Atlantic Coast Line Co v. United States

• Decision Date: 04 January 1932
• Docket Number: No. 88,88
• Parties: ATLANTIC COAST LINE R. CO et al. v. UNITED STATES et al
• Court: U.S. Supreme Court

284 U.S. 288

52 S.Ct. 171

76 L.Ed. 298

ATLANTIC COAST LINE R. CO et al.

v UNITED STATES et al.

No. 88.

Argued Dec. 7, 1931.

Decided Jan. 4, 1932.

Messrs. Carl H. Davis and F. B. Grier, both of Wilmington, N. C., for appellants.

The Attorney General and Mr. John Lord O'Brian, Asst. to Atty. Gen., for appellees United States and Interstate Commerce Commission.

Mr. W. S. O'B. Robinson, of Charlotte, N. C., for appellee Piedmont and Northern Ry. Co.

Mr. Justice BRANDEIS delivered the opinion of the Court.

This suit, under the Act of October 22, 1913, c. 32, 38 Stat. 208, 220 (28 USCA § 47) was brought in the federal court for Western South Carolina, to set aside an order of the Interstate Commerce Commission dated June 9, 1930. Restriction in Routing in Connection with the Georgia & Florida Railroad, 165 I. C. C. 3. The plaintiffs are the Atlantic Coast Line Railroad, the Louisville & Nashville Railroad, and the Charleston & Western Railroad. The defendants are the United States, and, by intervention, the Commission, the Piedmont & Northern Railway, and the Georgia & Florida Railroad. The order assailed was entered under section 15(7) of the Interstate Commerce Act, 49 USCA § 15(7). It requires the cancellation of provisions in tariff schedules by which the plaintiffs seek to exclude the Georgia & Florida from participating as connecting carrier in through routes established over the Carolina, Clinchfield & Ohio Railway. The Commission held that the restrictive schedules violated the conditions under which that railroad had been leased to the Atlantic Coast Line and the Louisville & Nashville. Clinchfield Railway Lease, 90 I. C. C. 113. The District Court, three judges sitting, sustained the validity of the order and dismissed the bill. 48 F.(2d) 239. The case is here on direct appeal. We are of opinion that the decree should be affirmed.

The Clinchfield Railway extends in a southerly direction from Elkhorn City, Ky., to Spartanburg, S. C., a distance of 276.85 miles. The Atlantic Coast Line system lies to the east and south. To the west and south lies the Louisville & Nashville, of whose stock 51 per cent, is owned by the Coast Line. The Clinchfield is a link in many possible routes between points in the Southeastern States and the North, in addition to those routes which are over the Atlantic Coast Line or the Louisville & Nashville. At Elkhorn City, the Clinchfield connects with the Chesapeake & Ohio Railway, whose system extends east, north, and west. At Spartanburg, the Clinchfield connects with the Piedmont & Northern, which extends in a southerly direction to Greenwood, S. C. And, at Greenwood, the Piedmont & Northern connects with a recently built extension of the Georgia &amp Florida, which now has 464 miles of line in the three Southeastern States. The restrictive schedules excluded from the joint rates traffic over the Clinchfield if routed via the Georgia & Florida. Such traffic was thereby subjected to the applicable combination of higher local rates. The effect of this was to prevent not only the Georgia & Florida, but also the Piedmont & Northern, the intermediate carrier, from participating in such business, with the result that the traffic would be secured for the Charleston & Western, which the Atlantic Coast Line controls through stock ownership.

In 1923 the Atlantic Coast Line and the Louisville & Nashville applied to the Commission for leave jointly to lease the Clinchfield. The extension of the Georgia & Florida to Greenwood was then in contemplation. The Piedmont & Northern and the Georgia & Florida opposed authorization of an unconditional lease, on the ground that, if joint rates on traffic moving over the Clinchfield should be closed to them, they would be deprived of much traffic which might otherwise move over their lines or future extensions thereof. In order to preserve, among other things, the existing and possible though routes via the Clinchfield on railroads other than the Atlantic Coast Line and the Louisville & Nashville, the Commission, in authorizing the lease, made it subject to five conditions which the lessees accepted.¹ Condition 1 requires the maintenance of a separate organization for the Clinchfield so that the road 'shall con- stitute a separate operating unit.' Condition 3 requires the continuance of existing routes and channels of trade, existing gateways for the interchange of traffic, and 'the present neutrality of handling the traffic inbound and outbound' so as to permit equal service, routing, and movement of competitive traffic to and from all connecting lines reached by the Clinchfield.² Condition 4 requires the lessees to permit carriers then connecting with the line of the Clinchfield, or which may thereafter connect with it, to participate, without discrimination, in through routes and joint rates on traffic moving over the Clinchfield as an intermediate road between points at and beyond the Ohio river, on the one hand, and points in Southeastern and Carolina territory, on the other; and that to this end the Clinchfield shall be maintained as an open route for traffic available to all carriers connecting with it.³ The order of June 9, 1930, here assailed, canceled the restrictive schedules on the ground that they violated conditions 3 and 4. The plaintiffs deny that the restrictive schedules are inconsistent with conditions 3 and 4, and claim that, if the schedules are inconsistent with the conditions, it is the conditions which are void.

First. The plaintiffs contend that the restrictive schedules are consistent with the conditions because the Georgia & Florida is not a carrier 'connecting with the Clinchfield.' The argument is that the Georgia & Florida does not connect, since its own rails do not physically abut on the Clinchfield's rails; the connection being made over the Piedmont & Northern, an intermediate carrier. There is no warrant for limiting the meaning of 'connecting 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.⁴

Second. The plaintiffs contend that the restrictive schedules are consistent with the conditions, because these assure equality of treatment only to connections existing at the time the order was entered authorizing the lease, and the Greenwood extension by means of which the Georgia & Florida connects with the Piedmont & Northern, was not built until several years thereafter. But the open route guaranteed by the conditions is not so limited. Condition 4 prescribes that the lessees 'shall permit the line of the Clinchfield and its subsidiaries to be...