# Jurisdictional Statement — Western Pacific Railroad v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Jurisdictional Statement
- **Published:** January 1, 1965
- **Citation:** 382 U.S. 237

## Text

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
tf! ⁵ĩ˙Ü ;WAA . TQ ei be 2
— d ĩ ĩ ¥onct ces okegee 2
e ices ce sevecceecwecsewcs 3
—.. oc MVVNdL..᷑̃]7 ! , ˙ 4ared nae choke 4
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.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386411_0195%3A03. Public record. Not legal advice.