Jurisdictional Statement — Western Pacific Railroad v. United States

FILED

f Ne 1964

*

IN THE JOHN F. DAVIS, OLE

Supreme Court of the United Staten

Ocroser Term, 1964

. 12

THE WESTERN PAC IO RAILROAD COMPANY, ET AL.,

Appellants

V.

Untrep States or America, Appellee

On Appeal from the United States District Court

for the Northern District of California.

Southern Division

JURISDICTIONAL STATEMENT

E. L. Van DELLEN

WALTER G. TREANOR

526 Mission Street

San Francisco 5, California

E. Barrett PRETTYMAN, JR.

Hogan & Hartson

800 Colorado Building

Washington 5, D. C.

Attorneys for Appellants

The Western Pacific

Railroad Company,

Sacramento Northern

Railway Company,

and

Tidewater Southern

Railway Company

Press or Byron S. Apams, WASHINGTON. D. C.

INDEX

Page

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TRR Question Is SUBSTANTIAL ............ceceeeeee 7

APPENDIX:

A.

1. Recommended Report and Order of the Wee

Examiner, Interstate Commerce Commission .. 1a

2. Report of the Interstate Commerce a ee 8a

3. Order of the Interstate Commerce Commission. 31a

4. Opinion and Opinion of the United States Dis-

trict Court for the Northern District of Cali-

SOOM SS ek y V. 32a

B.

1. The National Transportation policy, 54 Stat. 899,

49 U.S.C. preceding Sections 1, 301, 901 and 1001 37a

2. Section 3 (4) of the Interstate Commerce ea age

Stat. 380, as amended, 49 U.S.C. Section 3(4) .

TABLE OF AUTHORITIES

CasEs:

American Trucking Ass’n v. United States, 326 U.S. 77

C ²ÜðW-. ¾ ¹ůmuͥüd A ae 8

(1886)

Atlantic Coast Line R. Co. v. United States, 284 U.S.

JJ ᷣ V 6, 7, 8, 12, 13, 14, 15

Baltimore v. Baltimore d Ohio Ry., 21 Md. 50 (1864) 10

ii Index Continued

Page

Black v. Delaware & Raritan Canal Co., 22 N.J. Eq. 130

(1871), rev’d on other grounds, 24 N.J. Eq. 455

% V ˙ ̃²ĩ˙rt: cones ss 10

Burlington Truck Lines, Inc. v. United States, 371 U.S.

Y G ²⅛¹ mm eCliv ees

Chicago, I. & L. Ry. v. United States, 270 U.S. 287

(19260) 4 44 43 7, 11

Construction of Lines in Eastern Oregon, 111 I. C. C. 3 17

Denver & Rio Grande Western R. Co. v. Union Pacific

RB; O6., Hi U.S. e e eee 14

Diwie Carriers, Inc. v. United States, 351 U.S. 56 (1956) 15

Georgia v. Pennsylvania R. Co., 324 U.S. 439 (1945) .. 15

Great Northern Ry. Co. Construction, 166 I. C. C. 3, 170

e e oc ccecegenticattveh taut 4,17

Louisville & Nashville R. Co. v. United States, 282 U.S.

TOO CIOOAY so ndiche ev eeatiniances ceeteseeseeses 15

New York v. United States, 331 U.S. 284 (1947) ..... 15

St. Louis Southwestern Ry. Co. v. United States, 245

cS) Pls ²˙ : 10

The Shreveport Case, 234 U.S. 342 (1914) .......... 15

Thompson v. United States, 343 U.S. 549 (1952) .7, 13, 14, 15

Srarurzs:

National Transportation Policy, 49 U. S. C. preceding

%%% C 4 6 2, 16

1%%/%%õͤͥũ ã 2

%% !)] 446 2

%% ˙· W ˙ 454i 2

%%% ͥͥͥͥ0ͥ0ͥ—Aiꝛũ 2

% 2

%%é1e 2

98 U.S.C. $§ 2321-2325 B e 4 2

49 U.S. C. 180 Throughout

49 U.S.C. § 1B(4) 20... . ccc cccccccccescnrcvccccces

MISCELLANEOUS:

17 Cong. Rec. 3476 (18860))))) ee eee sees eeeee 10

78th and preceding Annual Reports of the Interstate

Comme: ce Commission

IN THE

Supreme Court of the United States

OcrToBeR TERM, 1964

No.

THE WESTERN PADI RAILROAD COMPANY, ET Al.,

Appellants

v.

Unirep States or AMERICA, Appellee

On Appeal from the United States District Court

for the Northern District of California.

Southern Division

JURISDICTIONAL STATEMENT

Appellants appeal from the judgment of the United

States District Court for the Northern District of Cali-

fornia, Southern Division, dated June 19, 1964, and

filed June 22, 1964, denying a petition to enjoin, annul

and set aside an order of the Interstate Commerce

Commission and dismissing appellants’ complaint.

Appellants submit this Statement to show that the

Supreme Court of the United States has jurisdiction

2

of this appeal and that a substantial question is pre-

sented.

The opinion of the United States District Court for

the Northern District of California, Southern Division,

is reported at 230 F. Supp. 852. The opinion and or-

der of the Interstate Commerce Commission are re-

ported at 316 I. C. C. 795. Copies of the District Court

opinion and judgment, the Recommended Report and

Order of the Hearing Examiner, and the opinion and

order of the Commission, are attached hereto as Ap-

pendix A.

JURISDICTION

This suit was brought under 28 U.S.C. §§ 1336, 1398,

2284, 2321 through 2325 inclusive, and 5 U.S.C. § 1009

to enjoin, set aside and annul a report and order of the

Interstate Commerce Commission. The decision of the

three-judge District Court (Appendix A, p. 32a) was

dated June 19, 1964, and filed June 22, 1964. Notice of

appeal was filed in that court by appellants here on

August 17, 1964.

The jurisdiction of the Supreme Court to review this

decision by direct appeal is conferred by 28 U.S.C.

§§ 1253 and 2101(b) and is sustained by Burlington

Truck Lines, Inc. v. United States, 371 U.S. 156 (1962),

and American Trucking Ass’n v. United States, 326

U.S. 77 (1945).

STATUTES INVOLVED

The National Transportation Policy, 49 U.S.C. pre-

ceding §§ 1, 301, 901 and 1001; and § 3(4) of the Inter-

state Commerce Act, as amended, 49 U.S.C. § 3(4), are

set forth in Appendix B hereto. ?

3

QUESTION PRESENTED

The Western Pacific Railroad Company makes up

the middle segment of a railroad through route (the

Bieber route) which has been created, established, and

maintained as a single unit extending between Port-

land, Oregon, and Los Angeles, California, for the

purpose of providing railroad competition with the

Southern Pacific route—the only other north-south

railroad route serving the Pacific Northwest and the

State of California. Union Pacific Railroad and

Northern Pacific Railway, although establishing and

maintaining with the Southern Pacific Company a

system of through routes and rates via the Portland

Gateway (the common point of interchange between

Union Pacific, Northern Pacific and Southern Pacific

on the one hand and the Bieber route on the other),

have refused to establish a similar system with the

Bieber route and have thus discriminated against

Western Pacific on traffic moving through that inter-

change.

The question is whether Western Pacific is a ‘‘con-

necting line“ within 49 U.S.C. §3(4), which prohibits

discriminatory rates and practices between ‘‘connect-

ing lines’’, even though Western Pacific does not have

a direct physical connection with Union Pacific and

Northern Pacific at the common Portland Gateway

and even though Western Pacific has not in the past,

because of the discrimination, been permitted to make

up a through route through the common interchange

point of Portland.

4

STATEMENT

For many years prior to 1931, the only railroad route

serving the Pacific Coast of the United States (includ-

ing the States of Washington, Oregon, western Idaho

and California) was Southern Pacifie Company and

its connections, In 1931 the Interstate Commerce Com-

mission, specifically responding to a request for the

institution of competitive railroad service, authorized

the construction of a short segment of railroad between

Klamuth Falls, Oregon, and Keddie, California. Great

Northern Ry. Co. Construction, 166 I. C. C. 3, 170 I. C. C.

399. This construction created, for the first time, a

through route parallel to and competitive with the

Southern Pacifie route between Portland, Oregon, and

Los Angeles, California (see the map on the following

page).

This route, popularly known as either the Bieber“

route or Inside Gateway' route, has been operated

from its inception as a single unit for the purpose of

competing with the parallel Southern Pacific route

between the same points. Of necessity, it is made up

of the end-to-end connections of Great Northern Rail-

way Company between Portland and Bieber: The

Western Pacific Railroad Company between Bieber

and the San Francisco-Oakland-Stockton area of north-

ern California, and The Atchison, Topeka & Santa Fe

Railway Company between Stockton and Los Angeles.

For the past 32 years this route has provided the

only railroad competition with Southern Pacific Com-

pany and the only choice for shippers in this territory.

For traffic moving between California and the States

of northern Oregon, Washington and western Idaho,

both the Southern Pacific and Bieber routes connect

5

with Union Pacific, Northern Pacific and Great North-

ern at Portland, Oregon, the only common gateway

served by both competing routes. Union Pacific and

Northern Pacific have, except for an extremely limited

number of commodities,’ consistently refused to join

the Bieber route in through rates on the same level as

those carriers participating with Southern Pacific

Company, and therefore the joint rates with Southern

Pacific are in virtually all instances lower than the

combination rates made applicable to the Bieber

route.“

The result is that in recent years the Bieber slate

has become unable to compete effectively with South-

ern Pacific for most traffic moving to or from points

served in the Pacific Northwest by Union Pacific or

Northern Pacific, although its physical facilities and

services are more than adequate for the job. As the

Examiner put it, the imposition of higher combination

rates ‘‘precludes shippers from using the ‘Inside Gate-

way’ [Bieber route] from or to such points [in Cali-

fornia and the Pacific Northwest]. The complainants

are even deprived of traffic which they themselves orig-

inate.’’ Appendix A, infra, p. 4a.

Western Pacific and its subsidiary lines challenged

the present discriminatory practices by filing a com-

plaint with the Interstate Commerce Commission un-

der the provisions of the Interstate Commerce Act,

49 U.S.C. § 3(4), which prohibits such discriminatory

rate treatment between connecting lines of rail-

1 Joint rates are in effect on cast iron pipe, automobiles and live-

stock. The rates on two of these products resulted from agreements

with appellees after complaints were filed, and one from a Commis-

sion order. Appendix A, infra, pp. 14a-15a.

2 Appendix A, infra, p. 12a.

6

road.“ The Hearing Examiner found in favor of

Western Pacific and issued an order recommending

that the appellees be required to cease the discrimina-

tory practices. Appendix A, infra, pp. Ia-7a. A panel

of the Commission reversed, holding that since Western

Pacific neither enjoyed a physical connection with

Union Pacific and Northern Pacific, nor already par-

ticipated in a full line of through rates with these car-

riers, Western Pacific was without power to challenge

the discriminatory practices. The requirements for

„connecting line“ status, said the Commission, were set

forth by this Court in Atlantic Coast Line R. Co. v.

United States, 284 U.S. 288, 293 (1932). Appendix A,

infra, pp. 8a-31a.“ The full Commission certified the

case as of general transportation importance? (Order

dated February 14, 1963).

Western Pacific is treated throughout this brief as encompassing

its subsidiary lines, the Sacramento Northern Railway and the

Tidewater Southern Railway Company. The Union Pacific, the

Northern Pacific and their shortline connections were named as

defendants and are commonly referred to throughout this Juris-

dictional Statement as appellees. The Great Northern and the

Santa Fe were also named as defendants, since the prayer for

relief requested a prescription of through routes to which they

would be a party, but they were not defendants in opposition and

pleaded in support of Western Pacific. Southern Pacific intervened

in support of the defendants in opposition.

* The Commission also held that the Bieber and Southern Pacific

routes are not sufficiently similar. We believe we demonstrated

beyond question to the District Court that the Commission’s con-

clusions on this score were wholly fallacious. In any event, the

District Court never reached the question of similarity, deciding the

case wholly on the issue of connecting lines. If this Court

notes probable jurisdiction, we intend to demonstrate in our brief

on the merits and at oral argument not only that the District

Court erroneously decided the connecting lines issue but that a

remand for further consideration of the issue involving similarity

of conditions is unnecessary, since the record fully supports our

position in this regard.

7

Western Pacific appealed to the three-judge United

States District Court for the Northern District of Cali-

fornia, which agreed with the Commission’s analysis

of „connecting line’’ status, denied Western Pacific’s

petition, and dismissed the complaint. The Court cited

not only Atlantic Coast Line but Thompson v. United

States, 343 U.S. 549 (1952), and attempted to distin-

guish Chicago, I. & L. Ry. v. United States, 270 U.S.

287 (1926). But the court added significantly:

Because the Supreme Court has not rendered any

decision on this question since Atlantic Coast Line

[32 years ago], this Court is bound to follow that

decision. Any further liberalization of the pres-

ent definition will have to come from the Supreme

Court. [Appendix A, infra, p. 36a.]

THE QUESTION IS SUBSTANTIAL

The importance of this case to the transportation in-

dustry can hardly be overstated. The Commission

recognized its importance by certifying the case as one

„of general transportation importance —a certifica-

tion made in only .007%, or 34 of 1%, of the eligible

cases handled at the ICC.5 The United States recog-

nized its impdrtance by entering the case before the

Commission,“ strongly supporting Western Pacific’s

position, and calling the proceeding one of unique

5In the first 37 months of the operation of the rule governing

cases ‘‘of general transportation importance,’’ only 37 cases were

so certified out of the 4933 cases handled at the Commission and

eligible for certification, These figures were supplied to Western

Pacific in two letters, dated September 9 and September 18, 1964,

from the Secretary of the Commission.

The United States filed three petitions before the Commission

supporting Western Pacific but took no position for or against

Western Pacific before the District Court.

8

importance“ which presented issues of large im-

portance with impact upon large segments of the pub-

lie and a vast area of the country.“ The District

Court recognized its importance by virtually inviting

this Court to review it.

The issues here are vital because, as the United

States stated in one of its petitions to the Commis-

sion:

** * [T]he Pacific Northwest and California

have rapidly increased in population, consumption

and production and are expected to continue to

ie There is testimony that through routes be-

een defendants and the Bieber route and rates

at the same level as those defendants maintain

with Southern Pacific would materially assist in

the ter industrial development of the Pacific

Northwest, B Ad for a greater and more com-

petitive rail system, and generally assist in the

economic growth of the whole area.“

As we shall show, the reliance of the District Court

on Atlantic Coast Line R. Co. v. United States, supra,

was misplaced. But even if that case stands for what

the District Court says it does, the intervening years

since it was rendered have resulted in far-reaching

changes in the railroad industry. The fact is that in

this age of merger, consolidation and sharing of the

— — 9

„Petition of United States to Full Commission (1) to Vacate

its Order Served July 30, 1963 * * *,’’ filed August 7, 1963,

pp. 5, 6.

% Petition of United States to Full Commission for Reconsidera-

tion of Report and Order of Division 2 and Request of United

States for Oral Argument before Full Commission, filed July 26,

1963, pp. 2-3.

nation’s railroad transportation plant,“ when so many

duplicating, paralleling physical lines are disappear-

ing, it is essential that the Bieber route concept“ be

preserved. It is essential, in other words, that single-

route, multi-line, end-to-end operations which provide

all of the services of paralleling lines be protected

against discriminatory treatment.

The present language about ‘‘connecting lines’’ in

§ 3(4) of the Interstate Commerce Act had its genesis

in § 3 (par. 2) of the 1887 Act, which required that

carriers afford equal facilities for the delivery of pas-

sengers and property to and from their several lines

and those connecting therewith, and shall not discrimi-

nate in their rates and charges between such connect-

ing lines. 24 Stat. 380. Except for the addition of

the word ‘‘fares,” the relevant language remained the

same in the 1920 amendment. 41 Stat. 479. The latest

amendment in 1940 provided that carriers must afford

equal facilities for the delivery of passengers and

property ‘‘to and from connecting lines; and shall not

discriminate in their rates, fares and charges between

connecting lines, or unduly prejudice any connecting

line in the distribution of traffic that is not specifically

routed by the shipper.” 54 Stat. 903-904, 49 U.S.C.

§ 3(4).

It should be emphasized that the legislative history

of neither the original language nor any of the amend-

ments affords any clue as to precisely what Congress

had in mind by the term ‘‘connecting lines except

o In the past seven years alone, 18 rail consolidations have been

approved, and additional merger or control cases involving 21

Class I railroads are now pending. See the 78th and preceding

Annual Reports of the Interstate Commerce Commission.

10

that every variety of unjust discrimination’’ was to

be prohibited.“ Certainly there was no indication that

the section was intended to carry the meaning attrib-

uted to it by the District Court in this case. The phrase

apparently was patterned after several English and

state statutes, and a number of early state decisions

had clearly established the concept that, as one of them

put it, Railroads can be connected, either directly or

by intervening roads.“ In other words, ‘‘connect-

ing’’ did not necessarily mean a direct physical con-

nection.

The argument that a carrier must have a direct

physical connection with a particular locality in order

to be guilty of discrimination against that locality—

a contention analogous to the one made here—was first

made to this Court as early as 1917 in St. Louis South-

western Ry. Co. v. United States, 245 U.S. 136, 144

The Court rejected the argument, pointing out that

NON 8

10 Remarks of Senator Cullom introducing the Interstate Com-

merce bill in the 49th Congress, Ist session, 17 Cong. Rec. 3476

(1886): ‘‘The third section is broader and more general in its

terms [than the second section, outlawing the long-short haul dif-

ferential] and * * * contains a general prohibition of every variety

of unjust discrimination. * * * The second part of the section

is modeled in part upon the English and in part upon similar

statutes in several of the states. The purpose is to require rail-

roads to furnish its connecting roads all reasonable and proper

facilities for the interchange of traffic that may be necessary for

the convenience of the public, and to prevent one road, or a com-

bination of roads, from ‘freezing out’ a connecting line by refus-

ing to accept traffic from or deliver traffic to it upon any terms,

as has been done.

11 Black v. Delaware & Raritan Canal Co., 22 N. J. Eq. 130, 402

(1871), rev’d on other grounds, 24 N. J. Eq. 455 (1873). See also

Atchison Ry. Co. v. Fletcher, 35 Kan. 236, 10 Pac. 596 (1886);

Baltimore v. Baltimore & Ohio Ry., 21 Md. 50, 89, 91-92 (1864).

11

‘‘Localities require protection as much from combina-

tions of connecting carriers as from single carriers

whose ‘rails’ reach them.“ Ibid.

The necessity for end-to-end connections was dis-

posed of even more directly nine years later in

Chicago, I. & L. Ry. Co. v. United States, 270 U.S. 287

(1926), which we contend is controlling here. In that

case, three of the four respondent carriers refused to

make reciprocal switching arrangements with the com-

plainant South Shore electric line, just as appellees in

this case have refused to make joint rates with Western

Pacific. The South Shore had no physical connection

with any of the three respondents and reached them

only over the fourth respondent’s lines. Nevertheless,

the respondents were all held to have discriminated

against a connecting line,“ the South Shore. The

Court posed the issue in this fashion:

It is argued that, as a matter of law, a carrier

cannot be guilty of unjust discrimination unless it

is able by its own act to remove the inequality;

that where there is no direct physical connection

with the railroad alleged to be discriminated

against, and no joint service is being rendered by

the three steam railroads with the South Shore,

there cannot, in law, be unjust discrimination,

because the existing inequality can be removed

only by the consent of a third party, the inter-

48. carrier. [270 U.S. at 292; emphasis

added.

And the Court answered the argument in these terms:

Unjust discrimination may exist in law as well

as in fact, although the injury is inflicted by a

railroad which has no such direct connection.

Wherever discrimination is, in fact, practiced,

an order to remove it may issue; and the order

12

* extend to every carrier who participates in

inflicting the injury. [Id. at 293.]

Thus, the Court dispelled any notion that a direct

physical connection was necessary and, further, that

the lack of prior arrangements for a through trans-

portation service deprived a carrier of standing to

complain of the discrimination.

Contrary to the assertion of the District Court,

Atlantic Coast Line R. Co. v. United States, supra,

either is distinguishable from or actually supports the

instant case. There, the Court was construing not

§ 3(4) of the Act but rather the conditions of a lease

which had been approved by the Commission. Never-

theless, the Court’s language bears on this case, because

the lease guaranteed non-discriminatory rates for lines

„connecting“ with the Clinchfield Railroad. As the

Court put both the argument and the answer to it:

The plaintiffs contend that the restrictive

schedules [then being proposed] are consistent

with the conditions [in the prior lease] because

the Georgia & Florida is not a carrier connecting

with the Clinchfield.’’ The argument is that the

Georgiu & Florida does not connect since its own

rails do not “teem eo on the Clinchfield’s

rails—the connection being made over the Pied-

mont & Northern, an intermediate carrier. There

is no warrant for limiting the meaning of con-

necting lines’’ to those having a direct physical

connection with the Clinchfield. The term is

commonly used as referring to all the lines making

up a through route. [284 U.S. at 293; footnote

deleted. |

Several points should be noted. First, the Court

clearly held that in common parlance, ‘‘connecting’’

13

does not necessarily mean a physical, end-to-end con-

nection. Secondly, the through route’’ to which the

Court referred was made up of the Georgia & Florida,

the Piedmont & Northern, and their more distant con-

nections, which is a route comparable to the Santa Fe,

the Western Pacific and the Great Northern in this

case. In other words, there is a through route' in

the instant case in the sense in which the term was

used in Atlantic Coast Line. Western Pacific has

readily conceded, however, that no through route“

exists here in the sense proposed by the Commission

and the District Court, namely, that the appellees have

held themselves out as offering through transportation

service with the Bieber route. The reason there has

been no such through service is apparent: the

appellees have refused to extend it, and this is precisely

the discrimination Western Pacific is attacking.

Having determined that the appellees and the Bieber

route together constituted the relevant ‘‘through

route, the District Court in this case turned to

Thompson v. United States, 343 U.S. 549, 557 (1952),

for a definition of through route.“ But Thompson

was considering quite a different problem—one having

nothing whatever to do with discriminations between

connecting lines under §3(4) of the Act. Thompson

dealt with § 15 (4), which prohibits the Commission

from establishing through routes and joint rates when

a carrier participating in such a through route would

be required to short haul’’ itself, i. e., to embrace in

such route substantially less than the entire length of

its railroad.’’ Since a carrier can waive its right to

its own long haul and accept a Commission route which

results in a short haul, the question in Thompson was

whether the petitioning carriers had in fact waived

14

their rights by previously offering the public a through

service over their respective lines.”

The language used by the Court in that case not only

has no logical relationship to this one but, if made

applicable here, results in a complete anomaly. For

if appellees in the instant case had chosen to accord

Western Pacific joint rates but at a higher level than

the rates they accorded Southern Pacific, the Commis-

sion and the District Court would not have hesitated

to find an illegal discriinination under §3(4). Yet

because appellees have refused to accord Western

Pacific any joint rates at all while at the same time

granting them to Southern Pacific, the Commission

and the District Court take Atlantic Coast Line and

Thompson to mean that Western Pacific has no stand-

ing to object. As the United States put it in one of

its petitions to the Commission, ‘‘On this reasoning a

carrier which has physical facilities to handle traffic

with a distant line which reaches it by an intermediary

line but chooses to favor the distant line’s competitor

may take the disadvantaged line entirely out of the

protection of section 3(4) by consistent and effective

adherence to a refusal to deal.’

12 The Court has itself recognized that the language in Thompson

was hardly all-inclusive. It has said: ‘‘We there emphasized the

purpose of §15(4) to bar the Commission from compelling rail-

roads to establish through routes resulting in trunkline ‘short-

hauls’ without faithful observance of restrictive conditions im-

posed by that section. At the same time we recognized that

Commission action is not necessary to the creation of through

routes. We pointed out that a through route is ordinarily a volun-

tary arrangement, express or implied, between connecting carriers,

and that the existence of such an arrangement depends on the

circumstances of particular cases. Denver & Rio Grande Western

R. Co. v. Union Pacific R. Co., 351 U.S. 321, 327 (1956) (emphasis

added).

18 Petition of United States, supra n. 7, p. 9.

15

—

Atlantic Coast Line and Thompson cannot possibly

be read as requiring such a result, and §3(4) cannot

by logie or language be given such an interpretation.

On the contrary, as this Court said in Louisville &

Nashville R. Co. v. United States, 282 U.S. 740, 749-

750 (1981) :

The legislative history of the Interstate Commerce

Act shows clearly that the evil of discrimination

was the principal thing aimed at. * * * This

court has said that the language of the Act ‘‘is

certainly sweeping enough to embrace all the dis-

criminations of the sort described which it was

within the power of Congress to condemn.“

In short, Section 3 outlaws discrimination in all its

forms’’ (Dixie Carriers, Inc. v. United States, 351

U.S. 56, 60 (1956) ), and an artificial interpretation of

the section, based not on the intent of Congress but on

a mistaken view of this Court’s decisions, serves only

to perpetuate the very kind of monopolistic combina-

tion that the Act has long been recognized as prohibit-

ing.

Although made up of end-to-end connections of

separately-owned railroads, the Bieber route was con-

ceived, constructed and operated as a single line to

provide competition to Southern Pacific. In any case

involving the frustration of that purpose, Western

Pacific cannot be treated merely as a completely

separate segment of the whole. Even if a physical

connection with Portland were necessary, Western

Pacific fully qualifies as the essential middle link of

the Bieber route, a route which serves no useful

14 Citing The Shreveport Case, 234 U.S. 342, 356 (1914). See

also Georgia v. Pennsylvania R. Co., 324 U.S. 439, 450 (1945) ; New

York v. United States, 331 U.S. 284, 296 (1947).

16

purpose except as a whole unit. Hampering the main-

tenance of such a route results in uneconomical and

grossly wasteful transportation, contrary to the clear

dictate of the National Transportation Policy (pre-

ceeding 49 U.S.C. §1). The fact that the Bieber route

concept (avoidance of unnecessary duplication of

physical facilities) was ahead of its time“ does not

justify the refusal to accord its members the right to

obtain relief from discriminatory practices. This is

particularly true where the discrimination is treated

as its own justification. It would be a mockery of the

law if a carrier's refusal to engage in nondiscrimi-

natory practices were to form the very cornerstone of

its justification.

A voluntary publication of a full line of through

rates cannot possibly prove harmful. Where, as in the

case of cast iron pipe, the traffic has been allowed to

move without the shackles of discriminatory rates, it

has moved smoothly and without complaint. There is

no reason why the rest of Western Pacifie’s traffic

moving to or from the Union Pacifie and Northern

Pacific cannot do likewise. Certainly the shippers

whose interests are most immediately at stake strongly

favor the competitive, nondiscriminatory rates which

Western Pacific is seeking.“

This case, then, involves far more than the loss to

the Western Pacific of an estimated 25,000 freight cars

u Sixteen shipper representatives, representing many varied

industries, testified in favor of the nondiscriminatory rates. In

addition, after the report and order were issued in this case, over

100 requests from shippers were filed with the carrier rate bureaus

for voluntary publication of the rates that Western Pacific was

seeking through its complaint. The Commission, however, did not

reopen the case for the introduction of this latter evidence. See

‘‘Complainants’ Petition for Further Hearing for Purpose of

Introducing Newly Developed Evidence, filed December 28, 1962.

17

a year,” as important as that loss is. The discon-

tinuance of discriminatory rates in this case would

protect and enhance present intramodel competition

and would help develop one of the most dynamic and

fast-growing sections of the country.” It would, in

fact, remove the last barrier to the very competition

that the Commission held was so essential when it

established the Bieber route“ and that is even more

essential today.

16 Appendix A, infra, p. 17a.

17 The record shows, for example, that population growth on the

Pacific Coast has taken place at a rate three times that of the nation

as a whole, that value added by manufacturing and farm marketing

cash receipts have both been increasing in this area at rates signifi-

eantly higher than for the entire country, and that personal income

increased 503% between 1940 and 1958 on the Pacific Coast as

compared with 355% for the United States. These and other

indicators of past and projected growth are shown on Ex. 17,

18; Tr. 42-50, 221-222.

18 The Commission stated at that time in its Great Northern

opinion, supra, 166 I. C. C. 3: ‘‘San Francisco and Portland are

now connected directly by the rails of but a single carrier. The

California Railroad Commission points out that this dependence

upon the ability of a single rail carrier is without parallel as

between comparable agricultural and industrial centers anywhere

in the United States. IId. at 33.] ** The proposed line would

give that much more transportation and furnish an alternate route

should an existing line be broken. Its distance from the coast

would be an additional protection against coast or air raids. A

witness stated that in a time of National emergency existing lines

between California and Oregon would be inadequate unless the

country had received ample warnings. [Id. at 37. * The

new line will aid in the development of a great timber area and

some considerable agricultural areas in northern California. As

we said in Construction of Lines in Eastern Oregon, 111 J. C. C. 3,

37: ‘Advantages to the shippers of an additional outlet for their

product are apparent. It is desirable that transportation facilities

of a high order be available to shippers from the Klamath Basin

and central Oregon. The assurance of access to lines other than

the Southern Pacific at critical periods is a factor of prime im-

portance to such shippers and is clearly in the public interest.

Competition within reason rather than monopoly is in the public

interest. [166 I. C. C. at 39.]

18

But on an even higher level, the correct interpreta-

tion of § 3(4) by this Court at this time would provide

one answer to the revolutionary transformation now

taking place in the railroad industry, with virtually

every large rail carrier in the country being ration-

alized by one method or another. We respectfully

suggest that this is no time in our history to penalize

our smaller carriers, particularly by a misinterpreta-

tion of a decision by this Court rendered 32 years ago.

Respectfully submitted,

E. L. Van DELLEN

Water G. TREANOR

526 Mission Street

San Francisco 5, California

E. BARRETT PRETTYMAN, JR.

Hogan & Hartson

800 Colorado Building

Washington 5, D. C.

Attorneys for Appellants

The Western Pacific

Railroad Company,

Sacramento Northern

Railway Company,

and

Tidewater Southern

Railway Company

APPENDIX A

INTERSTATE COMMERCE COMMISSION

Served August 10, 1961

No. 33679

TR Western Pactric Ramroap Company, ET AL,

V.

Camas Pam RAU ROAD Company, ET AL.

On February 10, 1961, the Western Pacific Railroad

Company (Western Pacific) and its wholly owned sub-

sidiaries Sacramento Northern Railway (Sacramento

Northern), and Tidewater Southern Railway Company

(Tidewater Southern), filed a complaint charging the

defendants! with violations of sections 1 and 3 of the In-

terstate Commerce Act. The violations are alleged to oc-

cur as a result of the refusal of the Northern Pacific,

The Union Pacific and their short line connections to join

the complainants and the Santa Fe and The Great North-

ern in the publication of through routes and divisions be-

tween California points and points in Oregon, Washington

and Idaho on the same basis as that granted by the said

he defendants are Camas Prairie Railroad Company (Camas

Prairie), Great Northern Railway Company (Great Northern),

Northern Pacific Railway Company (Northern Pacific), Pacific

Coast Railroad Company (Pacific Coast), Spokane International

Railroad Company (Spokane), Union Pacific Railroad Company

(Union Pacific), Walla Walla Valley Railway Company (Walla

Walla), Washington, Idaho & Montana Railway Company (Wash-

ington, Idaho & Montana) and the Atchison Topeka & Santa Fe

Railway, (Santa Fe).

2a

defendants to the complainants’ competitor, the Southern

Pacific.

By answers duly filed the Great Northern, the Pacific

Coast and the Santa Fe stated that they were all willing

to establish voluntarily a general line of competitive joint

through freight rates as sought by the complainants. At

the hearing the Washington Idaho and Montana made a

similar statement on the record and expressed its support

of the complainants.

The complainants operate 987 miles of railway lines

within the State of California. Some of the major point

served by them are San Francisco, Oakland, Alameda, San

Jose, Stockton and Sacramento.

The relief sought by the complainants is limited to the

area of California, Oregon, Washington and Idaho. Relief

is especially sought between points in California and points

on the lines of the Union Pacific and Northern Pacific and

their short line connections in Oregon, Washington and

Idaho. The relief would be applicable to the ‘‘Inside Gate-

way’’, that is, to traffic moving between points in California

via Bieber, Calif., and Portland, Oreg., and thence from or

to other points in Oregon, Washington, and Idaho.

The Bieber route, or Inside Gateway’’, has been in ex-

istence since 1931 and was certificated by the Interstate

Commerce Commission in Great Northern Ry. Co. Con-

struction, 166 I. C. C. 3, 170 I. C. C. 399. It is one of two

major railroad routes through Portland that serve Cali-

fornia generally and the Pacific Northwest. The route

of the Inside Gateway consists of the lines of the Santa

Fe, Western Pacific, and the Great Northern.

The second major route is made up of the Northern lines

and the Southern Pavific. South of Portland this route

is either single line via the Southern Pacific or in conjunc

tion with Santa Fe south of Stockton.

3a

There is another route which serves Southern California

but not The Central or Northern Areas. This is the Union

Pacifie from the Pacifie Northwest through Salt Lake City,

Utah, and thence to Southern California.

Since the construction of the Inside Gateway”’ in 1931

the complainants have participated with the Great Northern

in a full line of joint rates via Bieber between points in

California and Portland, Oreg., and thence to other points

on the lines of the Great Northern in Oregon, Washington

and Idaho. These rates are competitive since they are

generally the same as those published by the Great North-

ern with the Southern Pacific via Portland, Oreg., and with

the joint rates published by the Northern Pacific and Union

Pacific via Portland with the Southern Pacific.

The Southern Pacific and the complainants both serve

Northern California generally and have many common

points.

The Northern Pacific maintains joint rates with the

Southern Pacific via Portland between points in Cali-

fornia and points in Oregon, Washington and Northern

Idaho. It has an interchange at Portland with the Great

Northern but refuses to publish rates via Bieber in con-

nection with the complainants.

The Union Pacific has joint rates with the Southern Pa-

cific between joints in California and points on its line

in Oregon, Washington and Idaho. It declines to partici-

pate with the complainants from or to the same points

via Portland and Bieber over the present routes in effect

between the Great Northern and the complainants although

the Great Northern connects with the Union Pacific at

Portland.

The result of this rate situation is that between points

in California and points in the Pacific Northwest when

either the Southern Pacific, the Union Pacific or the North-

ern Pacific participate in a routing with the complainants,

4a

in most instances, combination rates higher than the joint

through rates are applicable. Naturally this precludes

shippers from using the Inside Gateway from or to such

points.

The complainants are even deprived of traffic which they

themselves originate. A good example is a shipper at

Sacramento located on the Western Pacific. This shipper

had made numerous carload shipments to Pacific North-

west points exclusive to the Northern Pacific and the Union

Pacific during 1959. The traffic moved via the Southern

Pacific because of the higher combination rates which would

be applicable via Bieber.

In 1960 the shipper applied for through competitive rates

via Bieber to destinations on the Northern and Pacific

and Union Pacific and their short line connections. In

its application the shipper stated that the use of the

existing route via Southern Pacific to Portland imposed

additional transportation charges over and above those

that would apply if the rates were established via Bieber.

The additional charges were the Western Pacific’s charges

for the switch from the shipper’s plant to the interchange

with the Southern Pacific. These were not absorbed be-

cause the traffic was non competitive under the terms of

of the Southern Pacific’s tariff.

Early in 1961 the Southern Pacific satisfied the shipper

by making an exception to its general practice of absorb-

ing switching charges only on competitive traffic. It

amended its tariff to provide for absorption of the switch-

ing charge at Sacramento, This reduced the shipper’s

transportation costs to the through rate level and at the

same time effectively prevented the complainant Western

Pacific from participating in line haul traffic originated on

its own line.

The ‘‘Inside Gateway’’ carries considerable traffic to

and from Northern California and beyond. The Santa

Fe forms the southern segment of the route. During the

5

five year period 1955 to 1959 the bridge traffio hauled by

the Western Pacific ranged from 28, 655 to 34,077 carloads.

Nevertheless the route is not used to its full capacity. It

carried much more traffic during World War II. The com-

plainants’ witnesses estimated that because of the lack of

joint through rates via Bieber the complainants have been

foreclosed from participation in the line haul handling

of approximately 25,000 cars per year.

The complainants presented the testimony of 15 ship-

pers. The witnesses represented diverse industries as well

as various freight traffic associations. In the main, their

testimony was that an additional route would improve rail-

road service and would avoid any further competitive dam-

age because of the penalties incurred when shipping to

points on the complainants’ lines. Some of them have

found that service via the ‘‘Inside Gate’’, when shipping

to and from Great Northern points, to be faster than the

Southern Pacific route. They also testified that the addi-

tional route would create greater flexibility for transit

users,

The defendants interrogated most of these witnesses as

to whether or not their testimony had been solicited by

the complainants. On brief they endeavored to minimize

the testimony of the witnesses because it was solicited. The

fact that the testimony was solicited does not of itself af-

fect its weight. The evidence submitted by such witnesses

is helpful to the Commission and should be encouraged.

The defendants argue, and presented evidence to the

effect, that the through routes and joint rates sought are

neither desirable nor required by the public interest and

that they would result in an inefficient and wasteful trans-

portation service contrary to the national transportation

policy. They further contend that the establishment of

through routes would violate section 15 (4) of the act. They

also claimed that, with minor exceptions, there are no

6a

through routes existing via Bieber between points in Cali-

fornia and points on the defendants lines.

Relying on Chicago, N., St. T. & P. R. Co. v. Spokane,

Pd. Ry., Co., 300 I. C. C. 453 they say that the existence

of joint through rates on only two commodities, that is,

pipe and automobiles, does not evidence the existence of

through routes on any commodities other than those

specifically covered by the published tariff. In addition to

those commodities the Commission has heretofore pre-

seribed joint rates via the Bieber route for livestock and

class rated traffic.

On brief, the complainants, without waiving their alle-

gations of unjustness and unreasonableness based on sec-

tion 1(4) of the act, directed their entire argument to the

violation of section 3(4), the unlawful discrimination. The

mentioned defenses raised by the defendants relate pri-

marily to issues involving sections 15(3) and 15(4) of the

act. In the examiner’s view of this proceeding problems

involving those sections of the act are not reached.

„The defendants in opposition interchange traffic at

Portland in the haul of which the complainants partici-

pate via Bieber, at competitive joint through rates insofar

as cast iron pipe, automobiles, livestock and class rated

traffic are concerned. The same facilities used for these

interchanges are employed in connection with such higher

combination rated traffic that moves via Bieber. There is

no difference in the manner of interchange. Nevertheless,

the defendants in opposition refuse to participate at com-

petitive rates in an interchange of other traffic at Portland

in which the complainants participate via Bieber. At the

same time they afford the complainants’ competitor, the

Southern Pacific a full line of joint through rates via

Portland. There is no justification in this record for such

treatment of a connecting line. The granting of a full line

of rates to one railroad at an interchange point while at

the same time limiting the extent of such rates to the

7a

favored line’s competitor is the essence of discrimination.

It is the type of unlawful discrimination that section 3(4)

of the act aims to prevent. It is, of course, a matter for

the defendants in opposition, in the discretion of their man-

agement to determine the means of eliminating the un-

lawful discrimination.’’

The examiner finds and concludes that the defendants’

refusal to interchange traffic at Portland, other than cast

iron pipe, automobiles, livestock and class rated traffic, in

the line haul of which the complainants participate via

Bieber, at rates competitive with those afforded the South-

ern Pacific by them is an unlawful discrimination in viola-

tion of section 3(4) of the act and should be removed.

Premises considered it is the Ononn of the examiner that

the defendants be, and they are hereby, notified and re-

quired to cease and desist, within 45 days from the date

this recommended order becomes the order of the Com-

mission and becomes effective pursuant to the provisions

of section 17(5) of the Interstate Commerce Act, and there-

after to abstain, from practicing the unlwawful discrimi-

nation found herein.

By the Commission, John F. Wright, Hearing Examiner.

Dated at Washington, D. C., this 3lst day July, A.D.,

1961.

Harotp D. McCoy,

Secretary.

(Seat)

8a

INTERSTATE COMMERCE COMMISSION

Service Date August 2, 1962

No. 33679

Western Paotrric Ramroap Company, ET AL.

v.

Camas PRA RR Rarroap COM aT AL.

Decided July 26, 1962

* * * 5

Report of the Commission

Division 2, Commissioners F'nzas, Gorr, and HAI

Freas, Commissioner:

ions to the report and order recommended by the

examiner were filed by the defendants and the intervener,

and the complainants replied. We have heard the parties

in oral argument. Our conclusions differ from those

recommended. Exceptions and requested findings not dis-

cussed herein nor reflected in our findings or conclusions

have been considered and found not justified.

By complaint filed on February 10, 1961, The Western

Pacific Railroad Company, and its short-line subsidiaries,’

hereinafter sometimes collectively called the Western

Pacific or complainants, allege that the failure and refusal

of the defendants? to establish and maintain, between points

1 The Sacramento Northern Railway (Sacramento Northern) and

the Tidewater Southern Railway Company (Tidewater Southern).

2 The Atchison, Topeka and Santa Fe Railway Company (Santa

Fe), Camas Prairie Railroad Company (Camas Prairie), Great

Northern Railway Company (Great Northern), Northern Pacific

Railway Company (Northern Pacific), Pacific Coast R. R. Co.

9a

in California, served by the complainants or in connection

with the Santa Fe, and points in Oregon, Washington,

and Idaho, served by the defendants, chiefly the Union

Pacific and the Northern Pacific, joint through rates over

routes through Bieber, Calif., and Portland, Oreg., on the

same basis as those maintained by the defendants in con-

nection with the Southern Pacific Company (Southern

Pacific) through Portland, violates sections 1(4) and 3(4)

of the Interstate Commerce Act, and is contrary to the pro-

visions of the national transportation policy. We are

asked to prescribe just, reasonable, and nondiscriminatory

competitive joint through rates, charges, practices and

through routes. We are also asked to hold open this pro-

ceeding in the event the parties are unable to agree on

divisions, so that the Commission may prescribe divisions.

The Santa Fe, the Great Northern, Pacific Coast, and

Washington, Idaho and Montana have indicated their

willingness to establish and maintain the routes and rates

sought. The Western Pacific, Washington, Idaho and

Montana, and numerous shippers and shipper associations

presented evidence in support of the complaint, whereas

the Union Pacific, Northern Pacific and Southern Pacific

(intervener) presented evidence in opposition.

General location of the railroads concerned—The com-

plainants operate for nearly 1,000 miles in California and

serve such cities as San Francisco, Oakland, San Jose,

Stockton, Sacramento, Modesto, Marysville, Keddie, Bieber,

and Oroville. The east-west line of the Western Pacific ex-

tends from Salt Lake City, Utah, to the San Francisco-

(Pacific Coast), Spokane International Railroad Company (Spo-

kane), Union Pacific Railroad Company (Union Pacific), Walla

Walla Valley Railway Company (Walla Walla), and Washington,

Idaho and Montana Railway Company (Washington, Idaho and

Montana). The Camas Prairie is jointly owned by the Northern

Pacific and Union Pacific. The Spokane is a subsidiary of the Union

Pacific, and the Walla Walla is a subsidiary of the Northern

Pacific.

10a

Oakland bay area, with a north-south line extending from

Keddie to a connection with the Great Northern at Bieber,

490 miles south of Portland. The Western Pacific connects

with the Santa Fe at Stockton, permitting service to and

from points in southern California, and also with the

Union Pacific at Wells, Nev., and Salt Lake City, So far as

the territorial scope of this complaint is concerned, it does

not physically connect with the lines of the principal de-

fendants, the Northern Pacific and the Union Pacific,

and does not reach the involved interchange point at

Portland.

The Great Northern, Union Pacific, and Northern Pacific

serve, among others, numerous points in Oregon, Wash-

ington, and Idaho. In addition to the connections previ-

ously noted, to the extent here important, the Great

Northern, Union Pacific, Northern Pacific, and Southern

Pacific connect at Portland; and the Union Pacific and

Southern Pacific connect at Ogden, Utah, and Wells. In

the northwestern area, the Great Northern and its con-

nections are competitive with the Northern Pacific. In

California, the Southern Pacific is competitive with the

Western Pacific and the Santa Fe, and the Union Pacific

also serves portions of southern California.

Routes—The two major routes considered herein are

hereinafter called the Bieber route and the Southern

Pacific route. The former, to Great Northern destinations,

has been in existence since 1931. See Great Northern Ry.

Co. Construction, 166 I. C. C. 3, 170 I. C. C. 399. This route

to such destinations consists of the Santa Fe to Stockton,

thence the Western Pacific to Bieber, and the Great North-

ern beyond; or from origins on the Western Pacific, that

carrier to Bieber, thence the Great Northern. The Southern

Pacific route consists of the Southern Pacific to Portland,

thence the Northern Pacific, Union Pacific, or the Great

Northern, depending upon the carrier serving the north-

western destination. The Santa Fe also participates in the

lla

Southern Pacific route on certain movements to or from

California points.

The routes sought herein generally consist of the Bieber

route as above defined over the Great Northern to Portland,

thence the Northern Pacific or the Union Pacific depending

upon the carrier serving the northwestern destination.

The Union Pacific, whose line reaches California in the

Los Angeles area, participates in routes between points in

California on the complainants’ lines and northwestern

points on its line east of Huntington, Oreg., with inter-

changes at Salt Lake City and Wells. It also has a route

between southern California and certain points in the

northwest via Salt Lake City and Pocatello, Idaho. The

Union Pacific and the Southern Pacific also participate in

routes via Wells or Ogden.

Present rate structure. The Great Northern participates

with the complainants“ in joint through class and com-

modity rates for application over the Bieber route. These

joint rates are generally the same as those maintained by

the defendants in connection with the Southern Pacific

through Portland. The Chicago, Milwaukee, St. Paul

and Pacific Railroad Company also maintains joint rates

with the complainants over routes through Bieber. Also,

the Union Pacific participates in joint rates with the com-

plainants over routes through Salt Lake City or Wells,

similar to those maintained by that defendant with the

Southern Pacific over routes through Ogden or Wells.

The defendants have maintained the joint rates with the

Southern Pacific through Portland for over 50 years. The

Northern Pacific has refrained from establishing joint rates

through Bieber with its strongest competitor, and it is

fearful that the establishment of such rates would enable

the Great Northern to solicit its traffic. The Union Pacific

feels that the existing rates are sufficient to meet the needs

8 Also the Santa Fe.

12a

of the shipping public. These defendants, however, favor

additional rates through Bieber if and when a need therefor

is demonstrated. Thus, there are, with some exceptions, no

joint rates over the routes sought, and the shipments must

move under combination rates, using the rates, local or

joint, from and to Portland. These combination rates are

generally higher than the joint rates maintained by the de-

fendants with the Southern Pacific.

Traffic may now move over the Bieber route between

points on the complainants’ lines in California and points

in the Northwest served by the Northern Pacific or the

Union Pacific and the Great Northern, if interchange

facilities with the latter* are available at the northwestern

point of origin or destination. The charges on such traffic

are based on the complainants’ and the Great Northern’s

joint through rates, plus the switching charge for inter-

change service, except that the switching charge is absorbed

by the Great Northern if the point on the complainants’

line has interchange facilities with the Southern Pacific.

Traffic may also move via Portland between points

served by the complainants and the Southern Pacific, where

interchange facilities exist, and points on the Northern

Pacific or the Union Pacific which are not served by the

Great Northern. A switching charge is made for the

interchange in addition to the joint rate published by the

Southern Pacific and the Northern Pacific or the Union

Pacific.

The complainants point out that the present rate situa-

tion deprives them of an opportunity to participate in the

line-haul service on traffic originating on their lines. For

instance, the Campbell Soup Company, whose Sacramento

plant is located on the Western Pacific, shipped over 150

Portland and Bend, Oreg., Vancouver, Chehalis, Seattle, Ta-

coma, Spokane, and Centralia, Wash., are representative examples

of such points.

13a

carloads of traffic to points served exclusively by the North-

ern Pacific or the Union Pacific in 1959. This traffic moved

over the Southern Pacific route because the combination

rates applicable over the route through Bieber exceeded the

switching charge and the joint rates in connection with the

Southern Pacific.

In 1960, the Campbell Soup Company sought through

competitive rates from Sacramento via Bieber to destina-

tions on the Northern Pacific and the Union Pacific or their

short-line connections so that its charges might be reduced

by avoiding the charge for switching by the Western

Pacific. In 1961, the Southern Pacific authorized the

absorption of this : ‘ching charge. This reduced the

shipper’s transportation costs, but the Western Pacific still

was denied an opportunity to participate in the line-haul

movement.

Between points on the Western Pacific and those on the

Northern Pacific or the Union Pacific, a number of joint

commodity rates are maintained over routes of the com-

plainants’ lines to or from a junction point in California

with the Southern Pacific, thence that line through Port-

land and the defendants beyond. The complainants agreed

to establish these rates in connection with the defendants

over sucn routes because they are needed to allow shippers

located on the complainants’ lines to reach markets in

competition with other California producers. Otherwise,

where switching service is not available at the origins or

destinations, the lowest combination rates are charged over

any route permitting interchange with the Southern Pacific

in California, or the Great Northern and Northern Pacific

or Union Pacific in Oregon, Washington, or Idaho.

On canned goods from McHenry, Calif., to Yakima,

Wash., the lowest combination is based on Stockton, and

applies only over the Tidewater Southern to Stockton,

thence the Southern Pacific to Portland, and the Northern

Pacific or the Union Pacific to destination. There are

14a

canners at Yuba City, Calif., on the Sacramento Northern,

but that carrier and the Southern Pacifio do not inter-

change traffic thereat. The lowest rates from Yuba City to

Walla Walla, Wash., for example, are combinations over

Marysville, Calif., using the local rate of the Sacramento

Northern to Marysville and the joint rate of the Southern

Pacific and the Northern Pacific or the Union Pacific

beyond. These rates deprive the complainants of a line-

haul although they originate the traffic,

Between points on the Northern Pacific or the Union

Pacific and those on the Santa Fe (except in the San

Francisco Bay area), joint rates are maintained over

routes including the Southern Pacific. Only higher com-

bination rates are available between the same points over

the routes sought herein through Bieber. The complainants

argue that this denies to the public the advantages of

alternate routes and deprives the Western Pacific of an

opportunity to participate in the movement of the traffic.

The complainants now have lower combination rates on

forest products from Olympia, Shelton, and other points

in Washington on the Northern Pacific to San Francisco

Bay points, than the joint rates maintained in connection

with the Southern Pacific to the same points. However, the

complainants fear that this adjustment is temporary, and

that this traffic will again be confined to the Southern

Pacific by a reduction of the joint rates.

There are joint commodity rates on cast iron pipe,

automobiles, and livestock, in addition to joint class rates,

from points on the complainants’ lines to points on the

lines of the defendants over the routes sought. The joint

rates on cast iron pipe, from Carpenter, Calif., on the

Western Pacific to points in Oregon, Washington, and

Tdaho on the Northern Pacific or the Union Pacific, were

established on June 21, 1952, as the result of a complaint“

5The complaint was dismissed after the parties advised that

they had reached a satisfactory rate adjustment.

15a

filed by the United States Pipe & Foundry Company. These

rates are the same as those in effect to the same points

from Decoto, Calif., on the Southern Pacific, with inter-

change at Portland. The Northern Pacifie and the Union

Pacific receive the same divisions of these rates north of

Portland on the traffic through Bieber as they receive from

the joint rates maintained in connection with the Southern

Pacific. In 1959 and 1960, respectively, 124 and 154 car-

loads of this pipe moved.

The joint rates on automobiles from Melrose (Oakland),

Calif., and Decoto, on the Western Pacific, are the same as

the rates from the same points on the Southern Pacific to

destinations on the Northern Pacific or the Union Pacific.

These rates became effective on October 4, 1959, following

the filing of a complaint, which was dismissed at the re-

quest of the complainant. The plant for which these rates

were published was never built, and thus there have been no

movements.

The joint rates on livestock were established as a result

of our order in American National Live Stock Assn. v.

Atchison, T. & 8. F. Ry. Co., 122 J. C. C. 609, and subsequent

reports. The class rates were established in 1956 following

our order in Class Rates, Mountain-Pacific Territory, 296

I. C. C. 555. There were no movements of livestock or of

class-rated traffic over these routes in 1960.

In addition to the foregoing movements, a total of 19 car-

loads in 1959 and 11 carloads in 1960, of government and

commercial traffic were handled over the routes sought be-

tween the considered points. The rates charged are not

shown, but it is reasonable to assume that they were on a

combination basis.

The Bieber-route movement.—The complainants use the

Bieber route in transporting traffic between points in

western transcontinental territory. During the 5 years

beginning with 1955, this route was responsible for ap-

proximately 20 percent of the Western Pacific’s total

16a

freight revenues. This territory produced about 50 percent

of the freight cars handled by the Western Pacific and 38

percent of its freight revenues. Excluding the joint move-

ments with the Santa Fe, the Western Pacific’s revenue

per car in 1959 averaged $169.63 northbound and $171.86

southbound over the Bieber route. It estimates that its

revenues per car would average about $144 northbound and

$146 southbound if competitive rates were established over

the routes sought. ee

More than 50 percent of the cars moving over the Bieber

route are between points on the Great Northern and points

on the Santa Fe. For the five-year period above mentioned,

the annual average was 30,982 cars over the Bieber route

and 7,226 over the Southern Pacific route. In 1959, the

traffic moving via the Bieber route in connection with the

Santa Fe produced for the Western Pacific revenues per

car of $126 northbound and $116 southbound. The West-

ern Pacific estimates that its revenues per car would

average about $101 northbound and $93 southbound if

competitive rates were established over the routes sought in

connection with the Santa Fe.

The traffic and rail service here concerned.—The Pacific

Northwest and California have, in the last 20 years, in-

creased their population, consumption, and production at

a rapid rate, and continued growth is expected. The

complainants urge that rail service in this territory must

be expanded to meet this economic growth, and that there

is need for the competitive routes through Portland. The

Portland Freight Traffic Association, made up of various

civic bodies and some 150 large shippers in Oregon and

Washington, stress that the routes and rates sought by the

complainants would materially assist in the greater in-

dustrial development of the Pacific Northwest, provide for

a greater and more complete competitive rail system, and

generally assist in the economic growth of this area.

The Western Pacific has improved its transportation

plant to keep pace with the economic growth mentioned,

17a

but it is moving only about 75 percent of the volume

handled by it in its heaviest war year, 1945, when the line

was not as well maintained as it is today. It is ready,

willing, and able to meet any demand for service over the

route sought through Bieber. Along its line it has some

30 different areas of about 4,500 acres of potential in-

dustrial land. It competes for industrial plants with other

carriers in California, and in the absence of joint rates and

routes to and from points in Oregon, Idaho, and Washing-

ton, it maintains it has had difficulty in attracting indus-

tries to its lines. Of the 100 industries which located along

its lines in the past three years, 85 are served, through

switching arrangements or otherwise, by the Southern

Pacific, and 70 of these also by additional railroads. At-

tempt» to locate several new industrial plants along its

lines were unsuccessful because of a need for service to

points in the Northwest on the Union Pacific, the Northern

Pacific, or their connections, and joint rates were not

available. In the last 30 years the complainants have been

unable to obtain traffic from industries served by these

defendants. A survey of 142 such industries indicated that

more than 25,000 carloads are moving annually which are

not available to the complainants because of the lack of

competitive rates. About 2,250 carloads originate or termi-

nate on the lines of the complainants and move to or from

points at noncompetitive rates,

The Longview Fibre Company has plants at Longview

and Seattle, Wash., Oakland, Los Angeles, and other points.

From Longview, except for the single-line route of the

Union Pacific to Los Angeles, on shipments to California,

it is restricted to routes embracing the Southern Pacific.

It urges that the routes sought would make available more

empty cars and give rise to faster, more efficient, and more

flexible service. However, this shipper may now use five

routes to California, consisting of the Union Pacific direct,

the Union Pacific to Portland and the Southern Pacific

beyond, the Northern Pacific to Portland and the Southern

18a

Pacific beyond, the Great Northern to Portland and the

Southern Pacific beyond, and the Great Northern to Bieber

and the Western Pacific beyond.

Centennial Mills, Inc., owns and operates flour mills at

Spokane and Portland. Its grain is supplied from Wash-

ington and Oregon, and moves to Spokane and Portland

over the Union Pacific, the Northern Pacific, or the Spokane,

Portland & Seattle Railway Company (SP&S). Only

limited quantities originate on the Great Northern in Wash-

ington for the reason that few grain elevators are located

along that road. This company’s flour and millfeed are

sold in California at the Portland price, plus a transit

balance of 44.5 cents per 100 pounds, based on rates on

eastern Washington grain, to northern California, and 52

cents, based on rates on Montana wheat, to southern Cali-

fornia. The latter presents no problem to this shipper,

since the Montana wheat generally originates on the Great

Northern, but at times it secures Great Northern wheat only

to find that the transit balance to northern California ex-

ceeds 44.5 cents. Also, on shipments to destinations in

northern California on the Western Pacifie, there is an

occasional shortage of Great Northern transit billing from

Washington; as a result, this shipper must use the Montana

transit billing and absorb the 7.5-cent difference. Centen-

nial desires the routes and rates sought by the complain-

ants, because they would provide greater flexibility to its

transit operations and eliminate the 7.5-cent penalty.

The plant of the Pacific Coast Paper Mills, at Bellingham,

Wash., is located on the line of the Great Northern, but it

is also served by the Northern Pacific through switching

arrangements. It prefers to use the Bieber route to Cali-

fornia which it has found to be faster. However, it has

used the Southern Pacific route because of car shortages on

the Great Northern. It feels the Northern Pacific’s par-

ticipation in joint rates through Bieber would increase the

number of available cars and eliminate the penalty when

19a

shipping over the Northern Pacific through Bieber. It

states also that the routes sought would facilitate delivery.

The Consolidated Dairy Products Company is located at

Seattle on the Northern Pacific but is also accessible to

the Great Northern through switching arrangements. The

switching at Seattle takes 24 hours, but faster service

over the Bieber route makes up for this delay. Consoli-

dated believes that the competitive rates and routes through

Bieber would eliminate the delay, since the Northern

Pacific would move the shipments to Portland; and that

they would increase the rail competition between carriers,

resulting in better and more flexible rail service. More-

over, the Northern Pacific has provided for storage and

repacking-in-transit privileges at Seattle, and Consolidated

could ship butter from Ellensburg, Wash., to California

points over the routes sought by taking advantage of these

transit privileges at the joint rates not now applicable over

such routes from and to these points. In 1959 and 1960,

this company used the Bieber route for one-third of its

shipments to Los Angeles with the balance moving over the

Southern Pacific route.

The American Pipe and Construction Company of Port-

land purchases steel raw materials for fabricating at vari-

ous points, including Kaiser, Calif., which is served by the

Santa Fe and Southern Pacific. Steel purchased at Kaiser

and shipped to Portland by the Southern Pacific can be

fabricated in transit and then shipped over the Great

Northern, the Union Pacific, or the Northern Pacific. The

route through Bieber is used in some instances, but then

the steel fabricated at Portland must move to points on the

Great Northern. This shipper must keep constant check

on the inbound movements to Portland in order to know

what steel products can be shipped beyond to points on the

Union Pacific or the Northern Pacific. It would be to the

advantage of this shipper if it were relieved of the present

complexities in transit operations brought about by the

20a

failure of these lines to provide competitive routes and

rates.

The foregoing is representative of the testimony pre-

sented by 15 shippers in the forest products, pulp, grain

products, cottonseed meal, paper, paper articles, — and

iron and steel industries. They support the complainants.

The defendants stress that these shippers have been aware

of the lack of joint rates and through routes through

Bieber for the last 31 years and have not submitted a

written request to the defendants for relief. However,

some verbal requests have been made. In the last six

years only one shipper requested the Northern Pacific to

establish joint rates through Bieber, and that request was

handled to the satisfaction of the shipper.

Operating routes north of Portland. The SP&S, which

owns the Oregon Trunk Railway and the Oregon Electric

Railway, is owned and under the common management and

control of the Northern Pacific and the Great Northern.

As material here, it has a water-grade line north of the

Columbia River, extending east and west, between Port-

land and Spokane through Vancouver, Wishram, and Pasco,

Wash., with the north-south line of the Oregon Trunk

extending between Bend, Oreg., and Wishram, through

Oregon Trunk Junction, Oreg. The SP&S is a party to the

joint rates with the Southern Pacific, interchanging at

Portland, and is used by the Northern Pacific as an alter-

nate ronte between Portland and points on the Northern

Pacific east of the Cascade Mountains, Yakima, Wash., and

east, the interchange between the SP&S and the Northern

Pacific being at Pasco or Spokane. This results in more

economic and expeditious service than over the longer

route of the Northern Pacific through Auburn, Wash., and

is requested by some shippers. Unless transit or some

other reason requires use of the longer route, traffic brought

into Pasco by the Northern Pacific for movement beyond to

points in California is turned over to the SP&S.

ct

21a

The Great Northern uses the lines of the Oregon Trunk

and SP&S under car-haul contracts, and in transporting

over the Bieber route, operates over the lines of these

carriers between Bend and its connections with the SP&S at

Vancouver, on the west, and Fort Wright Junction (near

Spokane), Wash., on the east. Traffic over the routes

sought would be handled over the SP&S to Portland.

Under the routes sought, the Northern Pacific would be

unable to use the shorter SP&S route between Portland and

Pasco. Instead, it would use its more circuitous route

through Auburn for movement to points east of the Cascade

Mountains. The complainants argue that the defendants

could handle the traffic from Portland the same as it is

handled over the Southern Pacific route. However, it

would not be so routed and would require a backhaul over

the SP&S between Wishram and Portland. The route

sought over the Northern Pacific from Portland, to Spokane,

for example, would require a movement over the SP&S of

106 miles west from Wishram to Portland, and 533 miles

over the Northern Pacific through Auburn to Spokane, or

639 miles, whereas from Wishram east over the SP&S to

Pasco, thence the Northern Pacific to Spokane, the distance

is 271 miles. Thus, the route sought to Spokane on the

Northern Pacific is 368 miles longer than over the lines of

these carriers east from Wishram to Spokane, and would

require crossing the Cascade Mountains at an elevation of

2,837 feet.

The route of the Union Pacific from Portland sought

herein to Spokane, for instance, requires a westward move-

ment from Wishram over the SP&S through Vancouver to

Portland, thence the Union Pacific in an eastward direc-

tion along the south bank of the Columbia River through

Oregon Trunk Junction, which is across the river from

Wishram. These westward and eastward movements ag-

gregate slightly more than 200 miles.

From San Francisco to Walla Walla, Wash., on the

Northern Pacific, the route sought through Bieber and

22a

Portland, thence the Northern Pacific is 1,339 miles, where-

as the route of the Southern Pacific to Portland, thence the

SP&S to Pasco and the Northern Pacific to Walla Walla is

1,014 miles. The distance using the Southern Pacific to

Portland and the Northern Pacific through Auburn and

Pasco is 1,170 miles; and through Bieber and Bend, thence

the Oregon Trunk, the SP&S to Pasco, and the Northern

Pacific to Walla Walla, the haul is 971 miles, or 368 miles

shorter than the route sought.

The routes sought to points west of the Cascade Moun-

tains would require a movement from Vancouver to Port-

land and return to Vancouver, a distance of 20 miles.

This distance, although short when compared to the longer

distances and out-of-line movements east of the Cascades,

represents costly and wasteful transportation to and from

Portland, as substantial bridge mileage is involved.

The Portland Transfer—Cars moving over the routes

sought herein (for convenience the northbound movement

will be used) from points in California would be inter-

changed at Portland by the Union Pacific or the Northern

Pacific and the Great Northern. The cars would arrive on

the tracks of the SP&S; they would be yarded at its

Vancouver yard for classification, and those for the North-

ern Pacific and the Union Pacific would be transferred by

the SP&S service to the Northern Pacific Terminal Com-

pany’s® Lake yard. This yard is 8 miles from the

Vancouver yard across the Columbia River and Willamette

River Bridges. The cars for the Northern Pacific would be

interchanged at the Lake yard, and there is no indication

that such interchange would differ from that between the

Northern Pacific and the Southern Pacific.

The Northern Pacific Terminal Company is a switching railroad

owned jointly by the Union Pacific and the Southern Pacific. How-

ever, 25 percent of the Northern Pacific Terminal Company’s Lake

yard at Portland is owned by the Great Northern and 75 percent

by the Northern Pacific.

23a

At the Lake yard, the cars are inspected by the Northern

Pacific Terminal Company’s mechanical forces, and those

for the Union Pacific are transported about 2 miles by the

terminal company to its Depot yard, where the cars are

given prescribed air tests and then transferred to the

Union Pacific. The crews and engines of the latter com-

pany move the cars about 2.5 miles over the Steel Bridge’

spanning the Willamette River to the Union Pacific’s

Albina yard, where the trains are made up. Thus, be-

tween Vancouver and the Albina yard, a car moves about

12.5 miles, and the elapsed time averages 13 hours and 20

minutes. For this movement the cost to the Union Pacific

is $3.69 per car, or $3.25 to the terminal company and

44 cents for handling over the Steel Bridge.

Cars moving from points in California over the South-

ern Pacific route for interchange with the Union Pacific at

Portland are delivered to the Southern Pacifie’s Brooklyn

yard in groups arranged in transit for easy transfer to the

Union Pacific’s Albina yard. These yards are in Portland,

about 4.5 miles from each other. The transfers are made

by the Southern Pacific’s engines and crews in about 45

minutes, and the cars are delivered in time for the Union

Pacific’s outbound movements. In this transfer, the car

moves about 4.5 miles, and the elapsed time averages 3

hours and 20 minutes between arrival at the Brooklyn

yard and delivery to the Albina yard. The cost to the

Union Pacific for this service is 46.88 cents.

Operating routes south of Portland. In most instances,

the Bieber route between points in California considered

herein and Portland is longer, has more interchanges, goes

through more engine districts, and has higher rises and

more curvature than the Southern Pacific route. From

The Steel Bridge is jointly owned by the Union Pacific and

the Southern Pacific. Maintenance and operation of the bridge

is supervised by the Union Pacific, but the expense is divided among

railroads making use of it on the basis of cars moved over it.

24a

Los Angeles to Portland, for example, the Southern

Pacific route (direct) is 1,098 miles long, with one inter-

change; the Bieber route (Santa Fe- Western Pacific—-

Great Northern) is 1,313 miles long, with three inter-

changes. The Southern Pacific route encounters 9 engine

districts ; the Bieber route 12. These respective routes have

total curvatures of 47,613 and 58,722 degrees; respective

rises of 12,560 and 14,324 feet; aggregate rises of 27, 389

and 32,357 feet; and a maximum rise in 1 mile of 138 and

176 feet. From Stockton to Portland, the same routes

are 702 and 788 miles long.

From San Francisco to Portland, different routes are

used for carload and less-than-carload traffic. Since joint

class rates, which usually apply on _ less-than-carload

traffic, have been established, the latter routes need not

be considered. The Southern Pacific route is 801 miles

long with one interchange; the Bieber route, using the

Western Pacific, is 880 miles long with two interchanges,

but in connection with the Santa Fe, it is 866 miles with

three interchanges. The Southern Pacific route encounters

8 engine districts, and both Bieber routes encounter one

barge movement and 8 engine districts. The Southern

Pacific route, and two Bieber routes have total curvatures,

respectively, of 38,028, 47,094 and 45,933 degrees; respec-

tive rises of 8,165, 8,753, and 8,367 feet; aggregate rises

of 19,381, 21,121, and 20,539 feet; and a maximum rise in

1 mile of 131, 133, and 133 feet. The above figures indicate

the transportation conditions are more favorable over the

Southern Pacific route than over the Bieber route between

Portland and points in California.

The Southern Pacific, using western-district costs and

Rail Form A, developed out-of-pocket costs over the

Bieber route which exceed those over the Southern Pacific

route to Portland by 25 percent from Los Angeles and 15

percent from San Francisco. According to the Southern

Pacific, these cost data do not take intc consideration dif-

ferences in such matters as total degrees of curvature, feet

25a

of rise, and total rise, which it is claimed would result in

greater differences in favor of its route.

Transit time—A car moving from Los Angeles to

Lewiston, Idaho, over the Southern Pacific to Portland,

thence the SP&S to Pasco, and the Northern Pacific beyond,

would be in transit approximately from 8 a.m. Monday to

3 a.m. Friday, and over the same route to Walla Walla to

7 a.m Friday. Using the Northern Pacific through Auburn,

the time would be about 24 hours longer, and this would be

true over the route sought. The fastest route between

these points is through Bieber, thence the Oregon Trunk

to Wishram, the SP&S to Pasco, and the Northern Pacific

beyond, which under favorable conditions would be 24

hours less than over the fastest Southern Pacific route, and

48 hours less than the route sought. From Los Angeles to

Seattle, the shortest time over Southern Pacific route in

connection with the Union Pacific is 44 hours, which is 26

hours less than over the route sought. From Spokane to

Los Angeles using the Union Pacific, the shortest time over

the Southern Pacific route would be 55.5 hours, whereas it

would require at least 81 hours over the Bieber route.

Short hauling the defendants.—The defendants contend

that the establishment of the routes sought would short-

haul them in violation of section 15(4) of the act. As shown

herein, the SP&S is under the common control and manage-

ment of the Northern Pacific and Great Northern.“ The

routes which the complainants seek to establish would re-

quire the Northern Pacific to exchange traffic with the

Great Northern at Portland despite the fact that the

SP&S and the Oregon Trunk extend beyond to Bend, The

Union Pacific also operates for 246 miles between Portland

and Bend, and it connects with the Great Northern at the

We have held that the SP&S must be regarded, for ratemaking

purposes, as a part of the Northern Pacific and the Great Northern

systems rather than as an independent line. See Helix Milling

Co., Inc., v. Great Northern Ry. Co., 287 I. C. C. 77, 78.

26a

latter point. If the routes sought were established, it

would be required to interchange traffic with the Great

Northern at Portland, which would short-haul it by 246

miles on every movement.

Discussion aND ConcLuUsIons

The complainants rely primarily on the alleged violation

of section 3(4) of the act. That section requires equality

of treatment between connecting lines, but the equality of

treatment is determined by similarity of circumstances and

conditions. Routing, Coal from Origins on Louisville &

N. R., 313 I. C. C. 752, 758, and proceedings cited therein.“

The routes sought through Bieber and Portland are longer

and involve more difficult operating conditions than the

Southern Pacific route, and they require hauls in a general

direction opposite to the direct movement.

Equality is required only between connecting lines. The

complainants do not physically connect with the defendants

at any point along the Bieber route. The connection is

made by the Great Northern at Portland. Insofar as rail

carriers are concerned, connecting lines are those carriers

having direct physical connections or making up a through

route. In Atlantic Coast Line R. Co. v. United States, 284

U.S. 288, the court found that

There is no warrant for limiting the meaning of ‘con-

necting lines’ to those having a direct physical con-

nection with the Clinchfield. The term is commonly

used as referring to all the lines making up a through

route.

While the court was construing a lease under section 5(2),

the Commission had imposed a condition therein similar to

the requirement under section 3(4) that carriers shall not

Our action was sustained in Atlantic Coast Line Railroad Co.,

et. al. v. United States, et. al., C.A. 1811, M.D. Ga., April 17, 1962.

27a

discriminate between connecting lines. This definition of

connecting lines was later adopted by the court in Atchison,

T. & S. F. Ry. Co. v. City of Chicago, 240 F. (2d) 930, 937,

in connection with the application of section 3(4).

According to this view, the complainants would be con-

necting carriers with the defendants at Portland only if

the present routes constitute through routes. The criteria

for the determination of whether a through route exists are

set out in Thompson v. United States, 343 U.S. 549, 557,

as follows (the quotation is from the Commission’s 21st

Annual Report to Congress) :

.. . Existence of a through route is to be determined

by the incidents and circumstances of the shipment,

such as the billing, the transfer from one carrier to

another, the collection and division of transportation

charges, or the use of a proportional rate to or from

junction points or basing points. These incidents

named are not to be regarded as exclusive of others

which may tend to establish a carrier’s course of busi-

ness with respect to through shipments.

In short, the test of the existence of a ‘through route’

is whether the participating carriers hold themselves

out as offering through transportation service. Through

carriage implies the existence of a through route what-

ever the form of the rates charged for the through

service.

In Beaman Elevator Co. v. Chicago d N. W. Ry. Co., 155

I. C. C. 313, the Commission held that proof of one shipment

on a through bill of lading over a particular route was

not sufficient to show the existence of a through route,

because, as noted by the court, in the above-cited case,

% * * one shipment was not representative of the car-

riers’ course of business. In Denver & R. G. W. R. Co.

v. Union P. R. Co., 351 U.S. 321, the Court held that the

evidence before us in Denver & R. G. W. Co. v. Union Pac.

28a

R. Co., 287 I. C. C. 611 did not compel a finding that through

routes were in existence. The evidence indicated, as noted

on page 618 of our report, that 55 shipments a year had

moved on through bills of lading over the routes sought,

as compared with thousands from and to the same points

at joint rates over existing routes. The conduct of the

major defendant had been to preserve its long haul and

keep the route sought closed. It had used the route sought

only in compliance with instructions from the shippers or

the prior carriers. Thus, we concluded that the 55 ship-

ments over the route sought must be regarded as of an

isolated nature and insufficient to show the existence of a

through route, since any other holding would constitute an

open invitation to any shipper to set aside the provisions

of section 15(3) and (4) of the act simply by preliminarily

making a shipment or two over the route sought to be

opened commercially, a result plainly not intended by the

Congress.

In Chicago, M., St. P. & P. R. Co. v. Spokane, P. & 8.

Ry. Co., 300 I. C. C. 453, affirmed in Chicago, M. St. P. & P.

R. C. v. United States, 366 U.S. 745, the record indicated

that 513 shipments had moved at joint rates over the route

sought, but thousands had moved over other available

routes subject to joint rates. The traffic was not solicited

nor did it move at the higher combination rates over the

route sought. We concluded that, with the exception of the

above-mentioned shipments, the route sought was not a

through route within the meaning of section 15.

In the instant proceeding, 278 carloads of cast iron pipe

moved at joint rates from points on the complainants’

lines over routes through Bieber and Portland to points on

the defendants’ lines in 1959 and 1960. During that time,

30 carloads of government and commercial traffic also

moved at combination rates over such routes. However,

the defendants have not solicited nor encouraged the move-

ment of traffic over the routes sought, but for more than

ee

29a

30 years have tried to keep those routes commercially

closed, except where the few joint rates above mentioned

were established. While the complainants have solicited

traffic for movement over routes through Bieber and Port-

land to points on the defendants’ lines, those actions do

not show a holding out on the part of the defendants to

offer through transportation. Thus, the few shipments

made at combination rates do not prove the existence of

effective through routes. It follows that, except where

joint rates now exist, no effective through routes exist

between points in California on the lines of the com-

plainants and their connections, and points in the North-

west on the lines of the defendants, through Bieber and

Portland. There is, therefore, no basis for a finding that

the carriers are connecting lines within the meaning of

section 3(4). Even if the complainants were connecting

carriers, the evidence of record does not establish the

similiarity of circumstances and conditions which justifies

equality of treatment.

While the complainants have indicated a willingness to

rely alone on the alleged violation of section 3(4), they

also allege other violations and request the prescription of

through routes and joint rates over the routes sought.

Section 1(4) of the act requires, among other things, that

the railroads establish reasonable through routes with each

other, and just and reasonable rates applicable thereto.

Where such routes are not established voluntarily, we have

the authority under section 15(3) of the act to prescribe

them whenever deemed by us to be necessary or desirable

in the public interest. This authority is restricted by sec-

tion 15(4), which provides that we ‘‘shall not * * * require

any carrier by railroad * * * to embrace in such route sub-

stantially less than the entire length of its railroad and of

any intermediate railroad operated in conjunction and

under a common management or control therewith, which

lies between the termini of such proposed through route

5 „57

*

30a

As above indicated, there are numerous routes between

points in the areas here considered over which joint rates

apply. The shippers urge that the rates and routes sought

would give them more freedom of choice in the movement of

their goods, would improve transportation service, time

in transit and car supply, and make available additional

transit privileges. Nothing of record, however, indicates

that the existing through routes and joint rates are in-

adequate to meet the needs of the shipping public. In fact

the failure of the shipper witnesses to initiate in the last

31 years a determined campaign to persuade the defendants

of the necessity of establishing through routes between

points on the complainants’ lines in California and points

on the defendants’ lines in the Northwest, is at least some

indication of the adequacy of the existing routes. The ex-

pression in the public interest’? means more than a mere

desire on the part of shippers for something that woald

merely be convenient or desirable for them. This desire

must be weighed against the effect on other carriers and

the general public. On the basis of this record, we cannot

find that the public interest would be served by requiring

the establishment of joint rates and through routes which

are substantially slower and costlier than the present

routes.

Additionally, the evidence indicates the routes sought

would in many instances short-haul other carriers with-

out their consent. In the absence of a showing by the

complainants that the present routes maintained by the

defendants are unreasonably long or do not provide ade-

quate, efficient, or economical transportation, we are pre-

cluded by the provisions in section 15(4) from prescrib-

ing through routes.

We find that the failure and refusal of the defendants

to establish through routes and joint rates with the com-

plainants through Bieber and Portland, between points in

California, on the one hand, and points in Oregon, Wash-

ington, and Idaho, on the other, on the same basis as

SS *

3la

those published in connection with the Southern Pacific

through Portland, is not shown to be unjust or unreason-

able, nor to result in discrimination against the complain-

ants in violation of section 3(4) of the act; and that the

establishment of through routes and joint rates in con-

nection with the complainants, through Bieber and Port-

land, is not shown to be necessary or desirable in the public

interest.

An order will be entered dismissing the complaint.

CoMMISsSIONER GorF concurs in the result.

Order

At a Session of the Interstate Commerce Commission, Di-

vision 2, held at its office in Washington, D. C., on the

26th day of July, A. D. 1962.

No. 33679

Western Pactric Ramzoap CoMPANY, ET AL.

v.

Camas Prarie RAU ROAD CoMPANY, ET AL.

This proceeding being at issue upon complaint on file,

and having been duly heard and submitted by the parties,

and full investigation of the matters and things involved

having been made, and said Division having, on the date

hereof, made and filed a report containing its findings of

fact and conclusions thereon, which report is hereby re-

ferred to and made a part hereof:

It is ordered, That the complaint in this proceeding be,

and it is hereby, dismissed.

By the Commission, division 2.

Harotp D. McCoy

Secretary.

(Szav)

32a

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN

DISTRICT OF CALIFORNIA, SOUTHERN DIVISION

No. 41779 Civil

TRR Western Pactric Rartroap ComPANY, ET AL.,

Plaintiffs,

v.

Untrep States or AMERICA, ET AL., Defendants.

Order Denying Petition

Before Merritx, Circuit Judge, and Swetcert and Zrrpot,

District Judges.

Zirpout, District Judge:

This is an action brought under the Judicial Code, Sec-

tions 1336, 1398, 2284 and 2321 through 2325 of Title 28,

United States Code, to enjoin, annul and set aside a report

and order of the Interstate Commerce Commission. The

plaintiffs, Western Pacific Railroad and its subsidiaries,’

claim that the defendants? are engaged in discriminatory

rate practices at the Portland, Oregon interchange, in vio-

lation of Section 3(4) of the Interstate Commerce Act;

49 U.S.C. § 3(4). Section 3(4) provides as follows:

1The Sacramento Northern Railway and the Tidewater Southern

Railway Company.

2 The defendants named in the complaint filed in the Commission

action were: The Atchison, Topeka & Santa Fe Railway Company ;

The Great Northern Railway Company; The Northern Pacific

Railway Company; The Union Pacific Company; The Camas

Prairie Railroad Company, jointly owned by Northern Pacific

and Union Pacific; The Pacific Coast R. R. Co; The Spokane

International Railroad Company, a subsidiary of the Union

Pacific; and the Washington, Idaho and Montana Railway Com-

pany. The Northern Pacific and Union Pacific and their sub-

sidiaries denied the allegations of the complaint. The Great North-

ern, Pacific Coast, Santa Fe and the Washington, Idaho and

Montana answered the complaint with expressions of willingness

to establish and maintain the routes and rates sought. The South-

ern Pacific Company intervened in opposition to the complaint.

33a

All carriers subject to the provisions of this part

shall, according to their respective powers, afford all

reasonable, proper, and equal facilities for the inter-

change of traffic between their respective lines and con-

necting lines, and for the receiving, forwarding, and

delivering of passengers or property to and from con-

necting lines; and shall not discriminate in their rates,

fares, and charges between connecting lines, or unduly

prejudice any connecting line in the distribution of

traffic that is not specifically routed by the shipper.

As used in this paragraph the term ‘connecting line’

means the connecting line of any carrier subject to the

provisions of this part or any common carrier by water

subject to part III.“

Several issues were ruled on by the Commission which

are challenged here“; but since we agree with the Commis-

The Commission noted that although plaintiffs had indicated

a willingness to rely alone on the alleged violation of Section 3 (4),

they had not withdrawn their Section 1(4) [Title 49 U.S.C. See.

1(4)] allegations nor their request for ‘‘prescription of through

routes’’, a remedy related to a Section 1(4) rather than a Section

3(4) violation (316 I.C.C. at 810). The Commission ruled on

both issues. On the Section 3(4) issue after a lengthy discussion

of the law and the facts, the Commission found (316 I. C. C. at

810):

„There is, therefore, no basis for a finding that the carriers are

connecting lines within the meaning of section 3 (4).“ It then

went on to say:; Even if the complainants were connecting car-

riers, the evidence of record does not establish the similarity of

circumstances and conditions which justifies equality of treatment.

This last quoted issue this Court need not and does not reach.

On the section 1(4) issue, which plaintiffs do not now urge, the

Commission found (316 I.C.C. at 811): ‘‘On the basis of this

record, we cannot find that the public interest would be served

by requiring the establishment of joint rates and through routes

which are substantially slower and costlier than the present route.

The Commission ordered plaintiffs’ complaint dismissed because

(316 I. C. C. 811):

We find that the failure and refusal of the defendants to estab-

lish through routes and joint rates with the complainants through

34a

sion’s conclusion that plaintiffs are not a connecting line

within the meaning of Section 3(4) of the Act, we find it

unnecessary to resolve the remaining issues presented by

the complaint.

The factual background of this case is as follows: The

two routes considered herein are called the Bieber route and

the Southern Pacific route. The former was created by an

order of the Commission in 1931 and was designed to be a

competitor with the Southern Pacific route. See Great

Northern Ry. Co. Construction, 166 I. C. C. 3, 170 I. C. C. 399.

For purposes of this case, the Bieber route consists of the

Santa Fe from points in southern California to Stockton,

California, thence Western Pacific to Bieber, California,

and thence Great Northern to Portland, Oregon. This line

extends along the eastern side of northern California

through eastern Oregon to Wishram on the Columbia ; from

Wishram the line runs to Vancouver, Washington and

thence to Portland, Oregon. The Southern Pacific route

extends from points in southern California by either

Santa Fe or Southern Pacific, through the central part

of northern California and Central Orgeon to Port-

land. Southern Pacific and defendants have maintained

a system of through routes and rates at the Port-

land interchange for over 50 years. With the exception

of a few commodities, defendants have refused to establish

Bieber and Portland, between points in California, on the one

hand, and points in Oregon,Washington, and Idaho, on the other,

on the same basis as those published in connection with the South-

ern Pacific through Portland, is not shown to be unjust or unrea-

sonable, nor to result in discrimination against the complainants

in violation of section 3(4) of the act; and that the establishment

of through routes and joint rates in connection with the complain-

ants, through Bieber and Portland, is not shown to be necessary

or desirable in the public interest.’’

Other issues raised in the complaint before this Court, and which

this Court need neither reach nor resolve, relate to the evidence,

testimony rejected and findings of fact that the Commission is

alleged to have either failed to make or erronecusly found.

35a

a similar system of through routes and rates with Western

Pacific.

A connecting line within the meaning of Section 3(4) is

one which has either a direct physical connection at the

common interchange or is one which makes up a through

route’’ through the interchange point. Atlantic Coast Line

R. Co. v. United States, 284 U.S. 288 at 293 (1932). Be-

cause Western Pacific terminates at Bieber, California and

is therefore the middle link in a three line route, it does

not have a direct physical connection with the defendant at

Portland, Oregon.

The criteria for the determination of whether a through

route exists are set forth in Thompson v. United States,

343 U.S. 549, 557 as follows:

‘*Existence of a through route is to be determined

by the incidents and circumstances of the shipment,

such as the billing, the transfer from one carrier to

another, the collection and diversien of transporta-

tion charges, or the use of a proportional rate to

or from junction points or basing points. These

incidents named are not to be regarded as exclusive

of others which may tend to establish a carrier’s course

of business with respect to through shipments.

In short, the test of the existence of a through

route’’ is whether the participating carriers hold them-

selves out as offering through transportation service.

Through carriage implies the existence of a through

route whatever the form of the rates charged for the

through service.“ (Emphasis added)

Plaintiff properly concedes that it does not meet the

above test* because the existence of a few instances of joint

‘ Plaintiff’s opening brief, page 8, states: There is little doubt

that, under the doctrine of the Thompson case, supra, there are not,

as yet, a full line of through routes over the Bieber route to or

from Northern or Union Pacific points.’’

36a

rates and through routes on some commodities is not

sufficient to establish a through route generally. Chicago

M. St. P. & P. R. Co. v. Spokane P. & S. Ry. Co., 300 I. C. C.

453 (1957), aff’d Chicago M. St. P. & P. R. Co. v. United

States, 366 U.S. 745 (1961); Denver & R. G. W. R. Co. v.

Union Pac. R. Co., 351 U.S. 321 (1956). Therefore, because

plaintiff does not meet the test of the Atlantic Coast Line

case, it is not a connecting line’’ within the meaning of

section 3(4).

Plaintiff’s reliance on Chicago, I. & L. Ry. v. United

States, 270 U.S. 287 (1926) is misplaced. This case in-

volved reciprocal switching arrangements and presented no

question of whether the carriers in that case were ‘‘con-

necting lines’’ for section 3(4) purposes. Moreover, the

case was decided prior to the Atlantic Coast Line case.

Plaintiff’s principal argument is that the definition of a

‘‘eonnecting line“ is not limited to the definition of Atlan-

tic Coast Line. This Court is satisfied that the present

definition fully comports with the statutory purpose, and

that any further expansion of the term is not war-

ranted. Because the Supreme Court has not rendered

any decision on this question since Atlantic Coast Lane,

this Court is bound to follow that decision. Any further

liberalization of the present definition will have to come

from the Supreme Court.

Ir Is Txererone Orperep that the petition to enjoin,

annul and set aside the order of the Commission is denied,

and the complaint is dismissed.

Dated: June 19, 1964.

CHARLES M. MERRILL

Circuit Judge

Writs T. SwEIcert

District Judge

Auronso J. ZmrolI

District Judge

37a

APPENDIX B

The National Transportation policy, 54 Stat. 899, 49

U.S.C. preceding §§1, 301, 901 and 1001:

It is hereby declared to be the national transporta-

tion policy of the Congress to provide for fair and

impartial regulation of all modes of transportation

subject to the provisions of this Act [chapters 1, 8,

12, 13, and 19 of this title], so administered as to

recognize and preserve the inherent advantages of each ;

to promote safe, adequate, economical, and efficient

service and foster sound economic conditions in trans-

portation and among the several carriers; to encourage

the establishment and maintenance of reasonable

charges for transportation services, without unjust

discriminations, undue preferences or advantages, or

unfair or destructive competitive practices; to cooper-

ate with the several States and the duly authorized

officials thereof; and to encourage fair wages and

equitable working conditions ;—all to the end of de-

veloping, coordinating, and preserving a national

transportation system by water, highway, and rail, as

well as other means, adequate to meet the needs of

the commerce of the United States, of the Postal

Service, and of the national defense. All of the pro-

visions of this Act [chapters 1, 8, 12, 13, and 19 of

this title] shall be administered and enforced with a

view to carrying out the above declaration of policy.

Section 3(4) of the Interstate Commerce Act, 24 Stat.

380, as amended, 49 U.S.C. §3(4) :

Interchange of traffic. All carriers subject to the

provisions of this chapter shall, according to their

respective powers, afford all reasonable, proper, and

equal facilities for the interchange of traffic between

their respective lines and connecting lines, and for

the receiving, forwarding, and delivering of passengers

38a

or property to and from connecting lines; and shall

not discriminate in their rates, fares, and charges be-

tween connecting lines, or unduly prejudice any con-

necting line in the distribution of traffic that is not

specifically routed by the shipper. As used in this

paragraph the term connecting line“ means the con-

necting line of any carrier subject to the provisions

of this chapter or any common carrier by water subject

to chapter 12 of this title.