Riss & Company v. Association of Western Railways

• Decision Date: 25 February 1958
• Docket Number: Civ. A. No. 4056-54.
• Citation: 159 F. Supp. 288
• Parties: RISS & COMPANY, Inc., Plaintiff, v. The ASSOCIATION OF WESTERN RAILWAYS, Eastern Railroads Presidents Conference, et al., Defendants.
• Court: U.S. District Court — District of Columbia

159 F. Supp. 288

RISS & COMPANY, Inc., Plaintiff, v. The ASSOCIATION OF WESTERN RAILWAYS, Eastern Railroads Presidents Conference, et al., Defendants.

Civ. A. No. 4056-54.

United States District Court District of Columbia.

February 25, 1958.

A. Alvis Layne, Jr., H. Charles Ephraim, Robert L. Wright, Lester M. Bridgeman and T. S. L. Perlman, Washington, D. C., for plaintiff.

Stuart S. Ball, Richard J. Flynn, J. H. Hays, Amos M. Mathews, J. W. Nisbet, Chicago, Ill., and Lawrence Cake, Washington, D. C., for defendant Association of Western Railways.

C. Brewster Rhoads, Joseph W. Swain, Jr., Philadelphia, Pa., Hugh B. Cox, James H. McGlothlin, Washington, D. C., for defendant Eastern Railroads Presidents Conference.

SIRICA, District Judge.

The plaintiff, Riss & Company, Inc., a common carrier by motor vehicle in interstate commerce, filed an action in this court, for an injunction and treble damages under the antitrust laws of the United States, alleging that the defendants, comprised of railroad companies, railroad associations and one public relations firm, agreed, combined and conspired in unreasonable restraint of trade and commerce to injure plaintiff's trucking business contrary to the provisions of the Sherman Anti-Trust Act, Sections 1 and 2 (15 U.S.C.A. §§ 1, 2). This court has jurisdiction over this controversy by reason of Section 7 of the Sherman Act (26 Stat. 210, 28 Stat. 570) and sections 4, 12 and 16 of the Act of October 15, 1914 (38 Stat. 731, 736, 737), commonly known as the Clayton Act (15 U.S.C.A. §§ 15, 22 and 26).

The complaint further alleges that the plaintiff has been operating as a common carrier of property by motor vehicle since 1927, and holds certificates of public convenience and necessity and other operating authority issued by the Interstate Commerce Commission authorizing service between points, over routes, and within the territory in 22 states and the District of Columbia, and also that Riss operates in excess of 800 truck units and has over 2,000 employees. Riss also has alleged that during the years from 1950 to 1953, inclusive, it was one of the five largest interstate motor carriers in the United States in terms of gross revenues and is, and has been for several years, one of the largest motor carriers of military supplies, including ammunition and explosives, for the Armed Forces.

Defendants include approximately 58 of the first class railroad companies in the United States, plus certain of their joint organizations and trade associations used for public relations and other purposes, and one public relations firm, Carl Byoir and Associates, Inc., of New York City.

The complaint further charges that defendants, beginning in or about the year 1950, conspired over a period of years to eliminate the plaintiff as a competitor and thus to obtain for themselves a monopoly of land transportation in the United States.

As a part, and for the purpose of effectuating the unlawful agreement, combination, and conspiracy to restrain the competition of Riss, and to monopolize the land transportation of property by the elimination of Riss, it is alleged that the defendants have engaged and are engaging in the solicitation, directly and indirectly through front organizations, of elected and appointed officials of states to institute action to bring about a revocation and cancellation of the interstate operating authority held by Riss.

Plaintiff further asserts that defendants, by similar methods, attempted to have officials of states, cities and towns, where plaintiff operates, impose statutes, ordinances and regulations which would eliminate, hamper, restrict and impede motor carrier operations by the plaintiff and which were designed to render motor carrier operations impractical and economically unfeasible.

As examples of these types of activities, it is charged that defendants sought to have statutes, ordinances and regulations adopted limiting the weight of certain commodities to be transported in one truck to a maximum of 5,000 pounds, and limiting or prohibiting the use of necessary routes, bridges and tunnels by plaintiff.

Defendants also are alleged to have abused their privilege of intervention in proceedings before the Interstate Commerce Commission. According to plaintiff, defendants joined together to carry on an extensive and vicious campaign of anti-truck propaganda in order to persuade citizens' groups, automobile clubs and other neutral organizations to register their complaints against Riss in the course of proceedings started by Riss before the I.C.C. to obtain new operating authorizations. Other unfair competitive practices, such as circulating and publishing false and malicious statements about Riss and its officers are also charged in the complaint. It is further alleged that in 1955 defendants submitted to traffic officials of the Department of Defense a uniform rate quotation on the carrying of explosives on the part of railroads competing with plaintiff for this same kind of traffic. Rates for shipments totalling 50,000 pounds were reduced more than forty per cent from the level which had prevailed for the preceding eight years. Plaintiff contends that this joint action is a further step in the conspiracy to eliminate plaintiff as a competitor of the railroads, especially in the field of transportation of explosives.

It is also charged that defendants have expended enormous sums of money, which plaintiff estimates at not less than $1,000,000, in pursuance of and in implementing their objectives of restraining and eliminating the competition of plaintiff. As a result of defendants' activities, plaintiff claims losses amounting to thirty million dollars. As relief, plaintiff seeks an injunction restraining defendants from their unlawful competitive practices and treble damages amounting to ninety million dollars.

Two of the defendants—The Association of Western Railways, hereinafter referred to as AWR, and the Eastern Railroads Presidents Conference, hereinafter referred to as ERPC—have moved to dismiss the complaint for lack of proper venue and they have also moved to quash the return of service of summons. In both motions, the questions of law are quite similar. However, the facts relied upon by either side with respect to the venue question are different and will be dealt with separately.

In suits by private parties for damages caused by violations of the antitrust laws and brought against defendants who are not corporations, the venue requirements are set forth in Section 4 of the Clayton Act (15 U.S.C.A. § 15), as follows:

"Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy and shall recover three-fold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee." (Emphasis supplied.)

In this suit, AWR and ERPC are unincorporated associations and hence they may be sued only in the district in which they reside or in which they are found, or in which they have an agent.

For all practical purposes, both AWR and ERPC have conceded that as far as the requirements of Rule 4 of the Federal Rules of Civil Procedure, 28 U.S. C.A., are concerned, plaintiff has made service of process upon an appropriate agent in the District of Columbia. They contend, however, and rightly so, that this service of process cannot be considered valid to confer personal jurisdiction over the defendants unless it appears that both AWR and ERPC are lawfully subject to suit in the District of Columbia under the terms of Section 4. In both motions, therefore, the essential problem to be considered is whether these defendants reside or are found or have an agent in this district.

A. Motion of Association of Western Railways to Dismiss Complaint, or in Lieu Thereof, to Quash the Return of Service of Summons.

AWR is an unincorporated association with its principal and only regular office in Chicago, Illinois. It consists of an Executive Committee of 15 members, all of whom are presidents of member railroad companies in the western part of the United States, and a staff of 18 full-time employees under the direction of Mr. Daniel P. Loomis. At present, AWR has no written constitution, articles, or by-laws. Since 1948, however, AWR has been filing reports with the Clerk of the House of Representatives, under the provisions of the Federal Lobbying Act (2 U.S.C.A. § 261). The first quarterly report for 1948 contains a paragraph that purports to summarize the purposes for which AWR was organized:

"The principal purpose of this association is to deal with matters which are regional in character and which are of common concern to the railroads of the Western District. It affords means for handling, and supervises joint facilities of western lines which handle matters of policy, operating matters, the weighing and inspection of freight, promotion of freight and passenger traffic, adjustment and publication of rates and related matters, the handling of labor relations, public relations, and economic, legal and transportation research and matters of similar character."

In actual operation, AWR appears to devote most of its efforts toward representing the western railroads before Federal administrative agencies, and before state and Federal legislatures as well as to advancing the cause of rail transportation in the western part of the United States through active public relations campaigns. These things are done by the two major departments of AWR—Public Relations and Law. The Public Relations Department and its staff specialize in gathering, writing and circulating data on a nationwide basis to influence public opinion favorably to the railroads and, according to plaintiff's allegations, adversely to motor...