ICC v. SOUTHERN RAILWAY COMPANY

• Decision Date: 15 August 1974
• Docket Number: Civ. A. No. 74-9-VAL.
• Citation: 380 F. Supp. 386
• Parties: INTERSTATE COMMERCE COMMISSION, Plaintiff, v. SOUTHERN RAILWAY COMPANY and Central of Georgia Railroad Company, Defendants.
• Court: U.S. District Court — Middle District of Georgia

380 F. Supp. 386

INTERSTATE COMMERCE COMMISSION, Plaintiff, v. SOUTHERN RAILWAY COMPANY and Central of Georgia Railroad Company, Defendants.

Civ. A. No. 74-9-VAL.

United States District Court, M. D. Georgia, Valdosta Division.

August 15, 1974.

Daniel S. Linhardt, Washington, D. C., for plaintiff.

E. Edward Bruce, Covington & Burling, Washington, D. C.; William H. Teasley, Washington, D. C., Ellsworth H. Hall, Jr., Macon, Ga., for defendants.

J. Reese Franklin, Nashville, Ga., for Nashville Milling Co.

James M. Collier, Dawson, Ga., for Walter Calvin Lee.

C. Nathan Davis, Asst. U. S. Atty., Macon, Ga., for United States.

OPINION AND ORDER

ELLIOTT, Chief Judge:

In this action the Interstate Commerce Commission ("ICC"), through its Bureau of Enforcement, has filed a complaint to enjoin alleged violations by Southern Railway Company and Central of Georgia Railroad Company ("Southern" and "Central Railroad" individually; "Defendants" collectively), of certain orders of the ICC. The ICC has also filed a motion for a preliminary injunction. Southern and Central Railroad have responded not only by opposing the ICC's motion for preliminary relief, but also by filing motions to dismiss the ICC's complaint under F.R.Civ. P. 12(c). In addition, two shippers, Nashville Milling Company and Mr. Walter Calvin Lee, who claim to be adversely affected by the Defendants' alleged violations of the ICC's orders, have each filed motions to intervene as plaintiffs in this action under F.R.Civ.P. 24 (b) and to add the United States as an additional defendant under 28 U.S.C. § 2322. According to their proposed complaints Nashville Milling Company and Mr. Lee seek damages as well as equitable relief in this action. Southern and Central Railroad have opposed the motions to intervene, and the United States Attorney for the Middle District of Georgia has filed a "Responsive Pleading of the United States of America" in answer to the motions to add the United States as an additional defendant.

The original parties to this action and the applicants to intervene have fully briefed each of these motions, and have filed numerous affidavits in support of their respective positions as to the motion for a preliminary injunction in this action. In addition, on July 22, 1974, the Court heard oral argument on the various motions and also received extensive evidence from two witnesses called by the ICC and from four witnesses called by the Defendants. At that time the Court reserved its ruling on all pending motions, although the Court did allow counsel for the two shippers to participate fully in the hearing. The Court is now therefore in position to consider and enter judgment upon each of the motions presently pending.

I.

A brief review of factual background to this action is necessary in order to place in perspective the various motions to be considered.

On December 5, 1962, the ICC, pursuant to Section 5(2) of the Interstate Commerce Act, 49 U.S.C. § 5(2), granted Southern permission to acquire control of the Central of Georgia Railway Company ("Central Railway"), subject to conditions essentially identical to those first imposed by the ICC in Detroit, T. & I. R. Co. Control, 275 I.C.C. 455, 488 (1950) (hereinafter referred to as the "DT&I conditions"). The conditions imposed in the ICC's December 5, 1962, order are as follows:

"1. Upon consummation of control of the Central of Georgia Railway Company, by Southern Railway Company, Central of Georgia Railway Company and its subsidiaries shall maintain and keep open all routes and channels of trade by existing junctions and gateways, unless and until otherwise authorized by the Commission.

"2. The present neutrality of handling traffic inbound and outbound by Central of Georgia Railway Company and its subsidiaries shall be continued so as to permit equal opportunity for service to and from all lines reaching the rails of those carriers without discrimination as to the route or the movement of traffic, and without discrimination in the arrangement of schedules or otherwise.

"3. The present traffic and operating relationships existing between the Central of Georgia Railway Company and the subsidiaries on the one hand, and all lines connecting with its tracks, on the other, shall be continued insofar as such matters are within the control of the applicant.

"4. Central of Georgia Railway Company and its subsidiaries shall accept, handle, and deliver all cars inbound and outbound, loaded and empty, without discrimination in promptness or frequency of service as between cars destined to or received from competing carriers and irrespective of destination or route of movement.

"5. Applicant shall not do anything to restrain or curtail the right of industries located on the Central of Georgia Railway Company and its subsidiaries to route traffic over any and all existing routes and gateways.

"6. Any party or any person having an interest in the subject matter may at any future time make application for such modification of the above conditions, or any of them, as may be required in the public interest, and jurisdiction should be retained to reopen the proceeding on our own motion for the same purpose."

Southern Ry. Co. — Control — Central of Georgia Ry. Co., 317 I.C.C. 557, 584 (1962).¹

Then by order entered on March 29, 1963, the ICC approved Southern's acquisition, through various subsidiaries, of the Georgia & Florida Railroad Company ("G&F"). This order, too, was made subject to the standard DT&I conditions. Georgia & F. Ry. Co. — Acquisition — Georgia & F.R., 317 I.C.C. 745, 754 (1963).

Finally, on January 29, 1971, the ICC authorized Central Railroad, a then newly formed subsidiary of Southern, to consolidate Central Railway, G&F, and other railroads in what was a purely intracorporate transaction. In so doing, the ICC reimposed on the newly formed Central Railroad the standard DT&I conditions to which its predecessor entities had been subject. Central of Georgia Ry. Co. — Consolidation — Central of Georgia R. Co., 338 I.C.C. 353, 378-79 (1971).

The ICC complains in this action that certain alleged practices of the Defendants in 1972-74 violate the standard DT&I conditions as imposed on Defendants by each of these orders. Specifically, the ICC alleges that prior to 1962 or 1963 when Southern acquired Central Railway and G&F or at least prior to 1971 when the intracorporate consolidation was effected, certain shippers located in South Georgia — including the applicants to intervene — had shipped grain in covered hopper cars via Central Railway and G&F to points in Florida located on what is now the Seaboard Coast Line Railroad ("SCL") without any limitations being imposed concerning the number of covered hopper cars which could be obtained for such shipments. Since 1972, however, Southern and Central Railroad have at times — according to the ICC — refused to furnish covered hopper cars to shippers on the lines of the former Central Railway and the former G&F for shipments of grain destined to points in Florida on SCL except on the condition that SCL provide a proportionate share of those cars consistent with its share of the joint line-haul revenues generated by these shipments.²

The ICC makes no allegation that Defendants have at any time refused to supply boxcars for off-line grain shipments, nor does it allege that South Georgia — Florida grain shipment routes have actually been closed. The ICC and the applicants to intervene have argued before the Court, however, that the shippers on the lines of the former Central Railway and the former G&F are equipped to load only covered hopper cars and that the consignees in Florida generally are not equipped to unload boxcars. They have also contended that it is more difficult for South Georgia grain brokers and the like to ship grain to Florida under Southern's present policy. Thus, the ICC's ultimate allegation here is that the Defendants' refusal at times to supply the shippers on the lines of the former Central Railway and the former G&F with covered hopper cars for off-line grain shipments to Florida has forced diversion of such shipments to destinations on Southern and Central Railroad where the price of grain is allegedly less than the price at SCL Florida destinations.

These alleged practices of Defendants are claimed to be violative of the standard DT&I conditions as imposed in the three orders of the ICC to which Defendants are subject. This is the exclusive basis for both the ICC's complaint for injunctive relief and for the proposed complaints of the applicants to intervene. In terms of relief, the ICC's complaint prays that the Court order Defendants to supply all shippers on the lines of the former Central Railway and the former G&F Railway with covered hopper cars "in the proportion that they are supplied to other Southern shippers regardless of the destination of shipments."

It is against this background that the motions which are now before the Court must be decided.

II.

First, as to Defendants' motion to dismiss this action under F.R.Civ.P. 12(b) (6), the basis for this motion is, quite simply, the contention that the ICC is without authority to institute this action in its own name as it has sought to do. Defendants' argument is based on the provisions of Chapter 157 of Title 28 of the U. S. Code that set forth procedures governing enforcement of ICC orders, which like those at issue here do not involve the payment of money. In response to Defendants' motion to dismiss, the ICC asserts that its cause of action arises under both Section 16(12) and Section 5(8) of the Interstate Commerce Act, 49 U.S.C. §§ 16(12), 5(8),³ and it argues that those sections grant it the requisite authority to institute this action notwithstanding the provisions of Chapter 157.

In the first place, the language of Chapter 157 of Title 28 stands squarely against the ICC's claim here. The first provision of Chapter 157, 28 U.S.C. § 2321,...