro v. Lyle, 80 Fed. (2d) 971.......-..++++5555 17, 72

Skages et al. v. Kansas City Terminal Railway Co.
ot ak, SS Week, WEE ox soca nk cn cesdvr ce Terre ... 16, 45

Smith v. Interstate Commerce Commission, 245 a. a

«Ye ERO AR PE res wey Por Pee eee ee ee et 12
St. Louis Dravage Company v. Louisville & Nashville

oe 3 SS A ereeer re eee re ee eee 16
Terminal Railroad Association v. United States, 266

ne. ag > A er ee eer ee 62
The Standard Oil Company v. The United States, 221

iS) ARR Oe ie eee ee 53, 66
Terminal Warehouse Company of Baltimore City v.

United States et al., 31 Fed. (2) 951.............. 16, 44
Terminal Railroad Association v. United States, 256

“hha 2 BUS ane UUs nee a ae ae aera ane Creare eRe eee 16, 62
Texas and Pacifie Rwy. Co. v. Abilene Cotton Oil Co.,

Se a. ase ee renee ee Sey ee ee ee 14
Transter of Freight Within St. Louis ete., 155 1. C. C.

gO re tt ee ee ee 14
Twist et al. v. Prairie Oil & Gas Company, 274 U.S.

OL EONS Bena ne iy Bak ae a es ee 9 en ee ea 8 |
Trucking Less-Than-Carload Freight ete., 18 ae oe ee

re ore as Pare ees Sen Solas Cake one 14, 28
United States v. Joint Traffie Association, 171 U.S,

Te tee a a ee Li nee wales Bh s-w A ae Re 16, 66
fnited States v. Fimell, 165 U: S. 255...........455. 14
U. S. Nav. Co. v. Cunard S. 8S. Co., 50 Fed. (2d) 83,

Oe a I oon ns nie eed nwee 15
U.S. v. Terminal R. R. Association, 224 U.S. 383. ..16,51
United States v. B. & ©. R. R. Co., 231 U.S. 274....... 16
Wheeling & L. E. Rwy. Co. v. Pittsburgh & W. Va.

Rwy. Co., 33 Fed. (2d) 390, 280 U.S. 593.......... 15, 30

White v. Sparkill Realty Corporation, 280 U.S. 9000. 69

AEE HOS). 2 = ote SRL AM DNS ORES OF SEIS YET PW EN eA ONT ee

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Statutes.
Clayton Act (U.S.C. A., Title 15, See. 26)............ 11
Interstate Commerce Act, Section 12(1) (U.S. C. A,
I ES ha eel as wad ada ssskeoessaune 12
Interstate Commerce Act, Section 1(3) (U.S. C. A,
NE gt hoc ae orn Ao eene oe ex Ca deieek a
Interstate Commerce Act, Section 3(3) (U.S. C. A.
ER Re BO win bey ob oa eu deus aoc 12
Interstate Commerce Act, Section 1(6) (U.S. CL A,
I so ra kook Pek eed ewe 13, 24
Interstate Commerce Act, Section 1(12) (U.S. C. :
SE ae eae s oth eee ho eee ee eet 13
Interstate Commerce Act, Section 1(13) (U.S. C. A,,
ea eter ey ae le een 13
Interstate Commerce Act, Section 6(1) (U.S. C. \
ee eC ee ea ci ead 13, 18
Interstate Commerce Act, Section 15(7) (U.S. C. A,,
MI NN oa Fk 6a oa oy Mk es eae ken en 13
Interstate Commerce Act, Section 1(11) (U.S. @. Ss
ND A 56 hv ose Vics on ood as we owe 22
ee ee 31, 69
Equity Rules.
ce CO ET Oe Dee Oy here om peal, SFM Tage 69

TAPER SIE RS RET AMR CET LPL LI NTE PE BY EERE A POLIT RON NEY STEER TBST AR aT ee) :

SUPREME COURT OF THE UNITED STATES.

OCTOBER TERM, 1932.

No. 523.

——
ler

CENTRAL. TRANSFER COMPANY,
Petitioner,

Vv.

TERMINAL RAILROAD ASSOCIATION OF ST. LOUIS et al.,
Respondents.

eee

a

BRIEF IN OPPOSITION TO PETITION FOR WRIT
OF CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE EIGHTH CIRCUIT AND
BRIEF IN SUPPORT THEREOF.

STATEMENT.

In view of omissions and inaccuracies appearing in the
statement of petitioner, respondents submit the following:

This controversy has to do with the methods employed
by carriers by railroad serving St. Louis, Missouri, and
East St. Louis, Illinois, sometimes referred to as the
St. Louis-East St. Louis switching district, in connection
with the receipt, delivery and interchange of less-than-

earload freight.

WOE NT ME ABET Ped eo 8 ow ——

Notwithstanding the various bridges, traffic has been
handled by dray or truck between St. Louis and East St.
Louis since 1854 (R. 83). Two methods of receiving and
delivering less-than-carload freight have been and are
employed, viz., through off-track stations designated by
the carriers in tariffs filed with the Interstate Commerce
Commission, hereinafter referred to as the Commission,
and maintained and operated by transfer companies and
by the so-called direct delivery plan under which traffic
passes through a constructive station on its journey to and
from the trader’s place of business, from and to the on-

track stations in East St. Louis.

During the early period of the transfer of less-than-
earload freight between St. Louis and Kast St. Louis the
charges for such transriver service were added to the rail
rates to and from East St. Louis. Through various steps
the rates of the carriers were extended to St. Louis and
such transriver service from that time on was made by the
earriers and the charges therefor included in their line-
haul rates (R. 84).

When this practice was established off-track stations
became stations designated in the tariffs where freight
would be received and delivered in the same manner as
though they were located on the tracks of the carriers.

The contract assailed in the bill of complaint (R. 49)
to which we shall hereinafter refer, in so far as this pro-
ceeding is concerned, has to do with the handling of less-

than-carload freight between on-track stations of the car-

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riers and between off-track and on-track stations of such
carriers, although petitioner disclaims any concern or in-

terest in traffie moving between on-track stations (R. 71).

The less-than-earload traffic moving between on-track
stations of the carriers is what is known as interchange
traffic and may be described generally as traffic moving
to Kast St. Louis over the line of a carrier ee at
that point and transported by dray or truck #rem the
on-track station of a carrier whose lines extend westerly
from St. Louis.

As to less-than-carload traffie moving between off-track
and on-track stations of the carriers the following is illus-
trative: The rails of important lines, such as the Baltimore
and Ohio, end in Kast St. Louis, but by their tariffs these
carriers provide rates to and from St. Louis on the same
basis as applicable to and from Kast St. Louis. They,
therefore, hold themselves out to deliver at and ship from
St. Louis, and, not having their own rails to St. Louis,
employ other means of performing the service between
the ends of their rails and St, Louis. Such means consist
of off-track stations established at points in St. Louis
between which and their rails or on-track stations in St.
Louis less-than-earload traffie is hauled by dray or truck
and at the expense of such carriers.

The carriers, for several vears prior to May, 1927, had
been considering the meted in whieh less-than-ecarload
freight was being handled in the St. Louis-Nast St. Louis

switching district looking towards a discontinuance by such

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earriers of al'owances to numerous transfer companies
and contracting for the service in question with only one
transfer company (R. 43).

Kspecially were such carriers concerned regarding what
they considered waste and abuses that had grown up
during the years in connection with the handling by drays
or trucks of less-than-carload freight between off-track
and on-track stations in such district, including the in-
creased number of such off-track stations. In the opinion
of some of the carriers the situation as far back as March,
1923, was admittedly bad and was resulting in unnecessary
costs to the railroads of thousands of dollars annually.
As far back as the date last mentioned transfer companies
other than those then employed were in the field clamoring
for recognition, and it was the thought of some of the
carriers that the desired results could be obtained by con-
fining the traffic to one trucking company (R. 43).

Another abuse was the performance of the transfer com-
panies employing soliciting forces to compete with each
other to see which one of them would do the hauling for
the carriers. The expense of such method was applied to
operations and ultimately borne by the carriers who em-
ployed the transfer companies as their agents. In some
eases where off-track stations were located across the
street from on-track stations of the carriers the haul per-
formed by the trucking company would be only across the
street from the off-track station to the on-track station
(R. 78, 74).

on ve

In the opinion of the carriers the elimination of such
duplication would have the effect of bringing about sav-
ings to such carriers (R. 74).

Also, one purpose of the carriers in arriving at the one-
transfer plan was to determine for themselves where a
given off-track station should be located and how it should
be operated (R. 73).

In response to numerous petitions filed with the Inter-
state Commerce Commission by certain teaming associa-
tions, transfer companies and others, the Commission, on
May 2, 1927, ordered a general investigation concerning
the lawfulness and methods then in effect at St. Louis and
East St. Louis having to do with the receipt and delivery
by dray or truck of less-than-carload freight at those
points.

During May, 1927, the carriers, through their joint pub-
lishing agent, filed with the Commission their tariff ef-
fective July 1, 1927, whereby it was proposed to reduce
the number of off-track stations then in existence at St.
Louis from twelve to seven, and to reduce such stations
at Kast St. Louis from two to one (R. 49, 938).

The tariff referred to was suspended by the Commission
for the statutory period (seven months) and the Commis-
sion entered upon an investigation as to the lawfulness of
such tariff.

The issues involved in the general investigation ordered
by the Commission heretofore referred to and the issues

involved in the investigation of the schedules heretofore

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mentioned were consolidated and, commencing on Novem-
ber 1, 1927, a lengthy hearing was held concerning the
practices of the carriers by railroad in connection with the
receipt and delivery of less-than-carload freight at St.
Louis and East St. Louis and concerning the lawfulness of

the schedules contained in the tariff in question.

Following such investigation and hearing incident
thereto, a report was handed down by the Commission
dated May 13, 1929 (R. 80). In such report the Commis-

sion found:

1. That the proposal of the carriers, other than the Chi-
cago and Alton, to employ a single transfer company for
the operation of off-track stations and the hauling between
such stations and the on-track stations of the railroads,
and in the interchange of freight between railroads, is
not violative of any provision of the Interstate Commerce
Act.

2. That the proposal of the carriers, other than the Al-
ton, to reduce the number of off-track stations in St. Louis
from twelve to seven and at Kast St. Louis from three to
two will not be harmful to the public interest or result in
unreasonzble and inadequate service.

The Commission, however, declined to approve the al-
lowances proposed to be paid for such service on the ground
that such allowances were not based upon a cost study,
and required the carriers to make a cost study and submit

the results thereof to the Commission.

~

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A further hearing was held, and following such further
hearing the Commission, on July 27, 1931, handed down its
second report and order (R. 143).

In such second report and order the Commission found
(R. 150) that, based upon 830,514 tons, which the carriers
stated was the total off-track and interchange service for
a normal year, the reduced rates provided in the new con-
tract would result in the saving of $181,398.37 annually.
It further found that it was estimated that the discontinu-
ance of the use of off-track stations by the St. Louis-San
Francisco and Missouri Pacific and the partial discontinu-
ance of the use of such stations by the other west-side
lines, as provided in the new contract, would effect an
annual saving of $125,000, or a total saving of $306,398.37.

The allowances, therefore, to be made by the carriers
for the services to be performed were approved by the
Commission.

On June 1, 1931, the carriers and the Columbia Termi-
nals Company entered into the contract assailed in the
bill of complaint (R. 49).

Less-than-carload traffic covered by such contract, in
so far as at present material, may be described as fol-

lows:

‘‘(a) Between ‘on-track’ freight stations of the
railroads in St. Louis, Missouri, and the said ‘off-
track’ freight stations in East St. Louis, Illinois.

‘“(b) Between ‘on-track’ freight stations of the rail-

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roads in East St. Louis, Illinois, and the said ‘off-
track’ freight stations in St. Louis, Missouri.

‘‘(e) From the said ‘off-track’ freight stations of
the railroads in St. Louis, Missouri, to the ‘on-track’
freight stations in St. Louis, Missouri.

‘““(d) Between ‘on-track’ freight stations of the
railroads located in St. Louis, Missouri (interchange
service).

‘“(e) Between ‘on-track’ freight stations of the
railroads located in East St. Lonis, Tllinois (inter-
change service).

‘‘(f) Between ‘on-track’ freight stations in St.
Louis, Missouri, and ‘on-track’ freight stations in
Fast St. Lonis, Illinois (interchange service).’’

The effect of the contract was to confine the handling
of less-than-carload traffic between on-track stations and
between the off-track and on-track stations of the car-
riers within the St. Louis-East St. Louis switching dis-
trict to one transfer company, the Columbia Terminals
Company. The contract also reduced the number of off-
track stations at St. Louis from twelve to seven, and East
St. Louis from two to one. Also, the carriers agreed to
file the necessary tariff schedules with the Interstate
Commerce Commission and appropriate state commis-
sions.

It should also be stated that by letter dated April 21,
1931, the Central Transfer Company, petitioner herein,
through its vice-president and general manager, sub-

mitted to the president of the Terminal Railroad Asso-

scitcey : : “ —

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ciation of St. Louis its bid, asking to be permitted to con-

tract as the sole transfer agent of the carriers for the

transportation of less-than-ecarload freight now being
handled by the Columbia Terminals Company through the

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contract heretofore referred to (R. 76).

On the 21st day of Angust, 1931, petitioner filed its bill
of complaint in the United States District Court at St.
Louis, Missouri, alleging a violation of Sections 1 and 2
of the Sherman Act, and praying temporary and perma-
nent injunctive relief under See. 26, Title 15, U. S. C. A.
(R. 2-10).

When petitioner’s bill was filed the two regular Judges
were out of the district and the case was especially as-
signed to Judge Merrill E. Otis.

On page 2 of the petition for writ of certiorari it is
stated that a preliminary injunction was granted by
Judge Merrill E. Otis, sitting specially, with bond fixed
in the sum of $15,000.00. This statement is incorrect. A
temporary restraining order only was issued at Kansas
City, Missouri (R. 16, 17, 18), and such temporary re-
straining order was issued for the purpose only of main-
taining the status quo until the plaintiff ‘‘shall have had an
opportunity to present to one of the Judges of the United
States District Court for the Eastern District of Mis-
souri its application for a temporary injunction’’ (R. 18).

On September 21, 1931, the cause came on to be heard
on motion for preliminary injunction, and, upon stipula-

tion of the parties, was tried on its merits before Judge

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Charles B. Davis at St. Louis, argued orally and sub-
mitted on briefs, and findings of fact and conclusions of
law proposed by the parties thereto.

On October 19, 1931 (R. 38), the District Court handed
down its findings of fact and conclusions of law, denied
plaintiff the relief prayed for, and entered its final de-

cree dismissing plaintiff’s bill. Thereafter the tariffs in
question went into effect.

The District Court held:

1. That the matter involved is subject to the regulation

; and supervision of the Interstate Commerce Commission,
3 and that petitioner is not entitled to the injunctive relief
q sought.

2. That the contract assailed in the bill of complaint
was not in violation of the antitrust laws of the United
States.

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On appeal to the Cireuit Court of Appeals, Eighth Cir-

cuit, the decree of the District Court was affirmed (R.
178).

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SUMMARY OF THE ARGUMENT.

The Clayton Act confers upon any person, firm, corpora-
tion or association the right to sue for and have injunctive
relief against threatened loss or damage by a violation of
the Antitrust Laws, with the proviso that ‘‘nothing herein
contained shall be construed to entitle any person, firm,
corporation or association, except the United States, to
bring suit in equity for injunctive relief against any com-
mon carrier subject to the provisions of Chapter 1 of Title
49, Transportation, in respect of any matter subject to the
regulation, supervision or other jurisdiction of the Inter-

state Commerce Commission.”’

Clayton Act (U.S. C. A., Title 15, See. 26).

I.

The Interstate Commerce Commission has authority to
inquire into the management of the business of all common
carriers subject to the provisions of the Interstate Com-
merce Act, is in terms required to execute and enforce the
provisions of such act, and the investigating and supervis-
ing powers of such Commission extend to all of the activi-
ties of carriers subject to the Interstate Commerce Act and

to all sums expended by them which could affect in any

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way their benefit or burden as agents of the public. Such
powers must necessarily be expressed in generalities.
Interstate Commerce Act, Section 12 (1) (U. S.
C. A., Title 49, See. 12);
Smith v. Interstate Commerce Commission, 245
U. S. 33.

Iil.

Transportation is defined to include locomotives, cars,
vehicles, vessels and all instrumentalities and facilities of
shipment or carriage, irrespective of ownership or of any
contract, expressed or implied, for the use thereof, and all
services in connection with the receipt, delivery, elevation
and transfer in transit, storage and handling of property
transported. This includes such service as would be per-
formed by trucking companies as employes of the carriers
in handling less-than-carload freight in terminal service.

Interstate Commerce Act, Section 1 (3) (U. S.
C. A., Title 49, See. 1);

In the Matter of Legality of Tariffs Embracing
Motor Trucks, etc., 91 I. C. C. Rep. 539.

IV.

The service between on-track stations of the carriers
performed by trucks as employes of such carriers con-
stitutes interchange service and is within the control and
supervision of the Interstate Commerce Commission.

Interstate Commerce Act, Section 3 (3) (U. S.
C. A., Title 49, See. 3);
Pennsylvania v. United States, 236 U. S. 351.

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V.

Carriers by railroad are required to file with the Com-
mission schedules showing the application of their line-
haul rates, to what points such rates apply, and showing
the services the carriers undertake to perform under their
published rates, by the following provisions of the Inter-

state Commerce Act:

Interstate Commerce Act, Section 1 (6) (U.S.
C. A., Title 49, See. 1);

Interstate Commerce Act, Section 1 (12) (U. S.
C. A., Title 49, Sec. 1);

Interstate Commerce Act, Section 1 (13) (U. S.
C. A., Title 49, See. 1);

Interstate Commerce Act, Section 6 (1) (U. S.
C, A., Title 49, See. 6);

Interstate Commerce Act, Section 15 (7) (U.S.
C. A., Title 49, See. 15).

VI.

Petitioner seeks an injunction to prevent the carriers
from applying rates duly filed with the Commission, since
the only method by which the carriers can establish or
eliminate an off-track station is through the filing with
such Commission of tariffs designating off-track stations

from and to which their rates will apply.

In so far as the movement of less-than-carload freight is

concerned between off-track and on-track stations of the

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carriers, the matter in controversy concerns only rates
filed with the Commissicn, which question is committed to
the jurisdiction of the Commission.

Texas and Pacifie Rwy. Co. v. Abilene Cotton Oil
Co., 204 U. S. 426;

Baltimore & Ohio R. R. v. Pitcairn Coal Co., 215
U. S. 482;

Transfer of Freight Within St. Louis, ete., 155
I. C. C. Rep. 129;

Trucking Less-Than-Carload Freight, ete., 185 I. ©.
C. Rep. 71;

Co-ordination of Motor Transportation, 182 I. C. C.
Rep., 1. ¢. 367;

Discontinuance of Off-Track Stations in New York
City, 173 I. C. C. Rep. 727, 730;

Northern Pacific Rwy. Co. v. Solum, 247 U. S. 477;

Procter and Gamble v. U. 8., 225 U. S. 282;

Motor Bus and Motor Truck Operation, 140 I. C. C.
Rep., |. ¢. 729.

VIL.

The contemporaneous construction of a statute by those
charged with execution and application, especially when it
has long prevailed, while not controlling, is entitled to
great weight and should not be disregarded or overturned

except for cogent reasons and unless it be clear that such

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3 construction is erroneous.

’ United States v. Finell, 185 U. S. 235;

5 New York ete. R. Co. vy. Interstate Commerce Com-
4 mission, 200 U. S. 361;

t California v. Deseret Water Co., 243 U.S. 415.

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VIII.

The matter in controversy being subject therefore to the
regulation, supervision or other jurisdiction of the Inter-
state Commerce Commission, petitioner is not entitled to
bring an action in equity for injunctive relief against re-
spondents, common carriers by railroad subject to the
provisions of the Interstate Commerce Act, because of an
alleged violation of the Antitrust Laws of the United
States.

Midland Valley R. R. v. Barkley, 276 U. S. 483;
General Investment Company v. New York Central
R. R. Co., 271 U. S. 228;
Keogh v. C. & N. W. Ry. Co., 260 U. S. 156;
Wheeling & L. FE. Rwy. Co. v. Pittsburgh & W. Va.
Rwy. Co., 33 Fed. (2d) 390, 280 U.S. 593;
U.S. Nav. Co. v. Cunard S. 8S. Co., 50 Fed. (2d) 83,
7 U.S. Sup. Ct. Adv. Op. 300;

Morrisdale Coal Company vy. Pennsylvania R. R. Co.,
230 U.S. 304;

General Investment Company v. New York Central
R. R. Co., 23 Fed. (2d) 822.

| b.

The action of respondents in entering into and carrying
out the contract assailed in the bill of complaint whereby
one transfer company handles less-than-carload freight for
the carriers between off-track and on-track stations and

between on-track stations of such carriers in terminal

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service, does not violate Sections 1 and 2 of the Sherman

Antitrust Act, or either of them,

Skaggs et al. v. Kansas City Terminal Railway Co.
et al., 233 Fed. 827;

Donovan v. Pennsylvania Company, 199 & S. 280;

Missouri Pacific R. R. Co. v. Reynolds-Davis Gro-
cery Co., 268 U.S. 366;

Terminal Warehouse Company of Baltimore City v.
United States et al., 31 Fed. (2d) 951;

Express Cases, 117 U.S. 1;

St. Louis Drayage Company v. Louisville & Nash-
ville R. R., 65 Fed. 39;

Atchison, T. & S. F. R. R. Co. v. Denver & N. O. R.
Co., 110 U. S. 680;

B. & W. Taxi Co. v. B. & Y. Taxi Co., 276 U.S, 518;

Chieago ete. R. R. Co. v. Pullman Car Co., 139
U. S. 79;

Little Rock & M. R. Co. v. St. L. I. M. & S. Ry. Co.,
41 Fed. 559;

Oregon Short Line & U. N. Ry. Co. v. Northern Pa-
cifie R. Co., 51 Fed. 465;

U.S. v. Terminal R. R. Association, 224 U. S. 383;

Terminal Railroad Association v, United States, 236
U.S. 194;

United States v. Joint Traffic Association, 171 U.S.
05;

Phillips v. Tola Portland Cement Co., 125 Fed. 593;

Merchants Warehouse Company v. United States, 44
Fed. (2d) 379, 283 U. S., 1. e¢. 506;

United States v. B. & O. R. R. Co., 231 U.S. 274.

SMPTE A NIE IOS! HOP RO LIT \ RANT DRT AL! PRICE LPI —

a.

X.

The petitioner is not entitled to have the case transferred
to the law side of the court, and the Court of Appeals, in

ee ee

not determining that the evidence shows a case for the law

side of the court, committed no error.

Twist et al. v. Prairie Oil & Gas Company, 274 U.S.
684;

Liberty Oil Company v. Condon National Bank
et al., 260 U. S. 235;

Perego v. Dodge, 163 U. 8. 160;

Palmer v. Doull-Miller Company, 233 Fed. 309;

Shapiro v. Lyle, 30 Fed. (2¢) 971;

Keogh v. C. & N. W. Ry. Co., 260 U.S, 156.

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a.

ARGUMENT.

I.
Petitioner’s Right to Sue.
The Covrt of Appeals held (R. 177) that the suit

brought by petitioner is in respect of a matter subject
to the regulation, supervision or other jurisdiction of the
Interstate Commerce Commission, and that the court
below was correct in holding that petitioner had not the
right to bring it. At page 9 petitioner says that the Court
of Appeals declined to discuss the merits. While it is
true the Court said there was no occasion for discussing
the question whether the agreement violated the antitrust
laws, nevertheless, the decision that petitioner has not the
legal capacity to maintain the action is a decision on the
merits.

General investment Company v. New York Central

R. R. Co., 271 U. 8. 228.

The Interstate Commerce Act, Section 6(1) (U.S.
C. A., Title 49, Sec. 6), provides, in substance, that every
common earrier subject to the provisions of the Inter-
state Commerce Act shall file with the Commission cre-
ated by the act and print and keep open to public inspec-
tion schedules showing all rates, fares and charges for
transportation between different points on its own route
and between points on its own route and points on the
route of any other carrier by railroad, ete. The tariffs in
question were filed in conformity with the provisions of

that section.

wm PRM MERE SEALER I OME I a ——

os.

Off-track stations of the carriers can be made available

only through the medium of tariffs filed with the Commis-

| sion and permitted to become effective by that body. What
4 petitioner is attempting to do is to enjoin the carriers, not
: from carrying out the contract assailed in the bill of com- 3
: plaint, but from carrying out the provisions of tariffs

filed and required to be filed with the Commission.

Petitioner secks to separate the controversy into two
parts: One a matter of contract and the other a matter
of tariffs. Without in terms assailing such schedules in
its bill, petitioner attempts to enjoin the respondents in
respect of the contract. Since the places of business of
petitioner are not designated in such tariffs as off-track
stations the question naturally arises: Ii respondents are
enjoined from carrying out the provisions of the contract
attacked, what becomes of the tariffs on file with the
Commission?

When this action was instituted there were on file with
the Commission the tariffs of the carriers designating
only the places of business of the Columbia Terminals
Company as off-track stations of such carriers and can-
celing previous tariffs designating the places of business
of the petitioner as off-track stations. Had the court
below entered a decree granting the injunctive relief
sought, how would that have availed petitioner? To have
granted petitioner any Measure of relief, would not the
Court necessarily have been required to by its decree not

only compel respondents to file tariffs then on file with

See oe ne oe nh a la

CORRELA EPL IDIE LUINA OT

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the Commission and approved by that body, but also
restore the places of business of petitioner as off-track
stations through the filing of additional schedules with
the Commission?

Petitioner concedes that the services performed by the
earriers in furnishing off-track stations and in transfer-
ring less-than-carload freight from on-track to off-track
stations are matters over which the Interstate Commerce

Commission has jurisdiction (R. 172

In its reply brief in the Court of Appeals the petitioner

states:

‘*We have always conceded that the Interstate Com-
merce Commission has jurisdiction of the services
performed by these trauster companies, and that the
Commission may investigate the service to determine
whether the carrier appellees have violated any of
the provisions of the Interstate Commerce Act. ‘There
is no doubt about this jurisdiction of the Commission,
but, as the Commission has correctly held, it has no

’

jurisdiction to control the carriers’ discretion in: se-

lecting their agents who perform the service.”’

The Court of Appeals correctly describes petitioner’s

theory of the case in the following language (R. 172):

‘It is the plaintiff’s theory that, while the services
to be performed under the coutract, the cost of which
is necessarily reflected in the rates contamed in the
tariffs filed with the Commission, are matters subject

<_< poe
to the jurisdiction of the Commission, the agreenient
itself providing for such services and fixing compensa-
tion therefor is not such a matter, and therefore that
a suit brought for injunctive relief against the per-
formance of the agreement is not in respect to any
matter within the jurisdiction of the Commission. It
is asserted that the Court may prevent the carrying
out of the contract without affecting the services io he
performed or the rates to be charged for such services.
To separate the matter of the services required to be
performed for the carriers by the Columbia from the
agreement by which the railroads have contracted
for their performance, and to enjoin the carrying out
of the contract without affecting the services or the
“ates, would seem to require one of those delicate
major operations which, while successful froma
surgical standpoint, necessarily kills the patient. Un-
der the plaintiff’s theory, the Court can enjoin the
carriers from establishing off-track stations at the
places of business of the Columbia, as provided by the
contract, but leave the tariffs designating such sta-
tions undisturbed: it may enjoin the carriers: from
employing the Columbia as their sole transfer agent,
and yet leave undisturbed the services which the
Columbia is to perform for the carriers at a_stipu-
lated cost, as well as the tariff rates which reflect the

cost of such services.’’

The Court of Appeals further finds, and correedy CR,

173):

“Unonestionably, as the plaintiff concedes, the Tn-
terstate Commerce Commission had jurisdiction to

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investigate, as it did, the reasonableness and lawful-
ness of what the carriers proposed to do, namely, to
reduce the number of off-track stations and to employ
a single transfer company to maintain for them such
stations and to receive and deliver less-than-earload
freight from and to their off-track stations. ”’

In connection with the contention of respondents that
the matter here involved is within the supervision and
control of the Commission, attention should be called to
the various provisions of the Interstate Commerce Act,
which, in our opinion, conclusively establish the fact that
this controversy, being one of rates and transportation
under such rates, is for the Commission. In Interstate
Commeree Act, Section 1 (3) (U.S. C. A., Title 49, See.
1), transportation is defined to include locomotives, cars,
vehicles, and all instrumentalities and facilities of ship-
ment or carriage, irrespective of ownership or of any con:
tract, expressed or implied, for the use thereof, and all
services in connection with receipt, delivery and storage
and handling of property transported, This includes such
services as would be performed for the carriers by the
transfer company under the contract assailed in the bill
of complaint.

By Interstate Commerce Act, Section 1 (11) (USS. C. A.,
Title 49, See. 1), it is made the duty of every earrier by
railroad subject to the Act to furnish safe and adequate
car service and to establish, observe and enforce just and
reasonable rules, regulations and practices with respect

thereto.

a, yo

It is obvious that, in view of the prior definition of
‘‘transportation,’’ the term ‘‘car service”? is broad enough
to include the service performed for respondents by the
transfer company, and it also follows that the Commission
may condemn as unlawful and require to be canceled any
tariff provisions which prevent or threaten the perform-
ance of the carriers’ duties under said paragraphs (3) and

(11) of section 1 of the act.

This Court held, in Pennsylvania Co. v. United States,
y)?

936 U.S. 351, in considering the jurisdiction of the Com-

mission, that:

“Not only does the act define railroads, but it spe-
cifically defines what is | meant by transportation,
which is made to include ‘cars and other vehicles,
and all instrumentalities and facilities of shipment or
carriage, irrespective of ownership, or of any con-
tract, expressed or implied, for the use thereof, and
all services in connection with the receipt, delivery,
elevation and transfer in transit, ventilation, refriger-
ation or icing, storage and handling of property trans-

yorted,? *’

The handling of traffic by the carriers between on-track
and off-track stations was necessarily a part of the serv-
ices to be performed under the schedules filed with the
Commission, and how that service was to be performed
Was necessarily an essential part of any Investievation that
might thereafter be conducted by the Commission,

In the case of Midland Valley R. R. v. Barkley, 276 U.S.

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483, the Supreme Court, in discussing the failure to furnish
cars for interstate movement of coal during car shortage,
held that the question involved was administrative and
committed to the exelusive jurisdiction of the Interstate

Commerce Commission.
In that case Justice Brandeis said:

“The assertion that no administrative question is
here involved rests upon a misapprehension, It may
be assumed that there was no order of the Commission
which required the Midland to distribute all available
open top cars among the tipple mines, but the rea-
sonableness of the Midland’s practice in doing so and
in allotting box cars to the wagon mines was the snb-

.

stantial matter in controversy. * The reasonable-

ness of the rule adopted by the carrier is a matter for
the Commission.’’

The Interstate Commerce Act, Section 1 (6) (U.S. C. A.,
Title 49, Sec. 1), direets the carriers to establish rates,
regulations, practices and facilities for the handling, trans-
porting, storing and delivery of property, and it is
clearly within the jurisdiction of the Commission in its
administrative capacity for that bedy to determine when
the carriers have complied with the provisions of such sec-
tion. The service here involved is a terminal and deliv-
ery service and the use of a transfer company to affect
such terminal and delivery service is essentially the use of

a facility. It is the contention of petitioner that the con-

ae or

tract in controversy under which the carriers employ one
transfer company to transport less-than-carload freight
between the off-track and on-track stations, specified in the
schedules on file with the Commission, is an instrument
over which the Commission does not have jurisdiction.

The error into which petitioner fell is obvious. Under
the Clayton Act if is the subject matter covered by the
contract that must be within the jurisdiction of the Com-
mission. If such subject matter is committed by the Inter-
state Commerce Act to the supervision, administration or
other jurisdiction of the (Commission, then the presence or
nonpresence of a contract as incidental thereto does not
affect the regulatory powers of the Commission. Two or
more carriers might agree to maintain a certain rate be-
tween two given points and file tariffs with the Commis-
sion carrying out such agreement, and in such a case un-
questionably the lawfulness of that rate would be for the
Commission to determine, notwithstanding the fact that
such rate was bronght about by an agreement which vio-
lated the Antitrust Laws of the United States.

The contemporaneous construction of a statute hy those
charged with its exceution and application, especially
when it has long prevailed, is entitled to great weight and
should not be disregarded or overturned except for cogent
reasons and unless it be clear that such construction is
erroncous. The Interstate Commerce Commission lias had
oceasion to determine its jurisdiction in connection wl

the matters involved in this controversy,

aes SE antes

It is the contention of respondents that the transfer
company is merely an agent and facility of the respond-
ents, transports no freight for its own account iso far
as this controversy is concerned, but is only employed by
the rail carriers in interstate commerce. This contention
is fully borne out by the decision of the Supreme Court in
Missouri Pacifie R. R. Co. ve Revnolds-Davis Grocery Co.,
268 U.S. 366, which holds that those performing only
terminal services are merely the agents of the line haul
carriers, that their charges are in the nature of switeh-

ing charges and are absorbed by the line haul carriers.

In the case of In the Matter of Legality of Tariffs km-

’

bracing Motor Trucks, ete., 91 1. C. C. 539, the Commis-
to] >

sion said:

**In discussing the legality of the tariffs under in-
vestigation, the extent of our jurisdiction over the
different: kinds of service by motor truck or wagon
transfer hereinbefore deseribed should first be de-
termined.’’

After a discussion of the proposition and after refer-
ence to certain applicable provisions of the Interstate

Commerce Act, the Commission concludes:

“While motor truck or wagon transfer companies
are not common earriers subject to the act, truck or
wagon transfer services performed in connection with
terminal services of a common carrier subject to the
act, or with transfer of freight in transit at an inter-

mediate point by such common carriers, are subject
te our jurisdiction. Such service is a part of a trans-
portation service by a farrier, over Which we have
jurisdiction,”

The Commission again had occasion to consider the
same question in Discontinuance of Inland or Off-Track
Stations in New York City, 173 I. C. C. 727, and arrived
at the conclusion that the services such as here involved

were squarely within its jurisdiction.

The Commission also passed upon the question of its
jurisdiction over terminal trucking service performed by
railroads in Motor Bus and Motor Truck Operation, 140

|

1. C. C. Rep. Le. 729, where it said:

“We have held that motor carriers are not common
carriers subject to the act, but that when services
are performed by motor ‘arriers in connection with
terminal services of a common carrier subject to the
net, or With the transfer of commerce in transit at an
intermediate point by such common carrier such
motor service is part of the transportion service by
a earrier over Which we have jurisdiction and such
motor-carrier service is under our jurisdiction, Car-
riers subject to the act may publish tariffs covering
charges for such terminal services by motor carriers
the same as charges for any other service granted by
them as part of their transportation service (‘Tariffs
Kmbracing Motor-Truck or Wagon Transfer Service,
91 1. €. C. 338)."*

J ae

Sa

To the same effect is the case of Trucking Less-Than-
Carload Freight, ete., 185 LC. C. 71.) In that case the

Commission, commencing at page 72, says:

“We have held that motor-truck or wavon-transfer
companies are not carriers subject to the aet: that
line-haul service performed by them is not transporta-
tion subject to the act, but that motor-truck or wagon-
transfer service performed in connection with ter-
minal services by a rail carrier is subject to our juris-
diction (Tariffs Embracing Motor-Truck or Wagon
Transfer Service, 91 LC. C. 539). When a motor-
truck service between freight houses within the same
terminal district is performed in interstate commerce
by a carrier subject to our jurisdiction, the extent
of the service and the rates therefor must be pub-
lished in tariffs filed with us.’’

To the same effect is Co-ordination of Motor Transpor-
tation, 182 1. C. C. Rep., 1. ¢. 367.) Throughout its petition
petitioner directs attention to the faet that the Com-
mission has held that motor-trueck or wagon-transfer com-
panies are not carriers subject to the Interstate Commerce
Act. The cases just cited deal with the question fully
and hold that the terminal services performed by such
instrumentalities for carriers subject to the aet are like-
wise subject to the Interstate Commerce Act,

Without regard to the contract assailed in’ petitioner's
bill, since the subject matter of this controversy is within
the supervision and regulation of the Commission, plain-

tiff is not entitled to maintain this suit.

yy)

A ease much in point is that of Keogh v. C. & N. W.
Ry. Co., 260 U. S. 156. That case was an action under
paragraph 7 of the Antitrust Act of July 2, 1890, brought
by Keogh in the Federal District Court for Northern Tlli-
nois, Eastern Division. The cause of action set forth was
that Keogh was a manufacturer of flax tow, and that the
corporations, defendants, were interstate carriers, and that
euch carriers had formed an association known as_ the
Western Trunk Line Committee; that it was the function
of that committee to secure an agreement in respect to
freight rates among railroad companies which would
otherwise be competing carriers, and that by means of
such agreement competition was eliminated. Uniform
rates were established and interstate commerce restrained,

he defendants set up the fact that every rate com-
plained of had been duly filed by the several carriers with
the Interstate Commerce Commission; that upon such
filing the rates had been suspended for investigation upon
complaint of Keogh, and that thereafter the rates were ap-

proved by the Commission and made effective.

In disposing of the Keogh Case the Court said, in part:

“The instrument by which Keogh is alleged to have
been damaged is rates approved by the Commission.
It is, however, conceivable that, but for the action
of the Western Trank Line Committee, one or more of
these railroads would have maintained lower rates,
Rates somewhat lower might also have been reasona-
ble. Moreover, railroads had often, in the fierce

a

‘

struggle for business, established unremunerative
rates.’’

Thereafter the Court further states:

‘But under the Antitrust Act a combination of car-
riers to fix reasonable and nondiseriminatory rates
may be illegal, and if so, the Government may have
redress by criminal proceedings under seetion 3, by
injunction under section 4, and by forfeiture under
section 6. That was settled by United States v. Trans-
Missouri Freight Association, 166 U. S. 290, and
United States v. Joint Traffie Association, 171 U.S.
505. The fact that these rates had been approved by
the Commission would not, it seems, bar proceedings
by the Government. It does not, however, follow
that Keogh, a private shipper, may recover damages
under section 7 because he lost the benefit of rates
still lower, which, but for the conspiracy, he would
have enjoved. There are scveral reasons why he ean-

not.’’

The case of Wheeling & L. E. Ry. Co. v. Pittsburgh &
West Virginia Ry Co., 53 Fed. (2d) 390, is also an au-
thority for the contention that there is no room for injune-
tive relief under the Clayton Act, if the matters com-
plained of are subject to the regulation and supervision
of the Interstate Commerce Commission,

Certiorari to review this decision was denicd by the
Supreme Court in P. & W. Ry, Co. v. W. & LL. E., 280 U.
S$. 593.

Petitioner contends at pages 22 and 23 that the Colum-

ey: oe

bia Terminals Company is a necessary party and that that
situation deprives respondents of the defense that the
subject of the action is within the jurisdiction of the Com-
mission.

The point is overlooked that if the matter in question is
subject to the regulation and supervision of the Commis-
sion, the authority to bring a suit because of the violation
of the Antitrust Laws is with the United States, and the
question of who is a necessary defendant is immaterial.
The point involved here is not who may be made defend-
ants, but who may be made a plaintiff.

Petitioner cites the case of Moore v. New York Cotton
Ixchange et al., 270 U. 8. 593, as authority in support of
its right as a private litigant to maintain this suit against
respondents for injunctive relief and refers to the fact
that the Western Union Telegraph Company was one of
the defendants in that case and that it is a common car-
rier, subject to the provisions of Chapter 1 of Title 49, U.
s. ©. A., Transportation, and to the fact that the District
Court, the Cireuit Court of Appeals, and this Court as-
sumed full jurisdiction of that case and decided all ques-
tions presented therein on the assumption that the plain.
tiff had a right to bring the suit under Section 26, Title
5 U. 8. C. A, notwithstanding the proviso contained
therein.

Petitioner discusses this case at some length and evi-
dently relies upon it as an authority in its favor to main-

tain this suit.

iy El nes

Petitioner says that whether jurisdiction was assumed
because of the jJoinder of an indispensable party, the Cot-
ton Exchange, which is not subject to the Interstate Com-
merce Act, or because the subject matter of the bill was
not in respect of any matter over which the Interstate
Commerce Commission has jurisdiction, does not appear
from the opinion in the case. That case is not even re-
motely analogous to the case at bar. The Moore ease in-
volved a controversy between the Odd-Lot Cotton Ex-
change and the New York Cotton Exchange and the West-
ern Union Telegraph Company and a subsidiary of the
Telegraph Company over the distribution of quotations of
cotton prices. The Odd-Lot Cotton Exchange made ap-
plication to the two telegraph companies for this service
which was refused, the New York Cotton Exchange hav-
ing declined to give its consent upon the ground that the
Odd-Lot Exchange was conducting a bucket shop. Plaintiff
then sought a mandatory injunction requiring the New
York Cotton Exchange to furnish it with continuous quo-
tations. Federal jurisdiction was invoked under the anti-
trust laws of the United States. This Court said, at pages
603 and 604:

‘First. We are of opinion that upon the allega-
tions of the bill no case is made under the Federal
Antitrust Laws. The only possible ground on which
the suit can be maintained rests in the claim that
there is a violation of Sections 1 and 2 of the Sherman
Antitrust Act, c. 647, 26 Stat. 209, for which appellant

is entitled to sue under Section 16 of the Clayton Act,
¢. 323, 38 Stat. 737. And whether this elaim is tenable
turns alone upon the effect of the contract hetween
the New York Exchange and the Western Union.
Independent of that contract, there is no averment of
fact in the bill upon which a violation of the Antitrust
Act can be predicated. The New York Exehange is
engaged in a local business. Transactions between
its members are purely local in their inception and in
their execution. They consist of agreements made on
the spot for the purchase and sale of cotton for future
delivery, with a provision that such cotton must be
represented by a warehouse receipt issued by a
licensed warehouse in the Port of New York and be
deliverable from such warehouse. Such agreements
do not provide for, nor does it appear that they con-
template, the shipment of cotton from one state to
another. Lf interstate shipments are actually made,
it is not beeanse of any contractual obligation to that
effect: but it is a chance happening whieh cannot
have the effect of converting these purely local agree-
ments or the transactions to which they relate into

subjects of interstate commerce,”

Ginee interstate commerce Was not involved, how could
the Interstate Commeree Commission have any jurisdie-
tion in the premises? That Commission had no jurisdic-
tion over any of the matters involved in that suit, whereas
sn the suit at bar the Commission has complete regulatory

supervision.

The opinion of the Court of Appeals in the Moore case

LOE OG IE DOG LG PBR

emphasizes the fact that interstate commerce was not in-
volved. In 296 Fed. 61 it is said, at pages 70 and 71:

**(8) The complainant asks a mandatory injunction
compelling the defendants to furnish to it the contin-
uous quotations of prices of contracts for the future
delivery of cotton made on the New York Cotton Ex-
ehange. The transactions in which the latter exchange

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is engaged and in which the complainant itself is
engaged constitute, it is claimed, interstate commerce.
The bill alleges that the purchases and sales made on
the exchange ‘constitute a large and important part
of the interstate commerce as between said cotton-
growing states and other states, including the State
of New York. That in addition to the said interstate
sales and purchase as alleged for delivery from said
states, through and into many states of the United
States, and into the State of New York, the said in-
terstate commerce involves the interstate shipments
and transportation of said commodity, through and
from said cotton-growing states to the State of New
York, whence it is consigned and shipped te other
cotton markets of the United States and foreign coun-
tries for manufacture.’ The coutracts made on the
New York Cotton Exchange are made in the board
room of the exchange in the city of New York, and
they provide that the cotton is deliverable from
licensed warehouses in the Port of New York. Per-
formance of the contract is made by the delivery of
negotiable wareliouse receipts issued by licensed ware-
houses in New York. There is no obligation to make
delivery at any place except in the Port of New York.
Such a transaction is local in its character and does
not involve interstate commerce. The decisions of the

—

Supreme Court make this clear. In Hopkims v. United
States, 171 U. S. 578, 19 Sup. Ct. 40, 43 L. Ed. 290, it
was held that the Kansas City Live Stock Exchange
was not engaged in interstate commerce under the
following circumstances: It received consignments of
cattle from owners in other states upon al under-
standing that they should be sold and the net amount
realized on the sale returned to the owners. In its
opinion the Court said:

se 6* * *

It is immaterial over how many
states the defendants may themselves or by their
agents travel in order to thereby secure the busi-
ness. They do not purchase the cattle themselves;
they do not transport them. They receive them
at Kansas City, and the complaint made is in re-
gard to the agreements for charges for the services
at that point in selling the cattle for the owner,
Thus everything at last centers at the market at
Kansas City, and the charges are for services
there, and there only, performed.

“<The selling of an article at its destination,
which has been sent from another state, while it
may be regarded as an interstate sale and one
which the importer was entitled to make, yet the
services of the individual employed at the place
where the article is sold are not so connected with
the subject sold as to make them a portion of in-
terstate commerce, and a combination in regard to
the amount to be charged for such service ts not,
therefore, a combination in restraint of that trade
or commerce. Granting that the cattle them-
selves, beeause coming from another state, are
articles of interstate commerce, yet it does not

ie ee

therefore follow that before their sale all persons
performing services in any way connected with
them are themselves engaged in that commerce,
or that their agreements among each other rela-
tive to the compensation to be charged for their
services are void as agreements made in restraint
of interstate trade.’

“There are other decisions of that Court) which
assert a like doctrine. (See Anderson vy. United
States, 171 U.S. 604, 19 Sup. Ct. 50, 43 L. Ed. 300; Ware
& Leland v. Mobile County, 209 U.S. 405, 413, 28 Sup.
Ct. 526, 52 L. Ed. 855, 14 Ann. Cas. 1051; Hill v. Wal-
lace, 259 U. S. 44, 42 Sup. Ct. 453, 66 L. Ed. 822.

‘The complainant relies upon Board of Trade of the
City of Chicago v. Olsen, 262 U.S. 1, 483 Sup. Ct. 470,
67 L. Ed. 839.) That case involved an appeal from a
decree which dismissed a bill in equity brought by
the Board of Trade to enjoin certain United States
officials from taking steps to enforce the Act of Con-
gress of September 21, 1922, known as the Grain
Futures Act, the constitutionality of whieh act was
directly involved. That case is not distinguishable
in principle from that of Stafford v. Wallace, 258 U.S.
495, 42 Sup. Ct. 597, 66 L. Ed. 735, 23 A. L. R. 229,
which involved the constitutionality of the Packers’
and Stockyards’ Act of 1921 (Comp. St. Ann. Supp.
1923, Sections 871614-871614z). In neither case has
the Court overruled the cases heretofore cited in this
opinion in which sales on the exchange were regarded
as transactions in intrastate commerce and not in
interstate commerce. It sustained the right of Con-
gress to regulate in the one case the boards of trade
and in the other the various stockyards of the country

= po

as great national public utilities. The acts involved
assumed that the corporations regulated by the acts
conducted a business affected by a public use of a na-
tional character and that they were therefore subject
to national reeulation. These cases show that the
power to regulate interstate commerce is not limited
by the fact that intrastate transactions may have be-
come so interwoven therewith that the effective gov-
ernment of the former incidentally controls the latter.
We find another illustration of the principle in the
Transportation Act of 1920, which authorizes super-
vision by the Interstate Commerce Commission of
intrastate commerce where it is so carried on as to
favor persons or localities in intrastate commerce as
against those in interstate commerce, (See Railroad
Commission of Wisconsin v. Chieago, Burlington &
Quiney R. R. Co., 257 U. S. 563, 42 Sup. Ct. 232, 66 L.
Kd. 371, 22 A. L. R. 1086; The Minnesota Rate Cases,
930 U. S. 352, 399, 33 Sup. Ct. 729, 57 L. Ed. 1511,
48 1. R. A. [n.s.] 1151, Ann. Cas. 1916 A 18.)

“But we find nothing in Stafford v. Wallace, supra,
or in Chicago Board of Trade vy. Olsen, or in any deci-
sion of the Supreme Court, which supports the com-
plainant’s contention that the New York Cotton Fx-
change is engaged in interstate commerce. Neither
are we cited to anv aet of Congress which entitles the
complainant to maintain its bill, And we conclide
that the bill itself must be dismissed.”*

The case of General Investment Co. v. New York Cent.

R. Co., 23 Fed. (2nd) 822, holds that:

“Whenever any subject matter pertaining to inter-

es eed
“a

3g

ioe Bp

pe

state commerce is vested in the Interstate Commerce
Commission the proviso of Section 16 applies to it.”’

Certiorari was denied in this case by the Supreme Court
(277 U.S. 588).

IL.
Illegal Combination.

It was the conclusion of the Court of Appeals that the
suit brought by petitioner is in respect of a matter subject
to the regulation, supervision or other jurisdiction of the
Interstate Commerce Commission, and that the court be-
low was correct in holding that petitioner had not the
right to bring it.

In view of that conclusion the Court of Appeals found
no occasion for discussing the question as to whether the
agreement between the carriers and the Columbia is vio-
lative of the antitrust laws, since that question could
properly be considered only in a suit in which injunctive
relief was sought by the United States.

The petitioner asserts that in so holding the Court
erred, that petitioner had a lawful right to bring the suit,
and that the Court should have held that the Anti-Trust

Act was violated.
Petitioner in its bill (R. 8) alleges, among other things:

‘*That on or about March 31, 1931, with the deliber-
ate purpose and intent of cousummating and carrying

— 39 —

into binding effect the aforesaid unlawful conspiracy
and agreement to destroy the business of your orator
and to unlawfully restrain petitioner in said business
the railroads entered into a mutual and reciprocal
agreement among themselves, designating and = ap-
pointing the Terminal Railroad Association of St.
Louis as their common agent,”” ete.

To refute the assertion that the purpose of the one-
transfer plan is to destroy the business of petitioner and
others similarly situated it is only necessary to refer to
the testimony and the contract entered into between the
rail carriers and the Columbia Terminal Company. The
testimony unquestionably shows the purpose and only
purpose of the one-transfer plan (R. 73). Some of that

testimony is as follows:

“One purpose of the carriers in arriving at the one-
transfer plan is to determine for themselves where
the off-track station should be located, and who
should operate it. That is evidenced by the fact that,
in designating the seven off-track stations in St.
Louis, to and from which the St. Louis rates of the
‘arriers apply, as outlined in the tariff to be effective
November 1, 1931, the carriers not only eliminated cer-
tain stations of the Central Transfer Company, but
they also failed to recognize two of the existing sta-
tions of the Columbia Terminals Company. Under the
present method, and before the filing of these tariffs,
the greatest abuse came about from the fact of locat-
ing what might be called competitive stations—that is
hardly a proper designation—duplicate stations in the

EB IO TEP EIR NTR OF BO PARP GON

— ae

same general locality, which, of course, if all the
transfer companies engaged as agents of the carriers
were supported, would necessitate unnecessary sup-
port of, and investment in, facilities and equipment.
Another abuse was the practice of the transfer com-
panies employing soliciting forces to vie with each
other to see which one of them would do the hauling
for the carriers. The expense of that was applied in
the cost of operations and ultimately borne by the
carriers who employed the transfer companies as their
agents. There were some cases where off-track sta-
tions were located across the street from on-track
stations, where the haul would only be across the
street from the off-track to the on-track station. The
elimination of those duplications would have the ef-
fect of bringing about the savings that are reflected
to some extent in the terms of this contract."’

An example of the situation sought to be corrected by
the one-transfer plan is found in the first report of the
Commission following its investigation of conditions re-
specting the receipt and delivery and interchange of less-
than-carload freight at St. Louis and East St. Louis, as
follows (R. 92):

“The Missouri Pacific and Frisco have on-track
stations located on the south side as well as the north
side of St. Louis. Notwithstanding that fact they have
for vears paid allowances for the hauling of freight
between off-track stations in St. Louis. An extreme
illustration of this wasteful expenditure is afforded
in the case of the off-track station of the Columbia at

a

Seventh and Cerre streets. This is an outbound sta-
tion, purchased from the Fidelity Transfer Company,
and located directly across the street from the Frisco
outbound depot. So long as the allowance remains
in effect it is possible for a shipper to dump outbound
freight for movement over the Frisco at this off-
track station, and for the handling of it across the
street, very often accomplished by a truck-to-truck
transfer without passage over the off-track station
platform, the Frisco has been and is paying an allow-
ance of $2 per net ton. The situation is only slightly
less flagrant in respect of the Missouri Pacifie on-track
station, which is only 210 feet away from this out-
hound depot. It was situations such as these that
finally brought the east-side and west-side lines,
strongly competitive, fo a realization that corrective
measures must be applied to prevent gross waste of
revenue, Under the proposed tariffs the Missouri
Pacifie and Frisco, with the exception hereinafter
noted, will discontinue use of off-track stations both
on the south side and north side of St. Louis, and will
use their on-track facilities for the receipt and de-
livery of less-than-carload freight.”’

It is well at this point to refer to the contract assailed
in the bill of complaint (R. 50). An analysis of this con-

tract shows:

1. The railroads have selected. off-track stations indi-
eated in such contract.

2 The Columbia Terminal Company agrees to provide

and maintain, at its sole cost and expense, to the satis-

— ie

faction of the railroads, adequate station facilities termed
‘off-track’? freight stations for handling less-than-ear-
load freight, and which shall be located in accordance

with the selection by the rail carriers,

3. The rail carriers agree to designate the freight sta-
tions specified in sections Nos. 1 and 2 of. this agreement
as the only off-track freight stations of railroads in the
City of St. Louis and City of East St. Louis, which off-
track stations are, of course, the station facilities agreed
to be maintained at its sole cost and expense by the

Columbia Terminals Company.

4. The rail carriers agree to file necessary tariffs with
the proper regulatory bodies designating the off-track

stations in question.

\. The agreement also covers the transfer of less-than-
earload freight in interchange between on-track stations

of the carriers,

6. The amount to be paid to the Transfer Company is
stated for its service in’ transporting less-than-carload
freight between off-track and on-track stations and be-
tween on-track stations.

It will be observed that what the carriers seek to ae-
complish by the contract assailed in the bill of complaint
and what they have accomplished by sueh contraet is a
substantial saving in costs of handling less-than-carload
freight at St. Louis and East St. Lonis, a proper. loca-

tion of off-track stations, and a more efficient handling of

a ee

the traffic involved through the selection by such rail
carriers of one transfer company to do the work, and the
carriers are as much within their lawful rights in estab-
lishing such off-track stations as such earriers would be
in locating on-track stations on their rails or in the estab-
lishment and operation of a union station,

It will also be observed that the essence of the contract
assailed is that the rail carriers shall designate certain
off-track stations as freight stations of the railroads, shall
deliver to one transfer company less-than-carload trafhie
handled in interchange, and that the arrangement shall
continue for a period of one year, with the privilege
thereafter of termination by either party upon six months’
notice,

The case of Merchants Warehouse Company v. United
States, 44 Fed. (2d) 379, declares the rule well settled
that a railroad carrier may exercise its own discretion in
the selection of its agents and employes to perform any
part of its transportation service,

Inasmuch as the rail carriers maintain off-track stations
at St. Louis and East St. Louis, such off-track stations
are carrier facilities to the same extent as are the on-

track stations of such carriers.

As stated by the Supreme Court in) Merchants Ware.

house Company v. United States, 285 U.S. 1 @. 006:

“We may assume that the railroads, in order to
carry on their business as interstate carriers, are not

slic AIRE cis

bound to maintain their own freight stations, but may
contract with others to supply them and to perform
the transportation services which they are under a
duty to perform,’’

If the carriers have such right, it is evident that such
carriers may agree as to the number of stations maintained
and who shall be their agent in connection therewith.

There is nothing in the arrangement covered by the con-
tract, which petitioner alleges violates the Sherman Anti-
trust Act, that might be called a combination not to em-
ploy the plaintiff or other transfer companies. As stated,
the agreement, in substance, provides for the selection of
certain off-track stations as the only off-track stations of
the carriers, and also provides for only one agent to han-
dle the traffie in connection with such off-track stations
and selects one transfer company for the handling of its
interchange business. There does not exist any agree-

ment, however, to destroy the business of petitioner.

Having regard to the fact that the contract assailed in
the bill of complaint provides for the selection of one
transfer company to perform certain terminal services for
the carriers party to such agreement the ease of Terminal
Warehouse Company of Baltimore City v. United States
et al., 31 Fed. (2d) 951, is peculiarly in point. In that case,

at pawe 956, the Court says:

‘It is also well settled that a carrier has full lib-
erty to select its own agents to perform transporta-

aa

tion service on its behalf, which it is under legal
obligations to perform, and that it may employ one
agent exclusively, and refuse to employ another (Cov-
ineton Stockvards v. Keith, 189 U. S. 128, 11 S. Ct.
461. 35 L. Ed. 73; Express Cases, 117 U. &. 1, 6 B.
C(t. 542, 628, 29 L. Ed. 791; Chicago ete. Bm. Bm Y:
Pullman Southern Car Co., 189 U. S. 79, 11 SB. Ct.
490, 35 LL. Ed. 97; Donovan v. Pennsylvania Co., 199
U. S. 279, 26S. Ct. 91, 50 L. Ed. 192).””

The ease of Skaggs et al. v. Kansas City Terminal Rail-
way Co, et al., 238 Fed. 827, is in point. The facts in that
case are:

The carriers by railroad entering Kansas City formed
the Kansas City Terminal Railway Company for the pur-
pose of having such last-named company act as their joint
avent and, among other things, in operating a union depot
at that point. While operating such union depot for the
trunk-line carriers serving Kansas City, Missouri, it en-
tered into a contract with a certain transfer company,
viving to such transfer company the exclusive privilege
of soliciting patronage for its cabs, ‘arriages and baggage
service upon the grounds and premises of the Terminal
Company at the Union Station operated by it. Such con-
tract was attacked as unlawful as a conspiracy and agree-
ment in restraint of trade and as ereating a monopoly af-
fecting interstate and intrastate commerce,

The particular point to which we call the attention of

the Court in this case is that the Terminal Association at

awe

eae

Kansas City was owned by, was a creature of, was the agent
of and operated for, the benefit of its owners, a facility
at Kansas City, Missouri, and that any contract made by
it giving exclusive privilege to one transfer company to
enter upon its grounds to solicit patronage for cabs, car-
riages and baggage was in connection with transportation
performed by the owners of the Terminal, the trunk lines
entering Kansas City, and the effeet of any such contract
would be to give to one transfer company the exclusive
right to solicit business on the grounds of the Terminal
Company that came from the lines of the owning trunk-
line companies.

In other words, looking to the substance rather than to
the form of the contract in the Skaggs case, a situation
was brought about wherein one transfer company had the
exclusive right to enter upon the grounds of the Terminal
Company and solicit patronage for its cabs and carriages
arising from the operation of all the trunk lines entering
such grounds.

The Terminal Company had no passengers and no bag-

ge to be carried, but simply provided a facility used by

e

ga
the trunk lines, and the effect of the contract was in law
an exclusive privilege granted by the trunk lines, through
their agent, the Terminal, to one transfer company to en-
ter upon the grounds of the Terminal and solicit business
as aforesaid.

In these proceedings the contract between the transfer

company involved and the trunk-line carriers was made

a

directly through the president of the Terminal Railroad
Association of St. Louis. That is to say, the contract here
assailed between the Columbia Terminals and the trunk-
line carriers was entered into between the transfer com-
pany on the one hand, and the president of the Terminal
Railroad Association on the other, acting for and on be-

half of trunk lines.

In law there is no difference between the arrangement
proposed at St. Louis and the arrangement upheld by the
Court of Kansas City. In upholding the contract in the

Skages case the Court said:

‘Furthermore, the rights of the publie are not im-
paired by the grant by a railroad company of the
exclusive privilege to solicit: patronage for hacks and
hageage transferring within its depot grounds, where
the recipient of the privilege and the facilities fur-
nished are subject to legislative regulation.”

Another ease in point is that of Donovan v. Pennsy!-
vania Company, 199 U, 8S. 280. The facts in that case are

as follows:

The Pennsylvania Company ope ‘ated What was known
as the Union Passenger Station in Chicago and had as its
tenants the Chicago and Alton Railway Company, the Chi-
cago, Burlington and Quiney Railway Company, the Chi-
cago, Milwaukee and St. Paul Railway Company and the
Pittsburgh, Cincinnati, Chicago and St, Louis Railway

Company. All of such last-named companies occupied and

#
ie

PSC ig he A tig RW WON OE

it

Pee

Ane Whe

used the station under a lease by which the Pennsylvania
Company had charge of the station, with authority to
contro] and manage all trains therein, as well as all watch-
men and employes in the business there transacted. The
Pennsylvania Company instituted against the defendant
Donovan and others, for the purpose of protecting that
company in the enjoyment of certain alleged rights and
privileges in respect of its passenger station and depot
grounds in Chicago, and asked that defendants be per-
petually enjoined from entering the station of the plain-
tiff for the purpose of soliciting the custom of incom-
ing passengers for cabs, carriages, express wagons, ho-
tels, ete.

Under the pleadings two principal inquiries arose: First,
whether the Pennsylvania Company, having made an ar-
rangement with the Parmalee Transfer Company to fur-
nish at its passenger station all vehicles necessary for
the accommodation of passengers arriving there on its
trains and on the trains of other railroad companies,
might legally exclude from its depot grounds all hackmen
or expressmen coming to either for the purpose only of
soliciting for themselves the custom or patronage of pus-
sengers; and, second, the rights of the Pennsylvania in
connection with the use of the sidewalk in front of the
station.

It will be observed, dealing with the first inquiry stated,
that the traffic in question not only arose from the opera-
tion of Pennsylvania trains, but from trains of other rail-

road companies using the station.

a

a

Citing many cases not necessary to refer te here, the
Court upheld the right of the Pennsylvania Company to
confer upon one transfer company the exclusive use of
its grounds to solicit patronage, not only in connection
with Pennsylvania trains, but in connection with the trains
of other railroads using the station facilities of the Penn-
sylvania.

An examination of the provisions of Sections 1 and 2 of
the Sherman Antitrust Act shows that the principles de-
clared by the courts in the Skaggs and Donovan cases,
supra, are applicable to the arrangement of defendants
and assailed in the bill of complaint. The essence of the
illegality declared in suid sections is restraint of trade
and commerce. If there is no restraint of trade the con-
tract or combination is not unlawful. The question, there-
fore, to be determined in any case is not how many are
parties to a given contract or combination, but whether
the effect of such contract or combination is to unrea-
sonably restrain trade and commerce.

In the Skaggs case, supra, the parties actually making
the arrangement were only the Kansas City Terminal Rail-
way Company and the transfer company, the traffic af-
fected by such arrangement was that handled by all the
trunk-line railroads entering the Union Station maintained
by the Terminal Railroad Company and the effect of such
arrangement on trade and commerce nec ssarily was the
same whether the contract: was entered into between the

Terminal and the transfer company or between the trans-

BENE BE ake A cath LE CLL NBER OPT: —

— 50 —

fer company and all of the trunk lines entering the Union
Station, and the Court, in holding that there was no un-
lawful restraint of trade or commerce, sanctioned an
agreement whereby the business of all the trunk lines en-
tering the Union Station, in so far as such business was
affected by the contract, for solicitation purposes was
placed in the hands of one transfer company.

In the Donovan ease, supra, while the arrangement in
controversy was entered into only between the Pennsyl-
vania, on the one hand, and the Parmelee Company, on the
other, yet, since the Pennsylvania station was used by sev-
eral other trunk lines entering Chicago, the effcet of the
arrangement was to give to the Parmalee Company the
right to enter the station operated by the Pennsylvania
and solicit the business, not only of the Pennsylvania, but
of all the trunk lines using such station. The arrangement,
therefore, brought abont a situation whereby the Parme-
lee Company was given the exclusive right to enter the
grounds of the Pennsylvania Company and. solicit the
business of all trunk lines entering the station to the ex-
clusion of other transfer companies.

The similarity of the arrangement in the Donovan case,
in so far as interstate trafie was concerned, with the ar-
rangement assailed in this proeceding is obvious, and if in
the case cited no unlawful restraint of trade or commerce
resulted, certainly none would result here. The point we
make is that the question of whether or not trade aid

commerce are restrained must be determined by the ar

Mbesisiesges

ye

—51—

rangement in question rather than by whom the contract
was entered into or by the number of carriers parties to
such arrangement.

Other cases in which the courts have expressed views
similar to those contained in the Donovan and Skaggs
cases, supra, are cited under point TX, summary of the
argument.

Petitioner seems to rely on United States v. Terminal
Railroad Association, 224 U. S. 383, in which the United
States filed a bill to enforce the provisions of the Sherman
Act against the Terminal Railroad Association and thirty-
seven other corporate and individual defendants as a com-
bination in restraint of interstate commerce. The con-
tention is made that these transfer companies, including
the petitioner, performed by dray or truck service similar
to that performed by the Terminal Railroad Association

and involved in the case cited.

The error of petitioner is apparent and an analysis of
the Terminal case shows that the conelusions therein ar-
rived at are against the contentions of petitioner and sup-
port the arrangement assailed. The controlling findings
of fact made by the Supreme Court in the Terminal Case,
supra, are:

1. The Terminal Railroad Association was organized for
the express purpose of acquiring the properties of several
independent companies at St. Louis with a view to com-

bining and operating them as a unitary system.

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2. The properties first acquired and combined into one
system by the Terminal Company comprised the Union
Railway & Transit Company of St. Louis and East St.
Louis, the Terminal Railroad of St. Louis and Kast St.
Louis, the Union Depot Company of St. Louis, The St.
Louis Bridge Company and the Tunnel Railroad of St.
Louis. These properties included the great Union Station,
the only existing railroad bridge—the Eads Bridge—and
every connecting or terminal company by means of which
that bridge could be used by railroads terminating on

either side of the Mississippi River.

3. The promoters of the Terminal Company sought to
obtain the control of every feasible means of railroad
access to St. Louis, or means of connecting the lines of
railway entering on opposite sides of the river, which way
manifested by the successive steps which followed.

4. The first successive step was the control by the Ter-
minal of the Merchants’ Bridge Company and its related

terminal companies.

5. The next step was the acquisition of the Wiggins
Ferry Company, which owned terminals on both sides of
the Mississippi River, and through such terminals con-
nected with the rail lines at St. Louis and at East St.

louis.

The Court then states:

‘*We come, then, to the question upon which the

= FRME PST

eee

mo
— oe ——

case must turn: Has the unification of substantially
every terminal facility by which the traffic of St. Louis
is served resulted in a combination which is in re-
straint of trade within the meaning and purpose of
the Antitrust Act?”’

The Court then finds that the unification of terminal
facilities of a great city where many railroad systems
center is not, under all circumstances and eonditions, a
combination in restraint of trade, and holds also that
whether it is a facility in aid of interstate commerce or
an unreasonable restraint forbidden by the Act of Con-
gress, as construed and applied in the case of The Stand-
ard Oil Company v. The United States, 221 U. 8. 1, de-
pends upon the intent to be inferred from the extent of
the control thereby secured over instrumentalities which
such commerce is under compulsion to use, the method
by which such control has been brought about, and the
manner in which the control has been exerted, stating

that:

“The consequence to interstate commerce of this
combination cannot be appreciated without a consid-
eration of natural conditions ereatly affecting the
railroad situation at St. Louis.”’

The Court finds that though twenty-four lines of rail-
way converge at St. Louis, none of them passes through;
that about one-half of these lines have their termini on the

Illinois side of the river, and that the others coming in

oom Yee

from the west and north have their termini either in St.
Louis or on its northern edge.

It further finds that the cost of construction and main-
tenance of railroad bridges over the Mississippi River is
so great as to make it impracticable for every road de-
siring to enter the city to have its own bridge, and that
the obvious solution is the maintenance of toll bridges
open to the use of any and all lines upon identical terms.
That the first bridge—the Kads Bridge—was and is a
toll bridge available to any carrier on equal terms; but
to use it, there must be aceess over rails connecting the
bridge and the railway, and this condition resulted in the
organization of independent companies, which undertook
to connect the bridge on each side with various railroad
termini. Thus, while the bridge might be used by all
upon equal terms, it was accessible only by the means of
the several terminal companies operating lines connect-
ing it with the railroad termini.

This brought about a condition which led to the con-
struction of the second bridge—the Merchants? sridge—
also a toll bridge and subject to use by all on equal terms.
This Merchants’ Bridge, like the Eads Bridge, had no rail
connections with any of the existing railroads, and these
facilities, as in the ease of the ads Bridge, were sup-
plied by a number of independent ‘alway companies who
undertook to fill in the gap between the bridee ends and
the termini of railroads on both sides of the river,

Then the Court finds that these lines, connecting rail-

a ee

roads with the railroad bridges, dominated the situation
and stood, as it were, just outside the gateway, and none
ec ld enter, even though the gate stood open, who did
not comply with their terms.

The result was that, as a practical matter, it was im-
possible for any railroad company to pass through, or
even enter St. Louis, so as to be within reach of its in-
dustries or commerce, without using the facilities entirely
controlled by the Terminal Company. This was true not
only beeause of the facts before stated, but because of the
geographical and topographical situation in and around
St. Louis.

The trunk-line railroad companies, being the sole stock-
holders the Terminal Company, compelled all other
railroad companies converging at St. Louis to use the
facilities owned and operated by the Terminal Company,
and while previously there had existed the Wiggins Ferry
Company and the Merehants’ Bridge Company, as well as
the Terminal Company, the result of the combination was
to substitute the facilities of only one, and that the Ter-

minal.
The Court then says:

“The physical conditions which compel the use of
the combined svstem by every road which desires to
cross the river, either to serve the commerce of the
city or to connect with lines separated by the river,
is the factor which gives greatest color to the unlaw-
fulness of the combination as now controlled and op-

erated.”’

ARAN 2 TR

It beeame, therefore, important in the minds of the
Court to know the character and purpose of the corpora-
tion which had combined all of the terminal instrumentali-
ties upon which the commerce of a great city and gateway
between East and West must depend,

The Court then finds:

1, That the Terminal Company was organized in 1889,
at the instance of six railroad companies, for the purpose
of acquiring all existing terminal instrumentalities for
the benefit of the combination, and such other companies
as they might thereafter admit to joint ownership by

unanimous consent,

2. That by another clause in the agreement the pro-
prietary companies obligated themselves to forever use
the facilities for all business destined to cross the river
which would seem to guarantee against any competitive
sysiem, since the companies to the agreement then con-
trolled about one-third of the railroad mileage of the
United States.

3. That certain practices of the Terminal Company oper-
ated to the disadvantage of the commerce which must cross
the river at St. Louis and of nonproprietary railroad lines
compelled to use its facilities, one of which grew out of
the fact that the Terminal Company was a terminal com-
pany, and something more; that it did not confine itself

to supplying and operating mere facilities for the inter-

— i, —

change of traffic between railroads and in assisting in the
collection and distribution of traffic for the carrier com-

panies.

4. That the Terminal, as well as several of the absorbed
companies, were organized under ordinary railroad char-

ters.

5. That the Terminal Company filed its rate sheets for
the transportation of every class of merchandise from the
termini of the railroad on the Hlinois side of the river to

destinations across the river over its lines.

6. That the Terminal Company adopted another prac-
tice that marked it as a transportation company which
had interposed itself between railroads having their ter-
mini on both sides of the river, and between the city itself
and the roads terminating on the east side of the river,
which was that all traffic destined to cross the river at
St. Louis, whether bound east or west, or destined for the
city if coming from the east, was billed only to East St.

Louis and there rebilled to destination.

7. That the effect of this practice of rebilling at East
St. Louis and of imposing this arbitrary upon traffic
originating within 100 miles of the city, destined to cross
the river, applied to the large coal traffic from the Illinois
coal mines, upon which the City of St. Louis is largely de-

pendent.

PROMI ERIE WELL HE Se

a
Then the Court states:

‘But the illegal restraint upon commerce among
the states which we here find to exist consists in the
possession acquired by the proprietary companies,
through the means and with the object we have stated,
of dominating commerce among the states carried on
by other railroads entering or seeking to enter the
City of St. Louis, and by which such railroads are
compelled either to desist from carrying on interstate
commerce or to do so upon the terms imposed by the
proprietary companies. This control and possession
constitutes such a grip upon the commerce of St.
Louis, and commerce which must cross the river there,
whether coming from the east or west, as to be both
an illegal restraint and an attempt to monopolize, ’’

The foregoing analysis of some of the holdings in the
Terminal case indicates clearly that the Court was of
the opinion the combination assailed in that case was an
unreasonable restraint of interstate commerce bec: AUse,
und only because of, the Terminal control of the entire
gateway through St. Lonis through the medium of tracks
connecting with the bridges across the Mississippi River
at that point, and beeause the Terminal had taken unto
itself the functions of a railroad company rather than a
terminal company, And added to these was the faet
found by the Court that the topographical situation at
St. Louis was such as to preclude the construction and
maintenance of other tracks and bridges across the river

to compete with the Terminal. These things gave the

— 9) —

‘Terminal a complete monopoly as a carrier by railroad of
all the railroad traffic entering or passing through the St.

Louis gateway,

There are no facts in the instant proceeding in anywise
similar to those found by the Court to exists in the Ter-
minal case, The Court, however, in that case made other
findings which apply with peculiar force to the facts of

this proceeding. For example:

1. The mere combining of several independent terminal
systems into one may not operate as a restraint upon the

interstate commerce which must use them.

2 The combination condemned would not have been
an illegal restraint had it been what was claimed for it;
a proper terminal association, acting as the impartial
agent of every line which was under compulsion to use its
instrumentalities.

8 ‘That there is an essential difference between terminal
systems properly so described and railroad transportation
companies. The first are but instrumentalities which as-
sist the latter in the transfer of traffic between different
lines in the collection and distribution of traffic. They
are a modern evolution in the doing of railroad business
and are of the greatest public utility. They, under proper
conditions, do not restrain, but promote, commerce.

In light of the fact that the contract assailed in this

proceeding has to do with the receipt and delivery of

LEDER IIE Ge DAN A ° . wig

— 60 —

freight and in the interchange thereof, the views of the
Court in the Terminal case just before set out are pe-

culiarly apprepriate and clearly distinguish what is in-

volved in these proceedings from what was held to be
an unreasonable restraint of trade and commerce in the
Terminal case.

The Columbia Terminals Company is not only a mere
terminal facility, but under the arrangement attacked is
the impartial agent of the carriers to transfer carrier

freight between off-track and on-track stations maintained

ted

4 ic RR LIER SD

by such carriers and in interchange. Such transfer com-

Pee Sh

pany’s only function is the collection and distribution of
ee less-than-carload traffic within the St. Louis-East St. Louis
terminals and the handling of that character of traffic be-
tween the on-track stations of the rail carriers. In no re-
gard can it be said that such function in any sense re-
strains or impedes the movement of trade and commerce
through the St. Louis gateway, and with less reason can
it he said that because the appellant is not a coagent with
the Columbia Terminals in collecting and distributing sueh

traffie the Sherman Antitrust Act is violated.

The Interstate Commerce Commission, in its first report
(R. 99), distinguished the combination condemned in the
Terminal Company case, supra, from the facts here in-

volved in the following lanenage:

‘Counsel for the St. Louis Chamber of Commerce
takes the position that the proposed contracts with the

Greene reams neem

en

Columbia will create a monopoly, in contravention of
the Sherman Antitrust Act, 26 Stat. 209, ¢. 647. He
relies upon United States v. St. Louis Terminal, 224
1. §. 383, in which the Supreme Court condemned the
arrangements entered into between proprietary lines
on the one hand and the Terminal on the other hand.
He argues that these transfer companies are here per-
forming by dray or truck precisely the same service
that the Terminal performs by rail. Admitting these
contentions, the case referred to is authority for the
conclusion that the arrangement here proposed will
not result in an unlawful restraint of interstate com-
merce, The commerce there found unlawfully re-
strained was in the entire traffic from, to and through
St. Louis, rather than in the receipt or delivery of
traffic at that point. The Court stated that if the
Terminal Association were to be treated as a mere
terminal facility the unification might he deemed pro-
motive of the public interest. It was the grip which
the association had upon the ingress and egress of ecom-
merce from beyond the terminal area over new and
additional lines which made it unlawful. At page 410
the Court said:

‘¢*Plainly, the combination which has occurred
would not be an illegal restraint * * * if it were
what is claimed for it, a proper terminal association
acting as the impartial agent of every line which is
under compulsion to use its instrumentalities.’

“The Columbia is such an agent. lis services are
those of a mere terminal facility. The arrangements
proposed will not change in any manner the flow of
commerce to, from or through St. Louis, either by the
lines now serving it or by others which might later be

PE SELE SOAS SWRPA Tne ATR PROP YAN ren nae ea |

ee

built, but will merely provide a different means of
handling the receipt and delivery of existing traffic.

‘*There is nothing in the so-called one-transfer plan
in and of itself which is unlawful. Nor can we con-
clude upon this record that service under this plan will
be inadequate. Experience, alone, will answer that
question, and if at any time the service becomes inade-
quate or is surrounded by practices which are unlaw-
ful, the shippers have recourse to us through the un-
usual channels of complaint.”’

That the views of the Commission are correct is evident

from what the Supreme Court found in its second decision

4

in the Terminal case (Terminal Railroad Association v.
United States, 236 U.S. 194), in which the Court approved
the decree entered in the District Court pursuant to the
findings and mandate of the Supreme Court in its first
decision (United States v. Terminal Railroad Association,
224 U. S. 383); but the decree as entered in the District

Court was required to be modified

‘*so as to recognize the right of the Terminal Com-
pany, as an accessory to its strictly terminal business,
to carry on transportation as to business exclusively
originating on its lines, exclusively moving thereon,
and exclusively intended for delivery on the same.’’

Seigtan YS Nafam alin eat PRES Ee REAR ah RACE ast AED

~

The substance of the decree, as modified, pursuant to
the second decision, is quoted by the Supreme Court in its

third decision (Terminal Railroad Association v. United

- Wei LAT hh ig ie
?

PORE a EELS WEEE S MOE POULT PEEL TE MU PP SERRE MEP AK, BRP ALE Ae mere

— 6 —

States, 266 U. S. 17), and, in so far as here ‘material,

is as follows:

“1. The Terminal Railroad Association of St. Lonis
is an unlawful combination contrary to the Antitrust
Act of July 2, 1890 (26 Stat. 209), when it and the

‘ayious bridge and terminal companies composing it
are operated as railroad transportation companies,
The combination may, however, exist and continue as
a lawful unification of terminal facilities upon aban-
doning all operating methods and charges as and for
railroad transportation and confining itself to the
transaction of a terminal business, such as supplying
and operating facilities for the interchange of traffic
hetween railroads and to assist in the eolleeting and
distributing of traffic for the carrier companies,
ewitching, storing and the like, and modifying its
contracts as herein specified. An election having been
made to continue the combination for terminal pur-
poses, the defendants are therefore perpetually en-
joined from in anywise Managing or conducting the
said Terminal Railroad Assoc iation or any of its con-
stitnent companies and from operating any of the prop-
erties belonging to it or its constituents otherwise than
as terminal facilities for the railroad companies using
the same, and from making charges otherwise than
for and according to the nature of the services so
lawfully authorized to be rendered. Provided, how-
ever, that the right of said Terminal Railroad Associ-
ation as an accessory to its strietly terminal business
to carry on transportation as to business exclusively
originating on its lines, exclusively moving thereon,
and exelusively intended for delivery on the same, is

{OT Se aR AREER TIS SR OTT Pe, AMES

SANS A LTT I PI STE GIA RS, QUA OTE ae SAT PE, |

RP TE con RS mT AE LL

—

hereby recognized, and nothing in this decree shall
be construed to deny such rights.”

It will be observed from the foregoing that the vice in-
herent in the operation of the Terminal in the first) in-
stance was that it operated as a railroad transportation

company, and that in the decree, as modified, it elected to

confine itself to the transaction of a terminal business,

change of traffic between railroads and assisting in the

4 such as supplying and operating facilities for the inter-
%

4 . . . . . . . .

2 collecting and distributing of traffic for the rail carriers.

As such, the decree was approved and as a terminal facil-
ity the Terminal was not ield not to be a combination in

j restraint of trade.

3 The services here involved consist, as stated, only in
the collection and distribution of less-than-carload freight
: and supplying facilities for interchange of less-than-ear-
load traffic within the St. Louis-Kast St. Louis district,
Such service as is proposed to be rendered is not in viola-
tion of the Antitrust Laws under the decisions of the Su-
preme Court in the Terminal case.

The fact should be emphasized that, while petitioner
insists that it is engaged in interstate commerce. it trans-

ports no freight for its own account. The rail carriers

transport the commerce involved, and the petitioner is

only employed by the rail carriers in such commerce. It is

not asserted that the petitioner is entirely without the

provisions of the Sherman Antitrust Act, but it is in-

3 eas
. PAN ME STI GRR PE UST ETS : ete
Creep nce rence sense Re eS EET ERE SRE iat iniciiai

=

sisted that it is not engaged in the transportation of inter-
state commerce under the Interstate Commerce Act, as is
the Terminal Railroad Association, and that, since the
commerce involved is transported by the rail carriers, pe-
titioner is only a facility used by such railroads in trans-
porting such commerce, the same as such carriers would
use their own rails, box cars and engines.

In the Terminal case, supra, the Terminal was a rail-
road transportation company, filing tariffs with the Com-
mission and engaging in the transportation of interstate
commerce on its own account. Obviously, by reason of
the fact that it controlled the bridges, in fact, the entire
gateway—that is, the railroad gateway at St. Louis—and
through such control the commerce of the country passing
through such gateway, It Is apparent that while the ar-
rangement was condemned by the Supreme Court, no such
situation exists, in so far as this controversy is concerned,
and it requires a peculiar stretch of the imagination to
contend that since the railroads use only the facilities of
the Columbia Terminal Company, commerce is restrained,
in view of the fact that the commerce in question is at all
times railroad freight in possession of the railroads and
being transported by the railroads through facilities either
owned or contracted for by them.

Since the Columbia Terminal Company acts only as the
agent of the carriers, or rather as a facility of the carriers,
in terminal service handling less-than-carload freight being

transported by such carriers and not on its own account,

Pa ne eee UMD BEFITS RESELL RIE ERE! LEE LIE LILLE ILLES RR ee

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= : Lhe diyid SEN RE TP eS cli BED CLUS NE AUPE ALS By SNORE AIS
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by no process of reasoning can the situation created be
likened to that passed upon by the Supreme Court in its
decisions in the Terminal ease.

It should not be overlooked that, as now construed, the
Sherman Antitrust Act applies only to combinations in
unreasonable restraint of trade (Standard Oil Company vy.
United States, 221 U. S. 1), and, in so far as this eontro-
versy is concerned, the only fact held up as constituting
unreasonable restraint of trade is the fact that the ear-
riers by rail do not employ the petitioner. It is not as-
serted that if petitioner were employed that any change
would be brought about in the manner in which such traffie
is being handled.

The case of United States vy. Joint Traffic Association,
171 U. S. 505, holds with reference to contracts that the
Antitrust Law applies only to those contracts whose di-
rect and immediate effect is a restraint upon interstate
commerce, and that when the effect upon interstate com-
merce is indireet or incidental only, the Antitrust Statute
does not apply.

That ease also holds that an agreement entered inte for
the purpose of promoting the legitimate business of an
individual or corporation, with no purpose to thereby af-
feet or restrain interstate commerce, and which does not
directly restrain such ecommerce, is not covered by the
antitrust laws, although the agreement may indirectly and
remotely affect that commerce.

OY Se a

ar

recs

—

To the same effect is the holding of the Court in Phillips

vy. lola Portland Cement Company, 129 Fed. 593.

The Duplex Printing Press case, Coronado Coal case,
Bedford Stone case and other similar cases, cited and re-
lied upon by petitioner im support of the proposition that
the arrangement here assailed constitute a violation of the
Sherman Act and an unlawful monopoly, have no analogy
to the instant case, are clearly distinguishable and are not
in any sense controlling. The authorities heretofore cited
clearly establish the fact that the arrangement assailed
violates none of the provisions of the anti-trust laws of

the United States.

IIT.
Other Rulings of the Court of Appeals.

Petitioner, commencing at page 33, contends that cer-
tain holdings of the Court of Appeals were erroneous; for
example, the conclusion of the Court that the execution
of the contract was ‘the adoption by the carriers jointly
of a method or practice of handling”’ this freight is criti-
eized. It is contended that what the carriers adopted
jointly was not a practice, but an illegal oral agreement
to discharge petitioner. An examination of the contract
discloses that the Court was correct. As stated by the
Court, all that the carriers have done is to arrange jointly
for the performance of a terminal service which does not

differ substantially from that performed by the Terminal

|

PR Hse Bt Oe

BREE LEPTIN G ALI eyo

1 WIL RRR at

—

Association with respect to carload freight. The point

is made that page 39, Exhibit 10, is not a joint contract,
but simply a device whereby one transfer company is em-
ployed by sixteen carriers under sixteen different con-
tracts made by a combination, that the service of the
Columbia is personal and confidential, each earrier paying
its own bills with no obligation to or for its associates
and having no interest in the service performed for them,

The contract in question provides for a sole transfer
company to perform for each earrier certain terminal serv-
ices, and the fact that there is no obligation on the part of

one carrier to pav the Columbia for services erformed
: ]

for another carrier party to such an agreement is wholly
beside the point. The further point is made at page 236
that the Court erred in stating (R. 170) that the investi-
gation of the Commission was “to determine the lawful-
ness of the methods proposed by the carriers for reducing
the number of off-track stations.” Then the further point

is made that the Court erred in saying that ‘*the Commis-

sion reached the conclusion * * * that the roposals to
|

reduce the number of off-track stations * * would not

be harmful to the public interest.’ Petitioner has over-

looked the conclusion of the Commission (R, 120) as fol-
lows:

‘“We have seen that there is nothing violative of
the law in the proposal of the carriers to restriet the
hauling for and on their behalf to a single transfer

.- © * ik ) H M :
ageney, Likewise, this record is not ¢onvine

. — Bi 2M SRT TEST BCBS POET AIOE OF EES?
re SEL OEL EEE AE EGE IED NTE BILE NS ELISE TELAT BONES. YORE
a BI Se 7 .

|

—_—

ing that unreasonable or inadequate service will re-
sult from, or that public interest will be adversely or
unreasonably affected by the proposed limitation in
the number of off-track stations to be operated for
the respondents, particularly if the suggestions herein
made in respect of direct delivery service are carried
out.’’

IV.
Disposition of the Case.

Under the above heading petitioner says if the Court
holds that it has the right to bring this suit it presumes
this Court will then pass upon the merits of the case, but
if it be held that petitioner has not the right to sue in
equity, then petitioner requests that the decrees below
be reversed, the pleadings ordered amended, and the case
be transferred to the law side of the District Court under
Equity Rule 22 and Section 397, Title 28, U. S. C. A.
The cases of White v. Sparkill Realty Corporation, 280 U.
S 500, and Diamond Alkali Company v. Tomson & Co.,
35 Fed. (2d) 117, are cited in support of the latter sug-
gestion. Neither of said cases, however, is controlling
here. The request that the case be transferred to the law
side comes rather late and should not be considered by
this Court in passing upon the petition for certiorari.
Petitioner filed its bill in equity and sought only in-
junctive relief under Section 26, Title 15, U. S. C. A. (R.

168). The cause was tried before the District Court as

LESSER IOLA IE SOS SOR

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an equity suit and there was no suggestion or request by
petitioner at any time while the ease was pending in that
court that it should be transferred to the law side. This
is not the case of where what is really an action at law is
erroneously begun as a suit in equity. This is unmistak-
ably a suit in equity. Petitioner attempted to state a
cause of action cognizable only in a court of equity, as
shown by the allegations of the bill and by its prayer for
relief. It was only interested in securing injunctive re-
lief to prevent respondents from putting into effect the
arrangement to reduce the number of their off-track sta-
tions in St. Louis. As petitioner prayed for a temporary
restraining order, a preliminary injunction, and a per-
petual injunction (R. 10) it doubtless would have strenu-
ously resisted transfer of the cause to the law side by the
District Court. Plaintiff prosecuted its appeal as from a
decree in an equity cause and did not at any time suggest
to the Court of Appeals that the case should be trans-
ferred to the law side in the event it was held that it
could not maintain a suit in equity for injunctive relief.
The proceedings on the appeal and in the Court of Ap-
peals were throughout those customary in an equity cause,
From petitioner’s conduct of the appeal the Court of Ap-
peals could have had no idea that petitioner desired the
case transferred to the law side, and petitioner did not
see fit to direct that Court’s attention to the matter by a

petition for rehearing.

os
Sole TRAE HORII win FOF el ee SAKINA ED DPOR 8 THAR AO ANAL REN OPE rem

mm TE te

As said by this Court in Twist et al. v. Prairie Oil &
Gas Company, 274 U. 8S. 684:

“In federal courts, as in others, a plaintiff has a
right to choose whether he will seek to enforce a
legal or an equitable cause of action and whether he
will seek legal or equitable relief. He makes his
election and proceeds at law or in equity at his peril.’’

In the ease just cited this Court reversed the Circuit
Court of Appeals for this (8th) circuit for treating the
appeal as one at law and affirming the judgment on the
pleadings, and remanded the case to it with instructions

to decide the appeal as one in equity.

In Liberty Oil Company v. Condon National Bank et al.
260 U.S. 235, this Court also reversed the Cireuit Court
of Appeals for this (Mighth) circuit for treating the ap-
peal in that case as one in an action at law and reversed
and remanded the case to that court for consideration and
decision of the issues of fact and law as on an appeal in
equity. In view of these two cases, the Court of Appeals,
in the instant ease, was fully justified in deciding the

appeal as one in equity.

In Perego y. Dodge, 168 U.S. 160, it was held that plain-
1iff, having voluntarily invoked the equity jurisdiction of
the court, he was in no position to urge, on appeal, that
his complaint should have been dismissed on account of

adequacy of remedy at law. This case is cited in Twist et

OTR ROLAND TRIOS LLIN 62 OVER TILT ERT BOLE LIES YEO Cea |

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teen

ne OR ins

al. v. Prairie Oil & Gas Company, supra. Plaintiff in the
case at bar is in the same position. Petitioner shouid not
be allowed to blow hot and cold with the Court.

The request for transfer of the case to the law side is a
mere afterthought. Moreover, transfer of the case to the
law side would be a useless gesture, as petitioner, under
the decision of this Court, in Keogh v. C. & N. W. Ry. Co.,
260 U.S. 156, cannot maintain an action in damages against
respondents for alleged violation of the Antitrust Laws
any more than it can maintain this action for injunctive
relief.

Where the question whether a suit should be on the law
or equity side of the court is not important for the purpose
of the decision because the same result must be reached in
either event, the cause will not be transferred from the
side on which it is brought to the other side of the Court
(Palmer v. Doull Miller Co., 233 Federal 309: Shapiro v.
Lyle, 30 Federal [2d] 971).

Conclusion.

It is therefore respectfully submitted that the coneln-
sion of the Court of Appeals to the effect that the snit
brought by petitioner against these carriers, respondents,
is in respect of a matter subject to the regulation, super-
vision or other jurisdiction of the Interstate Commerce
Commission, and that petitioner had not the right to bring

it, is correct; that the holding of the District Court to the

me Ae

effect that the contract assailed in’ the bill of complaint
was not in violation of the Antitrust Laws of the United
States was correct, and that the petition for a writ of cer-

tiorari should be denied.

Respectfully submitted,

Cc. S. BURG,
Db. P. CONNELL,
W. N. DAVIS,
A. H. KISKADDON,
H. H. LARIMORE,
M. G. ROBERTS,
HAROLD R. SMALL,
L. H. STRASSER,
GUY A. THOMPSON,
THOS. W. WHITE,
Counsel for Respondents.

EDWARD J. WHITE,

J. M. BRYSON,

Kk. T. MILLER,

N.S. BROWN,

7. M. PIERCE,

Of Counsel.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386008_0315%3A4. Public record. Not legal advice.
