Pennsylvania R. Co. v. United States

• Decision Date: 08 December 1943
• Docket Number: Civil Action No. 2092.
• Citation: 55 F. Supp. 473
• Parties: PENNSYLVANIA R. CO. et al. v. UNITED STATES (INTERSTATE COMMERCE COMMISSION et al., Interveners).
• Court: U.S. District Court — District of New Jersey

55 F. Supp. 473

PENNSYLVANIA R. CO. et al. v. UNITED STATES (INTERSTATE COMMERCE COMMISSION et al., Interveners).

Civil Action No. 2092.

District Court, D. New Jersey.

October 9, 1943.

On Argument in Respect to Form of Decree December 8, 1943.

COPYRIGHT MATERIAL OMITTED

John A. Hartpence, of Trenton, N. J., for Pennsylvania R. Co.

Duane E. Minard, of Newark, N. J., and Parker McCollester, of New York City, for Hoboken Manufacturers R. Co. and Seatrain Lines, Inc.

Arthur T. Vanderbilt, of Newark, N. J., and H. H. Larimore, of St. Louis, Mo., for New Orleans & Lower Coast R. Co.

E. M. Reidy, Asst. Chief Counsel, Interstate Commerce Commission, of Washington, D. C., for Interstate Commerce Commission.

Robert L. Pierce, Sp. Asst. to Atty. Gen., for the United States.

Before BIGGS, Circuit Judge, and FAKE and SMITH, District Judges.

BIGGS, Circuit Judge.

The suit at bar was brought under the provisions of Acts of Congress approved June 18, 1910, 36 Stat. 539, March 3, 1911, 36 Stat. 1148 and October 22, 1913, 38 Stat. 219, 28 U.S.C.A. §§ 41(28) and 43 to 48 inclusive, by some fifteen trunk line rail carriers to set aside an order of the Interstate Commerce Commission entered by the Commission in its proceedings at Nos. 25728 and 27878 on October 13, 1941. Though the amended petition complains of two other orders, they are supplementary to or in aid of the order of October 13, 1941, and therefore it is the order of October 13, 1941, with which we are really concerned. Since the case at bar requires extensive findings of fact we shall endeavor to reduce this opinion to essentials in an endeavor to make a complicated factual situation plain. The findings of fact filed with this opinion will state the facts more fully.

The order of October 13, 1941,¹ requires some fifty-two rail carriers, accordingly as they participate in through-rail and water routes with Seatrain Lines, Inc., in interstate commerce between Belle Chasse (New Orleans), Louisiana, and Hoboken, New Jersey, to cease and desist from prohibiting the interchange of their freight cars with Seatrain. The order also requires the rail carriers to establish reasonable rules for freight car interchange with Seatrain at a per diem rate of $1.00 per day per car but provides also that the per diem is to be paid by Seatrain only for such periods of time as the cars are in its actual possession. The Interstate Commerce Commission, Seatrain, New Orleans & Lower Coast Railroad Company, hereinafter referred to as Lower Coast, and Hoboken Manufacturers Railroad Company, hereinafter referred to as Hoboken Railroad, have intervened in this proceeding as parties defendant.

Seatrain is a common carrier by water subject to the Commission's jurisdiction. Investigation of Seatrain Lines, Inc., 195 I.C.C. 215. A description of the manner in which Seatrain operates is set out fully in an opinion of this court reported in Hoboken Mfrs' R. Co. v. United States, D.C., 47 F.Supp. 779, at page 781. Seatrain operates ocean-going vessels having four decks, each deck in turn having four sets of standard gauge railroad tracks. By means of a special loading device, consisting of a crane and cradle, provided at three ports (Hoboken, New Jersey, Belle Chasse, Louisiana, and Havana, Cuba), loaded freight cars with their contents are put on board Seatrain ships without breaking bulk and are thus transported in commerce. Seatrain's transportation usually takes the cars and their contents into the port of Havana, Cuba, en route to or from Hoboken or Belle Chasse. The loading facilities for Seatrain ships are located at Belle Chasse on the property of Lower Coast, a terminal-switching railroad, a subsidiary of the Missouri-Pacific Railroad Company, connecting in turn with the Southern Pacific and the Texas Pacific Railroad Company. The loading facilities at Hoboken are located on the property of Hoboken Railroad. Hoboken Railroad is a short, single-track terminal-switching line which runs along the water front of Hoboken and connects with the Erie Railroad and via the Erie with other trunk lines reaching New York harbor.

From 1929 to 1932 Seatrain and its predecessor company operated its ships between Belle Chasse and Havana exclusively. During this period most of the petitioners in the case at bar allowed their cars to be delivered freely to Seatrain ships to be delivered to Cuban railroads. In 1931 Seatrain contemplated the extension of its operations into interstate commerce by the use of the Port of New York and in 1932 made arrangements to effect that end with Hoboken Railroad. These arrangements are described at length in our prior opinion. See 47 F.Supp. at page 783. Just prior to the inauguration of Seatrain's interstate service, the American Railway Association (to which trunk line railroads including the petitioners belong) promulgated a car service rule which was intended to eliminate Seatrain as a competitor. The rule (Rule 4) provides, "Cars of railway ownership must not be delivered to a steamship, ferry or barge line for water transportation without permission of the owner filed with the Car Service Division."

The promulgation of this rule by the American Railway Association and the refusal of many of the petitioners to permit the delivery of their cars to Seatrain brought an immediate reaction. Hoboken Railroad and the Lower Coast filed two separate complaints with the Commission and attacked the refusal of the railroads to allow their freight cars to be used by Seatrain. Seatrain was permitted to intervene in both proceedings. The two complaints were subsequently consolidated and the consolidated cause has been before the Commission for hearings and argument on at least three different occasions. In 1935 the Commission held in its report in Investigation of Seatrain Lines, Incorporated, at No. 25,565,² 206 I.C.C. 328, that Seatrain was a common carrier by water and subject to the jurisdiction of the Commission; that the service of Seatrain between Hoboken and New Orleans was in the public interest and (most important of all in so far as the legal questions presented in this case are concerned) that where through routes existed between rail carriers and water carriers the Commission had jurisdiction to require rail carriers who were parties to such through routes to interchange cars with water carriers if such was the reasonable and appropriate method of interchanging traffic moving over such through routes. The Commission stated: "We find nothing in the act imposing any duty upon or giving us jurisdiction to require a rail carrier to permit delivery of its cars to a water carrier where through routes between such rail and water carriers do not exist." The Commission also went on to say: "Whether defendants including some of the petitioners in the case at bar who refuse to permit delivery of their cars to Seatrain participate in through routes with Seatrain cannot be determined upon this record."

Thereafter on January 28, 1938, in a proceeding at No. 25,727, known as the "Seatrain Through-Route Case", Seatrain Lines, Incorporated, v. Akron, Canton & Youngstown Railway Co., 226 I.C.C. 7, the Commission found that through routes existed between certain rail carriers (including some of the petitioners) in connection with Seatrain "between points in trunk-line and New England territories, on the one hand, and southwestern territory on the other hand"; "That the public interest requires the establishment and maintenance of through routes and joint rates" by certain trunk-line rail carriers (including the petitioners) in connection with Seatrain between designated points in official territory, and southwestern territory; and that these connections were in the public interest. The Commission then proceeded to prescribe maximum joint rates. These joint rates were modified following a further hearing of the same proceeding in 1940 (243 I.C.C. 199) so as not to exceed the joint rates over comparable routes between rail carriers and break-bulk water lines. The latter of course do not use railroad cars on their ships. It is important to have in mind that The Pennsylvania Railroad and certain of the other petitioners thereupon established the through routes prescribed by the Commission and, as the amended petition alleges, those through routes are now in full force and effect.

The Commission reopened for further hearing the proceedings at Nos. 25,728 and 25,878, Hoboken Manufacturers Railroad Company v. Abilene & Southern Railway Company, and New Orleans & Lower Coast Railroad Company v. The Akron, Canton & Youngstown Railroad Company, to determine on what terms and conditions, including compensation, the petitioners should be required to interchange their freight cars with Seatrain. On October 13, 1941, after completing its hearings the Commission announced its final decision (248 I.C.C. 109) and entered the cease-and-desist order of October 13, 1941, complained of in this proceeding. The Commission reaffirmed its jurisdiction to require rail carriers, parties to through routes with Seatrain, to permit the use of their freight cars in Seatrain's service.³ The Commission found that the rail carriers' refusal to permit interchange of cars between themselves and Seatrain was a violation of the Interstate Commerce Act, 49 U.S.C.A. § 1 et seq., and that the current code of per diem rates governing the interchange of freight cars between the various railroads, including the current inter-railroad rate of $1 per day, should be payable by Seatrain, though only for such periods as the railcarriers' cars were in its actual possession.⁴ On the same day the order complained of was entered by the Commission.⁵

The petitioners contend that the order of October 13, 1941, should be set aside or at least mitigated for three reasons. First, they assert that there is no duty on rail carriers to deliver their freight cars for the use of, or to interchange their cars with, a water carrier and...