Seaboard Air Line Co v. United States Interstate Commerce Commission v. Florida East Coast Railway Co

• Court: U.S. Supreme Court
• Writing for the Court: PER CURIAM; FORTAS
• Citation: Seaboard Air Line Co v. United States Interstate Commerce Commission v. Florida East Coast Railway Co, 382 U.S. 154, 86 S.Ct. 277, 15 L.Ed.2d 223 (1965)
• Decision Date: 22 November 1965
• Docket Number: 555,Nos. 425,s. 425
• Parties: SEABOARD AIR LINE R. CO. v. UNITED STATES. INTERSTATE COMMERCE COMMISSION v. FLORIDA EAST COAST RAILWAY CO

382 U.S. 154

86 S.Ct. 277

15 L.Ed.2d 223

SEABOARD AIR LINE R. CO.

v UNITED STATES.

INTERSTATE COMMERCE COMMISSION

v. FLORIDA EAST COAST RAILWAY CO.

Nos. 425, 555.

Decided Nov. 22, 1965.

Paul A. Porter, Dennis G. Lyons, Harold J. Gallagher, Walter H. Brown, Jr., Richard A. Hollander, Edwin H. Burgess, Prime F. Osborn, Albert B. Russ, Jr., and Phil C. Beverly, for appellants Seaboard Air Line R. Co. and others.

Robert W. Ginnane and Fritz R. Kahn, for appellant Interstate Commerce Commission.

Solicitor General Marshall, Assistant Attorney General Turner and Lionel Kestenbaum, for the United States.

A. Alvis Layne and Fred H. Kent, for appellee Florida East Coast railway co.

W. Graham Claytor, Jr., for appellee Southern Ry. Co.

Edward J. Hickey, Jr., and William G. Mahoney, for appellee Railway Labor Executives' Ass'n.

PER CURIAM.

Atlantic Coast Line Railroad Company and Seaboard Air Line Railroad Company filed with the Interstate Commerce Commission an application for authority to merge. In the administrative proceedings, the applicants contended that the merger would enable them to lower operating costs, improve service, and eliminate duplicate facilities; other carriers opposed the merger on the ground that it would have adverse competitive effects; and the Department of Justice contended that the merger would create a rail monopoly in central and western Florida.

The Commission approved the merger, subject to routing and gateway conditions to protect competing railroads. It recognized that the merger would eliminate competition and create a rail monopoly in parts of Florida. But it found that the merged lines carried only a small part of the total traffic in the area involved; that ample rail competition would remain therein; and that the reduction in competition would 'have no appreciably injurious effect upon shippers and communities.' Seaboard Air Line Railroad Co., 320 I.C.C. 122, 167. In addition, the Commission noted that the need to preserve intramodal rail competition had diminished, due to the fact that railroads were increasingly losing traffic to truck, water, and other modes of competition.

A three-judge District Court set aside the order and remanded the case to the Commission for further proceedings. It concluded that the Commission's analysis of the competitive effects of the merger was fatally defective because the Commission had not determined whether the merger violated § 7 of the Clayton Act, 38 Stat. 731, 15 U.S.C. § 18 (1964 ed.), by reference to the relevant product and geographic markets. By thus disposing of the case, the District Court did not reach the ultimate question whether the merger would be consistent with the public interest despite the foreseeable injury to competition.¹

We believe that the District Court erred in its interpretation of the directions this Court set forth in McLean Trucking Co. v. United States, 321 U.S. 67, 64 S.Ct. 370, 88 L.Ed. 544 (1944), and Minneapolis & St. Louis R. Co. v. United States, 361 U.S. 173, 80 S.Ct. 229, 4 L.Ed.2d 223 (1959). As we said in Minneapolis at 186, 80 S.Ct. at 237:

'Although § 5(11) does not authorize the Commission to 'ignore' the antitrust laws, McLean Trucking Co. v. United States, 321 U.S. 67, 80, 64 S.Ct. 370, 88 L.Ed. 544, there can be 'little doubt that the Commission is not to measure proposals for (acquisitions) by the standards of the antitrust laws.' 321 U.S. at pages 85—86, 64 S.Ct. at page 379. The problem is one of accommodation of § 5(2) and the antitrust legislation. The Commission...