Interstate Commerce Commission v. Atchison, Topeka Santa Fe Railway Company

• Decision Date: 08 June 1914
• Docket Number: No. 98,98
• Citation: 58 L.Ed. 1319,34 S.Ct. 814,234 U.S. 294
• Parties: INTERSTATE COMMERCE COMMISSION, the United States of America, Associated Jobbers of Los Angeles, and Pacific Coast Jobbers & Manufacturers Association, Appts., v. ATCHISON, TOPEKA, & SANTA FE RAILWAY COMPANY, Southern Pacific Company, and San Pedro, Los Angeles, & Salt Lake Railroad Company
• Court: U.S. Supreme Court

234 U.S. 294

34 S.Ct. 814

58 L.Ed. 1319

INTERSTATE COMMERCE COMMISSION, the United States of America, Associated Jobbers of Los Angeles, and Pacific Coast Jobbers & Manufacturers Association, Appts.,

v ATCHISON, TOPEKA, & SANTA FE RAILWAY COMPANY, Southern Pacific Company, and San Pedro, Los Angeles, & Salt Lake Railroad Company.

No. 98.

Argued January 14 and 15, 1914.

Decided June 8, 1914.

[Syllabus from pages 294-296 intentionally omitted] Mr. Blackburn Esterline and Solicitor General Davis for the United states.

[Argument of Counsel from pages 296-299 intentionally omitted] Mr. P. J. Farrell for the Interstate Commerce Commission.

Messrs. Gardiner Lathrop, Fred H. Wood, Robert Dunlap, T. J. Norton, C. W. Durbrow, W. F. Herrin, and J. P. Blair for appellees.

[Argument of Counsel from pages 299-302 intentionally omitted] Mr. Justice Hughes delivered the opinion of the court:

The Atchison, Topeka, & Santa Fe Railway Company, the Southern Pacific Company, and the San Pedro, Los Angeles, & Salt Lake Railroad Company, brought this suit against the Interstate Commerce Commission in the circuit court of the United States for the district of Kansas, first division, to restrain the enforcement of an order of the Commission made in April, 1910. The order required these companies to desist 'from exacting their present charge of $2.50 per car for delivering and receiving carload freight to and from industries located upon spurs and side tracks within their respective switching limits' in Los Angeles, California, when such carload freight 'is moving in interstate commerce incidentally to a system-line haul.' It also prohibited the exaction of any charge whatever, other than the charge for transportation from points of origin to destination, for delivering or receiving carload freight in such cases.¹

After answer had been filed by the Commission, the suit was transferred to the commerce court, and the United States, the Associated Jobbers of Los Angeles, and the Pacific Coast Jobbers' & Manufacturers' Association, intervened. The United States thereupon moved to dismiss the bill for want of equity, and the petitioners asked for a preliminary injunction. The commerce court, denying the government's motion, suspended the Commission's order until the further order of the court (188 Fed. 229, 929); and this appeal is prosecuted.

The complaint of the petitioners in substance is that they have established in the city of Los Angeles their public terminals, including what are known as team tracks and freight sheds, for the accommodation of the public in receiving and delivering carload freight; that these facilities are entirely adequate for the purpose, and are sufficient to handle all the carload freight shipped or delivered in the city, including that now received or delivered upon the industrial spur tracks in question; that the spur-track service has been established simply for the convenience of the shippers thus served; that it is a service essentially distinct from the line haul, and additional thereto, being of great benefit in the saving of cartage charges to the favored shippers for whose use the spur tracks were constructed; that the industries or plants located upon the spurs are distant from the main tracks, in the case of the Atchison Company, from 1/5 mile to 3 1/2 miles, in that of the Southern Pacific Company from 200 feet to 7 miles, and in that of the San Pedro Company from 1/5 mile to 4 miles, and that the special switching service involves a much greater expense than if the carload freight were received or delivered on the team tracks or at the freight sheds of the carriers respectively; that the charge of $2.50 per car for this service is entirely reasonable, and one which the carriers are entitled to make in addition to the line haul rate; and that, as such, it has been duly specified in their published tariffs. It is also averred that, while in the contracts governing the construction and maintenance of the spur tracks no specific sum was prescribed for the service of receiving and delivering carload freight thereon, the charge above mentioned had been generally established; that at the time of the making of these contracts the shippers understood and willingly consented that, if the railway company performed this special service, there should be additional compensation, and that such charge has generally been maintained and collected. The adequacy of the public terminal facilities for carload freight in Los Angeles (consisting of the team tracks and freight sheds of the carriers respectively), the facts set forth with respect to the construction of the spur tracks, their location, the acquiescence in the switching charge and its maintenance, were established before the Com- mission, it is alleged, by undisputed evidence. It is further stated that on account of water and other competition, the rates of transportation to an from Los Angeles have been forced to an exceedingly low basis, so that the companies do not receive the amount to which they are justly entitled, and that they ought not to be required to perform the service in question without reasonable reward. The Commission's order was assailed as beyond its authority, involving a discrimination in favor of the owners of plants located upon the spur tracks, and a deprivation of the property of the carriers without due process of law.

The report of the Commission (18 Inters. Com. Rep. 310) was made a part of the bill. It appears that the proceeding before the Commission was instituted by the Associated Jobbers of Los Angeles, and was directed against two distinct practices, involving the spur-track switching charges incident to a system-line haul and to a foreign-line haul respectively. The propriety of such a charge when the line haul was by a foreign carrier was sustained, and the prohibitory order was confined to cases where the charge was made in connection with a system-line haul. The pertinent facts, as found by the Commission, are substantially as follows:

Each of the carriers has designated certain territory as within its switching or yard limits in the city of Los Angeles, extending for 6 or 7 miles in a general easterly and westerly direction, and including numerous tracks, main lines, branch lines, industry spurs, classification tracks, team tracks, freight-shed tracks, hold tracks, repair tracks, and others, and also their stations, freight sheds, derricks, roundhouses, and other structures. Freight moving in carloads is delivered at team tracks, at freight sheds, or at industry spurs. At team tracks and freight sheds no charge is imposed for the receipt or delivery of such carload freight over the freight rate named in the tariffs, while at industry spurs an additional charge of $2.50 is imposed on every loaded car moving either in or out. These industry spurs vary in length, some leading directly from the main track into or alongside of the industries served, while others are of greater length and branch at one or more points, short spurs running off from what is known as the 'lead' to serve other industries in the immediate neighborhood. These spurs have been constructed under substantially uniform contracts.² None of the industries at Los Angeles fur- nishes its own motive power, and interline switching is done from the interchange track to the industry by the locomotives of the delivering lien, the carrier performing the switching service.

The Commission found that these spur tracks were portions of the terminal facilities of the carriers with whose lines they connected, being distinguished from mere plant facilities such as were under consideration in Chicago & A. R. Co. v. United States, 26 L.R.A.(N.S.) 551, 84 C. C. A. 324, 156 Fed. 558, and in the cases of the General Electric Co. and Solvay Process Co. 14 Inters. Com. Rep. 237, 246. Each of the spurs here considered, said the Commission, is, in a real sense, a railroad terminal at which the carrier receives and delivers freight. It further appears from the report that the charge for spur-track delivery has been made by all of the carriers at Los Angeles as long as the railroads have had access to that city; that it was first imposed by the Southern Pacific, and as the other lines came in they adopted the policy of the line already there; that, as to certain commodities, the charge was not imposed until quite recently, and at all times until the Hepburn act [Act of June 29, 1906, 34 Stat. at L. 584, chap. 3591, U. S. Comp. Stat. Supp. 1911, p. 1288] went into effect there was great variation in charge as between individual shippers. It is added that there are 97 places in California to which what are known as coast terminal rates apply, rates lower than to intermediate points; only in Los Angeles, San Francisco, and San Diego is there such a charge for spur-track delivery, though in many of these places such delivery is furnished. To the north, in Portland, Seattle, Tacoma, and a large number of other points which also enjoy coast terminal rates, the Southern Pacific, Northern Pacific, and Great Northern lines impose no such charge, and to the east, where defendants' lines have their termini in cities competing with Los Angeles, this charge is also unknown.

The Commission thus described the character of the service in question: 'Spurtrack delivery is a substitute service,—a service which it has solicited the right to give, as the evidence here shows,—a service which costs the industry for the installation of the track and the use of its property as a railway terminal. It is a service over the carrier's own rails to a point where it yields possession of the property transported, and which involves no greater expense than would team-track delivery. It relieves the carrier's team tracks and sheds, necessitating less outlay for expense of yards in a crowded city, promotes the speedy release of equipment, and vastly aids in conducting a commerce which is greater...