Riss & Company v. Association of American Railroads

• Citation: 170 F. Supp. 354
• Decision Date: 16 January 1959
• Docket Number: Civ. A. No. 4056-54.
• Parties: RISS & COMPANY, Inc., Plaintiff, v. ASSOCIATION OF AMERICAN RAILROADS et al., Defendants.
• Court: U.S. District Court — District of Columbia

170 F. Supp. 354

RISS & COMPANY, Inc., Plaintiff, v. ASSOCIATION OF AMERICAN RAILROADS et al., Defendants.

Civ. A. No. 4056-54.

United States District Court District of Columbia.

January 16, 1959.

COPYRIGHT MATERIAL OMITTED

A. Alvis Layne, Jr., Lester M. Bridgeman, Robert L. Wright, Washington, D. C., for plaintiff Riss & Co., Inc.

Hugh B. Cox, James H. McGlothlin, Washington, D. C., for defendants Baltimore & O. R. Co. and others.

Francis M. Shea, Lawrence J. Latto, Washington, D. C., for defendants Atlantic Coast Line R. Co. and others.

Stuart S. Ball, Richard J. Flynn, Chicago, Illinois, for defendants Atchison, T. & S. F. R. Co. and others.

Martin A. Meyer, Jr., Washington, D. C., for defendant Virginian Ry. Co.

Edward K. Wheeler, Robert G. Seaks, Washington, D. C., for defendants Chesapeake & O. Ry. Co. and New York Cent. R. Co.

H. Graham Morison, Newell A. Clapp, Washington, D. C., for defendant Louisville & N. R. Co.

John D. Lane, Fred S. Gilbert, Jr., Washington, D. C., for defendants Boston & Maine R. R. and New York, N. H. & H. R. Co.

J. Raymond Hoover, Washington, D. C., for defendants Grand Trunk Western R. Co. and Central Vermont Ry., Inc.

SIRICA, District Judge.

On August 8, 1958, the United States Court of Appeals for the District of Columbia remanded this case to the District Court with directions to vacate its order of May 26, 1958, and to reconsider petitioners' motion to suspend proceedings in the light of said order.

In the early part of 1958, petitioners moved to suspend all proceedings in this antitrust litigation except discovery not connected with this motion, and urged the Court to refer to the Interstate Commerce Commission one of the issues set forth in the complaint regarding rate-making, pursuant to agreements on procedure filed with the Commission, so that the Court might obtain a ruling on whether these joint rate reductions were immunized from the operation of the antitrust laws. Extensive briefs were filed and the Court heard oral arguments. After delivering an oral opinion from the bench, the Court denied the motion in an order entered May 26, 1958. Relying strongly on a recent Supreme Court decision not mentioned by the Court in its oral opinion, most of the railroad defendants then petitioned for a writ of certiorari from the Court of Appeals and asked that Court to reverse this Court's order and to direct this Court to suspend proceedings and refer the above issue to the Commission. The Court of Appeals granted the writ, ___ F.2d ___, but declined to rule on the merits. Instead, it remanded the case to this Court with directions to vacate the order of May 26, and to reconsider petitioners' motion in the light of its order and of the Supreme Court's recent holding in Federal Maritime Board v. Isbrandtsen Co., 1958, 356 U.S. 481, 78 S.Ct. 851, 2 L.Ed.2d 926.

Petitioners then requested the Court of Appeals to clarify certain language in its order of August 8, 1958. ___ F. 2d ___. The Court granted this request in an order dated December 16, 1958. ___ F.2d ___.

Before discussing the legal issues raised by this motion, it is necessary to summarize the background of this complex case so that all issues may be viewed in their proper context.

In 1954, Riss & Company, Inc., a common carrier by motor vehicle in interstate commerce, filed this civil antitrust suit, seeking an injunction and $90,000,000 in treble damages. It alleged that beginning in or about 1950, defendants, most of whom are railroad companies, had agreed and conspired in unreasonable restraint of trade and commerce to injure or destroy plaintiff's business and to acquire a monopoly of land transportation of property in the United States, and had thus violated Sections 1 and 2 of the Sherman Act (15 U.S.C.A. §§ 1, 2).

Plaintiff alleges it has been a common carrier of property by motor vehicle since 1927 and operates as authorized by the Interstate Commerce Commission throughout 22 states plus the District of Columbia. It uses over 800 truck units and employs over 2,000 persons. 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. About 58 first class railroad companies, several joint railroad organizations and trade associations and one public relations firm are defendants in this action.

In order to effectuate the object of the alleged conspiracy, plaintiff charges that defendants employed various means, some of which are cited as examples in the complaint. Defendants are accused of having carried on a program of soliciting, directly as well as indirectly through "front" organizations, the elected and appointed officials of various states to take steps leading to the revocation and cancellation of the interstate operating authority held by plaintiff. In 1952, it is alleged that some of the defendants employed a public relations expert to persuade the Public Utilities Commission of Ohio to file proceedings before the Interstate Commerce Commission looking toward the cancellation of plaintiff's operating authority.

By similar methods of solicitation, according to the complaint, officials of states, cities and towns through which plaintiff operates, were urged by defendants to enact statutes, ordinances and regulations designed to unduly hamper the operations of the plaintiff and to render them economically unfeasible, such as by imposing unreasonably low weight limits on truck shipments or by banning the use by plaintiff's vehicles of certain important highway routes. Defendants are also alleged to have urged, directly and indirectly through "front" organizations, that state officials carry out a campaign of unusually strict enforcement of statutes, ordinances and regulations particularly aimed at plaintiff's vehicles such as by urging the Public Utilities Commission of Ohio to assign special investigators to follow plaintiff's trucks for hundreds of miles in order to discover possible violations.

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.

According to the complaint, defendants used railroad groups in their public relations campaign as well as "front" organizations whose connection with the railroads would not be known to the public. It is also asserted that defendants tried to infiltrate and make use of several independent public organizations such as the Illinois Parent-Teachers Association and the Congress of Parents and Teachers of Oklahoma in order to achieve their unlawful objectives. Chief reliance, however, is alleged to have been placed on such instrumentalities as "Competitive Transportation Research", "Motor Carrier Bureau" and "Committee on Motor Transportation" set up by defendants, as well as upon other temporary committees and organizations. Plaintiff claims that defendants spent large sums of money, estimated at about $1,000,000 in carrying out their unlawful activities.

In January, 1958, with the permission of the Court, plaintiff filed a supplement to its complaint which is embodied in paragraph 18. Plaintiff claims therein that, pursuant to the unlawful plan described above, defendant railroads submitted to traffic officials of the Department of Defense in 1955 a 40 per cent reduction in rate on the carriage of explosives totaling more than 50,000 pounds by railroads competing with Riss for the same kind of traffic. It is plaintiff's claim that this reduction was intended to accomplish one of the principal objects of the conspiracy; i. e., to exclude plaintiff from the explosives traffic and it has allegedly had that effect with respect to the principal points served by the plaintiff.

Plaintiff further alleges that defendants' conduct has caused serious damage to its business and to its reputation and has forced plaintiff to spend large sums to counteract the effects of defendants' conduct. By way of relief, plaintiff demands the following:

"1. Injunctive relief permanently enjoining and restraining AAR, Western Railways, Presidents Conference and Eastern Railroads, and each of them, from creating or continuing any committees, subcommittees, bureaus, departments, sections, divisions, subdivisions, or other association activity the principal purpose of which is to restrain, impede, impair, hamper, harass or eliminate the competition of plaintiff and of other motor carriers;

"2. Injunctive relief permanently enjoining, restraining and prohibiting defendants and each of them and their officers, directors, agents, servants and employees from agreeing, conspiring or combining to restrain the competition of plaintiff and from conspiring, combining and attempting to monopolize land transportation by the elimination of plaintiff and from performing any acts in furtherance of such unlawful objects and purpose;

"3. Judgment against defendants and each of them for $90,000,000, being the amount equal to three times the damages sustained by plaintiff;

"4. Judgment against defendants and each of them for the amount of reasonable attorneys' fees and costs of this action;

"5. Such other and further relief as to the Court may appear just and proper; and

"6. Injunctive relief enjoining the defendant railroads

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