Great Northern Ry. Co. v. Kalispell Lumber Co.

• Decision Date: 05 October 1908
• Docket Number: 1,552.
• Citation: 165 F. 25
• Parties: GREAT NORTHERN RY. CO. v. KALISPELL LUMBER CO. et al.
• Court: U.S. Court of Appeals — Ninth Circuit

165 F. 25

GREAT NORTHERN RY. CO. v. KALISPELL LUMBER CO. et al.

No. 1,552.

United States Court of Appeals, Ninth Circuit.

October 5, 1908

I Parker Veazey, for appellant.

H. D Folsom, Jr. (John Lind and A. Ueland, of counsel), for appellees.

Before GILBERT, ROSS, and MORROW, Circuit Judges.

GILBERT Circuit Judge.

This case differs from that of Northern Pacific Railway Company et al. v. Pacific Coast Lumber Manufacturers' Association et al. (just decided by this court) 165 F. 1, in that the bill was not filed until after the new rates had been established. The new schedule of rates went into operation on November 1 1907, the bill was filed on November 9th, and the injunction order was made on December 4th. The bill alleges in substance that the appellees are lumber manufacturers in Flathead county, Mont., and have invested large sums of money in that business; that their said investments have been made and their business built up in the reliance on the permanency of reasonable freight rates for the transportation of their products to markets in the state of North Dakota; that the rates in force for many years prior to November 1, 1907, were reasonable and just, but that the appellant on November 1st established, and is now enforcing, a schedule of extortionate rates between points in Flathead county, Mont., and the markets in Dakota; that the said increase in rates is from 20 to 30 per cent., and will seriously injure, if not entirely destroy, the appellees' business; that the appellant owns the capital stock of the John O'Brien Lumber Company, a corporation engaged in the lumber business in Flathead county, on the appellant's railroad line, and possessed of large mills for the manufacture of lumber; that the lumber so manufactured by said corporation is shipped by the appellant and to a large extent is sold in the Dakota markets in competition with the appellees; that by means of the increased rates the appellant has sought to depress the business of the appellees, and to depress and lower the value of timber and stumpage in the Flathead district so as to acquire the same at less cost for its own manufacturing business; that it will be several months before relief can be had from the Interstate Commerce Commission, and that if the appellant is permitted to exact the rates prescribed by its tariff of November 1, 1907, until its reasonableness has been passed upon by the commission, the damage will be such that it cannot be established or recovered under the provisions of the act to regulate commerce.

By the injunction order the appellant was forbidden until the further order of the court to collect from the appellees the tariff of rates made effective on November 1, 1907, or any amount in excess of the rates of the old tariff which had been established for many years and was in force prior to and until November 1st.

The Circuit Court held that its jurisdiction was properly invoked as exclusive, for the reason that the suit was brought to enforce compliance with the terms of the interstate commerce act (Act Feb. 4, 1887, c. 104, 24 Stat. 379 (U.S. Comp. St. 1901, p. 3154)), and granted injunctive relief upon the clear showing that a great injustice would be done by requiring the appellees to submit to the newly adopted rates until the Interstate Commerce Commission could act, since the enforcement of that schedule of rates would be followed by the practically immediate destruction of the business of a large number of persons, and that said rates were extortionate and unreasonable.

The question which was before the Circuit Court was a new one, not directly affected by prior adjudications, unless it is to be held that its decision was indicated in a general way by the principles announced in Texas & Pacific Ry. Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 27 Sup.Ct. 350, 51 L.Ed. 553. Upon the case made in the bill, and the sustaining affidavits, it appears that the appellant is engaged in the commission of acts which, before the Interstate Commerce Commission shall have determined their legality, will have caused irreparable injury to the appellees, and for which there is no remedy unless it is to be found in a court of equity.

We are not insensible of the force of the argument that the existence of the power of the Circuit Court to afford such relief is not inconsistent with the decision in the Abilene Cotton Oil Case, and that it is not the necessary inference to be drawn from that decision that no court may enjoin the enforcement of a newly established unlawful schedule of rates until after the Interstate Commerce Commission shall have exercised its jurisdiction to pass upon the question of its lawfulness. In that case the court said:

'For if it be that the standard of rates fixed in the mode provided by the statute could be treated on the complaint of a shipper by a court and jury as unreasonable, without reference to prior action by the

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