Atlantic Coast Line R. Co. v. United States

• Decision Date: 09 March 1931
• Docket Number: No. 278.,278.
• Citation: 48 F.2d 239
• Parties: ATLANTIC COAST LINE R. CO. et al. v. UNITED STATES.
• Court: U.S. District Court — District of South Carolina

48 F.2d 239 (1931)

ATLANTIC COAST LINE R. CO. et al. v. UNITED STATES.

No. 278.

District Court, W. D. South Carolina.

March 9, 1931.

F. B. Grier and Carl H. Davis, both of Wilmington, N. C., and M. G. McDonald, of Greenwood, S. C., for plaintiffs.

Elmer B. Collins, Sp. Asst. to Atty. Gen., for the United States.

Daniel W. Knowlton and H. L. Underwood, both of Washington, D. C., for Interstate Commerce Commission.

W. S. O'B. Robinson, Jr., of Charlotte, N. C., for Piedmont & N. Ry. Co.

W. H. Nicholson, of Greenwood, S. C., and Hull, Barrett & Willingham, of Augusta, Ga. (James M. Hull, Jr., George B. Barrett, and J. J. Willingham, all of Augusta, Ga., on the brief), for Georgia & F. R. Co.

Before PARKER and NORTHCOTT, Circuit Judges, and WATKINS, District Judge.

PARKER, Circuit Judge.

This is a suit instituted by the Atlantic Coast Line Railroad Company, the Louisville & Nashville Railroad Company, and the Charleston & Western Carolina Railway Company, against the United States, to enjoin the enforcement of an order of the Interstate Commerce Commission which requires complainants to cancel certain restrictive schedules filed as amendments to joint tariffs theretofore filed with the commission. The commission has intervened in defense of its order, as have also the Piedmont & Northern Railway Company and the Georgia & Florida Railroad, who are interested in maintaining it. These various railroad companies are commonly referred to by the initial letters of their corporate names, and we shall so designate them in this opinion. The effect of the restrictive schedules which have been suspended and ordered canceled by the commission was to deny the benefit of through routes and rates, which had been theretofore established, to shipments passing over the Greenwood extension of the Georgia & Florida between Greenwood, S. C., and Augusta, Ga.

Complainants urge as justification of the restrictive schedules that the Carolina, Clinchfield & Ohio Railroad between Elkhorn, Ky., and Spartanburg, S. C., over which the through traffic in question moves, is operated under a common control with the A. C. L. and the L. & N. within the meaning of section 15 (4) of the Interstate Commerce Act as amended by the Transportation Act of 1920, § 418 (49 USCA § 15 (4); that the C. & W. C., which is operated as a part of the A. C. L. system, has a line between Spartanburg, S. C., and Augusta, Ga.; and that to allow the P. & N. between Spartanburg and Greenwood and the G. & F. between Greenwood and Augusta, to participate in the hauling of through traffic passing over the C., C. & O. under the through routes and rates theretofore established is to require complainants without their consent to accept a short haul on such traffic in violation of the provisions of section 15 (4). Defendants contend that complainants cannot invoke the provisions of section 15 (4) because of conditions 3 and 4 imposed by the commission and consented to by the A. C. L. and the L. & N. in their lease of the lines of the C., C. & O., by the terms of which it was stipulated that the line of the C., C. & O. should be maintained as an open route equally available to all connecting carriers. Complainants reply that a proper interpretation of the conditions of the lease does not require that they short haul themselves as to traffic passing over the C., C. & O., and that, if the conditions be so interpreted, it was beyond the power of the commission to impose them.

The through routes and rates in question, 304 in number, were established by joint tariffs in which complainants, the P. & N. and the G. & F. participated, and which were filed prior to the completion of the Greenwood extension of the G. & F. between Greenwood and Augusta. They applied to traffic passing over the C., C. & O. between points at and beyond the Ohio river on the one hand and points in southeastern and Carolina territory on the other. Prior to the completion of the Greenwood extension, the natural course of this traffic between Spartanburg and Augusta was over the line of the C. & W. C. The Greenwood extension was completed and opened to traffic on June 1, 1929; and a route via the P. & N. from Spartanburg to Greenwood and via the G. & F. from Greenwood to Augusta thereupon became automatically available for this through traffic passing over the C., C. & O. under the through routes and rates theretofore established. It was to exclude this route from the provisions of the tariffs establishing the through routes and rates that the restrictive schedules were filed by complainants. The commission, acting under section 15 (7) of the Interstate Commerce Act, as amended by the Transportation Act of 1920, § 418, as amended by Act March 4, 1927, § 2 (49 USCA § 15 (7), suspended the operation of these restrictive schedules, and after hearing ordered that they be canceled as violative of conditions contained in the order authorizing the lease of the C., C. & O. by the A. C. L. and the L. & N. Condition 1 of the order approving the lease required the lessees to maintain a separate organization for operating the leased property. Conditions 3 and 4, which are the ones of particular importance here, are as follows:

"3. So far as lies within the power of the applicants, existing routes and channels of trade and commerce heretofore established by other carriers in connection with the Clinchfield shall be preserved, existing gateways for the interchange of traffic with such other carriers shall be maintained, and the present neutrality of handling traffic inbound and outbound by the Carolina, Clinchfield & Ohio Railway and its subsidiary, the Carolina, Clinchfield & Ohio Railway of South Carolina, shall be continued so as to permit equal opportunity for service and routing or movement of traffic which is competitive with traffic of the applicants, or either of them, to and from all connecting lines reached by the line of the Clinchfield companies, without discrimination in service against such competitive traffic.

"4. The applicants shall permit the line of the Clinchfield and its subsidiaries to be used as a link for through traffic, via existing gateways of interchange, or via such gateways as may hereafter be established under authority of the commission by means of the connecting lines which the Louisville & Nashville Railroad Company proposes to build, equally available to such other carriers, now connecting, or which may hereafter connect, with the line of the Clinchfield and its subsidiaries, as may desire to participate in through routes and joint rates between points in territory north and west of the line of the Clinchfield and points at and beyond the Ohio River on the one hand and points in the southeastern and Carolina territory on the other, under divisions to be agreed upon by the applicants, or either of them, and/or the Clinchfield organization, on the one hand, and by the other participating carrier or carriers on the other, and shall not discriminate as to rates, fares, and charges against such participating carrier or carriers as compared with the applicants, or either of them; the intention of this provision being that the line of the Clinchfield and its subsidiaries shall be maintained as an open route equally available to all carriers connecting with the Clinchfield for traffic between the points designated." (Italics ours.)

The A. C. L. owns 51 per cent. of the L. & N. stock and controls its policy. The C. & W. C. is operated as a part of the A. C. L. system. The C., C. & O. is leased to the A. C. L. and L. & N. and is operated by officials appointed by them. It would seem clear, therefore, that the C., C. & O. is operated under a common control with the lines of complainants within the meaning of section 15 (4) of the Interstate Commerce Act as amended by the Transportation Act of 1920, and that complainants would be entitled to the long haul on the traffic in question and to exclude the P. & N. and the G. & F. from participating therein, as they have sought to do by the restrictive schedules, unless they are precluded from so doing by the conditions of the C., C. & O. lease. Two questions arise, therefore: (1) Whether the conditions of the lease require that the line of the C., C. & O. be maintained as an open route for this traffic; and (2) whether these conditions are valid and binding upon complainants. We think that both of these questions must be answered in the affirmative.

It is argued that condition 3 merely requires that the existing neutrality in the handling of traffic over the C., C. & O. be continued so as to preserve equal opportunity for service and routing and movement of traffic competitive with traffic of applicants via existing routes and gateways, without discrimination in service against such competitive traffic; and that condition four merely requires that the line of the C., C. & O. be maintained as an open route for the carriers then directly connecting therewith or, at the most, for carriers which might under the approval of the commission be allowed to make such direct connection thereafter. We think, however, that this gives too narrow and restricted a meaning to the conditions. As thus interpreted, condition 3 would require nothing not already required by sections 3 (3) of the Interstate Commerce Act as amended by the Transportation Act of 1920, § 405 (49 US CA § 3 (3). And, as to condition 4, it certainly could not have been intended to restrict the requirement of neutrality for the benefit of those roads having direct connection with the C., C. & O. when, as said by the commission, the term "connecting lines" is commonly used "in referring to the lines in general making up a through route." The purpose of the conditions was to withhold from the lessees a partisan control of the C., C. & O. so that its line would remain available on equal terms to their competitors; and we think that this purpose was clearly expressed in the language of the...